Partner at Kleiner Perkins, Kleiner Perkins
GDC 2024: AWS for Games and Clevertap for Gaming - Live Ops Symposium - Keynote - Bing Gordon
From the first Gaming Live Ops Symposium held at GDC 2024, hear from former Chief Creative Officer of Electronic Arts and ...
About Bing Gordon
Bing Gordon, a partner at Kleiner Perkins and former chief creative officer at Electronic Arts, has continued to speak publicly about the evolution of the gaming industry, the metaverse, and investment strategy. In a June 2025 podcast appearance, he discussed his early career at EA, including writing the company's business plan in 1982 and raising $2 million from Kleiner Perkins and Sequoia. He stated that his metric for a board is "one valuable idea received by the management team per hour of a board meeting" and that "companies go astray when the boards don't ask hard questions." In a March 2024 keynote at the Game Developers Conference, Gordon argued that the game industry has historically been underestimated by investors, stating that "75% of the time investors could prove that the game business would always suck." He also described the metaverse as a "fundraising tool" similar to the "Information Super Highway" of the 1990s. In a January 2024 interview, he predicted that the law will eventually "start recognizing virtual worlds as physical real estate." Gordon has also emphasized the importance of founders as "learning machines" and noted that venture capital firms like Kleiner Perkins seek "every now and then 100X return" over a seven- to ten-year period.
Transcript (25 segments)
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Bing Gordon0:18
Thanks. So I want to haul ass and try to cover some stuff quickly and then get on to other people. But I went to the first two Game Developers Conferences, and looking out at this group here, there's more people in this room than there were in the first two GDCs. And the theme of the first two GDCs, there was a guy named Chris Crawford who did a game called Eastern Front on the Atari 400/800, and it was about 40 whiners one year and about 80 whiners the next year. So if you're thinking the game industry is hard right now, the whining was retailers don't sell enough of my product. And I had to tell them, I'm a marketing person. Retailers think their job is to put it on the shelves and pay you after the thing sells, and they don't do any marketing, so you're getting it all wrong.
I'm a fan of rhetoric, and what I found is that if you have a bad lecture, wear a suit, and if you have something that doesn't quite make sense, put it in rhyme and it sounds more believable. So here you go, this is an unpaid ad: Will upside fall into your lap if you get hooked up with CleverTap? If your game is drowning in the red ocean, will CleverTap and AWS be key to your next promotion? Getting high RAS is not like shooting sitting ducks. You need great execution and you need some luck. Loving what you do, however, is more controllable than making big bucks. And remember, as we grew the game industry 100-fold, 75% of the time investors could prove that the game business would always suck. Okay.
So I got four things for you. The first I call 'We're not dead yet.' This seems like a pretty lousy time to be in the game business. People getting laid off, there is this red ocean. I've been through a lot worse. Some of you have only been in the games business for about the last five years when money was free and even COVID was good for game devs. You don't know how bad it really was. So in 1982, when Atari shipped the game called E.T. and shipped 5 million and got 6 million returns, The Wall Street Journal and The New York Times could prove the game industry was as dead as the hula hoop. So we were the hula hoop, interactive entertainment. And it took a lot of 'you don't know' to persevere.
In 1986, John Sculley—any of you who are a founder and ever feel bad about finding a successor, take a lesson from Steve Jobs: don't hire a suit that the board likes. So that was John Sculley at Apple, and he said in 1986, 'There's no home computer market.' And all the way until the iPhone, Apple proved that as far as Apple is concerned, TV didn't matter, computer games didn't matter, and meat was illegal for your children. And then Apple also was the platform for people who didn't have friends. You got to pay attention to who the chief designer is.
In 1988, after Nintendo saved the game industry, at Electronic Arts I saw John Sullivan at Toys 'R' Us, and he said, 'Bing, sit down, I want to show you my weekly sales.' And he had, for those of you who remember when computer printout files came like that, and there was no online desktop Excel spreadsheet, he had paper pages after pages. And he said, 'Look,' and he turned a couple of pages to show his best-selling computer game after four pages of Nintendo games. And he said, 'Bing, your best game is doing zip codes, and Nintendo games are doing telephone numbers.' That's a math joke.
And then in 1993, our sales went down 30% because we had our first console trough. So any of you who make games for consoles, they have six-year life cycles. And why six years? Back in the day, because Moore's Law: six years at a double every 18 months is a 10x, and consumers think an order of magnitude change is a whole new category. Well, what it meant in the fifth and sixth year of any console, people get bored. And so that was an existential crisis for us. 2008 was a financial crisis, and 2023 post-COVID was kind of a crisis. Almost everybody, including Amazon, including Twitch, thought that COVID was just an acceleration of 2030, and then we found out it was just a short-term bump.
Now, the next thing, I did mention investors. In the last 42 years I've been in the business, 25% of those years investors have believed that investing in the game industry was okay. So 75% of the years nobody could raise money. And from 1983 to 1992, that was a hell no. But anyway, for about the last four years, with things like Roblox and Dapper and Activision at huge valuations, it was really easy to raise money. And now guess what? We're back to where we usually are. 70-75% of the time you can't get money from anybody but your mom.
At EA, a lot of the problems along the way were very self-inflicted. And so the theme of this get-together is avoid self-inflicted wounds. And if you're in the AAA business, you have all kinds of self-inflicted wounds. And the main one is you're not paying attention to understanding customers. Because you're still a B2B2C business in the AAA business, even though it's gone to digital delivery, the AAA companies aren't becoming data science companies yet.
When I left EA in 2008, on the mobile front, the head of EA Mobile said, 'Why do we care about this iPhone thing? Tetris is the number one game on BlackBerry. It's going to be the number one game on iPhone. It's going to be a 12% market share. We don't even have to pay attention.' So how many people play Tetris on their iPhone this year? And then the other thing was the head of sales at EA—I'd been on the Amazon board for a while—and in 2008, I asked, 'Well, how big's e-commerce ever going to be as a percent of commerce?' He went, 'Yeah, 2%.' Wait, wait, wait. And how big is e-commerce of games going to be? And, you know, 2%.
And I finally left EA when the CEO at the time said, 'Games will always be a packaged goods business.' I think Netflix has proved that movies is not always going to be a packaged goods business. But the people who don't pay attention to the change in technology and consumer behavior are having self-inflicted wounds.
So meanwhile, for those of you who have friends, I think somebody said there's 100,000 layoffs in the game business. Good news: there's no layoffs in the gamification business. In the words of Marc Andreessen, 'Games eat the world.' So here are some places that need game makers. The education business—companies like Duolingo and Newell—it's about a hundred billion dollar business overall. The education business, everybody needs game engineers, game product managers, and game designers. It's pathetic the way they make decisions, except for Duolingo. So if you're trying to self-improve yourself, don't play Clash of Clans, play Spanish.
The medical business, which is a trillion dollar business—I'm working with a couple medical companies—and it just turns out that most humans touch the medical profession twice a year. And in the games business, in the AAA business, they touch consumers a couple times a week, and the mobile business we touch kind of three to seven times a week. And the medical business finds if they could touch people once a week, payouts are smaller. So any of you who are in the business of engagement and retention, the medical business knows how to monetize. If you're a monetization hacker, you don't need to go hang out in the medical business, you can go in the fake medical business like Calm or Noom. But that's a one billion dollar business that needs people like your friends.
Employment—I work with a couple employment companies—and recruiting, training, employment is about a hundred billion dollar business that needs game makers. The dating business—nobody here goes to dating apps anymore, none of you are basketball players, right? Okay, so the dating business needs to be gamified. And the problem with the dating business is they don't have great retention. So if they succeed with someone, they never see them again. So it's a hard data business. So if you go into the dating business, I think you want to make sure that your customers wear wearable sensors so you can get data when they're not in the app.
The e-commerce business needs to be gamified. And everybody I meet—I was involved with the early days of Prime on Amazon—and everybody says, 'I think I'm the best Prime customer ever.' Well, if you're a game designer, you go, 'I know how to get engagement from that person.' What's your Prime streak? What's your Prime score? What's your Prime gamer score? And we know that stuff would work. All you need is a couple people like you in the room. And the biggest business of all is the $30 trillion global government business. And clearly voters get gamed. There's one party that basically says, 'I'm not going to tell you exactly this, but if I keep gay people who live a thousand miles from you from getting married, will you give me 10% of your money?' And a third of us voters say yes. It's just not put in that way.
And then finally, the solution for all of us is execution. So the games-as-a-service business has increased LTV a lot more than the AAA business. But the games-as-a-service business in mobile, we've increased the monetization per hour by 10x in the last decade. And that's just through constant experimentation. So that is the art of product management. And then the engineers who built experiment harnesses so that Apple allows us to run different features that look to iOS like data and actually is a new feature. We are in the era of the quantified customer. So if you can't add and subtract and you're an English major like me, Duolingo has a math app now so you can learn about obtuse versus acute angles.
There's a concept of—we're in the era of the server-connected customer. If you're working in a company that does not have instant server connection with customers, you probably should either change companies or find an engineer who can instantiate a real-time server connection. We're in the era of high-value actions. So we're all in the business of predicting and doing R-squared on actions that'll predict some kind of future behavior. And when I grew up, CRM—customer relationship management—the state of the art was putting all customers into five buckets and you just decide which of the five offers you make them. And we're in the infinite CRM now, if your engineers are good enough.
And user acquisition—for those of you who've been in mobile—we've just reached the era of red ocean in user acquisition. We have also reached the death of free earned media. Influencers all figured out that they're just an ad platform that doesn't have to be auditable. So growth hacking with user acquisition has gotten to be just about impossible. For a while there, it looked like Discord could be the new free model, but it's not.
For those of you who are depressed about AAA, it looks to me like development cost in AAA is up 6x in the last 10 years, and freemium kind of 2.5 to 3x. And that is the death of a media business when the cost of development goes up a lot. The good news is if you have what we call a forever franchise. The first one of those that I came across was Madden. The first year we did Madden, a guy named Rich Hilleman and I proposed to sequel it the next year, and we got told by Walmart and Toys 'R' Us, 'If you make it, we not only won't carry it, we'll ship all the remainder from last year back to you and not pay you for it.' And we said, 'You guys are stupid because we'd buy it.' And so we did it. So that's how Madden became a forever franchise.
And there's a lot of lessons from the death of Hollywood. So any of you who once envied Hollywood, Netflix has now turned the movie business into a 15 cents an hour business, which is worse than World of Warcraft, which is about the same as cable TV in the US. And this is the movie business that used to be a $2.50 an hour business, not including popcorn and parking and first dates. Good news is that World of Warcraft is better than Netflix. Yeah, World of Warcraft is way more exciting. World of Warcraft is my favorite game of all time, and I'm back to playing it again, Season of Discovery. I'm an Alliance person, and I don't like the ugliness of the Horde, but I think the Horde is like the Republican Party. They're a minority, they're ugly as hell, but they'll do anything to win, and they're kind of more effective at it. So this is not really a political rally, but if you go into a PvP Zerg against the Horde, if you aren't really well organized, you're going to lose. So if you like the Democratic Party and you make bad speeches and bad platforms, even though you're the Alliance and you look handsome and all that, you're going to get your ass kicked.
So potential disruptions. We all talk about AI. So if you're at a company that's figuring out how to reduce its dev cost by a third and maybe as much as two-thirds—to get a AAA game down to $35 million in development instead of 100, or 50 instead of 150—your company is not long for the world, unless it's GTA or unless it's a company that's already doing a couple billion a year. But even something like Call of Duty or GTA in the next five years has got to figure out how to Midjourney themselves and GitHub Copilot themselves. I'm more excited about new categories that can be created. I go back to Ultima Online and World of Warcraft, where there's so many scripted characters who come to life because they've got like five scripted sentences. And I do think that with containers and generative AI, we're going to have characters who have real lives, not on screen.
So those of you who love Unreal and the renderers, you notice they're a lot like Pirates of the Caribbean at Disneyland, that the scripted characters start their script when your boat hits a switch right before the Pirates of the Caribbean scene comes into view. And when you go around the corner, it resets just as the next boat comes along. And that's the way our world games are mostly created. I mean, when you play WoW, you can see the NPC bad guy when they first come into view, they don't react, and you know that's kind of a benefit, makes you feel almost Godlike. But it's only because it's too hard to script them to do anything without bringing your RAM and your prosthetic knees to a halt.
I think there's going to be a whole new world of simulation and open world. So I was there at the beginning of simulations with things like SimCity and Chuck Yeager's Flight Trainer, and that made games believable for grown-ups. In the early days, grown-ups said, 'I've never gamed, but I'm playing a flight simulator. I'm saving money on flight school.' So grown-ups were puritanical about games, and moms were puritanical about spending. And then we got Candy Crush and they got flight simulator.
The next disruption is going to be games as platforms. And I think this is going to make forever franchises twice as valuable three or four years from today as they are now. Even if you see Fortnite start to become a world, Fortnite's going to become its own Disneyland. So if Disneyland doesn't become Disneyland, Fortnite's going to become Disneyland, and Roblox will become Disneyland.
I'm excited about the de-siloing of the game industry distribution. I'm hopeful that within 18 months, distribution costs are going to go down about 15% from 30%. Sorry. I'm pretty excited about blockchain for game assets, so that game assets, like books, can always be passed along. And then the whole game industry makes a lot of money on what we call breakage. I guess I should have gotten water that's not COVID. And I'm a big fan about decentralization. I think in general that when people have agency about what they do, everything becomes more valuable.
And then I promised these guys I'd now, with the rest of my allotted 15 minutes, ask me anything for the next hour. So that's it for the opening remarks, and now we're going to go to combat.