Voices of Video
Explore the inner workings of video technology with Voices of Video: Inside the Tech. This podcast gathers industry experts and innovators to examine every facet of video technology, from decoding and encoding processes to the latest advancements in hardware versus software processing and codecs. Alongside these technical insights, we dive into practical techniques, emerging trends, and industry-shaping facts that define the future of video.
Ideal for engineers, developers, and tech enthusiasts, each episode offers hands-on advice and the in-depth knowledge you need to excel in today’s fast-evolving video landscape. Join us to master the tools, technologies, and trends driving the future of digital video.
Voices of Video
Smart TV Gaming: Breaking Boundaries in Your Living Room
What if your TV was the only gaming console you ever needed? Join us for an eye-opening conversation with Vesa, the CEO of Return Entertainment, as he takes us on a journey from the nostalgic days of the Commodore 64 to revolutionizing cloud gaming today. With nearly a billion connected smart TVs globally, Vesa's vision is to transform these screens into gaming portals, breaking down barriers and expanding access to immersive gaming experiences. Listen in as we explore how Return Entertainment is leveraging smart TVs to unlock new gaming potential, directly in your living room.
Discover the allure and obstacles of cloud gaming platforms, such as Google Stadia, and learn how Return Entertainment is navigating these challenges. Vesa shares his experience as an early adopter of Stadia, highlighting the convenience cloud gaming offers compared to traditional consoles. We delve into the technical intricacies of delivering seamless gaming experiences on TVs, discussing dynamic buffering and AI upscaling, which enable smooth gameplay even on devices lacking a GPU. By simplifying processes for game developers and utilizing innovative streaming technology, the future of cloud gaming looks promising.
As we reflect on the evolution of streaming services, we draw parallels with the early days of platforms like Vudu and examine how Netflix is innovating with mobile phones as gaming controllers. The collaboration with partners like Samsung is paving the way for multi-screen gaming experiences, exemplified by games like Rivals Arena. Explore the strategic approaches to monetization, including the use of in-game ads and infrastructure optimization, which offer a glimpse into the economic potential of cloud gaming. Don't miss out on this exciting discussion about the future of interactive entertainment right from your television screen.
Stay tuned for more in-depth insights on video technology, trends, and practical applications. Subscribe to Voices of Video: Inside the Tech for exclusive, hands-on knowledge from the experts. For more resources, visit Voices of Video.
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Speaker 2:Voices of Video.
Speaker 1:Good morning, good afternoon, good evening to everyone who is here for this next edition of Voices of Video. As always, we're so happy to have you join us. We have a great time on a pretty regular basis every week or two. We talk with industry insiders. We talk with people who are doing a lot of very interesting things in the areas of video and so today I'm super excited to talk about cloud gaming who are doing a lot of you know very interesting things in the areas of video, and so today I'm super excited to talk about cloud gaming, and we are, you know, going to explore what is happening in that space. And so I guess, without further ado, visa, let me first of all welcome you to the show. So welcome to Voices of Video, thank you.
Speaker 2:Mark.
Speaker 1:Yeah, yeah, yeah. Well, you know we connected, I think, maybe a couple of years ago now and in the context of, obviously, NetInt, and you know what we do with cloud gaming. So as we got exposed to what Return Entertainment is building and has built, it made a lot of sense to have you come on and tell our audience what you're doing. So why don't you introduce yourself and tell us a little bit about Return Entertainment?
Speaker 2:Sure. So once again, thanks for having me. It's super, super cool this video series you are hosting. So my name is Vesa, I'm currently the CEO of Rittan Entertainment and basically my entire career I've been spending in technology, pushing the limits, what's possible, when you really kind of design and innovate new ways to do things. And it's kind of what drives me to kind of really trying to envision a future that is not possible today. But then you kind of plan your way how to get there.
Speaker 2:And I've also kind of always been a I've also kind of always been a very kind of avid gamer. So I basically grew up with video games. So I think kind of I feel lucky that I happened to born in the times when the video gaming was making its breakthrough, in the 80s, yeah, and I grew up kind of with my first computer gaming, like with the Commodore 64, big 20. Then the kind of different kind of Nintendo portable game consoles came and that was kind of a really, really big breakthrough. I remember kind of buying my first PC. I think it was 1994. And I remember the kind of the feeling when the Doom game came out kind of in the 90s and you were having the first experience, a first person shooter kind of.
Speaker 1:It was amazing.
Speaker 2:Yeah.
Speaker 1:I'm with you. I'm with you with that same progression. Yeah, exactly, brings, I'm with you with that same progression.
Speaker 2:Yeah, exactly, brings back a lot of nostalgia. Yeah, so having lived through this kind of evolution of video games has been kind of amazing. And now, of course, being part of the industry and kind of being part of defining what's coming next is really what drives me, of being part of defining what's coming next is really what drives me. So I've been working in the gaming industry and kind of really following my passion since more than 10 years now.
Speaker 2:I joined Robio Entertainment into mobile gaming like 10 years ago. I was running kind of all the commercial operations for Rovio's business, so dealing with our biggest partners. For example, I made the licensing deal with Lucasfilms for the Angry Birds Star Wars franchise games In 2015,. I was the GM for Rovio China, based in Shanghai, and really kind of a great experience personally being personally experiencing the really fast-paced, totally different market dynamics when it comes to kind of publishing games and you know there's no Google Play Store in China at all that was really fantastic and kind of the living and breathing, really the totally different pace of making things happen. It was super, super amazing. And I also kind of consider myself as a cloud gaming pioneer.
Speaker 2:I was already kind of soon 10 years ago, co-founding a mobile gaming cloud gaming studio called Hatch Entertainment, and that time we were basically really innovating how you can actually deliver mobile games in a totally new way with streaming, and we built a totally new technology and platform and we licensed more than 500 titles from different publishers and studios to bring to the service what we then rolled out to 21 markets around the world.
Speaker 2:So really kind of learned a lot through that process. What does it really take to build a scalable cloud gaming platform and launch it across the different geographies and how do you really kind of optimize the entire experience and all that? So a lot of work there and from that perspective. So we were a bit too early with Hatch and it didn't really kind of succeed in the end of the day. But, like I said, we learned a lot. And now I've been with Return Entertainment, where we are again continuing the cloud gaming agenda but now focusing on smart TVs. That's such a massive opportunity that really kind of drives me day in, day out. Yeah, like, think about it that there's soon one billion connected smart TVs around the planet and only a small fraction of those are being used for gaming today.
Speaker 2:Yeah, so there's this massive opportunity to kind of bring gaming to hundreds of millions of big screens sitting there waiting to be kind of unlocked for gaming, and I truly believe that cloud gaming streaming is the only model that can unleash this massive opportunity.
Speaker 1:Yeah, well, you would expect that I would nod very strongly in agreement with what you just said, especially about the opportunity on connected television, and I think there's a lot of things that we're going to unpack over the next 25, 30 minutes or so that I know will be really not only interesting but, I think, helpful to the audience, because it feels like or it seems like, as we're out talking to the market, there's two camps. There's the camp that is cloud gaming will never succeed it. I always sort of shake my head and wonder how in the world can someone really believe that? But I continue to be really surprised, even at some large publishers, and you know people who now you know, if you look at where they are in the ecosystem, as some of it makes sense, right, you know, you know well, your business model is based on selling a 60 physical media. You know physical media, a game, and you get to do this. You know once a year or once every 18 months or two years, when your new game comes out like I guess, yeah, that's a revenue model that you really like and it works pretty well and it has worked for many, many, many, many years, and so when you convert to streaming. All of a sudden it's like, oh, wait, a second. You know I'm only getting paid as someone plays. Or you know, it's like the licensing works. Very different, of course. Um, and and I'll get to why I believe that, um, you know, those folks need to look at history, uh, and the movie business, the entertainment business, to say you're going to get disrupted. So hello Blu-ray, hello DVD.
Speaker 1:But so there are those folks that aren't quite convinced, shall we say that it's economically viable, or that can really work, or that consumers are really going to quote like it, viable or that can really work, or that consumers are really going to quote like it. And then there are those, you know, like, like, like you and me and and, and probably a lot of our audience, who are like oh yeah, you know, this is absolutely the future. So I wonder, you know, as you have a lot of experience, you're out there every day, you know, talking to the publishers. You have a lot of experience, you're out there every day, you know, talking to the publishers, you're talking to the device makers, you're talking to the market.
Speaker 1:What is your perspective? You know, maybe you can, maybe you can help shed some light. You know, even saying, hey, I can understand why people who don't believe cloud gaming is viable. Here's some of the reasons why, and those may be true today, but they're not going to be true tomorrow or, you know, in the near future. And then let's talk about the optimistic side of it. You know why this is going to be the way that consumers ultimately consume gaming. You know participate.
Speaker 2:Yeah, I think the fundamental thing here is that it's not either or, so it's not that you know, either it's cloud gaming or it's the traditional model. I think they will kind of coexist and I think a good analogy is that you know, like my background, being with Robio and mobile gaming, is that when the mobile gaming era started, it wasn't that you took the existing console games or PC games and put them onto the mobile screens, so we had to basically create totally new ways of creating games, like for touchscreen devices. Also, if you think about mobile gaming, free-to-play became quickly the dominant way of monetizing gaming on mobile devices, totally different what we have seen before in the different gaming platforms. So I think, in the same way, what has kind of been a bit kind of a failure in the industry, that cloud gaming has been seeing just yet another distribution channel for the existing games and the existing models and that hasn't worked and that will never work. And I think you need to kind of in the very same that way that you know you, you had to kind of rethink what is gaming for mobile.
Speaker 2:I think now we need to think what is gaming for cloud? That kind of is fully designed and kind of the technology and the user experience. The monetization has to be made from the ground up for this market and for this model. And if you think about the failures in the past, like I think, google Stadia comes to mind. I think that's where they got it wrong that they tried to take the very same AAA console games and deliver those to the very same hardcore gamers who probably already had their game consoles.
Speaker 1:Exactly.
Speaker 2:And say, hey, play these same games with a bit more compromised experience. That will never play.
Speaker 1:Yeah, yeah.
Speaker 2:And like personally being a gamer, one of my favorite games is Elden Ring. I love the Souls games and I would never play Elden Ring with the cloud gaming platform, because it can be a matter of milliseconds whether you beat the boss or you will die. So I think, if you, if you think about audience like myself, hardcore gamers who love to play this kind of really, really demanding, fast-paced, real-time, sensitive games, you're always better off with a dedicated gaming rig, whether it's a console or gaming PC or whatnot. But then there's this kind of massive mainstream market out there, people who don't identify as gamers. We could call them players. They might be playing mobile games with their phone, but they haven't taken that step or the leap to extend their gaming to big screen.
Speaker 2:taken that step or the leap to extend their gaming to big screen and for that audience, we believe cloud is the right model because that will make the experience so much more simple, easier, more accessible and also cheaper to start with you don't need to invest, to buy a 600 bucks PlayStation 5 or subscribe to a kind of very, very expensive kind of subscriptions or whatever, but we can just kind of offer a very simple and easily kind of accessible way to kind of play games on your TV, for example.
Speaker 1:Yeah, yeah, yeah, totally agree and I think that's a really good insight. The gamer versus players. You know I, interestingly enough. So, even though I referenced in the beginning when you were talking about your journey, you know, even from those popular games in the 80s and 90s and and all I, you know I wasn't, I'm not really a gamer per se. You know, I've never invested a whole lot of time, you know, in mastering, but I always find myself gravitating, you know, towards, if I'm in a room or you know, around other gamers like, oh, you know, show me the latest game, and you know. So it's like I have an have, an affinity, I guess, and the reason I say that is that I would be a player and so it's very interesting. Uh, what you point out about stadia. So I jumped on stadia, I had the very first um.
Speaker 1:I think they called the founders pat and it wasn't the fact actually I think it was yeah, yeah, yeah, anyway, you know I had the first controller and I was, you know I was so excited. Now, in all fairness, you know, even at that time I was, you know, I was working in and around, you know, selling technologies to, you know, onto these large platforms and you know, talking to Google, et cetera, platforms, and you know talking to Google, et cetera. So you know you could say, well, you know, in reality, that was kind of, you know, part of you trying to, you know, license technology and sell Google or others technology, and that certainly was true. But, frankly, I became a little bit of a gamer during that time. And why Is it because and I think a lot of our audience can relate to this, you know, is it because I can't afford a console?
Speaker 1:No, I can afford a console, you know, thankfully. So it's not that there's a barrier for someone like me, and there are millions and millions of people like that too, where, ok, four or five hundred bucks, you know that's not, I'm not suggesting it's not insignificant money, but it's possible, right, you know, a lot of times it's about what you choose to spend your money on. Rather, can you, you know, um, so it's not because I couldn't afford the console, um, but it. And not even because, oh, then you know, I have to buy some games. Ooh, you know, like, okay, I could buy a few games as well, but it was the every time I would think about it, ah, I think I should go get the new PlayStation, I should get the new Xbox, you know. Or it'd be like, oh, then I got to unhook my entertainment system, I have to connect it. Literally, this went through my mind, you know, like, oh, then I got to connect it, then I've got to figure out how I'm going to get an Ethernet cable to it, because my Wi-Fi is not that good, and so, guess what? So I would never do it right. Now people can laugh and go, oh, come on, you know, it's like those things are and, yes, they're easy to solve. Of course, no-transcript. And I was actually a little bit sad when they, when they killed it.
Speaker 1:You know, I had great fun because I could sit down just and within 45 seconds it was some of the games, even a little bit less than that, you know it was, you know, the stream started and I was playing, you know, and so 20 minutes before my wife had dinner, you know, I'd be like, hey, I'm going to go play a game, you know, and I'd sit down at my desk and I'd fire it up, you know, and I'd play, you know it was fun, so. So okay, let's, let's come back to return entertainment and tell us then what exactly? Because the the challenge, what exactly? Because the challenge I think also with cloud gaming is that you have all the technology required to deliver that gaming experience, and that has to be built, or you need to leverage a platform that can deliver that for you.
Speaker 1:But then you need the content and you know, unfortunately it's not quite as simple as licensing a mezzanine file. You know, like, like when you license a movie, for example, from you know, from, you know universal pictures or something, it's not quite as simple as taking mezzanine file, encoding it and then you stream it out. You know You're mesing, filing, coding it and then you stream it out, you know. So what have you built at Return Entertainment? You know how much of the end-to-end experience have you built? What are you, you know, leveraging other solutions? Like, why don't you tell?
Speaker 2:us what that looks like. Yeah, sure, and I think, like I was saying earlier, that we really try to walk the talk here, that we believe that in order to be successful with providing a great gaming experience for the TV audiences, you really need to build the technology and the whole user experience from the ground up for this new audience and this new way of playing games, targeting these players, not the gamers. And that's what we've been doing. And cloud gaming is also a perfect delivery model for TVs, because if you look at the TV install base, there are multiple different manufacturers, there are multiple different platforms, there are varying specs in terms of what are the hardware capabilities on those TVs.
Speaker 2:The replacement cycle of TVs is really long, so it's more than 10 years. So people have these very old TVs still sitting in one wall in one of the rooms and they don't kind of renew those. Like mobile phones. The renewal cycle is like less than three years. So it's much, much faster that you always have the latest, consistent hardware there. But with TVs that's not the case there. But with tvs that's not the case, so there's no way you could run modern, demanding games natively on those devices, because it's just such a nightmare. You can, you can never get it.
Speaker 2:Yeah, and, and, yeah, and, and that's why I I truly believe that the only way to serve this massive market is streaming, because it's also so much more simpler and less complex model for the game publishers. Like you just mentioned, how you get the games. If you would need to ask the game developers to build a new version for every single different TV platform, they would never do it because the maintenance burden is just too much. I remember during my Rovio days we got always asked there was some big company in India who had some own kind of mobile platform that, hey, we can pay you this many millions if you just make a new version of Angry Birds for our platform. And we always said no, because it's not about the money you get initially, but you're actually committing yourself to a very long maintenance kind of risk and it's just going to kill you.
Speaker 2:So that's why we believe this is the right model.
Speaker 2:And there are a couple of things that are critical when you think about building a business around cloud gaming.
Speaker 2:So one thing is, of course, the user experience and, like I was saying earlier, that you can never win or be successful if you try to offer something that is a compromise or a mediocre experience compared to the alternatives.
Speaker 2:So you need to have the experience right. And then the other thing, what is super important, that you need to be able to run the business with profitability. Also, design and architect your, your, your system in a way that you can actually scale it and run it with cost efficiency. And these have been kind of the two cornerstones for us when we've been building our Smart TV gaming platform that we're designing the whole user experience so that it's super easy, simple and the visual quality is there and the gameplay is super smooth and just works. And then, on the other hand, we had to kind of reinvent a bit how do we do the streaming so that we can do it cost efficiently enough that we can monetize at the level that makes the equation hold water. So that's kind of the being the kind of the cornerstones of what we've been putting together.
Speaker 1:Yeah, yeah, it makes sense. And so, getting into the specifics, then let's talk about how you actually deploy and work with your partners, and so my question is this is this like a white-labeled platform that you bring to a TV manufacturer, for example, or to anybody who wants to just stand up a store a gaming experience, or are you bringing them the technology and then they are implementing it, they operate it? You bring them the content. Maybe they bring content, or is there some third model, like what's your approach here?
Speaker 2:Yeah, I would call our model kind of a platform as a service. So we operate the platform. We provide the fundamental technology that you can use to offer gaming on TVs to mainstream audiences, build a consumer-facing subscription service or kind of starting to build a game catalog that we can then basically start marketing directly to consumers. We are primarily working with smart TV manufacturers, so our main partner today is Samsung. It's been such a great thing for us to work very closely with the biggest TV manufacturer on the planet and they are fully aligned with our vision of serving these players, these mainstream TV viewers, who don't own a game console and who are not necessarily willing to go all in to video games but who might want to kind of experience beautiful gaming on their Samsung TVs. And that's what we are doing. So we've been now live in the US market on Samsung TVs with our debut game, rivals Arena, and basically validating the technology, testing that everything scales, collecting a lot of user feedback on the user experience, and also kind of what we've been testing now for the last few months is that we have also now enabled free-to-play monetization on the platform. So we are monetizing the gaming experience with in-game video apps. So these are all the kind of the building blocks that we need to get right before we start scaling more massively.
Speaker 2:But really, of course, I'm not able to talk about the other potential partners we are working on at the moment, but it's basically many of these big smart TV manufacturers which we are discussing at the moment, plus also there's a lot of this kind of other kind of connected TV device brands out there, without naming any, but it really seems that there's kind of a lot of momentum at the moment around TV gaming. Everybody's kind of trying to figure out what's the right way to do it and at least because, you know, I've been running around the world for the last few years meeting basically everybody, it's been at least very interesting to see that that, uh, there is not that much competition and we are actually in a pretty unique position today with what we are offering and hence we have a lot of interest from the major industry players to kind of trying to figure it out together so are you guys actually delivering the the game and the streams, or is samsung, for example, or whoever your partner is?
Speaker 1:uh, without being specific, running the infrastructure, like that's? One of the things that we hear is um, is, there's two major hurdles? Uh, there's more, but there's two. One is the content, you know. So everything's go, go, go. Yeah, this is amazing. We would love it. And then like oh, but where's the content? You?
Speaker 1:know, how do I license that and? And that's not an insignificant hurdle right there, as you well know, you know from your background um, but then you get over that and then it's like, oh, but now who's going to operate the infrastructure? Because, let's face it, a TV manufacturer is not. They don't even operate their own streaming services. I mean most don't, in fact, even those you know, even even like a Roku, for example, it's partnership, even though there's Roku brand, right, you know, on their various services, or they're aggregating, you know, streams and kind of presenting them in the UI. So what is your model?
Speaker 2:Yeah, we are basically offering a total solution, like you know, a complete package that you know, whether it's Samsung or whoever could actually take our platform. We can integrate our platform to any smart TV OS or we could even plug it into any existing smart TV application. For example, we are discussing with many of these video streaming services out there. Many of them are interested in providing gaming in the future for their subscriber base. Some of them are already testing it publicly, as we know. But that's kind of how we have architected our solution that it can either reside as a standalone app on the TV that you download and you can then start offering gaming through that app, or it could be a kind of existing app, for example, a video streaming service app that you have on your TV. We can basically plug in our solution into the existing application experience so a streaming service could actually start and easily offering gaming as part of their software.
Speaker 1:So are you running your own infrastructure, do you have your own data centers, or are you running this on some public cloud?
Speaker 2:We are not owning the cloud capacity ourselves. We are running on public cloud. We are very agnostic on the cloud platform itself. We are today, for example, the collaboration with Samsung in the US. We are running on AWS, of course, super high quality stuff we can access, but of course has its limitations from the cost perspective, for example.
Speaker 1:Very expensive.
Speaker 2:Well, everything is relative, of course, and I just actually flew back from Bangkok today, so I was there for a few days. There was the Android TV Summit by Google.
Speaker 1:That's right.
Speaker 2:One year organizing the Android TV Summit for all the different Android TV ecosystem members.
Speaker 2:We were demoing and showcasing our platform there, running on Android TV OS, and we were using the cloud infrastructure from our partner, aether.
Speaker 2:So we are partnering with Aether, which is a decentralized GPU cloud provider, and it's a kind of perfect fit for our technology, because the way Acer works is that they are basically pooling unused GPU capacity from the market and then reselling this otherwise idling GPU capacity with a very affordable price and since we have developed a very latency-friendly streaming protocol that we don't need to have the data centers very close to the players. We can very easily access, for example, aether's capacity wherever they happen to have it available, like now this week in Bangkok, where we were demoing the solution. We were streaming from the Acer hardware in Singapore. Also, I was testing it, like two weeks ago we were in San Francisco, I was testing the solution and showing it there, streaming from Singapore to San Francisco, and even though there's a few hundred milliseconds of latency, we were able to kind of deliver a totally smooth gameplay experience. So that's how we are doing it, so we don't plan to kind of own our own.
Speaker 1:Yeah, at least at this stage.
Speaker 2:Of course, later on, who knows, when we have more scale.
Speaker 1:Yeah, yeah, yeah, understand on who knows when we have more scale. Yeah, yeah, yeah, I understand and we'll talk about as much as you're able to. You know what other large platforms are doing I'm thinking of, like Netflix, and you know some of the others that you probably have some visibility into. But I want to ask a question though. So does it mean that every frame of that game that the user is interacting with video frame, I mean is being rendered on the TV or on the device, and then you know, like maybe you can explain that, because I've also noticed in my discussions around cloud gaming it's really important to distinguish that, because there is a very considerable technology difference and also a delivery cost difference. If the game is entirely being rendered Game logic, the graphics engine, everything is in the cloud and it's being streamed, or if a large part of the game is being rendered locally.
Speaker 2:Yeah, we are fully pixel streaming, so we don't render rendered locally. Yeah, we are fully pixel streaming, so we don't render anything locally.
Speaker 1:Which makes sense, because a TV doesn't have a. Gpu A mobile device does, though Exactly.
Speaker 2:Back to what I was explaining in the beginning, that with TVs it would be a nightmare to try to have a consistent execution of some code on the local device. It just doesn't work. But there are a couple of things we do differently so we are actually having a very low bitrate stream. So on average we are streaming only like four megabits per second, which is like roughly one fifth of what the kind of the other today.
Speaker 1:So are you delivering 1080p? Is that your name?
Speaker 2:We are streaming 30 frames per second and 1080p resolution, but what we are doing actually is that we have a proprietary streaming protocol which has dynamic buffering, so we are putting a bit of latency into the stream on purpose. So this is kind of also fundamentally different approach. Typically, cloud gaming services are always trying to fight the latency and really trying to force fit a really kind of high resolution, 60 frames per second stream in a very kind of narrow pipeline, and we know that in reality it always is not perfect.
Speaker 1:Yeah.
Speaker 2:So we do it a totally different way, that instead of fighting the latency, we're actually embracing the latency and we are putting some latency intentionally into our streaming pipeline. Interesting, with the small buffer we are putting in there, we can actually handle this kind of last mile connectivity issues. If there's packet loss in the network or jitter or whatever, we can always, with the small buffer, deliver a butter smooth gameplay video on the TV screen. And the other interesting kind of benefit what we are getting from this buffer is that basically all the modern smart TVs have AI upscaling functionality. But if you are using a standard cloud gaming service which is typically running on real time protocol, like WebRTC, with the real-time streaming protocol there's no time for the TV to do the upscaling, so it's by default switched off. But because we are putting this little buffer in there and we are using our own proprietary streaming protocol, the TV has time to upscale the 1080p resolution to 4K.
Speaker 1:Interesting.
Speaker 2:So this is kind of how we are handling this situation that with very low bitrate, like four megabits per second on average, we can still deliver a 4K image quality on your big screen TV, and that's what matters to the people, because this kind of jitter and kind of slugginess of the gameplay is what's killing the feeling and it's killing the experience. We have chosen, rather, to kind of have a very smooth gameplay experience and not even trying to kind of stream 60 frames per second, and not even trying to kind of stream 60 frames per second or ensure it's always 4K, because it just doesn't work out and it's also very expensive if you need to render 4K 60 frames per second, so it's so many more times more GPU power needed compared to rendering 30 frames per second of 1080p. So I guess you know how the math works.
Speaker 1:Yeah, exactly, exactly, interesting. Okay, so tell us what you know about, for example, netflix and you know, and any other video platforms, because I think this is interesting. You made the statement very early on when you were saying, hey, we really believe in this opportunity for cloud gaming to the connected television, and I was very fortunate to have been involved in streaming video from not the very earliest days, but kind of the earliest days of when it became commercialized earliest days, but kind of the earliest days of when it became commercialized. And one platform that I was a part of called Vudu, which eventually got acquired by Walmart. We were in 2007,. We launched this.
Speaker 1:Um, you know, we, we kind of positioned it and thought it at the time is like a blockbuster. You know the video store, which is very huge and in the U S at the time, you know, for renting DVDs, you know it was a blockbuster on your television. You know it was like the whole, the whole value prop. You know I can remember the reaction and certainly from the industry, you know from the, from the studios, was like, well, we're pretty happy selling discs, thank you very much. You know like we're not that interested in licensing, licensing you content. So again the two hurdles Right. You know we had to get over the.
Speaker 1:You know the hurdle of like getting content and at that time it was pretty, it was, it was challenging. You know the hurdle of like getting content and at that time it was pretty, it was, it was challenging. But but then, you know, it was even just the the the consumer. You know, I I can recall so many interactions where consumers would basically tell us like I don't understand, like you want me to watch a mainstream Hollywood movie. You know, big, big screen movie at the quality of YouTube. You know, because, again, youtube had just come out of the ground, you know, was like about 18 months old at the time. Cat videos everywhere. So people's reference point was this. So they were equating kind of what they knew you know to like. Well, this is not the quality that I want. Why would I even want to consider doing this?
Speaker 1:Well granted you know our first product was 480p right, but then again we forget that was DVD quality. You know that resolution DVD was 480p right, and so that's why, all of a sudden, when Blu-ray came out at 1080p, you know it was like, wow, this is so amazing. And you know, of course, now we're like 1080p, that's almost like standard definition, you know so, as we're looking at 4K. So the question that I have for you is that, you know, I can recall 2006, 2007, 2008, 2009, 2010,. When there still were, was this feeling like, yeah, streaming's kind of this niche little thing. And you know, okay, there's certain use cases that make sense, but certainly I believed, and we believed that Voodoo and others who were building, you know, entertainment platforms at that time, streaming platforms that this was going to be dominant, this was going to be the new way of distribution.
Speaker 1:Well, now it would be crazy for someone to suggest that, oh no, we're going to go back to, you know, to carrying around, you know, DVDs, right, or Blu-ray. So what do you think, what do you make of? You know, like Netflix, introducing gaming and other platforms that you're probably working with, Like you know, what do you make of that? What do you understand? What their thinking is their mindsets. How did they view it? Is this just sort of like an additional add-on to, a little cherry on top to their core service? Is this a future for them? Like you know what, what are you hearing and what do you perceive?
Speaker 2:yeah.
Speaker 2:So we we have been in very close dialogue with netflix and many other other streaming services for years and, uh, it's been really great to see that, like, what Netflix is doing is fully aligned with our vision and we've been comparing notes over the years to kind of see what we are doing.
Speaker 2:And it's, of course, really encouraging that they have now started also testing TV gaming.
Speaker 2:And one of the friction points in cloud gaming today is that, of course, if you have a Samsung TV, for example, you can go to the gaming hub and you can subscribe to Xbox or you can subscribe to GeForce Now or Luna from Amazon, but these players we talk about people who are not gamers they don't have the game controllers and it's a kind of massive friction point today that basically, all these premium cloud gaming services, they offer AAA content that require a controller and it's really limiting the penetration of cloud gaming today, penetration of cloud gaming today, and that's why we are using your phone, mobile phone, as the controller which is the same thing what Netflix is now doing as well, and we believe that is part of what I was saying earlier that to get this right for TVs, you need to rethink the whole experience, and we believe that the phone, as the controller is the is the right way to get it, get it, get it working, because everybody has a phone and if you look what, what are the most popular games like in mobile games or console games, they are multiplayer games.
Speaker 2:so even even though you might have a controller at home, you don't have two or four of them, but everybody has a phone. And that's, for example, what we are now working with our partner, samsung. We are really trying to think that how do we bring people together around the big TV in their living room and let them start having fun with great games and great interactive entertainment and make it super easy to participate and jump into that fun, and phone is a perfect way to do that one. And, of course, like said so, we've been happily kind of seeing that Netflix is having the same model. Of course, amazon has also a mobile control app for Luna, so it's not the kind of totally new thing, but what we believe is kind of going to be new is that you will start seeing that games will be built and designed around this second screen experience and that is also.
Speaker 2:what really kind of makes me excited is that when you start thinking what all can be possible, when you start designing new types of games that don't only appear on one screen but can actually take place on multiple screens, like Rivals Arena, our debut game what we are now having live on the Samsung TVs in the US market. It's a tactical card battler and the phone is a perfect user interface for that one.
Speaker 2:So you see these epic battles happening on your 4K Samsung TV and you can have two players fighting each other and I have my cards on my phone. You have your cards on your phone. It's kind of hidden content, I don't want you to see my cards.
Speaker 1:and then I can play my cards from my phone and you are happy, interesting, wow, yeah, yeah, wow, that's, yeah, that's fascinating, because I can see where that also would allow you to shift. We talked about the latency. You're streaming effectively. I mean, I'm grossly, I'm not using there, but it's like the movie that's being streamed, right, you know, to the television and of course it's interactive and it's being rendered in real time. I get all that, but the actual, maybe the interaction or some of the more you know, down to the 100 millisecond type action is happening on your phone, right? So oh, here we go.
Speaker 2:Yeah, I thought that you know this would be a perfect-.
Speaker 1:No, this is great. Yeah, I thought that this would be a perfect-. No, this is great. Yeah, yeah, yeah, this is great.
Speaker 2:This is the kind of the blueprint of our cloud gaming platform. So the way we are doing it, the phone we use as a controller so that we are using your web browser, so it's a web app. Sure, so you're. Basically, you're scanning a QR code from your TV screen, the controller starts out of the box on your phone. It's running on your web browser, so you don't need to download anything to your phone or install any app on your phone. That's kind of one of the differences, like with Netflix or Luna, so you need to go to an app store and download your controller app, a native app.
Speaker 2:We are running on your browser and we believe that this is the most frictionless way to get people into game with the TV. So there's no hassle, no extra steps. You start the game on the TV, you scan the code and you're on and, kind of, the phone is directly connected to the cloud, so that you don't need to pair your phone with the TV with Bluetooth or whatever. You don't need to be in the same Wi-Fi. It's totally independent. So the phone can be on cellular network, it can be on Wi-Fi, it's directly communicating with the cloud and the controlling experience is fully with the cloud and the controlling experience is fully responsive, snappy, it's real time and then, like you could even say that the TV doesn't know that there's a game being played on the TV.
Speaker 2:We are streaming a video stream to the TV and the TV is basically our client app on the TV is basically only a video player, so there's no kind of complexity on the client side. It's just kind of playing back the video we are streaming Sure, and that's what the TVs are perfectly made for. So this is kind of really kind of capitalizing on the strengths of every component in this system of every component in this, in this system, and and and and.
Speaker 1:Back to you know my point earlier about, uh, when I asked you know, are you rendering something on the device like on the GPU? And then I I, you know, of course I went oh, I guess I answered my own question. Tv doesn't have a GPU, so what would it render on Um, or at least um? You know the vast majority of TVs, maybe there's some now that do. But the mobile device, even an entry-level mobile device, has a GPU, right, so you have more processing there. Well, this is super interesting.
Speaker 1:Yeah, so we had a couple of questions come in and I think this is a good time to hit those. One of them is around the economics and this. This is very applicable. You'll have a good answer for this because you mentioned the ad. You know the ad sponsored gaming, so you know where there's ad revenue in stream, et cetera, the ad-sponsored gaming, so you know where there's ad revenue in-stream, et cetera. So this person asked specifically you know can well. So it's a two-part question First of all, how they say, how are the economics of cloud gaming? But then the second part of the question is can they be profitable, meaning the economics with ad revenue in the $20 CPM range.
Speaker 2:Yeah, that's the million dollar question.
Speaker 1:And that's the right question to ask.
Speaker 2:Yeah exactly Without going too deep in the specifics. So currently our Rivals Arena game what we are now running on Samsung TVs we have in-game video ads in the game. We have both this kind of mandatory, non-skippable video ads which come like after every couple of matches you play. There's a kind of video playing after the match. And then we have also implemented rewarded video ads so that the user can opt in to watch an ad to gain some kind of more rewards or in-game currency in the game, and it's kind of very, very well proven ad format from the mobile game side. So the interesting thing actually is that with rewarded video ads you can have much higher CPMs as well, because when people are opting in to watch the ad, they are much more engaged with the advertising.
Speaker 2:So they are not going to the fridge to grab a beer, but they actually they are kind of more into it because they feel that they're getting value from the ads, so they are kind of also more engaged. So there are ways to kind of raise the CPMs beyond this kind of $20 limit. But currently we are roughly at the level that we are showing roughly 10 ads per hour. So it's kind of every five or so minutes there's an ad With $20 CPM.
Speaker 2:It means that we are basically $20pn, means that one ad show is like two cents yeah with 10, 10 shown apps per hour, we are generating 20 cents of ad revenue and, uh, that's kind of the, that's kind of the starting point when you look at your cost side yeah and with with the kind of ways we are.
Speaker 2:We are kind of doing the streaming kind of uh, not going to the 4K resolution rendering, not going for the 60 frames per second, and also kind of innovating a bit on the infrastructure side. We can easily go below the 20 cents per hour cost mark, way, way below. So the profitability can be there for sure, even with ad monetization. But then of course, when you think about gaming and the upside, there will be then of course a lot of eagerness to try in-game purchases as well of eagerness to try in-game purchases as well, and that is something that we really, really support.
Speaker 2:We'll bring support for the IAPs as well, because in order to really kind of make a blockbuster game for TVs and monetize that at the massive level so the ads are not enough, but you want to have the kind of upside that comes from this kind of addictive free-to-play organization make any sure we are used to the mobile games I don't know more increasing on the PC and console side as well, yeah, yeah, interesting, okay, that's, yeah, that's a good answer and that's good news because I it's important.
Speaker 1:If you can't make the business model work, you know, then you fundamentally don't have a business. So the other question that came in here is okay, sometimes I have to decipher what the real question is. So this one I sort of have to. So this one I sort of have to understand ASIC. But what role for AVPU? I think I know what this person is mobile device, you know, CPU, GPU, and then some sort of you know of a video additional video processor processing engine. That's a different question. Apu is a streaming appliance that one of our partners has. So maybe so I can give a response. It's probably largely aimed at me, but I would like to turn to give you a chance to just comment about what does the architecture look like? So you're running x86 CPU, I guess, for all your game logic, and then are you rendering everything on GPU. Are you then using, you know, the encoder that's on the GPU to create the stream, or like what are you doing?
Speaker 2:Yeah, we are running the games on Linux machines in the cloud, and then we are using GPUs for the rendering and encoding as well, so we don't have any kind of dedicated VPUs because we are using public cloud.
Speaker 2:Yeah, exactly, I do not understand if it is kind of a publicly kind of on-demand VPU capacity available in the market, but definitely so I'm fully convinced that you know if and when. For example, if we want to start building our own infrastructure, when you have scale, dedicated VPUs can really make it more efficient and more performant and also way more cost competitive.
Speaker 1:more efficient and more performant and also way more cost competitive, so that when you really start to optimize the entire streaming pipeline, then of course having dedicated hardware for every single step yeah the problems can really let you to fully, fully optimize the entire entire streaming pipeline and get the costs kind of in a totally different level yeah yeah, exactly yeah, um, you know, thank, thank you for that comment and I want to um actually cycle back around to even the first question around the economics and just make the point that, um, one of the um both challenges but but then opportunity is is that when you're using you know I'm going to say I'm going to use the word commodity, but when you're using sort of commodity architectures or commonly available that's a better word, commonly available you have x86 CPU instances running on public cloud.
Speaker 1:There's obviously GPU in those boxes or those instances are available anyway. You know that's standard available there's. You know AWS has it, gcp has it, azure has it, oracle has it. You know kind of everybody has it right. So you know there's a certain level of cost there. However, when you go to a dedicated solution and you know can't comment on what some of these large platforms are doing, but you know it would be very fair and it would be accurate to assume that they are not running a standard configuration and that's why they can afford, you know, that's why they can afford to offer cloud gaming, you know for free, and you know some of it is they just have the massive scale from their core business that they can afford to invest right.
Speaker 2:But it can also be a very expensive way to do it. Like, if you go back to the Google Stadia, they were basically running PlayStation hardware in their data centers and it didn't scale. At least I heard that. I don't know if it's true, but I heard this comment that at the best times, they have basically capacity for 1,000 concurrent players globally. Wow, wow, interesting, yeah, yeah, I don't I don't know about the yeah, I don't.
Speaker 1:I don't know about about those, about those density numbers, but yeah, so so the way that the largest platforms and what we're seeing is basically what they're doing is they are splitting apart so that the GPU is just rendering the frame and then they're using dedicated silicon for the actual video encoding and just for a couple, you know, data points. For those who are saying, well, how would that help or why would that be good? Because the GPU already has a video encoder, why don't we, you know, why don't we just use that? It turns out and a lot of people aren't actually aware of this, so it's important to know this.
Speaker 1:The GPU silicon, the way that custom silicon works is, you know, you only have so much real estate. You know, literally, it's limited by how many transistors you can put on the chip state. You know, literally, it's limited by how many transistors you can put on the chip. And so the GPU function that is, the literal graphics processing, you know, engine is about 85%. So it doesn't matter which GPU you're looking at. Obviously the designers can vary this ratio. You know, if you're looking at H100, they don't even have a video IP block. You know, because that's not what they're designed for, right, you know they're designed for large language models, et cetera.
Speaker 1:But if you look at the GPUs that you know we use in the context we're talking about here for gaming, only about 15% of the real estate is dedicated to video. Now, what is maybe a little bit counterintuitive is that the bottleneck is actually not on the rendering side, it's on the encoding side, and so, for a lot of these pipelines, when you really say, how do we just wring out as much density as possible on a single box, which, at the end of the day, that's what we're talking about If I can go from 40 or 50 sessions on a server to 200, well, I've just, you know, I just improved my density by 4x, or at least 3x, 3.5x, you know, very, very, very significant. And you do that by saying I'm going to let the GPU only render frames and then I'm going to use dedicated silicon to encode those frames, and so that's, you know, one of the techniques that is highly highly effective.
Speaker 2:I can so relate to that one, because we are currently so. The game we have now live on the Samsung TVs is an Unreal 5 game, and we have optimized the system so that we are using AWS, g5, 4x devices and we can run six to eight games on one GPU. But, like you said, if we were able to kind of take the encoding away from the GPU, we could run 10 games at least, or more on the one GPU, so that could kind of bring the cost per game massively down from the current.
Speaker 1:Massively.
Speaker 2:yeah, If we were able to run multiple games on one GPU. We could even increase that number on one. Gp you'll be able to kind of even increase that number.
Speaker 1:That much more, yeah, so, all right, well, good, well, wow, we've been going an hour. Visa, this is actually, I have to say, this is really a testament to, you know, to the conversation and how engaged we both are, because usually at about 45, 50 minutes you know, not because anybody I talk to is boring or the topic's boring, but usually I'm like, okay, it feels about time to kind of land the airplane. And you know, I looked and went, oh, I guess we better wrap up here. So, all right, yeah, well, it was a, it was a great conversation. Thank you so much for coming on and, you know, thank you to the listeners who hung in there with us for an hour. We really appreciate you. So, visa, you know, wish you all the best and we will be following, of course, your development as cloud gaming goes mainstream, which we know it will, we know it is. So, yeah, thank you for coming on. Voices of Video.
Speaker 2:No, thank you so much for having me and for those people in the audience who happen to live in the US. If you have a Samsung TV, so go to the gaming hub and try Rivals Arena out, Really experience the future of TV gaming yourselves.
Speaker 1:It's great.
Speaker 2:And I'm going to do that. And the rest of you, stay tuned. We will be expanding to other markets soon as well.
Speaker 1:That's awesome. All right, well, good, well, have a great day everyone.
Speaker 2:This episode of Voices of Video is brought to you by NetInt Technologies. If you are looking for cutting-edge video encoding solutions, check out NetInt's products at netintcom.
