Gamescom 2026 Recap: AI's Real Cost, Rising CPIs & the Death of the Game Disc

So, we got a new podcast. This is brilliant. I'm very excited about this. It means I get to chat here every week. So, everybody, I'm smart and I'm right. And together, we are smart and right. It's really funny since I've started telling people about this. I keep getting people saying, it's like that, it's like that old image. Don't be right, be smart. I quite like that. I thought we could have used that as a title as well. I think I would be a traitor to my own name if I said that. So, I think we're smart and right. At least most of the time. At least most of the time we're smart and right. All right. So, what are we doing this? So, I think we had so much fun. Where was it? It was a snap, wasn't it? When we did the "We're the Fortune" panel. It was one to remember. That we thought it would be fun to start just having a weekly catch-up where we just talk a whole load of rubbish about what's going on at the moment and what we've found interesting. Because we figured if we find stuff interesting, then other people will probably find it interesting too. As always, in the gaming industry, there's so much going on and so much innovation and so many people bring in different things to the market. It's quite cool to sort of pick out different things that we've found that are exciting. There's a lot of exciting. For sure, man. I think from my perspective, when you approach me with the idea of this, it's one, we've known each other a long time and we've done loads of things together over the years. But this will be the first time for me that I've actually done my own podcast rather than guesting on yours or Mateis or Mishkas. So for me, it's a real fun opportunity to have a regular cadence, talking about real subjects that matter, explaining to people my full process is around what's going on and hopefully discussing some interesting stuff and supporting the industry and learning whilst we do it. So a weekly cadence is going to be almost impossible, but we're going to try it. Let's see how this goes. I guess the first thing that we should really talk about is Gamescom. As it was last week and it's like one of the biggest events in the gaming industry, God, I had a lot of fun. As I'm sure you did. Gamescom is my favourite event of the year. Generally, it always has been, I think. I've been going to Gamescom for over 10 years now. So I never went when it was in the previous location, when it was Gamescom. I've only ever been since it moved to Cologne and became Gamescom. But my first one was probably like 2015 around that time. And it's my favourite event of the year, because not only do I get to see all of the people from a professional standpoint, but I get to see the consumers. And that's the best art. It's amazing. It's amazing. It's amazing being people interacting with the Games and just the sheer level of excitement. There's nothing bare for me in seeing the users in their own environment. People drinking in everything around them. They're fully encapsulated with the brands and how much it means to them on an emotional level. It's just so amazing seeing, from someone who develops Games, it's so amazing seeing people engage with that and remind me of why we do this. It's much more than just a pan, right? We don't do this just for making money. If we wanted to make money, we'd do other things. That's why I was in the camp and then finance for years. But seeing things at Gamescom, seeing the people in the masses, just absorbing everything around them, seeing the excitement from the announcements and stuff like that, it's a beautiful thing at them. And where else do you walk down the corridors and get Deadpool throwing a fake banana at you? This is a true story. I was out in the courtyard on the Tuesday or Wednesday, and there was a guy dressed as Ash Ketchum, and his girlfriend dressed as a sexy fey porian. She had like a full like, and I was just like, this is amazing. It seems to get better and better. I was like, what's going on? What's this? And literally I was just pointing at him, I was standing with a bunch of people like, look, what's going on over there? And I was like, and someone just looked at me dead in the eyes and went, "Gamescom, baby!" You know? Welcome to our world. All right, but what? Like for me, there was lots and lots of lots of takeaways, but it's not necessarily the actual conference. Like, there was a lot outside the actual conference, and there was a lot of conversations, a lot of drinks, a lot of dinners, everything else. And you pick up a lot of stuff, which isn't necessarily as well known as, you know, everything else. So what was your takeaway from Gamescom that you didn't necessarily know before that was super interesting, or you found super interesting? Oh, man, actually, do you know what it does without throwing in on a robot? Yeah, so whilst I had the tremendous Gamescom, I would actually say professionally speaking, it wasn't as good as last year. I don't really feel that. Yeah, look, I personally felt that because you missed the first event. Yeah, because maybe because I was free, I was late for a flight and missed my opportunity to speak with the CMO of Stillfront Wargaming and Supercell. And luckily for me, my great friend Adam Smart was ready to kick me under a bus and take my spot. No one would have noticed it wasn't you? Yeah, a few people would send me pictures like, "This is not you, why are you not eating?" No, I'm not. Next up, I'll fly in the night before, which is the smart thing to do. But no, like I said, dude, I really think like for me, it didn't seem like you had the same, I don't grab a task this year, professionally speaking, right? Anything to do with the conference itself inside around the games and then, you know, the IPs and stuff was great. But I felt like there was quite a few people that maybe who I wanted to catch up with who didn't attend this year. I don't know why, but I just generally didn't feel that there was the level of attendance of certain people was as high. Where? I had completely the opposite. Oh, interesting. That's really funny. Yeah. And look, I was going to, like, the thing, the big thing for me, man, is the side event, more important than the day at the conference. The meetings that I have between, say, 10 and 3, you know, a lot of it is not the most interesting stuff. It's, you know, potentially it's some like new supplier or it's something like catching up with someone. But the really interesting stuff happens around the breakfasts, the lunch, the side event, you know, I went to the deconstructor of funding on Tuesday and I sat on an amazing table with the X head of marketing from Nintendo. And, you know, I'm talking to her and then there's the new CEO of news, who's there. And I'm having these really, really big educated fun conversations with, you know, the upper echelon of the industry. And those things for me are the most interesting. And, you know, those rooms are hard to get into sometimes. But when you're in them, I think you generally learn a lot and you get great exposure and you meet new people and interesting people. So for me, it's more about those events than it is, you know, the day to day, you know, in the event hall, per se. But look, I think, do you know what Adam, the biggest conversation point for me, I was speaking to a lot of other studio owners and heads. And I hate to be that person to bring up AI once again. But it was like, it felt like 50% of the conversations I had were around AI and the difference between last year and this year is last year, it was all about like, how are you implementing it? Like, how's it supporting? And it was only supporting like, maybe certain divisions of the business, like marketing and stuff like that. Whereas now, I had open conversations with studio heads where they're like, right, every single division now has like AI running for it and there's agents to do this. And so the level of adoption has gone up tremendously in the last 12 months, not just using an LLM to do stuff, but like really integrate into the product and such. And the other thing, which is a little bit more on the sad note, was did you hear, sorry, going to the AI stuff, did you hear it? I had a few conversations regarding cost of AI and that that's starting to become semi problematic with the huge uptake of AI within businesses and then suddenly realizing, actually, this is quite intense. So there were two major things that I brought away from all of these conversations. One is that there's generally been some changes of staff in a lot of big studios over the last 12 months because it feels like you've even got pure AI advocacy or you've got rejection and there is nothing in between. So people were talking about having to let certain employees go and rehire people that were more AI enabled. So that was quite interesting in the fact of making headcount changes phased off this because of how the, you know, what's adopted. Which I get, you know, like if you're trying to build something and someone isn't adopting that as part of the strategy and stuff, then you know, you have to look at other things. And And the other point, as you said, is the operational costs. And I was talking to someone from a studio, which I'm not going to name, but they were talking about how some random mid-manager employee ran up like 30 grand of token costs in one month. But just figuring something out, Adam, you know, and he's there in ROI on that. Yeah, no, no, no, no, it's mad to think that one is true, but do think about it. One of the whole shining lights and all the big positives around AI has been, "Oh, use AI, save money on headcount," you know, like it's cheaper than a person. But if you put AI in the wrong hands and someone uses it, you know, willy-nilly, they can easily become super expensive and look, I spoke about this. Come on, we've seen a lot of memes recently about like, you know, I'm hiring people because it's cheaper. Exactly, dude. But look, I said this a while back on LinkedIn. But there's going to be a role in studio soon, which is head of AI operations. And their job is to basically look at the operating expense and the costs allocated to the teams and make sure that they're spending effective with it, because yeah. Yeah, because honestly, man, it's easy for someone to spend like 20 grand, like just for nothing, you know, so you need to respect it. So I guess sort of taking away from my experience of Gamescom, one of the biggest things that I came up against and I heard an awful lot was people trying to start to use Web more as a platform. So with the intention, it seemed to be that the intention wasn't really to run on Web because I think everybody knows that sort of retention is very, very difficult for anything Web-based. But I think it's more to because of the rising CPIs on mobile to start really trying to bring users in through Web to lower the costs. And that seemed to be the sort of direction that a lot of companies are trying right now, whether or not anyone's actually going to make it success is another thing. And that's probably something we can cover a little bit later on in this and see who's winning at this. But right now, it feels like that's quite a big direction. Yeah, I also heard a lot of talk around this like Web-to-App from a funnel perspective and the strategic perspective. We've all reported big CPI increases over the last six, 12 or 18 months, right? I feel like every quarter or every six months, we're looking at some sort of sensor tower or apps fly a report where we're seeing a trend of, oh, CPIs have gone up 20% in the genre. When that kind of impact is felt throughout the industry, Adam, the only thing you can do is look for innovation, right? And new ways of doing stuff to bring to that. That's where the mobile industry has always been so strong is the innovation side of it. They're always going to find a ray-round stuff. And that's it, man. Look, we've got some tremendously smart people in our industry who have figured out lots of problems over the last 15 years. And if increasing marketing costs, which then create unbalanced unit economics and lack of profitability, we can either continue down the same road and die and just studios shut down and everything like that, or we can be smarter and innovate. And one thing that I don't think mobile gaming is defeatist, like I don't think generally people are really stuff to fail. So I think, look, man, we're smart people will figure it out and web2app is one of those. I don't know if it's going to be the most impactful, but it's something that people are looking at now as could potentially make the difference. Yeah. Yeah. And then I guess I've got a couple of takeaways from the event that we did with Centitaur, the app's Lauren Centitaur event. The one that I missed was the one you would have actually loved and been fantastic on stage. Unfortunately, everyone had to put up with me, but you know, that's a dick. That's a dick. I know what they really wanted. They wanted the prime rib and they got you the rump cut. Exactly. Exactly. Exactly. They had to put up with smart, not right. So I guess one of the biggest things from there that I took away was the, I mean, bearing in mind, the premise of that event, that whole event was really sort of the PC console and mobile side of things and really how they're starting to diverge into one ish kind of. We had some interesting conversations, but what really stood out was how openly people talked about the sort of cultural shift within gaming at the moment. And I think that is, that's probably one that I'd love to talk about for a minute. Yeah, I mean, because obviously, because I didn't make it. Let me explain it. I'm glad you asked. So when you have generations that sort of grew up like our generation, I'm going to put a sun to the same bucket. It's probably a slightly different bucket. No, we're definitely so jealous. I'll go younger. But you know, you grew up with consoles. You grew up with like Sega, Master System Mega Drive NES, where you had cartridges or even earlier than expected. And then you kind of, you kind of had that mindset of, I'm going to play a game. I'm going to go buy a game. I'm going to go rent a game from Blockbuster. And you used to be able to go get a game, play it for a bit, get bored of it, go get another game. And it's a, it's a contained package. And then sort of as PlayStation 1 came in, it started to get a little bit aware of I remember having to do style up on the other PlayStation 1 to get it connected to the internet and that kind of thing. And then, you know, as you sort of move along, they sort of start to get more DLC coming out more often and updates for games and having to download 100 gig every every every time you want to play a game. But then you've also got the sort of next generation along who kind of grew up with drivers and roadblocks and in-app purchases and really the sort of the mobile methodology of gaming. And that generation is starting to sort of be the generation that has potentially more free income, you know, certainly over the next few years. And they're the ones who are going to be spending the majority on gaming. So our games being designed for the wrong generation, how kind of thing. Yeah, look, I mean, the whole physical game sort of reaction, right? No, you know, now that people are saying that they're no longer going to create like physical disc games and this, I think there's going to be a loss in some of the, I don't know, we're just going to lose something, dude, with that. Like I understand from a business perspective, you know, you're cutting costs essentially by not producing the discs and, and look, if you're playing, things like, you know, Call of Duty wards or whatever, you're downloading, everything's like downloading online, right? Anyway, but I don't know, man, I feel like we're losing some of the the most memorable with the kind of nostalgic. Yeah, 100% and I feel like the discs with the only thing differentiating PC and console from mobile. I mean, obviously take PC out of that with steam because you didn't have any discs anyway. Yeah, but they've begun for a while, but, you know, with, with PlayStation now removing them from like next year, I think it's going to change, it's going to take away any boundaries there were for making games that that are live service and work in a very different way to to premium title, surely it has to. Yeah, and one of like, bringing a game over a buddy's house like, you know, you're going, you're a teenager, you're going to sleep over, you know, one of you had maddened, one of you had 2K, you know, and you would go over their house and you would bring the disc, all of that kind of experience for the younger generations is going to be lost and for me it was a big thing, you know, with my social group like taking discs and cartridges and stuff like that. So I'm a little bit gay that the younger generation was going out on to the woods on BMX after school, you know. I mean, yeah, true. And parents got particularly caring where we were, you know, very true. Also, yeah, I mean, times of change, I know we're saying like boomers now, you know, in my day, but no, like all serious though, man, like I'm against it and also I'm still, I'm still believing like the collection, like I still have like games from PS1 that I've got 30 years later that are in like a shelf somewhere. So I do feel like that is a negative, I'm interested to see how the Switch 2 progresses, like not changing everything to digital immediately and how much sort of emphasis people put on the physicals for Switch 2 now, that's going to be quite interesting. Yeah, do you know what my son loves it when we have a cartridge in the box because they, you know, like the other day we purchased something, I think it was the not breath of a wild, but the second one, I always forget what it's called, the wind, like wind, that's able to something. And the first one, the breath of the wild, he had the little cartridge and he loves something like that, yeah, it isn't, I can't remember. I've played the first one to death, but I haven't played really the second one he has. But the second one didn't have a cartridge and it only had a code and the first one did. And the experience for him, he was much more animated and obviously physically happy getting the cartridge and putting it in and, you know, he's six. So I still, I know again where the The business decision is coming because of production costs and they're looking at margins and you know, they're making this corporate decision for shareholders and all that bullshit, but I mean it's for them. That's for sure. It makes sense for them, but not maybe not the user. Okay. So, so good for business, maybe not good for user experience. Yeah, although the majority of my catalogs that I have on PlayStation and steam and even switch are all digital now, I don't think I bought a game that hasn't been digitally in quite some time to be honest. Yeah, I think I think it depends, man, like I said, I'm not. In some ways I'm bothered by it, but other ways I'm not. It's all about ease and accessibility to the game, right? Like if I can't be bothered to go down to smiths to buy something and I can just download it, I will. Because I want that, you know, so I think it depends on a few different factors, but what I'm saying is for the younger generations, I think something will be lost. Makes sense, makes sense. But then is that yeah, I guess you have to question if that is a indeed a bad thing for that generation when they've been brought up on on Roblox and that kind of thing which has never been any physical copies of. Very true. Very true. I don't know. Maybe we'll have to a survey. Maybe we'll ask the audience. What do they think? We'll bring that to the wheel. Exactly. We'll do it. All right, and the other thing that really stood out is China's influence over Gamescom is seems to be getting more and more, you know, my, my high, my high-o stand was insane. Gamescom. We had Infinity Nikki was another massive, massive stand, but also very focused towards women, which was again, something slightly different for Gamescom. But that was huge. It was love in deep space with their stand there, which was obviously very focused on women again. It's interesting. It's interesting to see that sort of focus or target demographic changing. That's going to change the people who are going to Gamescom hopefully for the better and make it more diverse and everything else. But it's interesting to see that they obviously feel that there's there's money to be made in different target demographics that aren't necessarily being catered for now. Yeah, look, man, I think it's good business sense at the end of the day. If you think that's a 50% of all gamers are men, right, and you've already oversaturated with that demographic, right, you've already done everything you can to try and get them to play your games. You have to look at the other slice of the pie, and you have to start tapering content to win it. And yeah, I think it's a very logical, logical step to do. And in mobile, we've been doing it for years with Candy Crush and Matchfree and Merchant. All of those games have been arguably over-optimized towards women because women are the power players, they're the spenders, etc. We haven't seen any more casual players. And for the most part, the more casual players. Completely, completely. So that makes sense. But again, if you oversaturate at a certain demographic, then you have to look at ways to increase your tam, right, you have to look at other ways to service a larger pool of players. And sometimes that's adjusting the IP that might be editing the story, you know, softening certain areas. Yeah, but these are decisions that they need to make if they want to grow. So I'm all for this, especially with some of the erasian counterparts that have been maybe overly sexualised in certain genres, right? And so, yeah, I'm really, you know, all for this. And yeah, I think it's good progress in the industry, Adam, is to see more of this. But to some extent, it's also the risk-taking element, isn't it? I mean, the Chinese seem way more open to taking risks on different genres, different types of games, different game mechanics. Whereas the West seem to have got semi-tied down in, okay, we know this works, let's repeat. Yeah, I mean, look, there's also the only elephant in the room that, you know, the Chinese studios have thousands of people and the 996 culture and, you know, they're arguably some of the more profitable studios. So they have the financial means and resources to take more shots on goal or shoot in different goals, right? In Europe at the moment, we don't, we've got a lot more financial constraints and as I thought, but look, again, go back to the AI piece. I think everyone I spoke to was talking about prototyping and every single person said, AI is a massive component in prototyping now. So there was hyper casual, we were able to do very quick two-week prototypes and then hybrid increased the prototype window for like two weeks or two months. Every time you add an additional week, the cost goes up of that prototype. And if it takes 10 prototypes, then that's time and money. So if we can now get back to the point where we're doing two to four-week prototypes, instead of two to three-month prototypes, because AI has sped everything out, then we are able to take more shots on goal, Adam. And that's where we start, can start to be better. Bobby from AppSlide, his presentation that he did at GDC, he actually created a game "Quack the Planet", which is interestingly titled on purpose. But if you go on either of the app stores, you can find it, you can play it. He actually built that in a week. It was kind of a challenge from marketing of, wait, you can't build a game in a week using just AI. And it was really cool. I mean, it works. It's essentially flappy birds, free skin, with a bit more in it. But it's kind of, it works. And he's released it, and it's on the App Store, and he's done that in like no time at all. I think we've got a blog post on it somewhere, so feel free to work. It's possible for people who don't even have like full-on gaming experience or anything above the level. I had two instances at Gamescom, so first was, you know, Dan Marcus, the CEO of Cohort, built this wave rider game, and it should be in place. I'm sorry, he showed me. Right, mate, I'm telling you, Dan's not a techie guy. Right now, Vince, Dan, love you, man. He's a business buddy, he built this game. And then also, I caught up with Chris and Dan Mo from MetaPlay, and they did the same thing. He created all of these features using the new agentic support that they have in the product to create like, you know, PVP systems and stuff overnight. Chris is incredible. Did he? I've got the BIs. But it'll bring their other costs, which maybe you can then reinvest in marketing. Who knows? And part of it's exciting, man, like again, the AI impact on prototyping and rebalancing some of the cost components in speed to market. These are the things that excite me about this being adopted in that part of the ideal use case for it, isn't it? It kind of takes me back to the days of Facebook Canvas, where it was like, right, let's try the next thing, let's try the next thing and see what works. And eventually, you found something that stuck, you know, but it's that kind of, it's that kind of quick generation of ideas, which is exactly the use case for it. Yeah, man, I completely agree. It's the thing that I, it's the thing that in my studio, we're doing as well now, like prototyping is heavily linked towards, you know, the devs using AI in a number of ways. But ultimately, yeah, everything is kind of co-created now, you know, you've got one dev using codex or Claude whilst they're coding and, you know, they're able to code free X, what they did previously because of running this stuff on the side whilst they're actually doing their own coding. And this is exactly what I think we should be doing for, especially when prototyping takes 100% 100% well, we were going to do 15 minutes and we've ended up a half an hour. We'll probably call it a day for the first episode. I've been looking at the club thinking F, you know, like we've overrun again. But the good news is people have only got seven days till they hear from us again. So, you know, you've got that to look forward to. That's really it. Okay, thank you so much. Let's, let's do this again soon. Yeah, that's it. So I'm right. I'm smart. And that's it. Have a good day, everyone.