Tim Sweeney: Fortnite, Unreal Engine, and the Future of Gaming | Lex Fridman Podcast #467

- Humans are by far the hardest part of computer graphics. because millions of years of evolution. have given us dedicated brain systems. to detect patterns and faces and infer emotions and intent. because cavemen had to, when they see a stranger determine whether they were. likely friendly or they might be trying to kill them. And so people in the world have extraordinarily. detailed expectations of a face. and we can notice imperfections, especially perfect arising. from computer graphics limitations.

Okay, one part is capturing humans. And so it involved really advanced, dedicated hardware. that puts a human in a capture sphere. with dozens of cameras in them, taking high resolution, high frame rate video of them as they go. through a range of motions. And then capturing the human face is complicated. because the nuance detail of our faces. and how all the muscles and sinews. and fat work together to give us different expressions. So it's not only about the shape of a person's face, but it's also about the entire range of motion. that they might go through. So that's the data problem.

There's a lot of other problems with computer graphics. You know, there's technology for rendering hair, which is really hard 'cause you can't render every, again, we know the laws of physics. It would be easy to just render every hair. It would just be a billion times too slow. So you need approximations that capture the net effect. of hair on rendering and on pixels. without calculating every single interaction. of every light with every strand of hair. That's one part of it. There's detailed features for different parts of faces. There's subsurface scattering. because we think of humans as opaque.

But really our skin is, we light travels through it. It's not completely opaque. And the way in which light travels. through skin has a huge impact on our appearance. And this is why there's no way you can paint a mannequin. to look realistic for a human. You know, it's just a solid surface. and we'll never have the sort of detail you see. - That kind of blew my mind, like thinking through that. I think I heard that sort of the oiliness of the skin. creates very specific, nuanced, complex reflections.

and then some light is absorbed. and travels through the skin. and that creates textures that are humanized, able to perceive and it creates the thing. that we consider human, whatever that is. All of that, while considering all the muscles involved. in making the nuance expression, just the subtle squinting. of the eyes or the subtle formation of a smile, it's a subtlety of human faces that you have to capture. Like the difference between a real smile and a fake smile.

But the way to show like beginning of a formation of a smile. that actually reveals a deep sadness. All of that, like when I watch a human face, I can like read that. I could see that. You have to have the tools. that in real time can render something like that. And that's incredibly difficult. - That's right, getting faces right requires the interplay. of literally dozens of different systems. and aspects of computer graphics. And if any one of them is wrong, your eye is completely drawn to that.

and you find it on the wrong side of uncanny valley. - The following is a conversation with Tim Sweeney, a legendary video game programmer, Founder and CEO of Epic Games. that created many incredible games of technologies, including the Unreal Engine and "Fortnite,". which both revolutionized the video game industry. and the experience of playing and creating video games. This is the Lex Fridman podcast.

To support it, please check out our sponsors. in the description. And now, dear friends, here's Tim Sweeney. When did you first fall in love with computers. and maybe with programming? - I had a brother, Steve Sweeney, who 16 years older than me, and at some point when I was a little kid, he went off to work in California for a tech company. and he'd gotten one of the first IBM PCs. And so for one summer, I think I was about 11, I went to visit him in California. It was my first like trip away from my family.

just to hang out with him. And he had this brand new IBM computer. and I learned to program over the course of a few days. in BASIC, I was just blown away with the capabilities. of computers at the time. It was unbelievable what they could accomplish. And I was hooked from that point onward. and very much wanted to be a programmer. - Do you remember what you wrote in BASIC? Is it a video game type thing? Is it like for loop, some numerical thing? Do you remember? - Yeah, it's funny, I have a perfectly vivid memory.

of all of the first things I learned to program. (laughs). I have a hard time remembering people's names, but like code really sticks with me. Every step and every challenge there were lessons learned. and you know, some of which I've come to realize. were just like me getting over some learning hurdles. But other things were actually shortcomings. of programming languages. and the realization that there are actually better ways than. what a programmer is learning to program for the first time. You know, a lot of what they're facing. isn't the challenge of learning a new art. It's friction introduced by failures.

of programming language design. And so I've constantly come back to those early lessons. there as I've progressed and done more. and more things including building programming languages. - Yeah, the friction and the pain is the guide. to learning in programming. Like if I were to describe programming journey. that would be marked by pain. And that pain, you shouldn't escape the pain. The pain is instructive for you. to understand programming languages. But do you remember what kind of stuff you were writing.

at that time? Just the early programs? - Yeah, in the early days. I wrote a little bit of everything. I wrote some games. The first game I wrote on the Apple II was... Since I only knew how to program in text mode, the computer would throw asterisks across the screen. They'd flow from left to right. and you'd have a parentheses on the right hand side. of the screen and yeah, looks like a baseball mitt. and you're supposed to catch the asterisks. That was my very first game. It took about a couple hours to build. and tune and I went from there.

But I built a lot of things. I built databases at different points. I built a programming language. and a full compiler for a language like Pascal. 'Cause I didn't know where you went to buy one of those. So I made my own. And you know, one of the fun things at that time. was Bulletin Boards. Before we had the internet in the hands of consumers, you used your modem and you dialed into a local phone number. and connected to whoever was running the computer there. And every town or city. had hundreds of these Bulletin Boards.

run by different people. with their own personalities and teams. And so I spent a lot of time Bulletin Board program. and learning how to deal. with database management and user interface. and dealing with multiple users concurrently and things. And so I don't know, I'd probably spend about 10,000. or 15,000 hours writing code just on my own as a kid. between like age 10 and you know, age 20. before I actually shipped a program to the outside world. - 10,000 to 15,000 hours. What was the value of the hours as a kid you put in,

in programming that led. to the success you've had in later life? Maybe this is by way of advice to younger people. in terms of how they allocate the hours of their early life. - Yeah, you know, it's not just hours. It's really striving to learn to understand. what knowledge you have, what knowledge you lack, and to continually do experiments. and work on projects that improve your knowledge base. And I didn't do this with a great amount. of structure or planning.

I was rather just going from project to project, doing things that I thought would be fun and cool. And with each project I learned new things. You know, learning about how to store and manage data, learning how to deal with advanced data structures, how to write complex programs. that have deeply nested data and control flow. Each one of those, you know, provided a lesson. which were later essential, you know, when in 1991 I released my first game. and over the course of that decade we went from,

you know, zero commercial releases. to the first generation Unreal Engine. But you know, this was largely just using the knowledge. that I'd built up over the previous decade. just doing fun hobby projects. And if I hadn't done all of that work, there's no way I could have ever built. the things that came later. - All the experimentation and all the exploration. somehow contributed, somehow made sense later on. Like all of that is integrated. somehow in the stuff you build. It's funny how life works, the pieces kind of come together eventually.

- Yeah, you know, there are definitely "Karate Kid" moments. 'Cause you know, all this time I was learning math in high school. and in college I studied mechanical engineering. And so, you know, you learn all kinds of math, calculus and vector math and matrices. and you know, all of these related fields, physics and stress and strain and how to, you know, deal with complex physical systems. And yeah, I wasn't really sure. how engineers would actually make use of that knowledge.

Do you just like forget about it. when you actually go off to do work? Or do you write down equations on paper? It was actually not clear as an early engineering student. what you do. But when I started writing the first generation. Unreal Engine and I was dealing with 3D math, I was like, wait, I know this stuff, I learned this. (Tim and Lex laughing). And you know, suddenly like the "Karate Kid", you know, you get to paint the fence and wax the car. and suddenly you put all the pieces together into, you know, a 3D engine based on whole lot. of accumulated programming language.

and math knowledge that. often knowledge gained without ever anticipating. that I might use it in that way. - Also, I think what's useful. is over and over learning a hard thing. and then showing to yourself, you know, that you can do it. That you can learn a hard thing. So then when you come to having to write a 3D engine. that in ways that haven't been done before, you're like, I've been here,

I've been here in this experience. Like I don't know what to do, but we'll figure it out. We'll learn, I'll learn all the necessary components. So just not being afraid of something new. - That's right, and constantly striving to make connections. between these fields and look for their applications. Long after I chipped on Unreal Engine, it was like going back through an engineering textbook. and looking at, oh yeah, I used that, I used that, I use that. And then I got to the section on eigenvalues, I'm like, don't know what the hell this is. But you know, it turns out eigenvectors. and eigenvalue were the critical breakthrough.

that made the Google search engine technology work. and stand apart from the rest. Because they found if you threw all the links. that exist in the web. and you know, links from in two different sites. and you put them in a giant matrix. and you conclude it, you found a dominant eigenvalues, then those eigenvectors described the best search results. for different things. And so constantly picking up knowledge. and looking for ways to put it together is the thing to do. And if you aspire to be a programmer, you've gotta write a lot of code.

and you've gotta continually learn new things and improve. And if you wanna be an artist, you've gotta continually. draw artwork all styles and all kinds. and constantly push yourself to learn more and more. because you never know exactly. what you're gonna end up doing in the long run. But the more knowledge you have and the more skills, the more chance you have putting it together. and being successful. - And whether you're a programmer or an artist, you should probably take linear algebra, even though it doesn't make sense at the time. - I found getting an engineering degree. and then never working in an engineering field, you know,

just being a computer programmer was immensely valuable. You know, I went to University of Maryland, which for some disciplines. it's kind of known as a party school, but they worked the engineers to death, worked really hard. (Lex laughing). And if you learn any engineering discipline, you learn massive amounts of math. and you learn the rigor of problem solving. You know, not just what you find from the Wikipedia article, but going through all the exercises. of solving complex problems. and building up series of solutions. to derive in an answer. It's valuable and it embodies the knowledge.

that you need as a programmer. And you know, people often go to university. and think, okay, my goal here is to get good grades, so I get a diploma and I prove. to an employer they're invaluable. Like, no, that's just kind. of the superficial bookkeeping of the university. The real purpose of all of this is to learn. And whether you learn formally or you learn on your own, it's the learnings that are really valuable in a career. And especially if you're going to be entrepreneur anywhere, it's really knowing the stuff that matters. and not having the diplomas is into, yeah,

there's ever more pressure to make rebuild society. more and more around credentials. Do you have this certificate? Do you have that proof? But like, you know, companies. that are focused on just building great products. and doing great things gravitate towards. people who do the great work. - Yeah, one of the great things about youth. is there's more freedom. There's just more time to learn. And people, when they go to high school, they sometimes think, "Wow, I can't wait to get out of this.

and be an adult and be free.". But it's not quite freedom. When you get a job and you start a family, all wonderful things, you get more and more busy. and less and less time to learn in the general sense, learn whatever the hell you want. That is a wonderful time in life. The teenage years, the early 20s. The 20s when you could just learn random shit. - Yeah, you know, I think this is something. that's kind of changing in America.

There's so much focus on grades and homework. and structure around kids' lives. You know, when I was growing up, you know, my mom would feed me and my neighbor's, you know, my neighbor's moms would feed them breakfast. and they'd, you know, be like, "Well be back by dark.". (Lex laughing). - And you know, we'd go out and we'd play. and we'd do all sorts of things. We'd, you know, explore the woods, we'd build go-karts, we'd, you know, salvage old pieces of electronics. and build you what we thought were. our spacecraft control panels for the, you know, fake spaceships we were building as play.

And we'd have an enormous amount of freedom. And you know, from basically being a little kid. through the time I went off to college, it had an enormous amount of free time. And some people just used that and waste it, and watched TV. Some people socialized. and some people really got into serious projects. So many people at all times were doing cool things. You know, I was programming, I was learning to build things. I was, you know, before I was releasing games to the world, I'd be like, yeah, having neighborhood folks over.

to play the things I was working on and check them out. And sometimes they're impressed and sometimes they weren't. and they'd have their own projects. and often we'd have spare time jobs. and everybody was entrepreneurial. Like everybody, you know, had a side gig. Sometimes you go around and mow people's lawns. or you'd, you know, rake the leaves up. and, you know, earn money and do... The freedom there, and the organic learning that occurred there, I think is something that is really critical. to the American experience. I worry is increasingly going away.

as society is ever more protective and sheltering. and makes it harder to get these experiences. - So on the video game side, when did you first fall in love with video games? - I've had a funny relationship with games. because my real aspiration has always been. to program cool stuff. I get more enjoyment of programming. than anything else in the world. And so, you know, my first really two formative experience.

with games were playing. this game called "Adventure" for the Atari 2600. It was like you moved this dot around the screen. and picked up objects like swords and fought dragons. and invaded castles and solved puzzles. Very, very simple iconic stuff, you know, rather than realistic graphics. And then the other game that really got immersed in. was "Zork," which was a text of adventure game. It would tell you where you are and what you see. and you type in commands like "go north" or "pickup sword". or "open door" and explore a world that way.

So the game didn't have any graphics, but in your mind you had this elaborate picture. of what you're seeing there. And it really brought inspired imagination. more than other things. And playing those games led me to (indistinct). and where I learn to program everything that I saw there. and that drove a lot of my programming. I learned how to move a player around the screen. I learned how to, you know, build a design tool. so I could build castles and save them off. and then play them in a game. And I realized there was a separation between the tools. that you use to build a game and the game itself.

And that if the more powerful tools you had, the more creativity you could unleash in yourself or others. And you know, I learned all the programming techniques. that supported games, how to parse text, you know, pick up sword and go north, how do you make that sentence. into an actual series of commands on the computer? And that was really, really exciting. I have to say, until the time that "Fortnite" came out, I played video games primarily to learn what they were doing. so I could go off and do that myself.

You know, I'd sit down, you know, when "Wolfenstein" tying came out. and then "Doom" came out, you know, I'd go through. and look at pixel by pixel, I'd move the mouse very slightly. and look exactly what was happening to figure out. - That's great. - What technique was being used there. and that was a puzzle solving at a grand scale. And it was so fun. - So, take me there in the early '90s. So you launched Epic Games in 1991, so the writing of your first big video game, "ZZT". What was it like? What was the technical challenges?

What were the psychological challenges of building that? - It was a funny project. because I didn't start out to build a video game. I just moved from an Apple II that, so my brother bought my family an Apple II. right after I'd visited him in California. So I've been programming on that for a few years. Learned a lot of techniques, but weren't many Apple II users around still. by the time that cycle came to an end. And so I'd just gotten an IBM PC of my own, I was learning.

to program and I realized I needed to text editor. So I started writing a text editor, you know, a text editor is a program to edit text files. You have logic to move the cursor around. and let people type things and backspace and delete. and do all of those, you know, mundane actions. And you know, one night I was like, I finished it up. and I was like, well, okay, I have a text editor, but this is pretty boring. And so I made the cursor into a smiley face character. and I had the like different characters you could place. in this document, perform different gameplay actions. Some would be walls and some would kill you.

and some would be moving objects. that could fly around the screen. And so this text editor that I made evolved. into little game editors. So I was building these levels for a game. I put a lot of time into like building an editor. and a primitive set of objects, about 20 or 30 different objects, enough to build a really cool and compelling game, but not so many that players would lose track. of what they're seeing. I started off just building different game levels. You know, the idea is you'd be on a series of board, they'd be connected by, you know, going north. passed the end of the current board would take you.

to a new one if it was open. or maybe it was block and you couldn't go there. I built the whole game world around that. and you know, this was the game that became "ZZT.". And I was having fun with it, building it and playing it, but I didn't know if it would really work. So I did this experiment. I started inviting neighbors over, like some adults, some kids of all different ages and sat them down from it. and said like, "Here's a game I made. Figure it out." (Lex laughing). And you know, I had to force myself not to tell them. what they need to do, right? Because I really wanted to learn if they were able to,

you know, discover it all for themselves. You know, today we would call this, you know, user experience test. and there's a whole field to research. around user experience research, but back then it was just inviting. some kids over to play the game. I took notes about what they got stuck on. and what they enjoyed and where they felt bored. and just iteratively polished the game. until I felt it was good and I put it out. and released it on, well this was before the internet, so there were Bulletin Boards. I upload it to a bunch of local Bulletin Boards. and from there it started spreading. because, you know, the way to build up cred.

for Bulletin Board users was to upload new files. and to claim that, "Hey, I was the first that brought this to you.". And you know, so there was a natural tendency. of the software to spread. I decided to use the sharer model, you know, so I didn't just build this one game. I built a trilogy of three games. And I released the first one for free. and I said, "Hey, if you'd like this, buy the two sequels.". And yeah, I included my parents' mailing address. and said, you know, "Send us $30. and you can get the sequels to this game.". And the checks started coming in within a few days. (laughs).

And I was making like, getting three or four orders a day, I was making like $100 a day. I'm like, "Woo, I'm rich." (laughs). Because, you know, being a 20-year-old, that was like a pretty big deal. - What did that feel like, just getting money. and probably feeling this immense success. from something you've created? - Well, you know, I looked at money always just as a tool. to help you fund accomplishing cool things. And you know, having enough. to do the things you wanna do is the critical thing.

It's always been just very utilitarian, but the knowledge that other people all around the country. and all then, you know, and a month later, all around the world were playing the game. that was mind-boggling. You know, that me, like this little kid, who'd put out. a game on a local Bulletin Board. could be doing international business. and shipping discs all over the world to players, you know, because the software was spreading on its own. It was just magical. And that was a new thing for software. Like that did not happen with mechanical devices.

Like you manufactured one, you sold it to somebody. and they had it and that was it. But software could spread. That was just really cool to see. And it made me realize there's really no upward limit. on the potential for business like that. You know, we saw Microsoft as a big juggernaut company. at the time, but it was like, hey, you know, if that Epic does games good enough, you know, we could accomplish what they've accomplished. with operating systems. And the sky was the limit. And I think this is the age we live in now, you don't have to be an industrialist. manufacturing physical products.

Anybody who builds anything digitally, if it's good enough you can reach the entire world. and build the, you know, next Microsoft or Meta or Apple. or Google or Epic Games. - It's such a cool origin story though. You start out building a text editor, so you're looking at this project, you're playing around with it, you're building up the tools. and it's such an inspiring moment. 'cause a lot of us start out building a project. and to allow yourself to see the potential pivots,

the potential trajectories that can go is really nice. To sit back, allow yourself to be bored. and like, "Ah, I'm gonna go this way.". I mean, that's like a crossroads. You came to a crossroads. I mean, you built, you know, compilers, you design your own programming language, you built compilers, databases, all this things you mentioned. And you started building a text editor. and then here came to this crossroad,

I'm gonna make this fun. And then from there, you know, one of the most legendary gaming companies was created. It's kind of cool, like that's an inspiring thing for sort of developers. Like be open to the possibility of creating something. you didn't plan to create and just go with it. Right, that's cool. - Yeah, and it was a bunch of learnings emerged. really quickly there. The neat thing I did with "ZZT" was I didn't just release. the game, I also released the editor with it. I built this tool so I could make these "ZZT" boards.

that people could play, but I also gave it. to all of the players themselves. And you know, like 30 years later I still run into people, you know, when I go to a game industry event, it was like, you know, "I grew up playing 'ZZT.'". And you know, here's an adult who grew up playing my game. (Tim laughing). And it was because it enabled anybody. to become a creator too. It had, you know, this old board editor. and it also had a little scripting language. so you could learn a little bit of programming in it too. And it kind of impressed. and it really set a formative principle of Epic,

which was that, you know, the company's mission. is to make awesome entertainment, but also awesome tools. and to share those tools with everybody. so that they can build their own amazing things too. And when we got into Unreal Engine a few years later, the interplay between us building a game. and us building tools that were widely used. by others was a critical part of that. And I think that's the sole reason. that Epic has been massively successful. And actually the reason that we've survived. all of this time is that by serving both creators. and gamers, we've been able to weather.

the ups and downs of the game industry. It's a brutal place for companies. We've been able to survive every financial downturn. and sometimes the Engine's been funding the business. because we didn't have a game. And sometimes the games have been funding the business. and it really set a principle in our culture. that's persevered and is continually. bought to their forefront. - But on the editor front, that's such a fascinating philosophy. that you always allow people to create their own worlds.

You have an engine from which you simulate the world. that the game is in. You have the actual game. and you also have the freedom for creators to create. various, you know, in "Fortnite" islands of their own. It's like with everything you ship, that freedom to create is always there. That's really interesting. - Yeah, and it's something we aim to do. more and more fully over time. You know, in the course of building "Fortnite,". we've built a lot of other tools,

they're useful for us too. because it's not just a game powered by Unreal Engine, but it's also, you know, a social ecosystem. where people can make friends and voice chat. and get together and parties. And we've opened up all of those social features. into Epic Online Services. and we give them away to all developers for free. because we all benefit from growth and that user base. And, you know, our goal is ultimately. to build the company's products. and the same technology that we share with everybody else. And to hope that foster a bigger and bigger ecosystem. over time where everybody benefits.

- If we could just linger on the '90s, (laughs). so you said Bulletin Boards, maybe you can explain. what that's like and also explain the birth of the internet, what that was like? What was the internet like in the '90s? - So the internet is a funny thing. It started out as this Defense Department research project. called the ARPANET, the Advanced Research Project Agency Network. And it's kind of like this secret thing. That became more and more open.

as they connected universities. Universities connected to the internet in the, you know, mid 1980s. And so if you're at a prestigious institution. with access to computers, you could get on there. But as a consumer, back then we had these modems, you know, this thing you plug into your phone line. and it dials up on phone number. and then, you know, it sends wild sound effects. over the telephone line. to send digital signals back and forth. And these were really slow three, you know, the first modem I had was 300 bauds. That means 30 characters per second of data.

So you're like sitting there watching a sentence. like slowly emerge character by character. as you're going online. But you know, that's how we got online. and we talked with each other. So you dial up to a local Bulletin Board, it'll be run by a person. Usually they have a computer or two sitting in their kitchen. or something that's running the Bulletin Board. and they have a small community. of a few hundred users all competing. to connect to that one phone line. It was often busy and you couldn't get in. And the more popular Bulletin Boards were hardest to get to. But you had all kinds of communities develop,

you know, and you could see like there was. the programming communities. where people talked about programming. There was the news and events, you know, community. I lived in the outskirts of Washington DC. so that was like a big thing. But then there was like the pirate community. where they're sharing pirate at Apple II games. and you know, very different community ethos. and mantras out there. But all, you know, all really nice and also very small. These Bulletin Board couldn't grow to the size of Facebook. 'cause your phone line couldn't take that many calls.

And, you know, then later in the 1990s, the internet which had been fostered in these colleges, that started opening up for the public. and anybody could connect to it. And suddenly the world took on life of its own. It became much, much easier to reach global audience faster. - And you would start shipping games to the internet, which is a bit of a crazy thing to do. because you're supposed to have like a, you know, a physical copy, but to post on the internet is pretty innovative. Even shareware is pretty innovative.

- Yeah, yeah, it's been a funny transition. for the game business. You know, Epic started out making shareware games. distributed digitally, but you know, as the first 3D games took off, like "Wolfenstein" and "Doom" from id Software. and then Unreal from us, took off, you know, to reach a huge audience of billions of users, we had to go into retail stores. So we worked with a retail publisher and they made a box. and they put CD ROMs in the box . And you know, then the world started transitioning. back to digitally, like, and that transition didn't start well, right? The initial transition of gaming to digital.

was all but BitTorrent, all piracy. And the other horror stories about games that would, you know, sell like 100,000 copies. but have 2 million users. 'cause most people pirated it. And then, you know, Steam came along. and introduced digital distribution. and made digital distribution of legit games so convenient. that most players moved away from piracy towards that. And you know, their practices followed by others.

and the early digital industry took form. - Yeah, it's fascinating. I mean, pirates do lead the way for innovation. (laughs). The same as the story of Spotify. You basically, I think most people when they derive value. from things like video games, want to pay for those video games, they just want it to be easy. And so the same thing with music with Spotify. But maybe just staying on the '90s, they're gonna be a lot of indie game developers.

will listen to us talking today. Can you go back to that mindset. and try to derive some wisdom. and advice to those folks when you were just. a solo developer, maybe just a small group of people. creating your early games. that eventually became this huge gaming company. But in the early days, what were you going through? What were the ups and downs? What did it take to sort of stay strong and persevere?

- Well, you know, one of the critical things. that Epic always worked hard to do was. to make something different that nobody else was doing. And to try to satisfy a small audience. rather than competing globally. with the game juggernauts. You know, back in the 1990s, Epic was new, but Electronic Arts and Activision. and the other big publishers had been around for a decade. And they were huge companies. It had giant retail distribution networks. You know, if I tried to make a game. and then convinced them to publish it,

I doubt I could have had a chance. And I doubt even if I made a successful game, that I would've made much money from it, though they might have. And you know, so the really unique angle to Epic. then was shareware. And that was just the idea. that if we distribute our game differently, then we can reach a much larger audience. than these bigger competitors. by virtue of this first episode of the game being free. You know, it was kind of the advent of. what later became free to play. And the logic of that is just as true now as it was then.

If the thing is free and anybody can get into it, then it's kind of spread from friend to friend. as people bring, you know, their real world friends. into the games they're playing. and, you know, have the opportunity. to build up a community around that. You know, so the other lesson there was just minimize. the friction of people getting into your game. Make it easy to get into and make it fun. And I think the other, well I was very fortunate, "ZZT" was a funny game. It was not like, much like any other game, it was had much worse graphics. 'cause it was all just text characters, smiley faces.

and, you know, other Greek letters. and things participating in this game simulation. They were kind of iconic representations of characters. rather than real ones. And you know, this was decades into the age. of real graphical games with interesting graphics. And so it wasn't even trying to compete in that area, but it was able to compete in a different area, which is that, you know, it wasn't just the three games I'd made. and shipped as a trilogy that were successful.

and drove the success of the product. It was the fact I released an editor. and there's a whole community around it. And you see that trend is repeated itself. Like there was know "ZZT" was one of it. Before that there was. "Bill Budge's Pinball Construction Set,". that was a 1980s Apple game. that let users build their own pinball tables. And since then you've had. some of the world's most successful games follow that path. Like "Minecraft," you can build your own stuff. "Roblox", now "Fortnite Creative". and underwriter for "Fortnite.". You know, games that become platforms for other people. to build stuff was a real opportunity.

You know, I think the big thing to realize. as for indie developers right now is like there's massive, massive competition in every major genre. And it's very unlikely unless you just happen. to be the world's best at a particular thing, that you're gonna release a game. in an existing highly competitive genre and win. A much better chance of success. is in releasing something that hasn't been done before. Being really unique and reaching an audience, even if big or medium size or small, reaching an audience.

and becoming really popular with that. Making some money from it and being able to reinvest. and then expand towards your ultimate dream. You know, I think the one shot go from idea. to commercial success at massive scale is a lot less likely. than the multi-step process of continually build better. and better stuff over time. until you get into a position of excellence. - And constantly try to do something. that others aren't doing. - Yeah, that's right. 'Cause if you look at every market,

there's a few markets where the current leader. came late to the space, usually because the prior leader failed to horribly. But most of the time the, you know, the company. that's succeeding and winning in a market is the first. or second entrant there. They've just continually buoyed their success. - Great advice and fascinating. But on a human level, was it lonely? Was it scary you sitting there as a developer? - I'd say it was the opposite of lonely.

because, you know, the thing that spurred me. to actually release this was seeing kids playing the game. in my neighborhood and having fun. I mean like, this is really good. And seeing them enjoying it and laughing. and pointing at the screen and, you know, getting together. and just wanting to play more. - [Lex] That's awesome. - Yeah, and the human element was always pervasive, you know, because I did not only receive orders, but people would actually write letters. You know, we wrote letters back then in the 1990s. People would say how much they're enjoying the game. and how their kids were playing the game.

and so on and so on. So, you know, they felt very connected. And you know, I think a lot of businesses have. to make scary decisions. because you're spending, you know, potentially. all of the money you have to take a shot at something. that you're not sure will succeed. I was very fortunate starting a business like this. because it didn't really need any capital. The capital is, well, the several thousand dollars in computers I'd bought. by mowing lawns. (laughs). And it wasn't much risk if that hadn't succeeded, I guess I could have figured out.

how people get mechanical engineering jobs and pursued that. But once it took off and once the orders started coming in. and people started writing letters saying. they're enjoying the game, I knew I was gonna go all out. and try to build a company there and succeed. And that was like gonna be, you know, my big goal. - So I'm sure people know, but Epic Games was created in 1991. and went on to transform the gaming industry several times, one of which is Unreal Engine.

So let's talk through the origin story of that. You said that when "Wolfenstein" and "Doom" came out, that changed everything. So take me to that moment. - Yeah, that was a very interesting time. Epic had, after my first couple of games. that had recruited developers, you know, usually college students, high school students. who are just working on their own, had real skills. but didn't have an outlet for their work. Epic had been matchmaking the best artists. and programmers together from all over the world.

Like "Jazz Jackrabbit" was Cliff Bleszinski, a high school kid in California, who had made a really cool adventure game. together with Arjan Brussee, a demo coder from Holland. who would make amazing graphical stuff. and had built a 2D game engine and connected them together. and a musician Robert Allen in California. And they, you know, by telephone and modem and so on, we were building these little 2D games. and having quite a lot of success. You know, there were a bunch of people making. thousands of dollars a month while they were still students. and royalties from the games.

The Epic was kind of producing. and by coordinating people and publishing through shareware. And that was all going great. The company had a little office. and we were, you know, copying floppy disks. and mailing them out. But when "Wolfenstein" came out, we realized like. the future of gaming is gonna be 3D. There had been a lot of experiments in 3D before. that hadn't been great. You know, there were 3D renderings of mazes. that were not in real time. and you're always looking north, south, east or west.

And then there were vector graphics. with little wire frames moving around and things. But you know, "Wolfenstein" was the first game. that was fast enough, you know, running at 30 frames per second. It really felt immersive. It felt like you were there, like you were, you know, in this castle Wolfenstein fighting Nazis. And that was a really amazing and immersive experience. 3D graphics were pretty primitive then, id Software followed shockingly fast with "Doom", which was much, much more capable 3D engine, which had, you know, stairs.

and though it was still what we saw, 2.5D it was environments. that were very realistic textures that were very realistic. You know, a form of lighting that was approximate. but incredibly realistic. and just such great artistry and sound effects. It feeled completely visceral and real. You know, you might look at it today from a, you know, point of view of a modern, you know, game player with, you know, 20 teraflops of computing power. in your device.

and say, "Oh, that's not very impressive.". But it was amazing at the time. - I mean, for me, just sorry to pause on that. I think "Wolfenstein" was one of. the most amazing moments of my own life. Just being able to, like you said, in real time move about a three-dimensional world. I just remember just moving around. just in like, what is that feeling like? I mean, you feel transported into another world.

- You feel that you're there, yeah. And especially when you turn the lights down in your room. and you turn the sound up on your speakers. and it'll scare you. (laughs). and you'll feel like, you know, that fireball that's coming at you is gonna kill you. That was an amazing time. 'cause we hadn't experienced that before. There was nothing like that. You know, you'd watch a movie, a scary movie or whatever, you know, it was just this thing that was happening. This was you, this was you in a 3D world.

- So how did that change Epic, this realization that the future of gaming. is going to be 3D? - Well, at first I was really depressed, I think. (Lex laughing). because the wizardry of "Doom" especially was so incredible. that I gave up on programming for like six months. I was like, "I won't be able to compete with this. I have no idea what we're gonna do.". We just keep making 2D games. and hope that the business goes on. But like, that was the nature of Carmack's wizardry. He had done things that were like, not just one innovation leap ahead, but like a dozen simultaneously,

interplaying in a way that you couldn't pick them apart. into their component pieces. But funny thing happened, Michael Abrash, long timer in computer graphics. that wrote a book on the techniques. for 3D graphics and texture mapping. And he wrote some articles. in one of the programming magazines of the day. and explained it and showed assembly code. to do texture mapping, you know, drawing these 3D graphics on the screen. And it was actually really simple stuff. I was like, "Oh, I can do that." (laughs).

And you know, so a bunch of us Epic independently went off. and started writing our own 3D graphics code. to figure it out. And we found at one point we had a number of people. dabbling in this, doing different parts of it. And at that point we decide, okay, this is 3D graphics. and 3D gaming is gonna completely change the world. We need to go all in on this. And so we took the best people. from our best 2D game development teams. and put them all together to make a 3D game. We didn't really know what we were doing at the time. None of us had ever shipped a 3D game. and most of us were still learning,

but everybody was like trying different disciplines. to see what they were best at. And it was a combination of a bunch of people. who came together to make Unreal. I'd initially volunteered to make the 3D editor. for the thing, and James Schmaltz. who had made "Epic Pinball.". "Epic Pinball," now that wasn't a crazy game. This was one of the 2D shareware games. He made it while he was in college. and he was making like $30,000 a month from, you know, the royalties from this game. because everybody had wanted an awesome pinball game, it was massively successful.

But he was a multidisciplinary person. He wrote the code for the game, the art for the game, and did basically everything. And the code was 30,000 lines of assembly language. (Tim and Lex laughing). And so he was initially gonna write the 3D engine. and I was gonna write the editor. and he sent me his code. so I could integrate into the editor. It was like just a giant pile of assembly code. I was like, "Hmm, why don't I just write this myself?". And so James instead started going off. and building 3D models. and 3D animations using the tools at the time.

And so Cliff, who had done a lot of design work. and built the level on "Jazz Jackrabbit" went off. and started learning basics of level design. And so I was writing this editor. and Cliff Lesinski was customer number one for it, starting to go off and build levels. And James Schmaltz was drawing awesome creatures, sending them to me. I get them implemented in game. And then we brought an animator to bring them into life. and we brought in, you know, more and more people until. at the peak of Unreal 1 development. we had about 20 people working on, which was a huge team for the time. and was really stretching Epic finances.

nearly to the breaking point. We barely survived. and almost ran out of money a number of times, but somehow we always pulled through. And it was a crazy project. because it was three and a half years of development. in a game that we always thought was six months. from shipping. (Tim and Lex laughing). You know, it was like a, you know, three and a half years. of 70 or 80 hour weeks for most everybody. working on the project, not even knowing what problems we'd need to solve next. because we were so immersed in the current ones.

- Were there moments when you were losing hope. that this might take too long. and the company will run outta money? - We were always very financially stressed, so I was continually worried about that. I had total confidence. that we'd work out all the technical and artistic problems. 'cause yeah, we knew the pieces. and it was largely a matter of typing code in. and solving some problems. And kind of like we knew we could ship a version of it. And the thing that was continually.

really interesting was the ongoing discovery of. new techniques as we went. You know, 'cause at the time "Quake" had shipped, it had a little bit of dynamic lighting. Unreal really pushed dynamic lighting much higher. than anybody else had done before. Even colored dynamic lights. with some shadow casting capabilities, statically or moving lights without shadows. And figured out how to do volumetric fog. so you could have foggy areas that were full of lights. and you get the kind of glow of the lights.

standing out in the fog. and affecting the appearance of the level. A whole lot of amazing techniques came together to build. a game that, you know, made a number of leaps. ahead of the state of the art at the time. Yeah, it was really crazy, but like, I think most companies. wouldn't have survived that, but the sheer talent of the people involved. made it possible. Epic has often done things that. most companies would've failed at and we succeed. Like, not because of awesome management or awesome planning.

or awesome financing, but because of the sheer talent. and willpower of the people involved to make it happen. - What about the interdisciplinary aspect of it? Like you said, sort of artists, engineers. or programmers, designers, all of them working together. What was that the 20 people, What was the dynamic there, like working insane hours? Like what was it like to sort of make a team like that. work together well as an orchestra.

to actually deliver the game? - Yeah, that's one of the really unique things. to exist in gaming. Not in normal big tech companies, which are just engineering. and business driven, but gaming really does require all the best people. across all the creative disciplines working together. And, you know, Epic had grown organically. by recruiting people with awesome talent. We always had a limited budget we could never pay to hire,

you know, bid up people's salaries. and hire them away by paying them more. We just had to find awesome people who were. at the beginning of their career and put them together. And, you know, so everybody was very new to this. and didn't have any assumptions about how companies worked. And so, you know, you put all these people together. and, you know, it was really a constant interplay of talent. as people were learning how to work together as a team. Nobody had management experience. Most people hadn't chipped at a game. before they worked with Epic.

And we were figuring out as we went, but it was a constant iterative cycle. You know, we'd make several new versions. of the game every day. Be a new compile, introduce a new feature. or fix some bugs, get to the artist, artist improve their levels, continue building stuff, and then we see what they're doing in their levels. Like, ah, I see what you need now. We'd constantly be improving the tools. and just the iterative process. and the speed at which that improves products. is the critical element to success in games. The slower the iteration cycle, if you make a build every week.

and you go through one iteration every week, you're gonna be way, way, way worse by the end. of your project than a game company. that makes, you know, new stuff every day. And that was the magic that happened together. And there was really nothing but passion. and everybody's individual dedication to it. that made it work. - I heard you still program, but how much programming were you doing back then? You mentioned the hours, probably insane hours. So like, it'd be almost fun to talk about your setup set up.

What a day in the life of Tim Sweeney in the '90s. when you were building Unreal look like? - Well, we'd all gravitated towards. a work schedule that maximized productivity. and that usually meant waking up late. I get to like, usually get to work around noon. and usually work till like 2:00 AM or so 3:00 AM sometimes. And, you know, I didn't have anything else going on. in my life, so usually just work and sleep and occasional eating.

and yeah, I found I always needed eight or nine hours. of sleep a night. Without good sleep, I would just become a zombie. and wouldn't be nearly at my best. So I always needed to get sleep, but I didn't need anything else going on. So the programming itself was so energizing and drawing. Yeah, so it was a, you know, three and a half years of that. during the project. Mostly spent programming, I'd say probably 60 hours a week. of programming, five hours a week of coordinating. with other people and iterating. and you know, sitting down with them.

and looking at what's going on and screen. and figuring out what they needed. Maybe five hours of business stuff, you know, there's a good division of labor then. I didn't have a big executive team, but it was like basically myself running the technical. and development part of the company. and Mark Rein running the business part of it, doing deals and, you know, maxing out his credit card. and going around the world. bringing in sources of revenue to keep the company funded. - What programming language, are we talking about C? Because you mentioned there's this pile of assembly,

what was your decision in choosing. the programming language. that Unreal Engine would be written in? - I'd grown up learning with Pascal as my favorite language. In order to just get maximum performance. and get the latest operating system features. I had to move to C for my second game, "Joel of the Jungle,". well, Nintendo style platformer. And so when I started Unreal Engine, it was. on 16 bit Windows using the C programming language.

And over the course of the first year. it moved to 30 terabit one, you know, 30 terabit, you know, using these Doss extenders. and then using Windows NT. And I moved to the C++ language. and just because it simplified the code so much. Went from a really complicated pile of code. to a much simpler one making that transition. And so almost the entirety of Unreal Engine development, about two and a half years of it was all on C++ 30 terabit, completely stay of the art then,

like 30 terabit protected mode. was kind of a magical thing having come from the days. when computers were much less reliable. and crashed all the time. - Yeah, and turned out to be a pretty good bet. 'cause C++ out of all those languages. ended up being the dominant sort of. performance oriented language that survives to this day. - Yeah, yeah, it's because it solves. all the problems at scale, often through manual pain, but always solves them. And yeah, a lot of other languages do better.

and a lot of like theoretical aspects. and are better for some usage cases, but you can't do everything. and that's really very limiting. - All right, so ridiculous questions, but like, did you have one monitor, two monitors? Were you picky on the keyboard? Were you picky on the chair? What are we talking about? Let's paint a picture. - Okay, I went through a big transition there. So I started out being pretty lazy. I'd had a bunch of, like, I bought used computers.

'cause you'd often get them at half the price of a new one. They'd be good enough. So I had this old 46 I was developing on, I guess it was a 15 inch monitor at the time it was all, it was a poor workstation set up, but it was very economical. And so as we started on Unreal, I realized that. like I had to write a ton of code. I had to write absolute maximum productivity. So I had to rearrange my entire life. around delivering maximum output. And so at that point I realized like actually spending money.

on getting good equipment was a good investment. And we're not talking about millions of dollars here, or billions if you're building a GPU farm. We're just talking about buying some basic hardware. And so I bought the biggest CRT you could buy at the time. 'Cause this was a CRT or it was 24 inches, it weighed like a hundred pounds. (laughs). I had back pain for a week after I installed it, but it got me 1920 by 1200 view. - Wow, nice state of the art. - In 1996, that was pretty cool. So I'd upgraded to a 90 megahertz Pentium (indistinct).

programming on that. It was on the 90 megahertz, these were the main consumer computers at the time. And I'd optimized the Unreal Engine software render on that, which was, you know, the Pentium was. the first super scaler architecture in consumer computing. It could run up to two instructions at a time. And if you wrote your assembly code very carefully, you could get absolute maximum throughput. You know, so I'd gotten my texture mapping code down. to six CPU cycles, comprising 11 instructions.

And, you know, that was required. for every pixel on the screen. And that was just enough performance to deliver that. But Dell came out with these new workstations. and Intel I just launched the Pentium Pro, the first out-of-order processor. And so I like basically bought the absolute maximum. configuration that money can buy. It costs $7,000. I had a gigabyte of memory in 1996. and a 200 megahertz CPU. - [Lex] Wow. - So it like tripled the speed of compiles.

and just made me massively more productive. So that's what I was using. throughout Unreal Engine development and chipped with that. - By the way, people in the '90s would've been blown away. by this workstation. (Lex laughing). I love it, yeah, yeah. In writing, were you considering the hardware much? Was there a sense like, so you know, for people. who don't know on Unreal Engine rendering, I guess is all software doesn't use the hardware, but were you trying to optimize, as I understand, maybe you can correct me, but like were you trying. to optimize to the hardware at all?

- Well, at the time, so we did most Unreal Engine development. before the first real GPUs came out. And, you know, the 3D effects Voodoo 1. The first GPU actually delivered serious performance. compared to software rendering. The first GPU that was really gainful came. into the development and we supported it really quickly, but it was not the target all along. And so development was focused on just building, there are two parts of the engine, right? There's all of the gameplay systems.

that manage the simulation and physics and so on. That's all written in very high level C++ code. and maintainability is as much of a goal as performance. You know, because we had to build massive amounts. of systems over time. But one thing that was really bottleneck was graphics. You know, the cost of rendering a single pixel. was really high. And so you had to do everything you possibly could. to optimize the rendering of pixels on screen. And you know, so we were talking about how many CPU cycles,

you know, and you say your CPU runs at a gigahertz. or whatever, it's a, you know, a billion instructions per second. How many instructions do you need to run. to get APIX on screen? And so there was a constant challenge to optimize that down. And you know, there was also competition. among all of the graphics programmers. who often send the emails, you know, like bragging to each other about. what new technique they've discovered, you know, to try to get the cost down. And Abrash's original articles took like 12 CPU cycles. to render a pixel and you know,

everybody else had figured out how to get it to like. down to six or sometimes even four cycles. And, you know, that involved lots of different trade-offs. of caching and memory hierarchy and so on. It was just like a magical time. where a human could actually understand exactly. what the CPU was doing under the hood. and could write code that exactly targeted that. And that's largely lost now. When we talk about optimization and software now, it's largely about heuristics. and statistically your, you know, this memory access is likely to hit the cache.

and you know, this algorithm is faster than that algorithm. because CPUs now have such advanced out-of-order execution. that you really can't micromanage what's happening. on an instruction by instruction basis, you can only manage the aggregate performance of code. And so there's kind of this lost art. Some people miss it, some people don't, in which the programmer had absolute control. over the machine and could work miracles. in special cases if you tried. - It seems like there's still value to that art. when it comes to GPUs and ASICs.

So basically trying to understand. the nuances of the hardware. and how to truly, truly optimize it, whether it's for machine learning applications. or for ultra realistic real-time graphics applications. Is that true? - Yeah, that's absolutely so. You know, the optimization problems have just moved around. In a system like Nanite, the virtualized micro polygon geometry system.

that Brian Karis, a brilliant engineer with Epic built, was just one of those multi-year optimization efforts that, you know, required him understanding everything. from the highest levels to the lowest levels of the hardware. to figure out how to, you know, make this breakthrough technique work in a way. that was actually maximally performant on GPUs. - And so Nanite is the system will jump around in time. that takes us to today with Unreal Engine 5.

It's the system that does the geometry? - [Tim] Yeah. - So rendering. the world sort of geometric, there's many layers to this. We'll probably sneak up to each of those, but one, you have to actually create the geometry. of the world around you. and do that in real time and really efficiently. And there's a bunch of different ways. to optimize that. Can you just speak to it? - Yeah, you know, with the advanced art tools we have today, it's really easy to create a scene. with billions of polygons. The hard part is how to render it efficiently. because you can't render billions of polygons in a frame.

Basically you wanna render an image. that's indistinguishable from the full detailed geometry. if you rendered it at ridiculous cost. And so the challenge is how to simplify every component. of the rendering, you know, the geometry, the lighting. and so on down to real-time techniques. They're efficient, they capture a realistic view. of what's around you. And so when an object is up close to you, you want to render it with a lot more polygons. than when it's far away. But one of the cool principles of f max. is the Nyquist sampling theorem that says.

if you're trying to reconstruct a signal, there's a limit. to the amount of data you need to bother capturing. If you wanna render a texture at a certain resolution, then you never need more than twice the pixels. than in the texture that you have on the screen. And that, you know, that's called the Nyquist limit. And so one of the challenges of computer graphics. is given the need to render objects. at extreme closeup distances and extreme faraway distances, you always want to be able. to generate the right amount of geometry. so that you have enough to be indistinguishable.

from reality, but not any more than necessary. And you know, with geometry, the idea is that. if you render two triangles per pixel, you should get. an image that is indistinguishable. from thousands of triangles per pixel. If you render less than two triangles per pixel, you're going to start to see visible artifacts of the loss. And GPUs have this amazing hardware. in a lot of different pipelines, but it's all very fixed function. There's pixel shader hardware, there's geometry processing hardware,

and then there's triangle rasterization hardware. And one of the limits of GPUs. is that the triangle rasterizers. are built for pretty large triangles. If you're building a triangle. or rendering a triangle with 10 pixels, that's pretty efficient. But if you're building or rendering a triangle. with one pixel, it's very inefficient. So one of the breakthroughs Brian made was. to design an entire pipeline. for avoiding the rasterization hardware in the GPU. and just going straight to pixels. and calculating what should be done with that pixel. as a result of some ray tracing.

and geometry intersection calculations. done in a pixel shader. So instead of using the triangle pipeline, we're just using pixel pipeline. and... - Wow. - [Tim] Getting a better result. - Because of the limitations. of the triangle rasterizer in the GPUs, that's fascinating. Because as you described, you need tiny triangles. for the detail, for the stuff that's up close. I mean, this might seem obvious to people, but it's not just stuff up close. It's like, depends where you're looking,

like the human eye and the human focus. and the human attention mechanism. defines how much detail you wanna show. because the thing that the human is likely to be. giving attention to, you want that. to be super high resolution. And everything else, including due to distance, can have less geometry and less texture, less information in it. - Yeah, yeah, that's right. But there's a lot of challenges like that. It turns out it's a lot easier to render one frame.

that looks perfect than it is to render a, you know, a series of frames in motion that look perfect. A lot of the problems with the earlier algorithms. that aspired to do the sort of things was popping. You know, you'd be running some number of triangles. for a while and then you'd switch. to a different number of triangles. and you'd see a visible transition. and screen would look like it got shaken up. You know, it's a disturbing artifact. that distracts you from the game. And so one of the magical trade-offs of Nanite was how. to avoid all of the visible transitions.

and get them down to a point. where though they exist statistically, they're not really perceptible. to a person looking at it. - You look at something like Nanite, I mean, there's a nice blog post, there's nice descriptions about the details, but you can tell even under the details, there's just incredible engineering that goes on. It's so cool. It's so cool how underneath this, you know, the actual experience. of beautiful detailed scenery, there's just incredible engineering. to bring to you simulation, ultra realistic simulation.

of reality in real time. Like lights changing everything. And then, you know, it just takes you back to. that feeling I had with "Wolfenstein", but like more, and you can completely lose yourself in that world. and you would forget that this real world exists. What is the real world anyway, you know? So it's that coupling of great engineering. and great storytelling. in terms of just feeling is super cool.

It's great to know, it's great to know. that these teams behind it. And it's cool that you're also releasing. a bunch of details around it. At least for folks like me. It's inspiring to see. So Unreal Engine is this fascinating creation. It's a big, bold, crazy bet that you made. Maybe it's good to actually explain what Unreal Engine is. for people sort of outside this world. I would say it transformed the gaming industry,

but that was a big bet in 1995. that most of the effort would be on creating. the gaming engine, not the game. - Yeah, Unreal Engine is a big bundle of code and tools, a huge software package. that provides all the functions you need to build. any sort of a 3D graphics application. Game developers use it to make games. and that's the predominant use. But it's also used in Hollywood film.

and television production to create 3D scenery in real time. for production sets to do pre-visualization. It's used by car makers to visualize their cars. before they're constructed or manufactured. It's used by architects to preview buildings. before they're made and industrial designers of all sorts. And it provides, you know, all of the 3D simulation features you need. both for creating highly realistic 3D graphics, but also physics and interactions.

between objects and making things happen. like you might see in the real world. And supports a huge variety of styles. from Pixar stylized movies to cel shading to photorealism. And it can be used for anything. that needs real-time 3D graphics. - Including humans that populate. those three dimensional worlds. And we'll probably talk a bunch of the details. involved in the process of creating ultra realistic humans.

because we humans care about how other humans look. and how they convey emotion. and express how they speak, all that kind of stuff. But so yes, it's the 3D objects that are static, the 3D objects that are dynamic. and on the dynamic front, including humans that are ultra dynamic. So all of that, you have to create this engine. that simulates that world.

This beautiful world that we know and love. Okay, but you know, you're early so. you see "Doom" and you're trying to create this world. and trying to create an engine. that would not just power "Unreal" the video game, but future video games. So how do you go about it? What are you thinking and that, I should sort of linger on that, that is a crazy bet that we're going. to build an engine as a company. - Yeah, well you know, the philosophy began with "ZZT".

and continued onward. We're not just building a game for players to play, we're also building tools that could be used. for building that game or any other game. And catering to all the artists. and designers who had used the tool. And so that philosophy started, it's a very early parts of Unreal development. I was building the tools for, you know, level designers like Cliff Bleszinski. and artists like James Schwaltz. And you know, as we began marketing the game.

thinking it was six months away, we were constantly releasing screenshots. and things like that. Other companies started calling us. and saying they wanted to build 3D games too, but they didn't have the expertise for that. and they wanted to license our 3D engine. And this was one of the coolest pivots in Epic's history. MicroProse called up Mark Rein, our, you know, Vice President and longtime business guy. and said they wanted to license our engine. And Mark Rein was like, "Oh, what? You wanna license what?

An engine, what engine?". And they explained to him what they wanted to license. He's like, "Oh that engine. Yeah, yeah, that's very expensive.". (Tim and Lex laughing). But this was one of the critical things that kept Epic going. through that three and a half years. We were starting to license our engine out. to other developers. MicroProse took two licenses. and we got in half a million dollars from that. and company GT Interactive licensed our engine. to build another game and we got paid for that. And so we had this revenue stream funding.

the development of Unreal Engine from other games. that were being built by other developers. And because they were the lifeline for the company, we took the engine business very seriously from the start. We set up, you know, mailing lists. so that our partners could ask us questions. and all the developers and artists working on our games. were participating in helping customers. Everybody took that very seriously. 'cause it was our funding source. And you know, that's kind of set this dual spirit of Epic. of boning technology. and supporting game developers simultaneous.

with building games and supporting gamers. It's continued onward and just grown over time. - Can you just go back to that, you programming, what are some interesting technical challenges. you had to overcome? You mentioned dynamic lighting, like create, you know, create this three dimensional world. and try to figure out the puzzle of how you actually. do that at a time when nobody, Carmack and you (laughs). doing this kind of thing. It's a totally open wild west.

So what are some interesting technical challenges. you had to try to solve? - There's a lot, some of them are visible on screen. and some are behind the scenes. and still require a lot of innovation. All the graphical techniques. were really interesting challenges. and Unreal Engine in those early days. went a lot further than the quake engine. and building environments. using constructive solid geometry with a realtime editor. And that was a really interesting technical challenge.

You know, the idea is building is extremely tedious. if you are only adding objects to the world. If you wanna build a door, then you need. to add like a dozen different pieces of door frames. and add a bunch of different walls together. to fit together in the right shape. It sure would be easier if you could just start. with a wall and subtract the door out. And so we had this way of adding geometry to the world. and subtracting geometry and the engine would perform. all of the calculations on that.

And this is something. that I'd been anticipating was possible for a long time, but when I finally got around to it, it took this 30 hour coding session. to like figure out all the special cases of the code. that needed to be implemented to make that work. But you know, in the course of 30 hours. I got constructive solid geometry up and running. I started doing a, you know, like handed it. to James Schmaltz the next time we were together. and it's like, "Okay, I think you're cheating here.". So you create a giant Taurus. and then add another giant Taurus interlocked with it.

and then subtracted a cylinder from it. and like created this really advanced composite object. with just three operations. He was like, "Whoa, I can't believe this.". It's like, "Yeah, we figured it out.". And that was cool to see it for the first time, but it was probably the first time somebody. had done constructive solid geometry in real time. But it was also a really useful artist tool. that all the artists appreciated immediately, began making use of. - Can you actually speak to that, the 30 hour session? I mean this is not, from everything I know about. computational geometry, doing this kind of thing. from your perspective, that's not easy.

That's, what is it? The uncertainty, the open questions involved. I mean even just on the algorithm front, how to do that efficiently. and then plus the usual programming thing of debugging, like suffering through the trickiness of it. And we don't have really, at that time you don't have the tooling. to really visualize everything that's going on really well.

And you probably like using some crappy editor. I mean there's just a lot of like friction here. So the 30 hour session is one that's probably rough. It's a rough one. - Your brain works in different ways. and depending on your state, right? There are some things that require. really working on a problem fresh. Where you've put together a bunch of logical pieces. and now you just need to write a whole lot of code. to make it all work together.

And, you know, plumb a whole lot of data. between a whole lot of different algorithms. But, you know, I think our brains. have vastly more horsepower. than we're able to directly access. by thinking of what code to type next. And you know, after you've been working. for a very long time, you can get into a sleep deprived state. where you have much, much more direct access. to that low level knowledge. (Lex laughing). - That's great, yeah. - You know, because you know their symptoms. that are well studied of sleep deprivation, one of them is short-term memory loss.

And so you're working without like. the easy recall of the code you just typed, but your brain is then freed to think about other problems. And you know, I built up this intuition. over a very long period of time, you know. So the foundation for the subject. is the binary space partitioning tree. This data structure invaded by a computer. Graphics researcher, Bruce Naylor. Carmack had picked up on that and had used the technique. in "Doom" to really great effect.

And I'd picked up on that. and Unreal Engine was using this technique. for all of its graphics and rendering, but it, yeah, it was just additive geometry everywhere. and it had a lot of overlapping polygons. and was pretty inefficient. So I had the idea that if we had a BSP tree, there was a really efficient way. to do constructive solid geometry. And to do that you had to break down the ways. that different pieces of geometry can fit together. I broke it down into like 14 different cases. and most of them are pretty simple, cranked them out.

Anyways, I got towards the end, you know, there were some pretty complicated things like, well how do you deal with coplanar polygons? They're in the same plane. and pointing in the same direction. versus the other direction. In what cases should you keep them? What cases should you eliminate them? And so on and so on. to create really efficient geometry output. And you know, just plowing through it, eventually. through mostly deduction, but some trial and error too. Like sometimes you just have to try the possibilities. and see what works. Yeah, I cranked it out and it worked. and the next day I came in like kind of weary.

and I was like, "Oh wow, this actually did work. It wasn't just a dream.". - So you're considering the edge cases also. I mean that's the problem with geometry is like. there's probably just gonna be all kinds of weird polygons. that you have to... So you're like thinking through, you're imagining the edge cases. and trying to see how do I not create inefficiencies. in this algorithm while still considering the edge cases, allowing for the edge cases. - Yeah, you know, it's pretty easy to write software. that's like 99% correct. It's the 1% that's the really hard part.

and where the devil lies in the details. - What about like lighting? Is there other interesting... - Well the funny answer is like, we know the laws of physics, so it's actually really easy. to do everything in computer graphics. But the direct solution of the laws of physics. is immensely so. And so what we're finding are approximations. rather than complete solutions. 'Cause you need something that's a million times faster. than the brute force answer. - We should say that the physics of the scene.

is you just take a bunch of photons, bounce them around, that's how light works. That's going to be very inefficient. because it's a lot of bouncing. and a lot of photons. - Yeah, yeah, photon tracing is the subject matter. that does brute force calculation of pixels on a screen. from all of the light in the scene. And it works and it's correct. and it just is an implementation of laws of physics. and it's millions or billions of times slower. than what we do. But Carmack had figured out how to do.

really cool lighting algorithms, including real-time lighting with objects moving around. And I hadn't taken it very far. So with Unreal Engine I'd realized like. we don't have nearly enough computing performance. on our CPU to compute the light of every pixel on the screen. from all of the light sources that affect it. Yeah, we were at a six cycle texture mapper. and we couldn't afford 30 more cycles for lighting. And so the answer had to be some approximation. And the one that Carmack had picked up on.

in the "Quake" engine was light mapping. Instead of calculating all the lighting on every pixel, what if we like made a big texture. that we placed over all of the walls. in the scene that was like wallpaper. And what if we say every foot, we're gonna compute a lighting value. for just that one foot grid on the object. rather than computing it everywhere. And then what if we just linear interpolate that. over the course of it? You know, you get a lighting and solution. that actually works pretty well and is fast enough to work.

And so a lot of Unreal Engine's lighting techniques. were based on light mapping. We introduced colored lighting. so you could have colored light sources. Then we realized, oh, since we're doing this. and we're doing it on light maps, we can actually do some pretty expensive calculations, hundreds of cycles since we're only calculating it. for every one foot of world space rather than every pixel. And so we introduced a whole bunch. of elaborate lighting effects like torch flickering. and you know, the caustic effects of water. bouncing off of a surface and so on.

And like pulsing lights. and blinking lights and everything else. And I created a system for compositing them together. So if you had an arbitrary number of light sources, they could all do that. And you know, then I implemented a shadowing algorithm. You know, if you cast a ray from a point. from a light to a point on a surface. and see if whether it intersects in the other geometry, if it doesn't intersect and the light hits the object. and if it does intersect. then the light hits something else first. and that pixel on the object should be dark.

So I built a real-time version of this. and it ran at about a half a frame a second. (Tim and Lex laughing). So I was running around at half a frame a second, like shooting out light projectiles. and looking at dynamic lighting, it was like, "Someday computers will be fast enough. for this, but not today.". So I made a non-real-time version. that precalculate all the lighting. and realized, oh wait, if you precalculated the shadowing. on an object, you can still apply the lighting dynamically. as long as the light's not moving. So you could do torch flickering with shadows. and you know, figure it out all the cases of dynamic.

and static lighting that were actually practical. on a computer at the time and exposed them to artists. And this was the wonderful thing. I was just like typing in these old features, exposing them to artists. and every day they'd find like a dropdown. with some more lighting options available to them. and they'd start using them and they'd do things. that I never thought possible. And this was always the coolest thing, as a programmer building an engine, you might think you know the implications. of the feature you're building, but artists are so clever. that you always find that you've built the capability. of doing vastly more than you ever anticipated as they start.

to use combinations of features together. in concert to do ever more amazing things. - That's the genius of artists is they're given constraints. and within those constraints they create something. you could have never possibly imagined. given the constraints. That's such a beautiful coupling. between engineering and artistry and art. - That's right, and it's timeless, you know, what did the renaissance painters do with paints. and what do the early game artists do with early engines?

You know, everybody's figuring out the capabilities. of their medium and you're seeing a revolution. - This is blowing my mind. This is so fun. What about fog? You mentioned fog. I don't even know, how do you even do fog? So you mentioned "Unreal," so the first version had fog. - Yeah, well it was a funny thing. So this graphics hardware company had just started up. in Finland and they released a screenshot. of what their GPU was doing. and they showed a scene filled with volumetric fog. She had a foggy room with some light sources in it.

And when that happens in the real world, what you see are. glows around the lights. as the light brightens the fog around it. But the brightening of the fog diminishes over time. because the fog absorbs some lighting. And so the further you get away from the light, the more falloff there is. And you know, you have a bunch of colored lights. overlapping together in a space like that. The effect is just absolutely magical. You know, like being out on a foggy light. with street lamps above. It's something that's surreal and looked just beautiful. So I was like, "Oh my God, they figured out. how to do realtime value metric fog.

I have to figure it out myself.". And so that was another like 30 hour coding section. (Lex laughing) - Nice. - But like at the core I realized, okay, what's happening here is we have this lighting function. saying that light at a particular point in space. is like, you know, falling off with the inverse square of the light, light the distance from the light source, right? The inverse square is all from Isaac Newton, which applies to lighting. What I had to realize was the way the fog interacted. with the light was that you calculate the view.

from your eyes position to a point on the surface. in the world. It's going through fog and you're accumulating more. and more light as a function of the amount. of light illuminating the fog at that point in time. And so, well, you know, I'd studied that (laughs). in mechanical engineering without even knowing it. That's the line integral, you know, you have an integral over a line of some function. Well this is exactly what it's for. It's for accumulating the values of a function. over a continuous space and time. And you know, I did a bunch of math. and realized that oh wow, the integral,

and then I looked in a reference book. of all of the integrals and you know, thankfully people had solved them all. And I realized the integral of, you know, this transformed one over R squared turns out. to be solved by the arc tangent of R. And so, you know, if you calculate some parameters. based on the position of the eye. and the position of the surface. point you're at ultimately seeing, then you calculate exactly. how much fog you can accumulate from that. But of course you can't do that per pixel. 'cause that's hundreds of cycles of CPU time. And so what we had to do is calculate volumetric fog.

on something equivalent to a light map, but calculating fog every square meter in the world. And so, you know, we had enough performance for that, built volumetric lighting and gave it to the artists. and they started building magically detailed levels. with volumetric fog and in real time. And then, you know, decades later. I was talking to one of the engineers. who'd worked on that hardware. and asked about their volumetric fog. and told them how it inspired me to, you know,

figure out how to do it in real time myself. And I was like, "Oh no, we cheated, we just rendered it our 3D Studio Max.". - That's awesome. That is so awesome. That is so inspiring on so many levels. That you saw that maybe it's possible even if it was. kind of smoke and mirrors. and then you actually made it happen. It's so inspiring to hear these kind of stories. when there's so much uncertainty. and so many constraints. and you figure out how to bring it to life in real time.

and create this world that Unreal did. Maybe if we could just pause, since you mentioned John Carmack a few times. As a fellow pioneer in the game industry at that time, what do you admire about John? - John singularly has this intense dedication. to getting the best result from his code. and having absolutely no attachment to passed code. And some of the legendary things he did,

the end result was an absolute breakthrough. in real-time computer graphics. Weren't his first try. They were like his seventh or eighth try. after he'd done something time and time again, tried it, found a better approach, thrown out the old one, build it again. and continually re-wrote out his code. until he found the absolute best solution to a problem. And you know, I think that stands as a lesson. for every programmer to pick up on. When something is really, really important, its performance is absolutely critical to the product. or its quality or its capabilities.

Just iterate on it until you've achieved perfection. and don't settle for the first. or second solution is good enough. - And it's, you know, the result of that, both you and him sort of define the future of gaming, of gaming worlds. It's so beautiful to see. It's just fascinating. It's inspiring because like under so much uncertainty, under so many constraints, you figure out a way. and that, you know, actually continues to this day.

because yes, the hardware is improved incredibly, but in order to create an ultra realistic, highly dynamic, real-time rendering of the world around us, it's still really, really difficult. And there's all these kinds of optimization, like you mentioned. Maybe you can speak to that. Unreal Engine 1 journey. from 1 to 5.5 or 0.6 now.

For 30 years you've been creating virtual worlds, what's it like evolving a game engine. for those 30 years. when the hardware under you. is improving exponentially? What are some things. that changed and what are some universal truths. that have not changed? - It's been an astonishing experience. Nobody 30 years ago had anticipated. that we'd see the performance gains in hardware. that we've actually seen in that timeframe. It's something like a hundred thousand times.

higher CPU performance. between multiple cores and higher clock rates. and more parallelism. Like, you know, if we had that in aviation, then we'd be like taking a trip to neighboring stars. - [Lex] Alpha Centauri, yeah. - Exactly. And in graphics it's been even more so. It's something like literally 10 million times more. net usable GP performance. than we had back running on a Pentium 90 CPU. all in 30 years. And you know, it's really made me appreciate.

that over the generations, some areas of our engine development. have absolutely kept up with technology. And you know, the rendering team. that works on Unreal Engine. are the real miracle workers there. Just about every generation of Unreal we've replaced. most of the rendering code and you know, the different leaders and different points in times. and the different luminaries have built systems. that were absolutely rethought. and optimized for the latest generation of hardware.

You know, Unreal Engine 1 was built for software entering. and then the Voodoo 1 came along late in the cycle. and we had support for it, but it wasn't fully capable and utilized. Unreal Engine 2 was about bringing. all the latest GPU hardware acceleration features. to the engine and you know, keeping forward. and honing some new features like vehicles. and a few other capabilities. And this was in the early GPU era. before GPU had really broken out of, you know,

everybody's expectations of Moore's Law. But that breakout occurred with DirectX 9. and the capabilities of, you know, programmable shaders. Once you had control of writing code running on the GPU. that could color every pixel on the screen. And that GPU code was literally a factor. of a hundred times faster than the equivalent code. I wrote a few years earlier in the Pentium 90. And so that DirectX 9 generation was a godsend. And Andrew Scheidecker, a longtime Epic luminary wrote the core.

of the Unreal Engine 3 render around. real-time pixel shading, real-time lighting, being able to do dynamic shadows. using several different techniques. and multi-thread the render to support bits of, you know, the early dual core CPUs that were starting. to show up at the time. And it was a massive, massive graphical upgrade. Unreal Engine 4 made a number of improvements. and just continued to add features to give artists.

more and more options for lighting. and for geometry that created realism. But then I think probably our biggest single level of leap. came with Unreal Engine 5. with a Nanite micropolygon geometry solution, and with Lumen the global illumination lighting solution. You know, which I think really bridged the gap. from, you know, game-ish computer graphics to, you know, total observable photo realism.

for artists who wanted to create that. And so that's been the evolution. and the progress on the graphics side. is absolutely astonishing. As it is on the audio side and a number of other areas. But parts of the engine also haven't changed. all that much since the version I wrote and chipped in 1998. You know, the a file management system. has been optimized a number of times, but it hasn't been completely rethought. And the networking system, the ways that clients.

and servers talk together and negotiate game state. is still an evolution of the thing I wrote. And you know, it's feeling kind of dated now. You still see networking bugs in "Fortnite" where like. for some reason when you're spectating you're not seeing. some parameters update. Well that's because of the lossful nature. of that networking model. And the biggest limitation that's built up over time. is the single-threaded nature of game simulation. on Unreal Engine. We run a single-threaded simulation. You know, if you have a 16 core CPU, we're using one core.

for game simulation. and running the rest of the complicated game logic. because single-thread programming is orders of magnitude. easier than multi-thread programming. And we didn't want to burden either ourselves. or our partners or the community. with the complications of multi-threading. And you know, over time. that becomes increasing limitation, you know, so we're really thinking about. and working on the next generation of technology. and that, you know, being Unreal Engine 6. and that's the generation we're actually going to go.

and address a number of the really core limitations. that have been with us over the history of Unreal Engine. and get those on the, you know, a better foundation. that, you know, the modern world deserves, given everything. that's been learned in the field of computing. in that timeframe, - That's a terrifyingly challenging engineering problem. And it seems like every version of Unreal Engine, the amazing teams behind it are willing. to just throw away most of the code. (laughs).

And maybe I'm being a little bit too dramatic, but basically throw away the old approaches. like you mentioned with Carmack. and start again, like with Nanite and Lumen, just keep optimizing to the current hardware, but even like rethinking how it's all done. But going from single-threaded to multi-threaded. Oh boy, that's terrifying. And that's in part we'll talk about it, why maybe you have to rethink. even the programming language that's being used.

to rethink a lot of things. That's fascinating. Can we just stick on Unreal Engine 5? So I watched a bunch of stuff, but the state of Unreal in GGC 2024. (Lex laughing). Thank you, I was just giggling. with excitement watching some of this stuff, so just if we can talk about different things here. just to nerd out a little bit. So people should go watch this video.

They talked about the dirt, just the ultra realistic, and this is for "Marvel 1943,". which is kind of putting the Marvel universe. into Nazi occupied France in the winter. So there's snow. And you know, that's a moment in history, that's a very intense moment in history. and it really creates a feeling and puts you there. and there's so much to that including the snow.

But just, you know, looking at the dirt is a really nice way. to show like how do you (sighs). add a lot of details to the scene in real time. that like gives this experience. like infinite detail. Like this is real, this is super real. And then I think in the talk they describe. what's entailed in the generation of the geometry,

what's entailed in the lighting, all that kind of stuff. Maybe can you speak about dirt? (laughs). What are the components for people. who might not know in like creating this ultra realistic, the texture, the lighting, the geometry, all of that. Like how Nanite, how Lumen all come together. in this beautiful orchestra to paint in real time. the dirt in Nazi occupied France in 1943. (laughs).

- Yeah, there's a lot happening here on screen. and you know, the real hero of of this image isn't Epic, it's the artists and technical artists. who work together to build this environment because it, and the reason we showed it at GDC was it went way, way. beyond what we realized the system was capable of doing. You know, largely because of their brilliance. And this is the magic of computer graphics. There's not one feature that makes this cool. There's a dozen technical features that each interplay. and because of the ways that they interplay with each other,

it's hard to actually identify. the individual components of it. One thing that's happening here that's really critical... Oh yeah, now we're seeing it being turned off is. the lighting happening. The Lumen lighting system. that's powering the scene is doing different. kinds of lighting calculations at different scales. This was the work of Daniel Wright following a decade. of moving the state of the art of lighting forward. But his theory, which was rather controversial at the time,

was that if you have enough levels of lighting calculation, then you can get everything. global illumination working everywhere. from the absolute highest levels of a scene, you know, that buildings are casting crack shadows, all the way down to details like you see on the dirt here, all working in concert. and without distinguishable boundaries. So there is a good decade of foundational work there. to make the lighting work. In particular when you see the very detailed shadows.

interplaying between the, you know, the ice and the dirt there, that's screen space lighting. There's actually shadow calculation going on, not based on the world but on the pixels on the screen. because that is the only way. that we could possibly do those calculations fast enough. running them on a pixel shader. - Yeah, watch this, watch when you add the objects, when you add the textures, the different layering all the shadows. that have to be computed.

- Yeah, yeah. - Boy. (laughs). - That shadowing is the amazing thing. But you know, the reason that works is counterintuitive. When somebody first explained it to me, I was like, "That's really clever, but I don't think that will work.". But it does work. because if you observe the positions of incoming lights. and you know the z coordinates. of the different pixels on the screen, you can figure out. how, you know, geometry there is likely. to occlude other geometry. And even though it's only an approximation. and not isn't perfect, it looks perfectly good.

to the human eye and gives you the subtle shadowing. that you see in a scene like this. that it makes it look highly realistic. and the shadowing influences other things. There's also, you know, some really interesting things happening with the color here. and I'm not even sure what's causing, you know, it looks like color is bleeding from some parts of the snow. onto other parts of the snow. It looks like there's some subsurface scattering going on. I'm not even sure if that's being used in the scene. And then there's a material layering system for laying down,

you know, layers of material, dirt and snow. and other things all making that work. And then there's the light bouncing off of the geometry, which is another system for lighting. on top of the global illumination system. - What about reflections too? Is that count as the light balance? So there's a light balancing off of stuff. to light it up in different interesting ways, but then there's also actually literal reflections. in like we're looking at a puddle in the dirt.

- Yeah, yeah, that's right. But the engine supports a number. of different reflection techniques. One is calculating basically textures that reflect, that capture all the lighting in the scene. and then bouncing that off of texture maps. So you can see different lights bouncing off. of different pixels in different ways. And then there's individual lighting. casting reflections off of things too. And a lot of this is under the control of designers. and you know, one of the things that's yet to do problem. for the future is you don't just like press a few buttons.

and this kind of scene magically appears. This is a lot of work from some highly skilled people, not only building out this particular scene, but in setting up the material layers. so that you get the dirt with the ice layered on top. and all the reflections working. and they need to make a number of technical art decisions. to make this work. And if a novice who hadn't, you know, worked very hard built the kind of scene like this, it wouldn't look nearly as good. So one of the challenges we have is. to make building this kind of quality level. even easier and more seamless and automatic.

You'd like to just build a scene. and say, use this material here. and have this appearance come out of it. - Yeah, and I mean once you create the scene. you could do things. I remember where they said like, "Can you turn off the headlights?". I forget you could control the lighting. I mean all of this we should say like, this is dynamic. So you could change the position of the light, you can turn on the lights and off the lights, that's incredible. So this is all real time.

The geometry, the lighting, the textures, all of it, real time. - This is the power of awesome technical art, three decades of feature development, and like you have to give credit. also to the 20 teraflops of graphics performance, that NVIDIA's delivering. - Thanks NVIDIA. (Tim and Lex laughing). - 90 megahertz to this, 90 megahertz is 90 megaflops. This is 20 teraflops. That's a big change. - That's a lot. So one of the other things.

that they talk about in the presentation is about snow. So you have to, if you're talking about 1943 Nazi Germany. in the winter, you know, you have to create a feeling, one of which is the season, the winter, the cold, and you can control the, you know, you have to cover everything in snow. And here shown is the ability to control. how much snow covers the objects. So the ability to do that for the artist is incredible.

Like just to control. how much snow is in the scene dynamically like that. That's cool. - Yeah, yeah. - That's really cool. - It's a cool system for material layering. and a dozen pieces coming together here. You also notice, you know, there's a fogginess. and there's some hot objects emanating fog. You know, an artist did that, that didn't just arise automatically. - So that's called material layering. So an artist creates the different materials. and are able to like layer the scene with it.

- Yeah, layer materials on top of each other. and see how much of each material should be protruding. in different places with the engine handling transitions. and things like that. - And that's on top of the sort of the geometry. that creates the structure of the scene. and all the occlusions that have to be computed, man. Okay, I gotta go to the other one. that was just blowing my mind, which is smoke. Let me see that, look at that. - Yeah. Yeah. (Lex laughing).

- Oh, there's a fire, there's a fire in a trash can with the smoke. and the lighting and the shadows. interplaying on the smoke. This is real time? - Yeah, that's all real time. - What the hell? How do you do that? (laughs). How do you do the smoke? Well there's a really powerful particle system underneath, it's providing the technological foundations.

for this sort of thing. But there's awesome artistry on top of that. and an awesome physics engine powering it. It's hard to tell exactly which piece is doing what, but you have several different particle systems there. There's one for the fire. and then there's another one for the smoke coming out of it. The really interesting thing happening. with the smoke here is that it's occluding light. You know, there's calculation of. how the light should diminish as it travels through smoke. And so you're seeing the lighting on the smoke. being the really interesting thing.

And there have been a lot of attempts, but this was the first demo. where I felt like this kind of smoke had really, it no longer looked like a video game. It looked like just, you know, a burning trash can, billowing out dark smoke. And yeah, it's the artist sophistication. It's a very, very, very large part of it. - So yeah, again, it's the interplay between the tooling. and the artist. But yeah, like I could watch that for a long time.

I mean there's something magical. sitting around a fire in real life. and just watching the fire and the smoke. I mean humans have been doing that for, I don't know, hundreds of thousands of years maybe. And then that same, I was just staring at that. and I wish the people would just stop talking. and I could just watch the fire infinitely. (Tim and Lex laughing). And that, I mean that's immersion. That's like I want to be in that. I want to sit around that trash can with a fire.

and the smoke and watch and maybe warm my... 'Cause I was also feeling cold because of the snow. You're like, you really get immersed into the thing. I mean it's so beautiful. It's true art. It's true art. It's just really wonderfully done. But, okay. So I gotta ask you about the humans. We talked about what's it like to create the scenes, but you know, creating realistic humans is really tough. Can you speak to that? How to create ultra realistic humans?

So you have an actor behind this to convey emotion, show the nuances and the details of the faces. and maybe this is a good opportunity. to also mention MetaHuman Creator. that's part of Unreal Engine. - Yeah, that's right. Humans are by far the hardest part of computer graphics. because millions of years of evolution. have given us dedicated brain systems. to detect patterns and faces and infer emotions and intent. because cavemen had to, when they see a stranger determine whether they were likely.

friendly or they might be trying to kill them. And so humans, we people in the world. have extraordinarily detailed expectations of a face. and we can notice imperfections. especially perfections arising. from computer graphics limitations, but it becomes by far the hardest problem. So the MetaHumans effort is part of a decade long initiative. that Vlad Mastilovic, the most talented digital humans visionary in the world.

has been working on. for generations and generations of games. You know, serving individual clients. around the game industry for a while. and then joining Epic as part of the three lateral team. And leading now a worldwide effort to build. all of the technologies required. to make digital humans realistic. Okay, one part is capturing humans. And so we built really advanced dedicated hardware. that puts a human in a capture sphere. with dozens of cameras in them taking high resolution, high frame rate video of them.

as they go through a range of motions. And then capturing the human face is complicated. because the nuanced detail of our faces. and how all the muscles and sinews and fat work together. to give us different expressions. So it's not only about the shape of a person's face, but it's also about the entire range of motion. that they might go through. Capturing one human requires, you know, a few hours of capture work. in a dedicated environment like that. Then thousands of hours of processing work to capture. a precise and, you know, real time replicatable version. of that human in the environment.

And so one of the things that. that's done is just capturing an actor. or actress in the real world. and then using them in a video game. But the much more interesting thing going on is capturing. thousands of humans to form a data set whose goal is. to encompass the entire range of faces in all of humanity. So, you know, going around every culture, every continent, every age and every face of variety. and capturing representative people. so the entire range of faces is represented. And then being able to combine.

and merge those together. to enable recreating an arbitrary face. that the system's never seen before. So you know, one of the ideas is capture giant amounts. of this high precision data. and you use it to reconstruct a face at a consumer level. Like maybe, you know, take an iPhone photo. of somebody's face and then capture a very accurate. depiction of that, not by synthesizing it then. and there on that device, but by combining all the known details of human faces. to accurately capture.

the most accurate representation of that. So that's the data problem. There's a lot of other problems with computer graphics. You know, there's technology for rendering hair, which is really hard 'cause you can't render every, again, we know the laws of physics, it would be easy to just render every hair. It would just be a billion times too slow. So you need approximations that capture the net effect. of hair on rendering and on pixels. without calculating every single interaction. of every light with every strand of hair. That's one part of it. There's detailed features for different parts of faces.

There's subsurface scattering. because we think of humans as opaque, but really our skin is light travels through it, it's not completely opaque. And the way in which light travels through skin. has a huge impact on her appearance. You know, this is why there's no way you can paint. a mannequin to look realistic for a human. You know, it's just a solid surface. and we'll never have the sort of detail you see. - We should actually just linger on that. That kind of blew my mind like thinking through that. I think I heard that sort of the oiliness of the skin.

creates very specific nuanced, complex reflections and then some light is absorbed. and travels through the skin and that creates, would it be fair to say like micro shadows or something? It creates like textures that our human eyes able. to perceive and it creates the thing. that we consider human, whatever that is. And so like you have to compute both that, the reflection, how light interacts with the oiliness of the skin.

and how it is also absorbed in. and all of that while considering all the muscles. involved in making the nuance expression. Just the subtle squinting of the eyes. or the subtle formation of a smile. It's a stupid annoying subtlety of human faces. that you have to capture. Like the difference between a real smile and a fake smile. Man, I love human faces. I love humans in general. But the way to show like beginning of a formation of a smile. that actually reveals a deep sadness, all of that.

Like when I watch a human face, I can like read that. I could see that. Again, this is the engineering and the artist. You have to have the tools. that in real time can render something like that. And that's incredibly difficult. But anyway, sorry. So yeah, so there's a lot of this kind of complexity. in even just the lighting of a face. - That's right, getting faces right requires the interplay. of literally dozens of different systems. and aspects of computer graphics. And if any one of them is wrong,

your eye is completely drawn to that. and you find it on the wrong side of uncanny valley. So the level of perfection needed in this area is vastly, vastly higher than, you know, world rendering or grass. or any of these other things. You know, if the shadows on a work of architecture. are slightly wrong, you're pretty forgiving with that actually. Your brain doesn't really care that much. But if anything wrong with the human.

it's totally jarring. - Can you speak more to the creation of digital humans. with MetaHuman, both on the editor side. and sort of bringing it to life side? It seems like, 'cause I've watched a bunch of videos, a bunch of individual developers doing it, it's not too difficult to bring a human to life. using the tooling. that Unreal Engine editor provides. - There are two main tools. You know, compared to the old days. where every face was created by hand.

by an artist from scratch. One is a MetaHuman Creator tool for creating faces. where you have a huge number of parameters you can adjust. to create a unique human. by adjusting all the different capabilities of them. And you can then get that MetaHuman Creator. into Unreal Engine, and then you can add all kinds of computer graphics features. they're in the engine. You could add clothing using the cloth simulation system. and you can adjust the hair. and all these other parameters on the thing. And then there's Metahuman Animator,

a tool for animating a human based on a facial capture, which can be done on a device as simple as like an iPhone. And transfers the captured animation to the human you want, which is not straightforward. If the actor has one face shape. and the character on screen has another face shape, the translation that needs to be done. from the actor to the face. is actually really sophisticated and non-obvious. And if you just applied it literally, then it would be completely wrong from your point of view. So those are the main tools that people are using now. And then when within the Unreal Engine,

then you have a face and you can do. absolutely anything you want to it. And you could also, you know, if you decide to go outside. of the Metahuman geometry pipeline, you could build your own face, like, you know, any creature. of any sort, and then use the animation tools to animate it. But, you know, this is 30 years into a project. that's probably like 50 years in total. to get to absolute photo realism. and controllability for absolutely everything. So there's vast amounts of work still to do. And you know, we don't feel like we've solved. the problem at all. We've just given artists a big productivity multiplier.

and a quality multiplier. But this is not in a state that we would say is done. - But nevertheless, I've seen people use it really effectively. I saw it almost like plugins, maybe external services. where you can get the faces. to approximate the mouth movements. required to speak a thing. So like that's a really useful feature. - Yeah, that's right. When you have an artist or actor in your studio. and you're recording a specific performance, you can just capture their facial motion and apply it.

But if all you have is a voice recording. or you're generating a voice recording or it's parametric. or procedural or AI generated, yeah, then you need the system to translate that speech, not only to movement of the mouth and lips, but also to facial expressions. and the whole intent. You know, when we're speaking, it's our whole face that's active. and emoting in different ways. and it's not just a mechanical motion of the pieces. - So we spoke a bit about Nanite, so the magic behind. the virtualized geometry system.

But can you speak a little bit to Lumen. and in general what it takes. to dynamically light in all the complicated ways, the faces, the scenes that we discussed? Like what are some interesting things to you. that made the magic of it happen? - Lumen is a system for global illumination. Being, it's supposed to calculate the interaction of light. with the entire scene in a way that mimics reality. The first generation of engines that did lighting just said, well, the light casts light.

and the surfaces that hits are lit. and the surfaces that doesn't directly hit are dark. And that's just all the techniques we have. So you'd have an area that wasn't hit by any light. being completely black, but in reality, light bounces. around the entire scene dynamically. When a light hits a red wall, then most of the blue and green light is absorbed, but the red light reflects off. and now is hitting other things. And so if you have a red wall with a white floor, light is bouncing off of the red wall into the floor,

and now the floor is being turned red. And so the entire bouncing of light around the scene. through multiple bounces is the critical challenge. to solve here. And again, laws of physics are known. And so the complete solution to this, it was written down in the 1950s, I think. The real magic here in Lumen is this system. that Daniel Wright developed over the course. of many years based on ideas formed. over a longer period of time. to calculate the way lighting bounces. around at different scales, ranging from, you know,

the scale of miles or kilometers, down to the scale of pixels and millimeters. And to not only calculated at each level, but integrate it seamlessly at each level. to give the appearance. of completely seamless and accurate lighting. And previous techniques were highly specialized. and artist had to make a decision for each light. about exactly what it did. And a lot of the practice with Nanite now. is you build a scene, you place lights in it, and it just works to make it that much easier.

- Yeah, I mean, we're watching, so I recommend people go. through this blog post, like, look at that so dynamically. I mean, we should say that, so there's the indoors and the outdoors, and to be able to dynamically compute the impact. of outdoor light. Just look at that. Look how gorgeous that is. Just the lighting, like, we're looking now at an image of a cave. So external light lighting. the intricate complexity of insides of a cave.

Look at that. - Light in the real world goes through a lot of bounces. and the effect of it are very, very subtle. But when they're not there, you miss them. Often a person can't point out why a scene is wrong, but they know it looks wrong. And it's the lack of the subtle lighting cues. that we're seeing here. - And you know, for great, 'cause we mentioned for great video games, but also for great films, lighting can make a film. and we're just looking at sort. of a very dramatic lighting of a scene. Like imagine stepping into the scene, it's exciting, it's terrifying.

And all of that has to do with light, the interplay between light and darkness. It's incredible, it's really, truly, truly incredible. Like light is everything, and then to put the power. of the tooling in the hands of an artist. that is really special. - Yeah, the industry's gone through a massive evolution. and there's so many supporting systems to make this awesome. And always artists. (Lex laughing). - We're looking at reflections on smooth surfaces. Oh boy, oh boy, look at how gorgeous that is.

- Yeah, that's right. - Wow. - And you have to appreciate, the algorithms are doing quite a lot here. You can have a, you know, a scene with a huge number. of not just lights, but also bright objects. that reflect light off of them. Every one of those has to be captured in the reflections. in order for it to be realistic. And, you know, you can't calculate. every photon in the scene, and so you need really detailed approximations. And that's the field of computer graphics. It's about increasingly effective approximations.

of the laws of physics, which are just totally intractable. - But the result of that graphics is the feelings. and experience by the viewer. And it's just to me, as a fan of, well, let's say beauty in the world, it's exciting that we can create. that synthetically, artificially via graphics. and that just, it blows wide open. the possibilities of storytelling. So outside of video games, a lot of people are using Unreal Engine. for movies, for films.

And big congrats, I saw "Wars is Over" short film. that was made with Unreal Engine won an Oscar. So you can add that to the resume. (laughs). So that's huge, you know, an Oscar winning film made with Unreal Engine. So what do you see as the future of. the use of Unreal Engine. and creating stories in the film industry? - Increasing capabilities and productivity. You know, the limiting factor.

in every one of these businesses is cost. And the more the engine can make their jobs easier, the more power that brings them. One of the big revolutions we've seen in Hollywood. is that moving away from doing computer graphics integration. into a human scene with green screens, to moving to these large LED wall panels, they're displaying real-time computer graphics. powered by the Unreal Engine. And that's a massive improvement in quality. You can recognize the old green screen movies.

because the lighting on the characters is just wrong. And you know, as much as they try to fix it up, it never really works. When you're filming in front of a LED panel. with LED light emitters in front of you as well, the actor not only picks up all the lighting. from the actual natural scene that they're supposed. to appear in the movie, but they also can look around. and see it, and they're aware of exactly. what set they're acting in. And just the overall end result is that much higher. It's as much because the actors are able. to do their jobs better seeing the scene they're in.

because the technology is enabling. a better lighting calculation. and a better interplay of virtual light. and real world light to make the end result awesome. - So there's a lot of excitement around generative AI. What do you think is the future of the interplay. between what a human artist creates. and what an AI system can create in Unreal Engine? - I think a lot of people in the industry. are overly optimistic about the rate of progress of AI. for video and other things like that.

The real problem is consistency, like spurting out an image is really high quality, but with video over the course of seeing, you know, all the AI approaches have consistency issues. going from one place to another. And I don't think that those will just be remedied. Fundamentally AI just doesn't have anything resembling. an understanding of the entire scene they're in, the entire arc of the movie or plot therein. and the entirety of the world around them. and how it might affect a scene.

Whereas game engines have that. exactly where they need to be. And so I think what we're gonna see. in the space of world-class high quality productions. isn't just everybody moves to AI. and a large part of the human creatives contributing. to that are obsolete. I think what we're gonna see is AI becoming. a multiplying force on the power of human creatives, making them able to create better stuff more quickly. and with higher quality end results. And I think unlike the fields of generative 2D art.

and generative text, I think the future of AI. is much more complex and nuanced. And I think your interview with Mark Zuckerberg. conducted in VR was a really. good first example of this. So you did this VR discussion, it was capturing your faces. and then rendering a completely 3D. computer graphics model of your faces. And then the end result was patched up. by an AI image enhancer that was able to add.

an awful lot of the missing subtleties that are lost. by normal computer graphics rendering. And that's the first step. You know, you can imagine the output of Unreal Engine. being enhanced by an AI pixel shading post processor. is one thing. You can imagine creation of objects being enhanced. and especially mashing up high quality objects. that have already been created. Like Epic's Quixel team went around the world. and scanned tens of thousands of real world objects. at extremely high levels of quality. They have everything from rocks to trees.

to archeological finds and so on. All captured there. And we have an awesome library of them. on the Fab content site. What it's missing is the ability. to create arbitrary amounts of new content. And you know, I think using data like that. and AI to create completely new trees. that meet your specification from all of the knowledge. that has built up of high quality scanned trees. is gonna be a really valuable thing. But you know, I don't see this reducing the need. for people or the role of people, rather, I think it actually is probably an enhancer on that.

I can't help but think when I go on Amazon. and Netflix to watch a movie, there's awful lot of linear content. and most of it isn't very good. because you know of the limitations of the media. and the budgets and of other things. If we can use AI as an enhancer on that, then, you know, everybody's gonna have. even more opportunity than they have now. And every single technological revolution. has changed the way that people work, but it's ultimately created more opportunity for people.

And you know, the (indistinct) its predicting. that this might be the last, but I think just the opposite. I'm an optimist on this. and an optimist that it's going. to create opportunity for everyone. - Do you think it would be possible to generate, so use generative AI to create. dynamic objects like you mentioned trees. in the Unreal Engine world, so create meshes and textures. and empower the creator. to create faster use meta knobs,

like hyper parameters versus very nuanced. where you can control much faster the look of a face, the look of a tree, all that kind of stuff. - Yeah, I think that's the central challenge. of the next decade of game engines and AI for, you know, content creation of all sorts. Because you have two very different models of the world. that are emerging. There's the scene graph, the technical term we use. to describe the set of all of the objects in the world. in a 3D world maintained by Unreal Engine. or another engine, you know,

so in the videos you saw, it's the rocks and the trees. and the snow and the bridge. and the people and all of these things. And each one has enormous amounts of data attached to it. Some are like texture maps, some are sound files, some are animation files. and enormous amounts of detail all stored there. in that procedural, in this precise computer graphics representation. that enables rendering it from any perspective. with any settings and so on. It's a completely general system. that has complete context.

about the state of the world at any point. And so you can always precisely reproduce it. If you play the same scene 10 times in a row, it's always the same. It's never randomly changing. You're like, "Oh no, why did it. that this character's face change midstream?". But it's also, you know, rather limited. because you have to build everything manually. and it's costly and it's time consuming. It requires expertise. And then you have this other model of the world, which is what AI sees or thinks. You know, if we could peer into what's really happening. in its parameters, there's something like the mushy connections of neurons.

in a brain. It has a vast amount of knowledge about the world. and about graphics and about images and about people. and about everything else. It's stored in a human incomprehensible form, but it can be extracted through queries. like asking it to produce an image from a prompt. or a video from a prompt or whoever. But the huge problem with that is it's very mushy data. We don't know how to give it a command. that will give us a precise result.

And if it produces one image one time. and we change our prompt slightly, it might produce something completely different. and we were unable to art direct it. And so it's this completely untamed tool. And I think, you know, when we figure out more. and more ways to merge these. and connect these two together, you can imagine AI enhancing the process of content creation. in a traditional scene representation. You can re imagine the scene representation. being cured with AI. So the AI not only sees a prompt, but also here's a list of all of the objects in the world.

and the characteristics and so on. It can learn more about how those objects. should move and interact. And so if you get a constant feedback cycle. going back and forth between an engine and AI, and I think you can get the best of both worlds, stable scenes, but also the higher productivity. of being able to get content out. and the ability to like select specific parts of it. and art direct those. And to have those art directions stick. and be recognized. as part of this permanent scene representation. - Yeah, I can't wait until AI can operate. not in the space of pixels,

but in the space of scene graphs. Creating objects in the scene graph, whether it's like you mentioned audio. or any of the things that you mentioned about. that empower the creator. Yeah, that's a super exciting future. I wonder if you could speak to a fear. that people have on this topic of artists, engineers fear losing their jobs, being replaced by AI.

Are there words of hope that you could offer them? - This is certainly the most extreme example of it. because AI is just so far ahead of prior technologies, but similar fears were had in every other industry. There's a fear that digital music synthesis. would obsolete musicians. And there's a very brief period of time. in which songs with digital music instruments, like there are early mini mugs. and Yamaha synthesizers weren't allowed. to win certain music industry awards. because they weren't considered real music.

And then, you know, over time the people were educated. and realized, oh, these are just instruments people are playing. and they're controlling them the same way they did before. There's similar questions about is, you know, computer art built in Photoshop really art, or is it just, you know, goofy computer stuff? And you know, I think nowadays digital artists. have gained respect and I think, you know, if you look at just the tools that existed in Photoshop, some of them are pretty sophisticated. and nowadays AI features, but I think AI is ultimately gonna be another tool.

in the artist's tool set. And you know, I think it's gonna become. a more powerful directable. and human serving tool in the future. And I think a lot of the alienation comes from the prompt. either being immensely powerful. at giving you an entire creation, but then being completely unwilling. to let you control the nuances of it. That feels alienating. You give it an image, but you're like, you know, replace this part of it with this thing. or make that object green. And it just like, it can't do it. Often it can't be convinced with any number of words.

in the prompt. And that makes it feel like the computer's taken. control away from us, you know, humans and artists. and is refusing to do what we want. and has its own opinions, right? It feels like a competitor. Or I think when we have much, much, much more nuanced. control of it and artists can join and just, you know, like, yeah, let's enhance this object, do this, do that, do that. They'll feel it's a, you know, like some of the tools. that exist in Photoshop, which are in some ways compared. to a paintbrush or superpowers already, AI will come to feel like that too.

And will increasingly serve creators creating. and enhancing a work in a way. that feels just a natural extension of their own, you know, their own bodies and minds. - And of course there is a real human pain to layoffs. and there is a hype around AI. and then companies might try to implement AI systems. and then so doing layoff a bunch of folks. and the pain that those folks feel is real. I think there's always going to be pain. with these kinds of transformation that's happening.

And it's a terrible pain. Pain in general in the human experience is terrible, but I think I'm personally excited. by the human AI collaboration. as you've described in this whole process. So I think if you just keep being open. to using the tools, constantly trying the cutting edge tools, how they can make you more productive, how can they empower you as a creator, as an artist. or as an engineer, I think you're gonna just keep winning.

- Yeah, there's a lot of complicated trends underway. and it can be hard to break them down and distinguish. And I think a lot of people like the theories. that get the biggest traction on social media. often don't capture the real underlying. mode of forces at play there. But yeah, I think AI involved in code production. will probably create a net benefit for the need for humanity. to be involved in coding. It may change parts of jobs, but I don't think it's gonna obsolete anybody.

who's willing to learn new ways of doing things. And it's always been this way. And I think that there's also a lot of over hype in AI. AI is really great at spewing out code that does something. that a million GitHub repositories already do. because it's, you know, kind of learned the underlying pattern. It's notoriously hard to get to do something new, it hasn't been done before, especially when it's a complex task. And you know, the bigger amount of code you ask AI for, the more it leaves you. with just a massive code that sort of works, right? And that's the problem with code it like 99% works,

but the 1%. Might be harder to get to 100% with AI. than with hand coding. And everybody who's looking at this topic should actually. try using the coding assistance on hard problems. and see how they do there. - Yeah, I think it, for me personally, it makes it more fun. and faster to generate boiler plate code. so I can focus on the harder decisions, harder big picture decisions. and harder innovative decisions and all that kind of stuff. And just makes programming more fun for me. because I feel less lonely.

(Lex laughing). I have like, even when it gives the wrong code, I feel like, oh, okay, well that's a way to do it. That's interesting, and then you could talk to it maybe. Maybe that shows something about the programming experience. that it is in part sometimes a bit lonely. - The topic of boiler plate code is an interesting one. because like the mere distance of boiler plate code. is a failure of programming language. and of the idea of creating software modules, right?

You know, you ask AI to create a sorting function, great, now you have another sorting function. that might be buggy alongside the million others. that different people have written. It would be better to have a sorting function. that's been written and tested and optimized. and everybody relies on it. And more modular software, I think will actually reduce the opportunity of AI. because, you know, people doing programming work. will largely be solving unique problems. They're actually hard problems in themselves. and not just connecting other widgets. - Yeah, I think as in many cases,

AI will just help improve the human systems. by shining a mirror to ourselves. I have to apologize for the pothead question ahead of time, but let's talk about the metaverse broadly. You've been a big proponent of the idea of the metaverse. We'll talk more specifically what that means today, but we've been talking about simulating reality. better and better and better. (Lex sighing). So the pothead question is, what does it take. to simulate reality to the level.

we see around us today? How far away from that are we. to simulate this ultra realistic, immersive fun reality that earth is? What does it take? - We're going to get shockingly close over the coming years, certainly less than 20 years. If you look at the progress, what areas. where we have achieved total photo realism. and what areas where we fall short? We're getting very close in awe, non-human interactions you see in the world,

walking through a jungle or a city, all the lighting, it's very close. And that might be just a few years away, but then all of the problems that involve humans, human dialogue and intent have a much, much, much higher bar. that they need to meet to satisfy our brains. and convince us that they're realistic and/or real. And yeah, I think that's gonna be the primary challenge. of graphics development. and simulation development over the coming decade. - So the realistic humans, that's gonna be the bottom line.

Yeah, so, and visual and behavior too, so everything? - Yeah, I was asked about this about 10 years ago. and I said that even if you gave us an infinite amount. of computing power, we couldn't simulate realistic humans. because we simply don't have the algorithms, we have no idea how to simulate human intelligence. And that was absolutely the case then, but it's not really true anymore. You know, what we're seeing. with generative text AI is not only at a level. that you could say that it's actually doing.

a pretty good job of simulating human, at least humans. at the text level, not at the emotional level yet, but at least at the level of words spoken and find more. and more ways of training it on more and more scenarios. that, you know, you might have. a very, very compelling human simulation going on. in the next five years even. I'm not saying it's a good idea, but I like think the arc of the technology. is inextricably heading in that way. and it's heading at a shocking, shocking rate. - You know, we don't say this enough, but the current state of LLMs, I mean.

if you put Alan Turing in conversation with ChatGPT, I mean it really passes the Turing test. like almost definitively passes the Turing test. Of course we like keep raising the bar. Well, the Turing test is not a real test, it's not a useful test, whatever. We just keep raising the bar for AI where it's always going. to be lesser than. But yeah, you have increasingly ultra realistic faces.

and bodies combined with increasingly moving. and powerful full of emotion, speech, text. You know, I work with this amazing company. called ElevenLabs that does text-to-speech well. There's companies that specialize. in bringing text to life, right? That's going to increase, different companies do that very well. And then all of a sudden you have. this synthetically created scene where human is speaking. and you're moved to the point of tears because of the scene.

Beautifully lit face in the full darkness, the emotion, the drama of the scene. Yeah, I think so you're saying five, 10 years maybe 20. - Yeah, absolutely. We'll definitely see it in our lifetimes. - Increasing the level of potheadness in my question. Do you think we might live in a simulation? And if we do or don't, how hard would it be to build such a simulation. where we're fully convinced we're in it?

- Well, I don't think. that these questions are necessarily unanswerable. I think I'd like to see more actual effort. to ascertain like what is the underlying. mechanism of the universe. And I don't think we're here for no reason at all. I think the world's a pretty cool place. and the fact that we can exist. and, you know, the laws of physics. and especially a standard model of physics. and all of the parameters that lead to, you know, these atoms and life evolving. and the presence of thermodynamic gradients,

that's really cool. And I think it's a worthy field. to study more about that holistically. I dunno, the question of are we living in a simulation. ourselves always boils down to, well, if we are living in simulation, what are they living in? Because at some point there has to be some base reality. Or, you know, one of the philosophical theories. that was put forth seriously was. that there is no physical reality. If you have a system of equations, you know, such as the laws of physics, then all possible evolutions.

of dynamical systems under those equations. kind of have a physical reality. So we just are kind of a manifestation of laws of math. rather than needing an actual universe around us. I dunno, I like dabbling into that philosophy. And as we see AI becoming smarter and smarter. and we get closer and closer. to really capturing the full laws of physics, these questions become quite a lot more compelling. - You know, you start to think, if we're not living in a simulation, what are the things about this reality. that are not simulatable?

So what are the big mysteries around us? It feels like the physics is simulatable. It feels like a lot of the incredible stuff. that we talked about while super nice seems simulatable. But then there's the flame of consciousness, the feeling of it, whatever that is. that lights up in our eyes as humans. Maybe that's not simulatable. Maybe that is the thing. Maybe that's a thread that connects to the explanation. of the mechanism, as you said, of the universe.

that's really important to understand. And we're completely clueless about that mechanism. I mean, a lot of the religious texts sneak up on. what that mechanism is, but we're still mostly clueless. We only have these like leaps of faith. in believing what that mechanism might be. - So, you know, the whole idea. of nested simulations perhaps, you know, given an sufficiently advanced technology is kind of mooted. such that if you wanted to simulate another reality, you're kind of just actually creating the reality. You're doing, you know, quantum mechanical operations.

that would produce the same result anyway. and you're running them at full performance. So it's not really a nested simulation, it's just another thing that's happening in the universe. So that would be interesting. But I think it's ultimately a theological question. and because it's no longer cool to deal with theology. as part of science, there's not been much work on that. You can't publish results on those topics. in a respected physics journal. So I think it's kind of been set aside,

but it's interesting to note that the laws. of quantum mechanics themselves have a place for, you know, god or souls or whatever external source of input you might. want to attach to such a thing. And that, you know, that there's this idea. of quantum ways function collapse, that when we, you know, look at a quantum system evolving. and perfect super position of many possibilities. and you go to observe it, you actually just see. a specific possibility. In the multi-slit experiment, the light ultimately ends up being observed. going through one slit or the other.

And that's a place where there's this random number. being injected into everything around us. You know, trillions of trillions of trillions. of times per second and everything we're observing. And if you want to ex attach some external input, well there's a place. (Tim and Lex laughing). - And it could be seriously accessible. to the rigors of science, but we just know so little there. - Yeah, it's funny, and in that area, we know nothing more than cavemen knew whatsoever. We know than the laws of quantum mechanics. And we have computers that maybe.

soon more advanced than we are, but we just don't have any answers. to the fundamental questions about life, the universe and everything. - Do you think sort of more practically, do you think we'll create video game worlds. of the metaverse variety in which humans will want to stay? So I mean, to me, this kind of discussion.

of a simulated reality, the real test of immersion is like. not wanting to go back to the real world. As a perfectly healthy, excited, normal human being, choosing to stay in that world. How hard is that, do you think? - Well, I think the technology is coming. and then there's a human question. of should we go that far? - [Lex] Should we? Yeah. - And certainly as a game developer ourselves, Epic doesn't aspire to that. We make fun games.

And you know, the ultimate manifestation. that we found is fun games that people play together. to have fun in between, you know, work. and the other things in their real lives. But as the simulations get more and more realistic. and the capabilities become more and more real, I think we have to ask ourselves some hard questions. about how should humanity operate in that space? What are the limits that we should go to. and what are the limits we should set? - Yeah, I think there's gonna be some hard questions. and I think maybe I'm just being human-centric here,

but there should probably be some legal bounds. on two things, sort of not creating a reality. in which humans would want to stay too long. Sort of, yeah, focusing more on the game side. And more importantly, not creating simulations of humans. that could suffer. To me, you know, as we talked about.

creating ultra realistic humans, eventually that means creating humans that can suffer, that can fall in love and experience heartbreak and loss. It can fear death. And the more you simulate that to the full reality. of the human condition, the more you get to this place. where you have assimilated humans. that is able to suffer. And I think legally speaking, I think you have to get. to a place where that's not allowed. Like there is a line you can't cross.

And that's a hard thing for humans to deal with. That's gonna be some interesting Supreme Court cases. Once you create a human sufficiently realistic to. where they can suffer, means that human could be tortured. and you know, terrible things to that human. that's "artificial" quote unquote. But boy, that still feels wrong.

I don't know what that is, but you feel wrong. to torture a simulated human. Now when you play a video game and it's a shooter. and everybody's having fun, that doesn't feel wrong, but there's a line and that's gonna be a fascinating line. for the Supreme Court to explore. (laughs). Oh man, what an exciting future we're living in, huh? - Yeah, you know, I think the thing to appreciate.

is like game developers have just generally. been on the good spirited side of things. If you look at the worst things that people do. and in popular video games today, it's like what? You rob a bank in "GTA.". Well, it's clearly fictional and awe and fun. and not serious and over the top. Yeah, I think, yeah, as things get more realistic, especially simulation of humans, yeah, there are some hard questions. that will have to be answered there. But I think the thing that all games developers. need to remember is we're here to make people's lives better.

by entertaining them, providing them with fun and a diversion from other things. and being a part of their lives. and not trying to be too big or being too much. and not trying to provide an alternate to reality, but to just provide a fun source of entertainment. like the many other things that people do for fun. - So you spoken, like I mentioned about the metaverse for many years. Let's step back, what is the metaverse? And speaking of fun, you know, "Fortnite," (laughs).

you know, just hundreds of millions of people. just enjoying themselves in this huge scale social game. You could call it a metaverse, maybe you can describe the different flavors, the layers of how you see what the metaverse is. - You know, the metaverse is an idea whose stock price. goes up and down depending on who says what. on what day. And some have an ability to drive it way down (laughs).

by opening their mouths. But ultimately this is about. multiplayer social gaming experiences. You and your friends getting together in a 3D world. and having fun together in any way you want. You know, if you're playing "Fortnite: Battle Royale,". in my view, that is capturing the essence of the metaverse. And it's, especially in "Fortnite" when we got Sony on board. so that all players on all platforms in "Fortnite". could play together, could voice chat together. and could be part of a single game experience.

It really took on a new nature, which was not just like a multiplayer game in, you know, with Heritage from "Doom", but also a true social experience. between you and your friends. And yeah, "Fortnite: Battle Royal". is just one manifestation of that. Another one is like "Rec Room VR", where you're standing. around in VR with friends playing billiards. or shooting hoops and we're doing other. like light entertainment things. I think every game that has a huge number of players. who play together socially as part of their, you know,

entertainment lives. Yeah, I think is really getting at the core essence. of the, you know, aspiration for the metaverse. And, you know, we're still in the very early days of it. You know, I was on the internet and like 1992 or so, and you know, it was a pretty bare bones thing. I think when we look back at the state of gaming today, we'll realize that there's a lot further. to go to get to the ultimate version of it. But, you know, I think it's all on track. And I think it was the time we released.

"Fortnite: Battle Royale" and started playing together, all the people at Epic and Squads. and experiencing that world that we realized. that this trend was afoot and that we needed. to do everything we could. to bring in other creators so that anybody could, you know, pile on to the work we were doing. by creating their own worlds, you know, for through "Fortnite Creative" and UEFN. and creating more games. and more genres that people could play. and ever expanding the repertoire of fun. - Yeah, I would love to sort of talk about. different aspects of that a little bit more.

because, you know, Epic has created a lot of amazing games. "Unreal Tournament", "Gears of War,". but the game that I think is fair to say. that transformed the gaming industry was "Fortnite,". or "Fortnite: Battle Royale" especially. Can you explain the origin story of "Fortnite"? - Well, "Fortnite" has humble beginnings. In 2011, we just been in the final days. of finishing one of the "Gears of War" games. and we wanted to explore ideas for new games.

and we'd had a general idea that we would like to build, you know, some smaller games, online games. or to learn more about, you know, that space. and not just have one single massive game in production. at all times and only one. And so everybody in the company was given a week. to form a team and work with whichever coworkers they wanted. and build a game, you know, using Unreal Engine. so you can actually build something. pretty interesting in a week. And one of the teams built. the very first version of what became "Fortnite.".

The very first version of it had a different art style, but it had the idea at the core that you're going. to build forts by day using this building system. Then night would come. and you'd defend the forts against zombies. And you know, the longer you could go, the more elaborate forts you could build. and the more survival, you know, waves you could withstand. and it would get cooler and cooler with time. And you know, that game was in development. for a very long time. We always saw the potential, just the building aspect. of it was incredibly fun.

But we made different pivots at different times. At one point we moved. to the current "Fortnite" art style, away from kind of more of a realistic style. Made it, you know, more in the Pixar vein of, you know, cool stylized characters. - What was that decision like? 'cause you mentioned "Gears of War" is this like incredible, like shows off the graphics to the fullest, different than the artistic style of "Fortnite.". It's amazing that the same company would make this like fun, silly graphic style of "Fortnite," you know.

- People come to Epic because they wanna work. with the best people in the world. and artists bring a lot of different. personal art aspirations and style capabilities. and many of them are very multi-talented, can produce photo reel content or highly stylized content. And a lot of the best artists on "Fortnite". were a lot of the best artists on "Gears of War". to change styles, but continue doing awesome work. We'd realized that "Fortnite" could be mainstream. and it could be a game people play for a long time. And so having a, you know, more visually pleasing art style. that's, you know, not as stressful as like a "Call of Duty".

game where you're constantly like pixel hunting, you know, a dark scene for a, you know, somebody's rifle scope. (Tim and Lex laughing). That was the goal, so, you know, a few of the artists. got through into finding a new art style and we moved to it. and at different points it evolved towards being. kind of like a light MMO like "Destiny". with rather complex RPG and stat systems. And that evolved into a, you know, kind of an UMO like. tower defense game. UMO only in that persistence of items and stats, you know, which became "Fortnite: Save the World" mode,

which we launched in early 2017. And it was a moderate success, you know, it paid its budget and we'd come out ahead. And then at the same time. the "Battle Royale" genre was booming. "PubG" had just come out, tons of people at Epic were playing that. They're like, "Oh, this would be so cool. if it had 'Fortnite' building.". And so we assembled a team in a war room, you know, like 30 people in one big room. And you know, they worked insanely hard for four weeks. to build "Battle Royale.". So the nice thing is all the content for "Fortnite".

had been built over the previous seven years. They had a huge library of content. but no gameplay of the type they wanted. So they had to build it all in that four weeks and ship it. And that put Epic on an exponential growth curve. where we went from 300 employees to, you know, to thousands of employees. and went from about a hundred million dollars in revenue. to billions of dollars in revenue. And, you know, kinda became the center of the gaming world. at the time. - Can you actually speak to the technical challenge. of going from mostly not online.

large scale gaming platform. to being able to support with "Battle Royale,". a huge number of people playing with each other. at the same exact time? Like what's the technical four weeks, what's the technical challenges. there that had to be overcome? - Since 2012, we've been building online backend system. to support player accounts and login. and you know, all of the different systems there. needed to make a multiplayer game. And we've been building them to be scalable. And by some miracle we built them stably enough.

that they were able to scale up. And you know, so the online team was responsible. for patching that code. Spent a year of intense work getting it. to scale from like 40,000 concurrent users. to 15 million concurrent users. Yeah, I mean they're scaling and there scaling, that's a lot. - That's immense, but they'd done such an awesome job. of building the foundations that it was tractable, it was doable. If they hadn't done that, then the company would've died that, you know,

"Fortnite" just wouldn't have been playable. and the whole thing would've failed. - I mean there's just so much detail there. that makes all the difference. because I mean that's what Spotify has talked about. that like the latency, it's like how quickly you can deliver the song. changes the product from being this shitty thing. that I'd rather pirate the songs to like this is good enough. to where I really enjoy the experience, I want to use it. And so like yeah, that's really important.

to create an experience for 15 million concurrent users. to where it's not lagging. or it actually works, right? Is there something you could say to the sort of like. how difficult that is to pull off? - You know, the trend nowadays. for building online services is microservices. There's not one big server that handles. all of the interactions with "Fortnite.". There's game servers running a hundred player game instances.

for each Battle Royale session. and then there's an account server. and many instances of it all talking to a shared database. and there's hundreds of different microservices. talking to each other. And so scaling is a matter of identifying. what are the bottlenecks in that system. and making sure that each one can scale. and has enough redundancy to be able to handle the load. Thank God for Amazon Web Services and cloud hosting. because Epic went to 15 million concurrent users.

without buying any server hardware. We are able to just call up Amazon and say, "We need more.". And there was a period of time there. where "Fortnite" was undergoing this exponential growth. and we'd find like one week we ran out of servers in Brazil. during a heavy weekend of play. and next week we had an even heavier weekend of play. and there were servers to handle it. Like somebody at Amazon had dropped shipped, you know, millions of dollars of server hardware into Brazil. and turned it on just in time for "Fortnite" to need it.

And you know, there are a lot of unsung heroes. in that story, many of whom we've never heard of. - Yeah, I mean behind AWS many unsung heroes. It's like so much of those folks who run. the modern internet, all the incredible services, the games, the services that we take for granted. are currently being run on AWS. or were originally and Google Cloud and so on. Yeah, can you speak to how much money "Fortnite" made?

(Lex laughing). So this is like one of the greatest successes. in the history of video games also. - "Fortnite" makes billions of dollars a year. and that's the majority of Epic's revenue. that we have a robust business. around on Unreal Engine licensing, "Rocket League". and "Fall Guys". and some other tools like the Fab content marketplace. But the majority of it is "Fortnite". because we've chosen to reinvest heavily in building. what we think is the future of technology. We're spending more every year than we're making.

And for a bit of time we were spending. over a billion dollars a year more than we were making. and we found that to be unsustainable. and we went through some painful layoffs at that time. and then we stabilize and now we're spending. several hundred million dollars a year. more than we're making, which we can very well afford to do. because we have billions of dollars in the bank. You know, thanks to a combination of the profits we made. when we were a very small company with a very big game. And because of investment we've raised. We're not an pumping oil out of the ground at.

where we discovered oil. We are growing to be a future technology powerhouse. and we think that 3D space. and the future of real-time 3D simulations is going. to be one of the major facets of technology for humanity. And we're all investing in that. - Yeah, it's exciting to see. that investing in a long-term future, sort of taking the risk of doing the research. and defining the next chapter of Epic. So using the successes of the day. to invest into the successes of tomorrow, that might look very different, like completely different.

And part of that is investing in the developments, the research and the innovation in the Unreal Engine. - That's right, we're a company. that can start working on a project knowing. that we won't reach fruition or make any money. from it at all for three years, four years, five years. We're totally okay with that. And you know, that's the cycle. that's fueled our growth over time. It's constantly investing in the future. and you know, being a serious company that's doing. serious R and D side by side.

with shipping and maintaining products. and earning money from them. - So can you speak to, I mean there's several directions here. So one of them sort of the future evolution. of this idea of the metaverse, so potentially creating communities. So "Fortnite" is this incredible, huge community of humans interacting, but your vision is to go outside of just one game.

So what is the kinds of standards. that you're thinking about building. such that people can sort of have an identity. to almost travel between games and that kind of thing? - Lemme start with the present of gaming and why it sucks. (Tim and Lex laughing). - Like that's a good start, sure. - "Fortnite" is an awesome thing. You go into "Fortnite," there's, you know, a hundred million monthly active users there, a huge number of your own friends are there, you can play with them, go from experience to experience seamlessly. without leaving the app. There a hundred thousand different islands you can play on.

And some of them are really awesome. and they're constant new ones coming out. and constant things to do. If you wanna play "Roblox", all right, you quit. out of the "Fortnite" app, you launch the "Roblox" app, different program, different friend system, different account names, your username in "Fortnite". and your username and "Roblox" are different names. and they're not connected to each other. So you have to remake all of your friends. and then find different, you know, things to play. And now the controls are different. So you have to relearn how, you know, the joystick, mouse, keyboard controller works in.

that experience and you have to go from place to place. And you buy some stuff in "Fortnite" and it's really cool. and you can use it anywhere in "Fortnite.". And then you go in "Roblox". and you don't have that stuff, you have to buy different stuff. and that stuff only works in "Roblox". And same with "Call of Duty", it's another isolated place. And same with "World of Warcraft", and same with "League of Legends". and every place you go is its own unique place, different friends, different account names, different people. And there's no social cohesion between them at all. And long time ago, console was set out to solve this problem. by creating their console-wide friend system in account.

So your friend on PlayStation in one game is your friends. on PlayStation in another game, but only on PlayStation. If you're on Xbox you can't see PlayStation friends. And so you have two basically orthogonal. and cross-cutting divisions of the world into fiefdoms, you know, which were not created with bad intentions. but arose and are, you know, separated, isolated islands. One is the platforms and their social services, Xbox, PlayStation, Nintendo, it's Steam, Epic if you add it to the list.

And the other is these different games people play. and you know, because of this weird historical artifact. where we're left in a world. where people can't seamlessly move from games to games, bringing their friends and their stuff. So the solution to this is to federate. and connect all of the systems together. All of the players on all the different platforms. can be recognized by their name. and put the @ sign in it, so your Xbox names and your "Fortnite" or Epic names. and your Steam names can all live together.

and operate together in a single space. So unifying the social ecosystems. is one thing that needs to happen. The next and bigger challenge is to unify the economies too. Now I'm not talking about like a sword you have in. "World of Warcraft" should work in "Fortnite". (Lex laughing). Every game's gonna have its own gameplay rules. and a lot of games are gonna have stuff. that only works in them. But you know, there's a huge set of games. that have in common the idea of a cosmetic system.

that does not affect gameplay outcomes. but is, you know, purely cool looks and cool appearances. Most of the major multiplayer games have them. and you know, if you look at games you could probably bundle it together. about 70% of them and say they're similar enough. that they could actually interoperate. That you could own an outfit in "Fortnite,". own an outfit in "Roblox", and own the same outfit in maybe "Call of Duty". and maybe, you know, a hundred or 200 other games. and actually expect they would work together.

And you find other kinds of items. are probably interoperable too. Like "Fortnite" has car outfits so you can, you know, buy different appearances of a car. And when you find a physical car in the world of "Fortnite,". if you're the first person to get into it in that session, boom, it takes on your, you know, your chosen car cosmetic. and now you have a cool car that's identifiable as yours. You know, we realized early on with "Fortnite" that the key. to making "Fortnite" work as a creator economy. was to open up the revenue from the item shop.

to all of those sources of engagement, right? There are two big things happening in "Fortnite". that make it work as a product and as a business. One is the game modes, "Fortnite: Battle Royale", and all of the user modes and everything else. are sources of engagement. People play there because it's super fun. And because they're playing there, they're willing. to buy cool stuff to make their character look cooler. And so you have all of these sources of engagement, but the sources of engagement don't make money directly. You can't spend money in "Fortnite: Battle Royale".

to buy a game item like everything's, you know, the gameplay is not pay to win and it's all just a game. So we make money from the item shop. and the item shop only exists. because of the sources of engagement. If you weren't playing "Battle Royale," trust me, nobody would wanna buy a "Fortnite" outfit. If you weren't playing any "Fortnite" games, why would you buy "Fortnite" outfits? And so you have all the revenue in this item shop economy. and all of the engagement in this engagement economy. And the thing that magically makes the "Fortnite" creator. economy works is revenue sharing. Item shop spending according to sources of engagement,

buy engagement, if you buy an item. and you've played, you know, 40% of your time. in Battle Royale and 60% of your time in these user modes, the amount you spent, the portion of that. that's profit can be separated out. and paid out to all the different creators. who participate in that economy. And that's why "Fortnite" scaled up. to a $400 million creator economy so far and is growing. - It's amazing. - One of the really critical things we aim. to do in designing that is ensure it's a creator economy. that could scale to other companies, other ecosystems.

And say, you know, right now we have. many industry standards bodies, so one standardized game ratings, you know, age ratings of games, another standardized file formats. for the web, another style, you know, standardizing file formats for 3D. like Khronos Groups in the Metaverse standards form. If we had a standards body standardize. what are portable outfits in games, you know, game outfits you could buy in one game that work in another. What are their, you know, dimensions.

and what are their capabilities. and what can you do. and what can't you do and so on. Then you could have an item economy where every game agrees. to respect each other's item purchases of that sort. And revenue is shared between ecosystems as well. - That would be incredible. That would be so amazing. Is there, first of all, just it seems silly maybe. for people who don't play video games, but an outfit is an important... If an outfit can be persistent across video games,

I mean, I don't know what's the purpose of life? Like, why do we wear clothing? Clothing is a part of our identity. It's how we present ourselves to the world. It's, you know, I wear the stupid suit and tie. It feels good. It feels good when I put it on. And even like the other outfit, I have two outfits, this and then a black t-shirt and jeans. And it feels good to wear that. It feels like me when I look in the mirror. Okay, I know that guy. And to be able to have that outfit go from game to game.

to game maybe across years, that would be wonderful. I wonder if you could just even comment, could there also be another standardization about the value? So for more complicated items, so, you know, take a sword from "Diablo". and transfer to a gun in "Fortnite.". But based on the value some, you know, some generic concept of money. So the value of a thing in one game.

versus the value of a thing in another game. where you're almost operating in a space of value. versus the actual items. Or is that already getting too general? - I think this can be done, yeah. We did a lot of analysis of the "Fortnite" economy. and found that some "Fortnite" experiences. lead to or correlate with higher spending than others.

And you know, "Battle Royale" is relatively strong. in that area because you see your character from behind. and see all of your other characters from the front, and you have lots of opportunities to really see who you are. and to emote and to interact with other players. And a lot of games have that characteristic. One funny anomaly stood out. There was this game. that was one of the big breakthroughs. in "Fortnite," "Only Up.". It's a game where you're just climbing up in the up. by following pads of stacks of objects and things.

It was just stupid fun. (Lex laughing). Everybody loved, okay, but we found people weren't spending. a lot of money on outfits. when they were playing "Only Up". It's kind of intuitive actually. Like you're not seeing other players, like if you see anything, like you're seeing their butt. as you're like trying to catch up to them, jumping from object to object and they're above you. And so, you know, it wasn't a mode. that shut off outfits very much, but you could, you know, you can determine the economic correlation. between a game mode and spending.

- That's so fascinating. I mean, "Fortnite" is this gigantic economy. where you could do those kinds of studies, you can understand markets, the digital markets. as they emerge amongst humans and what they value. And from that value, you can probably have a very stable. kind of money that emerges. - Yeah, I think so. You don't need like an alternate currency system, you know, unfortunately, a bunch of ideas have conflated. because people were trying to hype up different things. But you know, this idea of large scale multiplayer. social gaming, you know, that notion of the metaverse,

you know, there's 600 to 800 million people playing. that kind of game every month. So like, you know, that's real and that's happening. and it's, you know, very much underway. VR has a much smaller audience. I don't think you need VR to have anything like this. Like VR is hardware that may or may not enhance. the experience for some usage cases. For some it'll probably be better. and for some it'll probably be worse, but certainly there's not any set. of "Battle Royale" players flocking to VR.

And the other thing is NFT is it's like you trying. to equate digital or cryptocurrency to the metaverse. It's just a way of denoting money or value exchange. You can do that with money or you can do it with NFTs. or whatever, but there's nothing about this future digital. economy that fundamentally requires. cryptocurrency or whatever. What you need is interoperability. Interoperability can happen through a blockchain, it can happen through a database, it can happen through standards bodies.

with defining standards and protocols. And we've been doing it for hundreds of years. since the railroads were standardized. And you know, it's not something. that totally requires a novel technological solution. - Yeah, I mean even on the topic of cryptocurrency, it's very frustrating. You know, blockchain and crypto is a really powerful. technology that I think can enable. a lot of the things that we're talking about.

But so many people use it to try to make money. to create these bubbles. And the hype and the meme coins and the so on and so forth, that becomes much less about. that drifts far away and rapidly. from things that are actually of value, which is the experience of playing "Fortnite". and how you look when you play "Battle Royale.". I mean, it sounds ridiculous to say, but it's true. But that's valuable. That's like, you know,

you have like gold in the physical space. We know that holds value. How your outfit looks like in "Fortnite" that, as you're saying, provably holds value. And so you want to connect. like a standard definition of money value. to that and not let it become this hype thing which NFTs. that you mentioned are just become that. Like quickly drifts away. into the land of people trying to buy.

and sell and try to make money versus like staying close. to the thing that people actually value. Forget the money, it's more about exchanging. valuable experiences or things of value. So you can play "Fortnite". and then go to another video game. and continue the valuable experience. and then come back to "Fortnite" and do that kind of thing. So you're saying there might be a way to do that.

and to basically create standards. the way the web has different standards. for displaying websites and all this kind of stuff. or the communication. that's required on the networking side. So all the different standards that make the web work, there need to be those kinds of standards. Like what would those standards look like. to enable the metaverse? - We need a lot of different things. The one area where the standards bodies. have been very successful in creating working standards. implemented by all the major engines today.

is in low level file formats for data interchange. You know, the web has PNG files for 2D images. and in MP3 files for audio. And 3D has the Pixar USD file format, the universal scene description, which is a description. of the scene graph, the entire set of objects in the scene. and all of their parameters so that any engine. that supports those features could import that. and then render the same scene as the engine they came from. You know, large parts of this work across Unreal Engine.

and Unity and Blender. and all of these 3D packages of different sorts. Then there's the GLTF texture format, which stores textures. and geometry and other low level data for 3D objects. You know, when you see a "Fortnite" character. that file format together with the image file formats. can store their static appearance, you know, the shape of their body, even their animations and their different poses. and the appearance of them, the different standard file formats could store. all of the sounds they make in their emotes.

But we're still missing a bunch of pieces. The biggest missing piece is the programming language. that's at the center of standardizing the metaverse. Now if you look at the web, the web is a combination. of a bunch of different technologies. The two biggest ones are HTML, which describes the 2D scene graph or the, you know, 2D layout of controls and objects on the webpage. But that's just static data. It's just a non-moving, non animating webpage. And then you have the JavaScript programming language,

which is used to manipulate that to display things. to the user and to implement anything. you could implement in code. So it's a little programming language. that runs in your web browser. And the Metaverse needs something. that performs that similar role. But the Metaverse and 3D gaming in general needs something. that's rather more powerful, more safe, more scalable, and more capable than JavaScript. because the metaverse is actually more difficult. technical problem than a webpage. A webpage like an app is just a single bundle of code.

and content that somebody, a company, has prepared. and they release it and it stays exactly what it is. until they release a new version. and it's upgraded from version to version as it goes. But the metaverse needs to be a composite of code. and content built by millions of different people. that could potentially form a seamless world together. - Yeah, it's fully distributed collaborative. First of all, also the amount of data,

I mean it doesn't have to be that way, but websites are showing very little information. The metaverse, even when it looks like something like. "Fortnite," just the amount of information. that's conveyed in the scene graph. as the individual players are collaborating is a huge, huge, huge amount. - Yeah, the highest detail of "Fortnite" updates. amount to about 60 gigabytes of data.

And you know, that's just a small part of. what exists in the "Fortnite" creative economy. And if you look at what this might be in a decade. as standards emerge, you might have exabytes. of data out there. "Fortnite: Battle Royale" is I don't think. the ultimate manifestation of gameplay that will, you know, ever be invented. What we've seen time and time again is that. as we gain more technical capabilities, graphics gets more capable, CPUs become more performant. You know, web services become ever more scalable.

We've seen new genres of games that emerge. that weren't possible before. and you know, "Doom" ushered in the era of Death Match. and the first time 3D multiplayer game. was even possible at all. You know, the early "Battle Royale" games. starting about 10 years or 15 years ago. only became possible back then. You couldn't have built one 20 years ago. because you just couldn't have rendered an environment. that's as large as a VR game with that many players, with that level of interaction and performance. It was just not possible to run it.

So you got a certain level of technical capabilities. and a genre came out that proved to be. by far the best shooter genre ever invented. But I think there are numerous, numerous more genres, some of which are better than any of the existing ones. that will be invented as we get more and more capabilities. You know, some of the capabilities we're lacking now. are the ability to build environments and game simulations. that span more work than a single company. can possibly create. And you know, you see kind of the birth. of that idea in "Fortnite" and "Roblox".

where there are tens of thousands creators, each building content. And users are playing meaningful amounts of it all. And so there's an ecosystem. that's scaled larger than company, but it's still very much you go into one island. and you play that creator's work. The other direction of its scalability is putting more. and more of people's work together in a seamless continuous. play space for games where that makes sense. You know, you can imagine a game taking place. in an environment that is the size of a continent. or earth in which you can like go from place to place.

and then see different areas. which are maintained by different people. So you go into different spaces, the game rules are customized according to that. and you can go from experience to experience. and instead of having just one company's authorship. ever present wherever you are, yeah you'd see you'd be driving a car built. by one person, carrying weapons built by 20 other people. and you know, taking place in a simulation in an environment. that's built by thousands of other people, you know, and working for separate companies or their own,

you know, entrepreneurs or indies or enthusiasts. all working together simultaneously. And we totally lack the programming foundations for that. You know, the kinds of code you would need. to write now to make that happen are just not practical. And so we're investing massively in building. new programming language technologies around Verse. and our proposed standards for, you know, future metaverse programming. that we hope will solve those kinds of problems. and make that kind of world possible.

- So first of all, that's a super exciting future where, you know, it's not hundreds or thousands, it's millions of creators that can just create. different small or big elements of a world as big as earth. Just if you sort of close your eyes and imagine that world, that's really exciting. Where it's not a centralized company controlling. the release of a particular island or so on. It's people constantly dynamically modifying.

all the islands of reality in this digital world. So if you could speak to some of the technology. that can enable that, you mentioned the Verse programming language. First of all also, how legit is it for you CEO of Epic Games. to be a co-author? The programming language theorists are losing their mind. (Tim and Lex laughing). So co-author in a paper that's describing. some of the sort of nuance details.

of a programming language. So maybe you could speak. to this programming language called Verse, it's a functional logic language. What is it? What are some cool features of Verse? - Verse is a programming language that we're building. for large scale simulation programming. It's designed to make it easy to write code. that can scale up to. not only you building a "Fortnite" island. but you building modules. or components that can be used by millions.

of other programmers and coexist in a huge environment. and also can scale up to a huge scale simulation. Some games will be small "Battle Royale" might find. that, you know, a hundred players is actually optimal. It might be the a thousand player version of "Battle Royale". would be worse, but I bet there are a thousand, million. and tens of million player experiences, they're even better than that. that will yet to be discovered. And so... - Wait, wait a minute, tens of millions of players together.

- Sure we've had "Fortnite" events. that have attracted 15 million concurrent users. but you know, the fact that they're all divided up. into servers with a hundred players each. for those events isn't really a positive. It's just a limitation of the technology. Tracing back to Unreal Engine 1. and its single threading decisions. You know, if we could build a concert. where all the concert participants, potentially tens of millions of them, could participate together simultaneously. and see that there's that massive a crowd.

and they could all do interesting things. and interact with each other, that would be way cooler. - Just if we just, sorry I'm just loading it in, just imagining together. in one scene graph, 10 million people interacting, what a cool world that is. - Sure, well, you know, 10 million people, you have less than 10 million pixels on your screen. So what does the Nyquist sampling theorem say? It says that you don't need full overhead for every player, you need to render the players around you. in some approximation of everything else.

- Yeah, too, but there's also a networking component. like yeah you're speaking to the rendering but like, oh boy. (Lex laughing). - There's a lot of work that has to happen there. but you know, this is what we do for a living, we solve hard problems. - [Lex] I understand. - 'Cause if they're easy then other people. could have solved them already. - That's really cool though. Just sort of the possibility, the vision of that is really cool. Even just, you know, even a hundred thousand people. were like bring 10,000 together just to... I mean there's a reason in the physical world.

when you go to a concert. and you have all those people around you, that energy or you go to a football game, that energy is unlike anything else. And if you can bring that energy to the digital world, that's amazing. Yeah, but anyway, so sorry. So on the technology side of bringing that to life. on the programming language side, can you continue, as I rudely interrupt you. talking about Verse. - Versus the functional logic language. because we think that's the way to make the most simple.

and powerful language simultaneously. Back in the 1970s, the programming language designer. who built Pascal, one of the early programming languages, Niklaus Wirth or Nicholas Wirth, as Americans might call him, stated this principle. that programming language should achieve. a high degree of power not by having a lot of features. but having by having a small number of features. that work together and can be composed together arbitrarily.

So that you have to learn a relatively small set of things. and then the real knowledge comes as you learn ways. to combine them to achieve bigger and bigger programs. And so, you know, there's long history. to the field of programming languages, but in the 1950s the first programming language designers. got together and built the first standardized language. called ALGOL. And there was this meeting in 1956, very few people even know about, but it's where all the major foundations. of modern programming languages were decided on.

That the C family of languages inherited. And so we're very much living in a world. that was defined by them. And thankfully they got a whole lot of things right. They defined how functions should work, how variable should work and how recursion should work. And you know, thank God they got those things right. but they got a few things wrong. and Verse is trying to fix those. And that's the functional logic part of it. The interesting thing about functional logic language. is that in an old school language. an expression produces a value.

In a functional logic language, an expression can produce zero, one or multiple values. If it produces zero values, we might say it fails. If it produces one value, we say it succeeds. And if it produces multiple values, it's kind. providing a set of values you could iterate over. And so there are a bunch of features. in today's programming languages that were defined. in an ad hoc way without really thinking this through. this zero, one or many values way. And that's the problem. that functional logic languages address. The most basic example, an if statement in a programming language.

If some condition holds, then do this thing, otherwise do that thing. And in the language today this is done with variables. of type boolean or expressions that produce booleans. We have boolean variables that are either true or false. We have expressions that evaluate to boolens. And so you can express a condition. as a bunch of these features together, but you've lost any computation you've done. in doing that boolen expression evaluation. So in a functional logic language,

your condition wouldn't do that. It would either succeed. and produce a value or it would fail. If it succeeds, it goes to then branch, your operation succeeded. now you're operating, you know, running this one batch of code. And if your expression failed. then you go to the else branch. But the exciting thing about that is your expression. that succeeds or fails can produce values. and bind variables that are then accessed. by the then branch. So you can write a conditional where you can only get. to the inside of the condition the then.

if a bunch of variables have successfully. been bound to variables. So it lets you test if some conditions hold. and then use the results of those tests. And that gives you a much higher level of reliability. And then a for loop in a traditional language, it's just a bunch of imperative code that's woven together. to produce a bunch of values iteratively. It's rather awkward to do complicated things in for loops. And so you often end up with either ever more complicated. constructs built to work around that, like iterators and other things. The idea of functional logic languages.

is your for loop can just produce multiple values. and if it produces zero values. you got to reiterate zero iterations. And it produces a bunch of values, you got all of those as your iterations. Rather than having a bunch of nested loops, you can write arbitrary things. that look like SQL queries in a condition. or in a for loop that bind a bunch of variables, do a bunch of tests, produce a series of results. and in some order that you're iterating over. and then you can handle all of them and produce a result. So you kind of gain the power of SQL queries,

you know, large complex queries over data structures. in a language that is much simpler. in which your code is just performing. simple iterative operations. And so it kind of gives you the best of databases. and of regular programming in a much more uniform way. And the power of this is now users can write functions. that not only produce a value, you can write functions that might fail. And so you can write a function that answers a question. The answer can be either a yes and my value is this or no.

And you can combine these together into arbitrary queries. And if you like, the funny thing. is that this is not how C++ works. And so when we have Epic programmers moving over from C++. and writing their first Verse code, they try to write C++ code and versatile. and it actually ends up being convoluted code. that's worse than good C++ or good Verse. But after a few months they get up to speed. and they're writing really awesome code that's tighter. and more compact than before. and with users who've never programmed before.

but are learning programming for the first time. in the context of "Fortnite," it's really fascinating. You see these users are learning this kind of as. it becomes their intuition. They just assume programming works this way. and they're writing way more advanced. and interesting for loops and conditions. than we're often writing internally. because they've kind of rocked the core concept. - Yeah, I mean you said a lot of really interesting stuff. First of all, it's very interesting. that there's a bunch of people, a lot of people learning programming.

for the first time with Verse, which is a very different way to look at programming. and some deep sense as you're saying, a very intuitive way to learn programming. But there's a lot of properties about this being. a logical language, one of which will maybe speak also about confluence. but also correctness. So being able to prove the correctness of a code.

is basically easier to write bug free code. Can you just speak to that. and the importance of that. when you're building the metaverse? - Yeah, right, so the challenge with the metaverse. is first of all that it's a huge base of code. that's evolving over time and written by many authors. So you might see every second a new module is updated. somewhere and you expect in this live ever running. simulation that never shuts down for everything. to upgrade live in place.

And so one critical component that is the ability to. release an update to something you've already published. and be sure that it's backwards compatible with the one. that you've already released. And that's essentially a type checking problem, checking that your new interface is backwards compatible. with your old one. And that comes down to the type system of the language. There's been a lot of very interesting research. on type systems over the years, most of which. hasn't ever made it. into the C++ programming language unfortunately.

But you see several branches of that whole field. One of the really interesting things that Java. and C# did in the early days and then later abandoned. and didn't bother update was defining a very rigorous. set of rules for if you publish a module. with one set of types today, then what changes can you make to that module. for your future updates to it. that don't break backwards compatibility. And that's a problem for type checking. You know like say you have a function that promises. to return some integer, when in the future you could say.

that returns some natural number. 'cause every natural number is an integer. So that's a backwards compatible change. But you can't say it returns a rational number. 'cause some rational numbers are not integers. So the, you know, system ought. to reject that kind of change. But the much, much, much more interesting thing. about type checking, it was the realization. it was actually made in the 1930s. that if you design a programming language type system. in a very particular way, then it becomes not only useful. for expressing types of variables.

A traditional thing every type system does is say. like variable X is of type integer. But if you design a type system in a certain way, then your types can express theorems. like mathematical theorems. You know the Pythagorean theorem is a cool one. But one theorem you might set of. in a program is like the theorem. that this function takes an array of integers. and returns an array of the same integers. but the result is sorted. If you express that as a theorem. and you follow this system of type theory,

then you can actually require that anybody who writes. that sorting function to prove. that it has actually sorted its result. And so you have types or theorems. and values constructed a certain way. can be proofs of those theorems. And, you know, nowadays in mathematical literature. you see more and more theorems. are being proven mechanically. Mathematicians are proving theorems in a way. that is verified by computer to be a correct proof. In the old days of math, people would write down. like language. If you look at all of Euclid's theorems,

it was just language. It was just writing an ancient Greek. to say the steps of the proof. to convince the reader that the thing is true. Starting in the 1930s, mathematicians move towards rigorous formal proofs. in which there's a series of steps. that can be mechanically verified, they're proving things. And when mathematicians say. they've done a computer proof of a theorem, what they really mean is they've written. the program in a proof language. Like Lean is theorem prover. a Coq is theorem prover and there are several others.

It means they've written a mechanical proof in that language. that a computer is checked so that it's impossible to lie. If you say that you've proven a thing. and the computer verifies it, then it's definitely true. And you know, this is a feature. of mathematical proof languages. but it's also I think an idea. that's making its way into programming language. is gradually over time. And our aim for Verse is. to be the first mainstream programming language. that fully adopts that approach and that technique.

and not only adopts it. but adopts it in a way that's really user friendly. So you don't have to do that. And the idea of this is. that you want gradually more information. to be incorporated in the types of variables. The property you want of a programming language is. that if your compiler accepts your program and doesn't beep. and tell you there is an error, then your program should work. Now there are all kinds of ways humans. can make mistakes there. so that we'll never achieve that ideal, but we can get closer and closer to it by having more. and more language features that enable the compiler.

to catch more human coding errors. and tell the user what went wrong. And you know, that becomes extremely important. in the metaverse, the cost of fixing a bug. that's made it through to a runtime and is in users' hands. The cost of fixing a bug in a shipping program is. hundreds of times higher. than fixing a bug that you've just observed. as you're running your code yourself. When it's running on your computer, you just fix a line of code and your bugs fixed. When you have to fix it live, you have to release a patch,

you have to release patch notes, you have to test the patch, you have to check. for all the other bugs that might have been introduced. and everything becomes vastly, vastly more expensive. So you know, the real aim of the Verse program. and approach is to catch all of these errors at compile time. and make the metaverse a very reliable place. - Do you see a world where like at compile time. you could prove that the program is correct. in some sense of correctness? - Proving things becomes commentorially harder. as they get larger, right? And so the really important thing.

about this whole field is that you should be able. to adopt these capabilities gradually. and apply it where you really need it. Like if you're writing something. like a cryptography algorithm, that's a good place to prove stuff. If you're writing a data decompressor that's gonna be used. by an entire ecosystem, like proving that. that doesn't overrun memory, it's actually really important. And a lot of the reason. that security vulnerabilities happen today. is because in a different language a compiler. could have caught, we're not caught in C.

because it just doesn't have this feature. But yet we shouldn't see this as scary. Everybody working in a type language like C. or C # or Java is proving theorems all the time. If you have a variable of type integer. and you assign some value to it, you've proven. to the compiler that value was an integer. 'cause otherwise it would've rejected it. And so, you know, as we add more and more advanced proofs, we'll get compositional properties flying out of our systems. that they're easy to use and you know, people prefer to use.

And we might think in a future. where we have AI helping us write certain kinds of code. The big problem with AI is you ask it to do something. and ask you to write a fragment of code that does something, it might give you a perfectly valid fragment of code. that compiles but does the wrong thing. And if we had languages where you could say, write a function that sorts these disarray. and prove that it did that it could actually write the proof. and you could, if the compiler didn't beep with it,

you could trust it was actually sorting the array. and otherwise you could go back to the AI. and say, well that didn't work. But you know, getting to the point where we know. that our programs do what we say they're going to do. or think they're going to do is a very important thing. - And by the way, I should mention that you sent me a note. about Curry-Howard correspondence, which I went down a rabbit hole. and that's a whole fascinating field which shows. the mathematical relationship between programs and proofs. - That's right, this is a result from the 1930s. It's one of the most important results of computer science.

that almost nobody knows about. But they did this rigorous breakdown of type systems. and the 1930s formulation of programming. and established that everything you can prove. in mathematical logic you can prove within a type system. if it has certain features. And you know, if you break down what is a proof, well a proof that integer exist as some integer, like five is a proof that integer exist. So when you have, you know, something like var xn.

and you say X equals five, well you're proving. to the compiler that five is an integer, you know, that comes as secondhand nature. But you can prove more advanced things. You know, if you wanna prove that a pair of things are true, that like theorem A is true and theorem B is true, then you need to provide a pair of values, one that proves theorem A and one that proves theorem B. and that's the conjunctive law of proofs. And there's a disjunctive law too. And then there's an implication law for proofs. And it turns out that's really satisfied by functions.

When you write a function of programming language, you're saying if you give me this thing, I will give you that thing. If you give me a parameter of type something, then I'll give you a result of some other type. And by writing that function, you're proving that given one of these things. you can produce another thing. And that's a proof of an implication. And with only like seven laws, you can construct. all of mathematical logic in a type system. And you know, one of the important thing. for programming language is hasn't been given. enough attention is some aspects of programming languages.

are just subjective. They're just machinations. of the programming language designer, you know. And Guido van Rossum decided. that Python should support indentation a certain way. And you know, as long as you're dealing. with things like human notation and naming of things, there's always going to be that subjective layer. But there are other parts of programming languages. that are not subjective but should be fundamental. And when you look at type systems, there is a way to do type systems. that gives you mathematical proofs.

And every other way of type systems. that doesn't give you mathematical proofs is just worse. and should ultimately be rejected. And so I think one of the jobs of computing is to identify. what have we actually done right in the past. and what have we done wrong. and for everything we've done wrong. actually going back and fixing it. otherwise we just keep accumulating so much croft. that our systems eventually are crushed. under their own complexity. And you know, there've been massive announcements. of horrible vulnerabilities in software. and services over the past year.

You know, turns out like some nation state backdoored. a bunch of Teleco's surveillance systems for wiretaps, like huge problem there. But you know, ultimately when you break it down. it's probably because of some buffer overrun. in some C program. Like these decisions about programming languages. have long-term implications. - It's really fascinating that in building these systems. that hundreds of millions of people use, you're rethinking about like. how do you actually build it from first principles? So I should mention that Verse's primary design goals,

it should be simple enough to learn. as a first time programmer, general enough for writing any kind of code and data. Productive in the context of building, iterating. and shipping a project in a team setting. Statically verified to catch as many categories. of runtime problems as possible at compile time. as we were talking about. Performant for real-time, open-world multiplayer games. We didn't really quite talk about performance, maybe I could ask you about that in a second. Complete so that every feature. of the language support program are abstraction.

over that feature. Timeless, built for the needs of today. and for foreseeable future needs, yeah. And then there's some design goals. that we talked about that is strongly typed. Multi-paradigm to use the best of functional programming, object-oriented programming and imperative programming. So it's as deterministic as possible. You know if you run it over and over, it runs in exact same way. You know, failable expressions as you talked about. It's super fascinating. There's so many cool features in this,

speculative execution, concurrency. Maybe can you talk about concurrency? Like what is it about Verse that allows for concurrency. at the scale that you need? - This is the one biggest technical problem. that we're working to solve in this generation. and that is taming concurrency. so that any ordinary programmer can achieve it. by just writing ordinary code. - It's hard. - Programming on a single threaded computer.

is hard enough but it is completely predictable. If you have a language that's deterministic. and you're on the same code over and over, it's always gonna do exactly the same thing. and there's no unpredictability. about what might happen, right? You're reading and writing variables in some order. and you're always gonna see it behave the same. The problem is when you introduce multiple threads. or multiple nodes in a data center all working together. on a single problem, is that they each want to read. and write different pieces of data. and change the state of the world as they go.

And still almost all concurrency. and real world programs today is achieved manually. Programmers are writing this code. that might run in multiple threads very, very carefully. so that they are negotiating among each thread to get access. to data in a way that's going. to give them predictable results. And it's incredibly hard. It's so hard that in five generations of Unreal Engine, every single generation decided we're not.

going to try to scale up all of our gameplay code. to multiple threads manually. It's just much, much, much too likely to go wrong. Not only for ourselves, but for every partner company. who licenses Unreal Engine. and tries to use it for building a game, it's just a massive foot gun. There's a variety of solutions to concurrency. that are all rather suboptimal. One attempted solution was like, "Oh, just don't try to solve this problem at all. Let's break our program down into microservices. And almost all online websites have massive scale.

like amazon.com work with the hundreds of microservices. where different servers negotiate with each other. by sending messages to each other. And by programmers writing those things very carefully, they eventually get to being able to take your orders. and not make a mess of them reliably. But you know, this is totally not scalable to the metaverse. where you have millions of programmers. who are like mostly not gonna be computer scientists, they're mostly gonna be hobbyists and enthusiasts. and first time programmers doing stuff for fun. That's never gonna work for them.

because they'll never be able to envision. all the different dependencies. between different computations they're running in parallel. But it turns out that there was amazing foundational work. done in the 1980s. that was made very real by paper on Haskell concurrency. "Composable Memory Transactions" is the name of the paper. And it describes the system for. transactional updates to programs. And the idea of a transaction is. a transaction is a block of code that does a bunch.

of operations on memory, might read, might write, it might process an order, it might accept an order. and/or reject an order. It might transfer money. between one bank account and another. It might make conditional decisions like, oh you asked to transfer $100 from your account. to this guy's account, we're gonna see if you. have $100. If you don't, we're gonna reject it. and if you have $100, we're gonna take $100 out of your account. and add it to this other guy's account. Without transactions, if everybody's just randomly adding. and subtracting each other's bank balances,

then you might have somebody read a bank balance, subtract a hundred and write it out. But in the meantime somebody has out written something else. in the meantime. And so you might get inconsistent bank balances. arising if you don't have a way of ensuring. that these all run in a specific order. So the idea of transactions is, it's a way of dividing an entire program into updates, you know, self-contained updates that do an arbitrary amount. of computation but must run in a single threaded manner. And in the case of a game engine, that's a gameplay object update.

When you're playing "Fortnite," you see a gameplay object. Every other player is a gameplay object. Every enemy is in a gameplay object. Every rocket and projectile and car. and thing you see moving around and interacting. It's not just a fixed static part of the world, that's a separate game object. And each of those objects is updated at, you know, a rate of one update per frame at 60 frames per second. And so then in the course. of "Fortnite: Battle Royale" gameplay, you have tens of thousands of object updates. happening every frame with a hundred players.

In a simulation with billions of players, you'd have a whole lot more than that. So right now that's done single threaded. Yeah that's done single threaded in each game session. This is why "Fortnite" is a hundred players limitation. If you absolutely maxed out a server, maybe today you could get up to 140 or something, but, you know, it's not going to thousands. or millions or billions. And so what we need is a technique. for magically automatically scaling our code to that. And transactions are the idea. And the idea is a transaction is a granule of code. that runs its entirety.

And so the idea of this transactional memory concept. is that we're gonna have programmers. write completely ordinary code, that reads and writes variables in a completely ordinary way. and they're not gonna have to worry. about concurrency at all. And then the system, like today a program, a computer just runs your program. There's no amount of speculation going on. at the programming language level. Value of transactions is, since we have a bunch of operations we need to know, we apply a large set of them concurrently, but instead of each one reading and writing.

from global memory shared by all, in which case they might be reading and writing. and contending with each other for the same data. and might be doing contradictory things to it. We're gonna track all of our rights locally. We're not gonna write changes out to global memory. We're gonna keep track of it in a buffer. It's just for that one transaction. So it's gonna look to that code exactly. as if it's running on the global system. affecting global game state, but it's gonna be isolated to just that one transaction.

and it's gonna be set aside. and buffered up for consideration later. We're gonna run tens or hundreds or thousands. of the updates concurrently. We're gonna see which ones had read-write conflicts. because if two transactions don't read and write. any of the same data, then you could have run them in. either order or simultaneously. and it wouldn't have changed the end result. - Yeah, the order doesn't matter. This is so fascinating to imagine this kind of system. arbitrarily concurrent. running millions of updates.

in parallel of gameplay objects. That's the thing that enables the thing. that we're talking about, which is, you know, tens of millions of people together in one scene. - Yeah, exactly, and the key is. that you're running these updates speculatively. and you're not committing their changes to memory. until you're sure that they're free of conflict. So you might update 10,000 objects, you might find 9,000 of them were conflict free. So you apply those 9,000 updates to memory.

and they could have run in any order. and it wouldn't have changed the result. - [Lex] That's so cool. - Now there's a thousand objects left over. Now you have to run those again. Try them, maybe interleave in a different way to get them. to eventually commit to memory. And in the meantime you just throw. all their computations away and redo them later. And by doing this, like we're moving this. from being a programming problem. for the programmer to deal with, to being a language problem. for us language designers to deal with. And we're moving a vast amount of pain. that would be imposed on a million people instead.

to a vast amount of pain. imposed on a small number of people. to have to actually make this work. - That's amazing, that's really incredible. So what's the state of things with Verse. and I guess what you're outlining is if, and hopefully it is successful, this would be a big part. of Unreal Engine 6. So what's the timeline? Where do we stand today? - Well there's a lot going on in parallel. The key thing with Verse. is that we have been specifying like. what we think is the ultimate version of the language.

with all the features we want. Whereas we've been shipping more modest. versions of language over time. and we've released dozens of updates. to it over the past year and a half. And the idea is that the shipping version gains. more and more features over time, but each maintaining backwards compatibility. with old versions and each continuing to improve. and approach the ultimate version of it as we go. And we've been doing this experiment entirely. within the world of Unreal Editor for "Fortnite" for now.

We wanna test this and iterate. with "Fortnite" creators in just the metaverse usage case. before we make it available to all of our partners. using Unreal Engine for all of their projects. And the idea is to iteratively improve it and build it out. 'Cause right now UEFN has relatively. few features for programming. It needs a lot more and everything we add makes the world. a much better place for "Fortnite" creators. and we're adding major, major new APIs every few months. throughout the course of this year. Whereas Unreal Engine licensees.

who are building standalone games. already have access to the full engine through C++. They have massive, massive expectations of an API. And so we can't release this to them. until we've built up all of the essential features. that they'll need for building. their game play in the future. And so, you know, we have these two different tendrils of progress. There's Unreal Engine 5 for game developers. and there's Unreal Engine 5. targeting the "Fortnite" community. And there's different bits of development. that are only in one area of it, there aren't applied to both. Like not all of the Unreal Engine 5 features.

are actually available in "Fortnite". because some of them we haven't figured out. or haven't gotten to the point where we can deploy them. to all seven platforms in a platform independent way. And so the place where all of these different. threads of development come together is Unreal Engine 6. And it's a few years away. We don't have an exact timeframe. but you know, we could be seeing preview versions of it. perhaps two to three years from now. and we're making continuous progress towards it. - So that's really nice. So there's this ultimate version of a language.

that you're constantly working on and thinking through. Then there's the shipped version of the language. that's used by a large number of people. but still in the constrained environment. of the Unreal Editor for "Fortnite.". So for the "Fortnite" game. And then there awaits the more general. Unreal Editor, Unreal Engine. for the lessons learned in the "Fortnite" context. to be integrated in the more general context.

of creating simulated worlds for all kinds of games, including "Fortnite.". It's a really nice setup. 'cause it's a testing ground of the language in "Fortnite". and you're keeping an eye on. what the ultimate thing will look like also, necessary to deliver all the features. that we mentioned, brilliant. - You know the aim for UE 6 is to bring. the best of both worlds together. A much easier gameplay programming. for the "Fortnite" community and for licensees, more scalability to large scale simulations of all sorts.

Greater ease of use, meaning it'll be easier. to hire programmers who are familiar with. and experienced with the thing, but also ensure that every game developer. has the full deployment capabilities. so that it can build a game once. and then ship it anywhere. Like the Autumn version of this enables a game developer. to build a game of any sort. or simultaneously both ship it into "Fortnite". as a "Fortnite" island that players can go into, bring their "Fortnite" items and cosmetics.

and interoperate properly. or ship as a standalone game or both. And if they ship as a standalone game, they shouldn't be missing out on the, you know, open economy either. because in this timeframe we'll have opened up. the "Fortnite" item economy. to third party developers of all sort. Hopefully there is standards body, but there might be multiple phases of it. so that if you choose to ship a standalone game. you can still choose to, you know, have "Fortnite" items work in your game. and have your game items work in "Fortnite". and have your item economy integrated.

with the overall metaverse economy. and solve the really core problem of the game industry. that Matthew Ball has been documenting. over the past few years. - Yeah, by the way, Matthew Ball has been really helpful. He wrote a really great book. that I recommend people check out. There's an updated version. Let me just ask for, 'cause again, there's a bunch. of indie developers listening to this. I saw that a lot of solo developers out there, they're using Unreal Engine. that they're basically creating video games solo.

I can highly recommend it's great, "Choo-Choo Charles,". it's a great video game. (laughs). Gavin Eisenbeisz, a great guy. He's solo created this game that's I think quite popular. I believe he says he used visual, he didn't even use C++. He used visual scripting, he used blueprints to create it. Okay, so I mean all that to say. people should go check it out, support indie developer, support Gavin, support everybody like that.

I think it's important to say. 'cause there's so much genius and artistry out there. that we wanna support the crazy dreamers out there. Anyway, all that to say, what are the ways you think Epic. can support indie developers like that? People like Gavin, like give them superpowers. to create games from which they can make at the very least. enough money that they can keep doing their art. - Yeah, well that's really about productivity. because to be successful with a game,

you have to have a great game. If you're building a type of game. that nobody's ever built before, you might be able. to build a smaller, simpler game than if you're competing. in a massive genre that has huge expectations. But it's all about enabling somebody to do that. in a reasonable amount of time that they can spend. and to be able to finish it and chip it. and maintain it successfully. The tools are a big part of that. Having the tools be as productive as possible. But there are a lot of other facets as well. Like having a content marketplace is a big thing.

You know, just off the shelf piles of content, some free, some paid built by other creators. can enable a small indie team to build a big game. and just be able to focus on the unique content of the game. Being able to write their gameplay. and lay out their environments the way they want, but not have to build every tree and rock. Yeah, because somebody's already built one. and there's is probably like, you know, perfectly suitable. for your game. And over time there'll be more and more. You know, there's also a lot of indie developers.

living as content creators. They'll be releasing content on Fab marketplace. or the Unity Asset Store and earn living for that. But specialization of labor. is a really, really valuable thing. In the early days, pretty much one person would build one game. Like that's how a lot of the games were built in the 1980s. Over time you had a separation. where artists became specialized and then programmers. and then gameplay programmers and engine programmers. Now you have technical artists. and you have, you know, dozens of different specialties. contributing to a AAA 3D game now. And the more we can modularize those bits of content.

so you could get something off the shelf. rather than having to build it or have to com, you know, engine synthesize it for you, the more we can enable creators. to create stuff fast and successfully. - So we should talk about the fact. that amongst many other things you've been. philosophically and spiritually battling monopolies. in general. Sort of one of which is sort of the Apple marketplace.

that charges 30% from developers. Can you speak about this idea. that you believe that Apple. and other companies valves should not be charging. that kind of revenue cut? - Sure, well let's start. from a very basic principle of computing. The first computer I owned was an Apple II +, you know,

designed by Steve Wozniak and marketed by Apple. and then an IBM PC. And in those days anybody could write code. Your computer literally turned on. with a programming language prompt in front of you. You had to actually do work to not write a program. and to instead run somebody else's program. That was incredibly empowering. And anybody could write a program, anybody could put it on a floppy desk, anybody could share it with their friends. Anybody could make copies of that, put it in a store, they could sell it, they could build a business around it. And they were completely able to,

without seeking any big tech corporation's permission, do whoever they want. Even from IBM, remember IBM. was the dominant computer company on Earth at the time. that they released IBM PC as an open platform. And you know, so it's really been firmly implanted. in my mind that this was a magical. and wonderful time of unmatched economic progress. for technology in the entire world. And you know, over time the big companies have realized.

that they could shut down. and just block software makers from releasing software. on their own and block software makers from doing business. with customers directly. And yeah, I've always viewed this practice. as terribly abusive. because when you buy a computer or a phone, you spend good money on it, it's your money you spend on that phone. and now you own that phone. And there's absolutely no reason that Apple should block you.

from installing apps. from other developers directly if you want, going to their webpage or writing your own apps. without their permission and running them yourself. without having to get a developer account, without having to go through their bureaucracy. And there's no reason that any consumer. who gets an app shouldn't be able to do business directly. with the developer of the consumer. You already bought that phone. Why should Apple be adding a 30% junk fee. to all commerce you do. And why do they selectively apply it.

to some things and not others? I've always viewed this as deeply abusive. and that it shuts down the competitive engine. that once fueled the app and software economy. It's still a vibrant competitive engine on Windows. and on the internet, but it's no longer with mobile apps. because these stores have popped up. and they don't provide any useful value to the user. Yes, they're a search function to find software, but there's no reason other companies. couldn't build a better one. And I bet if you had Steam.

or if you had Valve build Steam for iPhone, I bet Steam for iPhone would be a much better app store. than the iOS App Store. And a lot of people would use it. And that Apple would be forced. to build a better app store in competition. and everybody would improve their products as a result. But you know, Apple and Google shutting down. the competitive engine that drives the software economy. has massive implications for everything. And you know, one of them is reshaping. the nature of mobile apps to be really offensive.

to gamer sensibilities. You know, if you go on console, the best console games you see listed in the store, on the storefronts, the best console games. that you see reviewed are awesome games. that really have a lot of creative merit. The ones that sell the best are really enormous values. for their money. or their product of an immense amount of work. You don't see that on iPhone. The top apps on iPhone or the top games on iPhone. at almost all times are these ridiculously greedy,

high monetizing, you know, whale games, which are pervaded with pay to win and loot box practices, you know, they have a sort of a legalized a form of gambling. and you know, these games are not driven by fun, they're driven by manipulation. of the players to greedy ends. And you know, it's very hard for the fun-based games. to actually succeed there. And you know, the cost of operating these online games. now are enormously high. So you have a game that's based on fun, it's not loot box heavy, you know, you have to pay 30%.

of your revenue to Apple. in order to just get access to the platform. And 30% is way, way, way more than most gaming companies. make in profits right now. And so if the that fee is more than the profit. from a natural company, then they can only stay in business by raising prices. So these 30% fees are raising prices of all digital goods. It's just inflationary as a force in the economy. That's just the first drag text. But then to reach users, when a user searches for like,

before Apple blocked "Fortnite" on iOS, when a user searched for "Fortnite,". the first result was always some competing game. Like it's utterly anti-user. Like you search for Steam for a game. and if that game's on Steam, it's the first result always. 'Cause Steam's not getting in inshitified. with advertising, Apple is. And you know, they do that. so they can make even more than 30%. So if you wanna be the first search result. for your game, you're probably paying more like 45%. If you wanna reach users on social media, you're paying another 20%.

So literally something like 70% of the revenue. for your game is just going into junk fees. to acquire users and get them in your game. And the money that's left over is only enough to fund these, you know, games with rather abusive practices. that do not look to normal gamers like games. for the most part. Now there are some exceptions. There are some great games on iOS. and there's some games with good practices, but you know, the engine has been really corrupted in a way. that competition would fix. If you unleashed lots of competing stores on iOS, then you'd have lots of awesome options.

and you'd have much better deals and much better prices. - I had a quick chat with Matthew. He asked me to ask you this question of. why don't more companies fight Apple in the way openly. and totally as Epic has been. What makes you, what makes Epic. so unique in this regard? And I should say, I think everything you said. I agree with fully. I think what Apple is doing is just wrong. I think Apple in many dimensions is an incredible company.

They have brought so much good for the world. In this regard, I just think it's straight up wrong what they're doing. That they're not providing the value of 30%. And even if they were the monopolization, the centralized control without competition is wrong. Anyway, why are you fearlessly fighting Apple on this? And other companies don't seem to wanna step up? - All companies are terrified of Apple.

because Apple can destroy their business. Epic was in a unique position with "Fortnite,". first of all having the, you know, the biggest game in the world at the time. we started the fight with Apple. And second of all, having a majority of our users. playing on PC and console. meant that if we lost access to iOS during a fight, then we would still be able to survive. That a bigger part, Spotify, Facebook, you name the top 10 mobile apps,

I think none of them would be able to survive without Apple. Like literally their business would be destroyed. if Apple blocked access to them. And Apple is incredibly clear with developers. that they're willing to deprive all users of access. to any app if they get in a fight. And they've, you know, if you look at how they dealt. with Epic, they were not just legally maneuvering. with the intent of winning the court case against us, they were also sending a message.

to all developers in the world. We will destroy your business. or we will try our best if you fight us. And a very small number of vocal developers. have been willing to speak up. and Apple was actually refrained from crushing. their businesses when they weren't violating. any Apple policies. And that took a bit of discipline, which I think is also amount of calculation by Apple. that they couldn't survive being seen as the company killer, that if you criticize us will crush your company.

But you know, the other thing that Apple has, that they can and will readily deploy. against every developer is soft power. When they take 30% and advertising is so expensive, soft power by Apple, like approving your updates faster. or slowing down all of your updates. by a couple weeks can also have a dramatic effect. on your ability to compete successfully. And Apple, it's a very long history of playing. cat and mouse games with developers. It's like a developer isn't in Apple's good graces, so just slow down the updates.

So they've been slowing down updates. for several major tech companies, sometimes for weeks, sometimes for months without all going under the radar. because everybody's afraid to challenge them publicly. And so Apple's wielding a soft power can change. a company's economics for the worse, enough to deter almost any public company. And you know, Epic is in the fight. because I firmly believe. that something like the metaverse will only arise, it's something like a billion plus user, you know, real-time 3D social ecosystem that grows to encompass.

potentially all or most major games. by all major developers tied together into an open economy. where they all participate as peers. and they all compete to give users the best deals. and they grow and, you know, do business. with their customers directly. That thing can only exist if the Apple. and Google gatekeeping monopolies are lifted. And it's not just the 30% fees. 30% fees are economically ruin us, but they impose other levels of control.

Apple prevents all web browsers on iOS from implementing. web standards better than Apple does. So Apple has really limited data storage capabilities. and 3D graphics capabilities on, you know, the iOS web APIs. So APIs you can access from web apps. running within a web browser. And you know, that's to eventually cripple those apps. to ensure that they can't possibly compete with native apps. And by depriving web apps of those features, they prevent web apps from competing with native apps.

Well, you know, Apple, if they treat the Metaverse the way they treat the web, they'll say you can only use Apple's metaverse engine. Unreal Engine is disallowed. And then they can impose all of their own limitations. on the metaverse to force all commerce through Apple. or force it to be so uncompetitive. and lousy that it can't compete. And you know, they have this giant array. of these anti-competitive techniques that they use. to disadvantage other app developers, you know, saying only Apple can build certain kinds of apps.

or only Apple can integrate certain features. In Europe, even where the DMA law requires Apple. to allow competing stores, they say a store can only be a store. You can't build a store into Facebook, you can't build a social network into a store. A store must only be a store. because a store that's more than a store might be able. to compete with us more effectively. It's just a giant, you know, to use the Soviet term, it's a defense in depth strategy. where they've constructed a massive series of barriers, each are fatal to any attempt to compete.

so that even if one barrier is overcome, the others remain in place and shut down the whole scheme. And that's playing out in Europe where Apple has enabled us. to launch the Epic Game Store, but has made it so difficult. and uncompetitive both for Epic. and for clients who we want to do business with that, you know, it has no chance of success. until the European Union. and starts to really enforce the DMA law and impose harsh. and serious penalties on Apple to force compliance. - I think it should be said, once again, I think it's wrong.

what they're doing there and I hope there's public pressure. and government pressure for them to open up the platform. And I believe as a person. who loves Apple, I believe this is also good for Apple. There's the natural thing in companies to want to close. and control and crush competition. But like Apple is full of brilliant engineers, open it up and win, it's going to create the right.

kind of competitive incentive to make the Apple Store better. to make, you know, 'cause they're great at creating great interfaces, but competition will sharpen the sword. I mean, it's just gonna make everything much better. So I do hope there's a lot of public pressure. and I deeply appreciate. that you're speaking out in this way, sort of putting. that pressure and letting people know. like it's okay to say that this is wrong. - Thanks, competition makes everybody better.

You have a monopoly that's forced to compete, suddenly the monopolies products get much better, the offerings to consumers get much better. You see so many areas where Apple could be the best, but what they have is just really, really lousy. And it's this old guard of leadership who is clinging. to these old policies, turning themselves into the enemy. of every developer, every regulator. And I think it's ultimately massively to their detriment. And I can't wait for a new generation to come in. and, you know, paint a bright path to the future. Epic was an awesome partner to Apple.

for more than a decade of demos and partnership. and technology usage together. And we did amazing things together. Love nothing more than to have that Apple, you know, bringing back Steve Wozniak's original views. Just the Apple II was such an amazing thing. It's a completely open platform. The manual to the Apple II included a listing. for all the ROMs, the source code to the ROMs, so you could understand exactly what was happening there. and you could learn from it.

It included a hardware schematic of the entire computer. so you could learn how to make a peripheral and plug it in. and an open ecosystem. And that's the awesome Apple, that company would be the best company in the world. Again, I think the current one is just. on the wrong side of history and needs to change. - Well I hope Epic and Apple find a path forward together. and flourishing together. and Apple embraces competition better. One of the things I admire about this conversation. that you mentioned Steam a bunch, with kind words,

supportive and basically never mentioned Epic Game Store. I love that. So I really love that. It really embodies the fact that you want variety, you want freedom for people to choose the best thing. and in so doing, create this large network. of humans interacting freely with each other. Okay, that said, one of the competitive pressures. that Epic has created a few years ago.

was by launching the Epic Game Store. And instead of Steam's 30% revenue cut, you went with 12% revenue cut. creating the competitive pressure saying, you know, "Listen, this shouldn't be that high of a cut.". Which I thought was like amazing. This is a brilliant idea. and I think it still is a brilliant idea, it's wonderful. Now in preparing for this conversation, I looked on the internet and I saw. there's a lot of criticism of EGS at Big Game Store.

First of all, I should say the internet, (laughs). it's full of drama and criticism. Like there's not enough celebrating of awesome shit, that let's get... If I can ask the internet as a blob one request, can we just celebrate awesome and also criticize. But just like there's not enough celebration. Anyway, the two directions of criticism.

is just straight up the Launcher interface is clunky. and lacks a lot of the features of Steam. And then the second set of criticism. is the exclusive contracts. which were made with some of the games. that are on Epic Game Store. So first huge props on the 12%. Maybe you could speak to the vision of that. And second, can you comment on those two criticisms?

- Sure, yeah, I think, one of the reasons that people. characterize the Epic Games launcher is clunky. is because like the Epic Games launcher is clunky. and we need to improve this. (laughs). You know, there's a lot of work going on there. and you know, I wish we'd gotten better. at addressing quality of life features. and prioritize them above all of the other features. You know, because Steam has 15 years of built up work.

by many of the best programmers in the whole industry. working on that. A much larger team working on Steam. and a lot more time working on it. And so we've had to make a lot of prioritization decisions. about what do we support with the Epic Game Store and when. A lot of the time it's been supporting commercial features. like merchandising, offering multiple versions of a game. for sale and offering upgrades from the regular edition. to the deluxe edition and other things that partners work. And you know, other priorities have been quality of life. and launcher load times and other things.

And we've not put enough emphasis. on the quality of life features. We've recognized this very clearly multiple times. and we've gone through multiple refactorings. But you know, that's definitely been a disappointment to us. and to a lot of users. And I think one thing it took us a while to realize. was it's not in uniform. Depending on your proximity to a CDN. and the size of your game collection, it can be either awesome or really clunky. And the users for whom it's really clunky.

are the people like I think. are a large part of the complaints. - They're gonna speak up. And I should also say that the Steam launcher. for a long time, from my memory, but also just looking online was also very clunky. in the beginning. - Yeah and you know, one of the criticisms of Epic Game. Store from the beginning was you don't have. all of the features of Steam, but we very much don't want. to have all of the features of Steam. Like Steam has forums to get to your game. and like we decide we don't wanna create forums. and our partners when we talk to them,

generally didn't want us to create Epic Game Store forums. for their games. because there's already, you know, channels that they prefer to them. There's social media and a number of platforms. and there's Reddit and there's lots of places for gamers. to discuss their game. and they preferred those discussions to be there. And so it's very much not our goal to mimic everything. of Steam, but we do wanna have. all of the convenience features that makes it as easy. and fun to use as Steam. So there's a long journey ahead, but you know, we continue to reinvest in. and you know, we're working.

to build a multi-billion dollar business there. and think we'll succeed. Already at the Epic Game Store, yeah, supports an immense amount of Epic games commerce. in "Fortnite," on PC, now on Android and iOS. and the European Union too. So it's a forever facet of the industry. and we are never losing heart in it. And we think at some point, you know, I really feel that the benefits of the Epic Games approach. are gonna outweigh the benefits of this Steam approach, especially as gaming becomes multi-platform.

One of the things that really sucks for all gamers is that, you know, you have a lot of friends in the real world, everyone has different platforms. Your Steam friends aren't connected to your Xbox friends. and they're not connected to your PlayStation friends, or your Nintendo friends. And so you're very much bottling up PC gaming. into a kind of a hard core group of PC only folks. and making all of the other aspects of it difficult. You know, a lot of games have flocked towards Discord, which is a mess in itself. Can now your Steam name is not your Discord name.

and that's not your PlayStation name. And so now you have two people in a game. and they have four different identities and that sucks. You know, our aim for that is, you know, with Epic Online Services and the social systems. that we built for "Fortnite" opened up. to all developers to have cross kept platform social. features be super easy and free for all developers. This is not something we're trying to gatekeep. or rent seek on or lock people into. It's just a way that we're making social gaming easier. for everybody. As more and more games follow the "Fortnite" approach.

of being multi-platform, especially multi-player games. You know, Metcalfe's law is a very real phenomena. in the industry. It's the thing that's upending some games. and causing growth in other games. It is the number one trend. for pervading the world of gaming today. And it says that, you know, your game is. quadratic more valuable the more percentage. of a user's real world friends they can connect to. Your game vastly benefits by connecting. all of its players together and not, you know,

segregating them off into different online platform. populations and so on. And so, you know, I think the future trend. is in that direction. I wish Velvet opened up Steam Works. to just work on all platforms. They could have easily done it, we did it, but you know, they seem to be using it as a lever. to keep people locked into the Steam PC game store. And you know, that's gonna be a long long running battle. because there's always a very toxic group of Steam users. who, like, they even created an entire subreddit dedicated.

to criticizing Epic on our store. And they create, you know, basically harassment campaigns. at times against developers who use Epic Online Services. You know, developers do that. so they can connect their players across platforms. and have friends across platform. and voices across platforms. But, you know, suddenly that's trying. to be turned into a negative. - It's clear that Epic wants developers to win, wants gamers to win.

and wants Steam to do awesome also. And in the competition between Steam and Epic Game Store, like create awesome stuff together. I mean there's just, it's obvious to me. if you don't read this stuff online, but online it's like there is this just negativity. that I don't think is constructive in general. I give a big sort of positive. thank you and props for the push to multi-platform.

that was always there with for "Fortnite.". Perhaps before the pressure. that Epic created on breaking the barriers of Xbox. and PlayStation and PC and be being multi-platform. Like I got a chance to play with "Fortnite" a little bit. with you and all the people in the group... By the way awesome interface audio chat, really fun. But you could see like a couple of PC folks, a PlayStation person, Xbox person all together.

You can't really tell what they're using. except for a little icon. And it's nice, it's like all these barriers. that we've created with these platforms are gone. and you creating the pressure with Epic Game Store. and just everything you're doing with "Fortnite" platform, it's really nice. There's no reason to create these silos. 'cause ultimately you should put the gamer first. and let everybody interact.

with actual real life friends. and make new friends across the entire network of humans. So anyway, thank you for that. Thank you for creating that pressure. - Thanks, yeah, that was an interesting time. Sony had a long running policy. preventing cross-platform play. and we had a long series of conversations. which got pretty harsh towards the end, but Sony ultimately came around. and they opened up PlayStation. and you know, through a series of private conversations. they did the right thing. And not only that, our partnership with Sony has increased,

you know, since that argument back in 2018. And we've gotten closer and closer. and done ever more things with, you know, Sony, you know, brand IP like the characters from "God of War". and other games coming into "Fortnite". and you know, all kinds of crossovers. Massive Unreal Engine adoption. and Sony for making games, for making movies at Sony Pictures, music partnerships with Sony Music. That's been an absolutely wonderful relationship. And I think, you know, that stands as an awesome example.

of a company that, you know, because of historic reasons got, you know, stuck with a policy that no longer made sense for the future. and you know, following a serious discussion. with a close partner, righted it and did an awesome thing. and now Sony's much better off and Epic's better off. and all game developers are better off. and the whole console industry. I think it's a lot stronger now than it would've been if, you know, these silos had continue to be playing out. And despite the kind of potential concern. that like maybe blocking platform play.

with Xbox gave Sony advantage, you know. Sony's actually grown in market share. relative to Xbox since that time. And so you can't say that anything. but goodness came of that time. And I think a better version of Apple would've received. the email I sent to Senior Apple Management. and been like, "Huh, there's an issue here. We should have a discussion, we should reconsider this, we should listen.". And you know, they didn't and that's why we're in the midst. of a five-year battle with Apple.

and in, you know, hopefully they're, still the early days of a 15 plus year partnership. with Sony. - Come on Apple, we love you Apple, do a little bit better. The second line of criticism that I mentioned, the exclusive contracts with some of the games. Can you just speak to that. because in so much of the journey of Epic. you've been sort of against exclusivity. - Let's back up and talk about the principles at work here. Apple forcing other companies.

to use their payment service is a cursive decision by Apple. - But if Apple convinced other developers. to use their payment service by offering benefits. or a better deal or funding. or any other positive incentive, then that would be perfectly fine. One is preventing competition. and the other is actual competition. Epic has never forced any developer. into any sort of exclusivity relationship.

Rather we've offered developers payment or incentives. or marketing or any number of things of value to them. in exchange for coming to our store exclusively. And it's their game. So it's entirely rightfully up to them. to decide how to distribute it. and to make the decisions about their business. It's their game. If they wanna distribute it through Steam, they can. If they wanna distribute it. through Epic exclusively, they can. If they wanna distribute it through both,

then they could do that as well. And if we pay them money. or other things of value in exchange. for them coming exclusively to the Epic Game Store, I think that's their right. And this is an example of Epic, an underdog. with a tiny fraction of Steam's market share, working to proactively compete with Steam. by offering a better supply of games. And some consumers who prefer Steam might prefer. that the game be on Steam, but the developer in each case has decided. that they believe they would benefit more.

by doing this exclusive deal in exchange for benefits. than by being on Steam. And you know, like one of the key exhibits. in the Epic-Google trial was it's opening exhibit, which was trying to point out to the jury in the trial. the benefits of exclusives. Like imagine a new store popping up. The store has a big sign outside of it, "We're the new store store, we have everything. that the other store has and it's at the same price.". Are you gonna go to the new store? No.

You know, nobody's gonna switch from Steam. if Steam has all of the same games as the competing store. and everything's priced just the same. And so we looked at initially two ways. of competing with Steam strongly. We wanted to sell BET games at a better price than Steam. by agreeing on the amount of money. we pay each game developer, you know, if the game's gonna sell for $50 and we take 12%, we'd actually lower the price. and potentially even lose some money to offer a better deal. Well, you know, we tried to pursue this,

but very quickly every developer told us. that they wouldn't agree to better pricing. because if they did then Steam would stop giving them, you know, marketing featuring and benefits. and the console makers would be mad. and all their relationships would be harmed, you know, so there's an undercurrent of powerful platforms. and ecosystems encouraging developers. not to compete on price. So not being able to compete on price, we decided to compete on supply by doing exclusive deals.

and we signed a lot of them, paid developers lots and lots of money. I think we distributed over a billion dollars. in net expenditures to developers beyond. the revenue we actually made from games. in order to get a whole lot of exclusive games. Some are successful, some weren't. "Borderlands" did awesomely on the Epic Games tour. and Gearbox felt that it did just as well through Epic. as it would've done on Steam. because you know, the players who wanted "Borderlands".

wanted "Borderlands" and they came and got it. Whereas a lot of other games, you know, some smaller games especially. that didn't have a dedicated audience. that was absolutely gonna play the game. typically benefited from exposure on Steam. They were reaching an audience. that wouldn't have reached organically. And so some of them in the end we. and they concluded that they did worse. by being on the Epic Game Store exclusively. in terms of, you know, reaching fewer customers. And so, you know, we had these limited time exclusives, when they ran out, they put their games on Steam. and you know, lots of data was gathered. to understand what worked.

And so this worked well for some games, didn't work for other games. But you know, companies. seeking to compete, especially underdogs seeking to compete, have to offer some unique value, have to offer something. that's not available through their competitors. And I get that Steam users who just prefer using Steam. and buying games on Steam and wanna have their library. in one place don't like this. But you're never gonna have competition. for better deals if you don't support. the competitive mechanisms. that allow competitors to come about.

And I think if Valve were forced. through Epic Game Store's success to compete. with Epic Game Store, then developers would be getting. a better deal, consumers would be getting a better deal. and these 30% fees would be driven down. quite a lot towards the actual costs. that are required to support the stores. - Yeah, I mean there's a lot to be said there. You know, I've gotten to watch Spotify. try to do this with podcasts, you know, enter as the underdog into the space. and try to attract, you know, they made exclusive deals.

with, for example, for Joe Rogan. where the podcast would only be published on Spotify. I personally think long term what I would love to see. for EGS for Epic Game Store is to not do any exclusivity. Similar to what Spotify's doing now. Even with Joe Rogan, they let go, it's wide open. And instead compete on the space of just.

the non-clunkiness of the interface. because the foundation of what. Epic games still represent with 12%, it's just philosophically. So you're also competing on the sort of spiritual realm. of like what it stands for, ethically. That's also a really powerful way to win. So now that there's enough number of people. using at the Epic Game Store, like to drift away,

to move away from exclusivity. It's understandable that it's needed for the competition. for the underdog to enter the scene. But it goes against the sort of the freedom, the free spirit of choice that I think you represent. in a lot of the decisions you've made, which is making the games cross platform. And just yes, giving freedom to the developers, giving freedom to the gamers to choose. So in that way I think exclusivity a little bit. goes against that.

- Well here's the conundrum, the exercise of soft power. by all of the competing stores. has made it intractable for almost any developer. to offer a better price. through the Epic Game Store than through Steam. You can imagine that if the effective Epic revenue. sharing 12% to developers was. that games just cost 22% less on Epic Games, sorry 18% less on Epic Game Store. That would actually start.

to reshape consumer behavior significantly. People would start coming here for the better deals. But I feel like Steam, you know, giving developers nasty phone calls. and so on, when they propose to do that. prevents developers from passing on savings to consumer, then what's the mechanism that drives users away. from the incumbent store to the store. that offers a better deal. If basically developers are fearful of competing on price. through stores, you know,

what can possibly be done to get a dominant store with, you know, something like 90% of revenue share from, you know, multi publisher stores, you know, in line so that a much, much smaller store can compete. I think some answers required there. A better UI is great. Like Steam is super polished. Epic Game Store and you know, time will hopefully be as polished. You know, how does that overcome the fact.

that your entire library over the past 15 years is there. If developers have been afraid. to exercise their own economic interest. because there's own developer's interest to sell on Epic. and you know, 18% more of the revenue. You know, I think there's a real power to incumbents. It's very hard to overcome through just being there. and being as good. - Ultimately, where I hope it converges to. is less exclusivity.

And where the competition can be the kind I love the most, which is on the UI, on the experience, on the just... And then on the Steam side, on the 12%. So it can go from 30%. and start to support the developer. by lowering it from 30% closer to 12%. So anyway, I'm a big supporter. and I don't like the criticism of Epic Game Store,

but I also have to say that I don't love the exclusivity. but I understand. I understand the reality of the world is. that you have to have some mechanism to get people. to switch or not to switch. but to at least get some of their games to try out, to experience, to allocate some of their library. to the underdog. So I totally understand. And hope the UI keeps improving. (Tim laughing).

- Thanks, one more bit on that exclusivity point. is that when we told Google that we were going. to launch "Fortnite" outside of Google Play. and go into competition with them, they viewed exclusivity. as such a powerful competitive force. that they went around to the top 30 publishers. and paid out hundreds of millions of dollars to them. in order to agree not to do exclusive deals. with competitors. And that was called Project HUG, H-U-G.

Hold developers Close. And that was one of the major pieces of evidence. on which the jury found their practices. to be illegal and anti-competitive. And the one more data point on that, you know, we talk about 30%. and there's always a lot of people defending Steam. Well of course they have more costs. because they have more features than Epic. We have data on that's very detailed. The all in cost of operating the Google Play store,

stocking it, maintaining it, the software, the entire ecosystem is around 6% of revenue. So you know, in a competitive market, what a company whose cost is 6%, people to charge 30%, like absolutely not. And Apple's costs are similar. Apple runs an even more efficient. and lean operation than Google. So their costs are also likely in the range of 6% all in. They mark it up from 6% to 30%.

Like only a monopoly can do that. Look at competitive businesses, they have a margin of a few percentage. The numbers there are strikingly supportive. of just outright anti-competitive distortions. - Okay, what do you think. is the future of the gaming industry? So we've said to me a bunch of exciting stuff. about indie developers so, you know, do what are called AAA video game companies, so these big gaming companies, do they have a future?

What is their role? How do you see like in the next 5, 10, 20 years. the evolution of these big companies and indie developers? - Yeah, there's one constant in gaming. that I think the industry manages to lose sight of. from time to time astonishingly and that's fun. and people play games for fun. Our whole job is to deliver fun. And when you look at a lot of the games. that failed recently, they just didn't deliver fun.

or they didn't deliver fun in a manner. that was nearly competitive. with the other sources of fun just in people's lives. And so, you know, at a basic level we don't need a terribly complicated theory. to explain a lot of the malas in the game industry. There's just been a degradation of the capabilities. of a lot of publishers, partly because of competition for talent. You know, companies like really vibrant game businesses. like Epic or Riot or others are hiring the best developers. and accumulating them and big tech companies are hiring.

the best game developers 'cause there's super talent there. And so in some cases the companies aren't competing. robustly or getting worse. They're making games that are less fun. And you know, I think everything else. that's happened is kind of a side show to that. You know, there's always political drama and so, and I think the core is of failure to deliver fun. And you know, the nature of fun is changing. It turns out that playing a game together. with your friends in a really socially. and engaging way with voice chat is just way more fun. than playing a solitary game for the most part.

And there are exceptions to that, but I think we're seeing much, much play time. shifting towards games you're playing. together with your friends. And not just random internet strangers who happen to play. that game too, but the people actually. you know in the real world. And that's certainly been the case with me. and with almost everybody I know who's playing. "Fortnite" or similar games. And that has really significant effect in reshaping. the whole game business. Because like a single player game, if you have 20 people with 20 different opinions.

of which game to play, each one might buy. a different single player game. But in a multiplayer game, if there are 20 games out. and each one might have their own completely individual. preference and each one or independently choosing. which game to play, each one might buy a different game. But they're all realizing that they wanna play together. And so what players are doing increasingly is playing. a game they like and accept together with their friends, even if it's not the game that every one of them. might be preferring to play themselves.

Like if you have, and you know, that's certainly the case in, you know, different "Fortnite" groups I play with from time to time. It's like, you know, one player might have been preferring. to play "COD", one might have been. preferring "League of Legends,". somebody else, something completely random, but it's just so fun to play together, we're doing that. And that means that there's really strong. Metcalfe's law effect in games. which are able to attract a large percentage. of your friends are more able to attract you. and not only attract, but also retain.

And so, you know, I think Matthew Ball's analysis. of this over the years has really documented. the trend towards, you know, you can call it the metaverse. or you can call it large scale multiplayer social gaming. He is really documented this trend. and you know, over the past year or so it's taken a really, really strong turn towards increasing rate of change, increasing numbers of players coming to "Fortnite.". You know, we hit an all time high. of 110 million monthly active users about a year ago. (Lex laughing). - That's crazy. - And another. like close to peak this time.

"Roblox" is bigger than ever. And you know, this trend is players consolidating. into multi-player experiences of play together. And we're seeing another trend overlaid with that, which is like when an awesome single player game comes out. or a small multi-player game comes out, people often will like treat it as a vacation. They'll go off and play that game for a while, then come back. And I think "Wukong" was an awesome example of. that wonderful game from a brilliant team. In China they made a game that's like, no western players had really seen. that type of thing done before. And it was awesome and it did well,

but most players play it for a while and move back on. And that could be lucrative. But a business that's building that kind of game, it's gonna have to build a new one every few years. and build a business around that while the other games. continue to accrete users. But you know, when you have a large number of gamers. migrating to a small number of games, the effect of that is increasing revenue for those games, increasing reinvestment. And you know, there are things that Epic can do. with a team of thousands of people building "Fortnite.".

Internally and tens of thousands contributing to "Fortnite". as independent creators. You know, there are just things that can happen. with that level of investment. that can't happen in a smaller game. And so there's somewhat of an increasing. winner take all dynamic. where the biggest games reinvest more. to make their games more fun, to gain fun at a faster rate than other games. And you know, the industry is changing around that. And you know, so I think the lesson for the game industry. now is that there are really two big opportunities.

being pursued. There's big games or games that have the potential. to be really big multiplayer experiences. that keep players around, you know, indefinitely. for very long periods of time. And then there are just really good single player. and small scale games. that people are taking a break from their big games for. And you know, the trend there is going. to be towards efficiently developing those games. You can't build one of those games. with a $300 million budget, but if you can do it with a $40 million budget, you can make a lot of money. So I think that's the main reshaping going on. and I think that it creates a rather bleak outlook.

for a lot of the category of like single player games. that don't have a huge audience to reach. But this is just one of the really trends. of restructuring the business around. the technology and changes of the day. - Okay, this is gonna be a ridiculous question, but aside from the games you've created, what are some of the greatest video games. ever created to you? Like what video games have been like.

either impactful to you in your life. or maybe you've seen created. and you're like, "Huh, that's a beautiful art piece.". Like it could be in a totally different realm. Like obviously for me, I returned too often. to the single player domain of role playing games. Of the "Elder Scroll" series, "Skyrim", that was like a world that they created. A recent game, "Baldurs Gate 3", that was really incredible piece of work and art. and doing a lot of innovative stuff.

again in the single player domain. Is there games like that outside the ones you've created? - I'm most impressed with the games that have created. what appears to be a full living, breathing world. You know, games that give you the sense that. you're just a part of it and there's a lot more happening. and there's, you know, always more. And you know, gives you the sense that you could go anywhere. and do anything. Even though these games really do have finite limitations.

and there are places you can't go. It really creating that sense of wonder. is just a magical thing. Like "Zelda: Breath of the Wild,". yeah "Skyrim," "Red Dead Redemption". - [Lex] "Red Dead" is great, yeah. - It's like there's an entire ecology simulator in there. I have a high school classmate. that got into studying river ecology. and he was commenting on like. "This is one of the very few games. that's hydrologically sound.". The way, like they actually went to the effort. of shaping the rivers. to follow like erosion dynamics and so on.

It is the attention to detail. There's something there, it's big, and it's been funny through the industry. Like I last designed a game in 1992, I'm not a game designer. Yeah, I have a very open-minded. like the best game genre that will ever exist. has not yet been invented. And as we get more technological capabilities. and creatives, people use that to,

and you know, hopefully empowered. by higher productivity tools and so on that will see more. and more cool things emerge. that we'd never dreamed possible. And you know, the idea of a world simulator. is actually really interesting there. It's been tried a lot. It's, you know, usually extremely slow. and expensive to create, but over time maybe we'll get better at that. and that will be a thing too. - You said so many interesting things there. New city builders. - [Tim] Yeah. "Civilization," it's a mind boggling. they built a game with that depth that can evolve. so dependent on your actions. - To do that scale of world,

but to where you can step into it. and be in it, you know. I think "Red Dead" is a great example, but to do "Red Dead" redemption in a way. where you can walk around with friends at a large scale. And I guess what you have given. so many years to is creating the tools. that enable the artists to give that attention to detail.

that "Red Dead" does on several of the things. And once you do, there's something magical about that. Like once you give that attention to detail, like, I don't know what it is, but the love of the artist comes through somehow. and you could feel the care that they put into it. - That's right, the best games of a soul. You can really sense it. You know, like "Call of Duty" has a very different soul. than "Fortnite" and it just kind of exudes not only. in what you see in the game,

but also in how players interact with it. and interact with each other online. And that's a really fascinating thing. I wish would be studied more. (Lex laughing). - I think we talked about the soul on several fronts, right? I wish it would be studied more. - Yeah, yeah, all game design decisions. the designers make have a profound impact on what players. think of the game and seeing the game. You know, "Fortnite: Battle Royale". always had a sense of mystery to it. You're on this island but you're not sure. exactly what's happening here. There are all these houses, they're abandoned, why?

And you know, I'm not the secret holder, you know, I'm not on the design team. I experienced "Fortnite" as a player, but it really exudes a lot of that. and a good spiritedness as well. 'cause even when you're eliminated in "Fortnite," you know, there's not like blood spurts and there's not jibs. You're just, you know, teleported out of the simulation. and often, you know, you end up losing the game in a way. that's hilarious enough to like, actually you're laughing at it. or you're like, respect to that player.

who just won because that was clever. And you know, it creates a very different dynamic. than these other games where players. tend to be very, very positive towards each other. One of the things I like to do in "Fortnite,". just to kind of gauge how the game is going. is I play full squads. so you get match made with the, you know, three other random players and play a game together. Sometimes they have voice chat, sometimes they don't. And you know, back when our matchmaking regions were bigger, I learned a little bit of like battlefield Spanish. so I could speak with the people who were down. - [Lex] Battlefield Spanish - As far south as, yeah. Mexico City, and you know, the positivity.

of the interactions there among just every kind of person. you might ever meet online were really quite impressive. and completely unlike what you would see in a game. like "Call of Duty", where it's always, you know, everybody's gotta be an Edge Lord. (Lex laughing). - Ah, I love online gaming culture. I have to ask it 'cause it's kind of like one of. the legendary games is "Grand Theft Auto,". speaking of the worlds that are just like...

I mean that's a whole, it's that's its own thing, right? That's that world, the characters, the style, the edginess, all of that. But the interesting thing about "Grand Theft Auto 6" to me. that I want to ask you about is they took forever. It's the six month thing that you mentioned before. You know, there's some games like that just take years. to bring to the conclusion. What can you say about that process that, you know, you eventually were able to take Unreal to completion.

If you were to look from the outside, why does it take Grand Theft Auto that long. or other companies. to take the games to the conclusion. and I mean, just insight into what that process is like. - Making games is very hard. and especially when you're pushing. the boundaries of something. You know, with "Grand Theft Auto,". it's just the realism.

and feeling that you're in this huge city. and anything can happen and it's all living. and breathing in you're just a part of it. The level with which Rockstar has brought quality. to that genre is astonishing. And when you're building something at a level of quality. and detail that's never been achieved before, you can't predict how long it will take. Whatever problems you're solving today to get to, you know, the next iteration of quality on it, you don't know what new problems that will unlock. And often, you know, you fix one thing.

and make it super realistic. and that just highlights the unrealism of other things. that you then need to fix. And I think the, you know, the thing that always. comes to mind is that shipping a game is easy. if you don't have a high quality standard, we also won't have much success. What we've seen from Rockstar is they take a long time, but they ship amazing games and it's worth it in the end. Right, a bad game is bad forever. The late good game is eventually game is released. and is good.

- Do you ever feel, like Rockstar is a good example of that, the pressure of delivering quality. You know, Epic has not missed recently. that I'm aware of in terms of delivering quality. Do you feel the pressure of that, that you're not allowed misses? - We certainly do. Everybody's often working very much to the last minute. to make something excellent. And it's really hard with these fast delivery timeframes.

because you really have to get a lot of stuff up and running. before you can judge it, like a new "Fortnite" season holistically. You know, it's not until like the last month or so. that you really know what you've built. and you really understand it. And if any late breaking problems emerge in like balance. or anything else, it's usually towards the end. and that usually leads to a rapid push to fix it. And then other lessons you can only learn live. And you know, from experience. and that means accepting a game that like.

it's a live experience and it's also an experiment. and it's gonna continually be improving. And anytime there's some things that some people don't like. and you learn from it and you improve it and you move on. - Let me ask you a big philosophical question. So you've created these gigantic worlds. that bring so much fun to humanity, but you also get to learn about humanity. What gives you hope about us humans, about the future of humans, the future of humanity?

- You know, I see two contrasting worlds that, you know, have been brought about in the digital age. One is the world of social networks. and people typing at each other. and just, you know, massive negativity and politics. and, you know, hucksterism. and, you know, curation by engagement. often promoting negativity and toxicity.

That's a harsh world, I think is a step. backwards in many ways. Like, I think that the foundation of the world. is actually a little bit shaky. because of just the social dynamic. that those platforms have have brought on. But then I compare that with the good spiritedness. of what's happening online when you're connected. to real people, like actually playing "Fortnite.". Playing "Fortnite," full squads with people. you've never met before, never talked to, and just judging what, you know, human connections develop there. and whether they're positive. I found those to be really, really excellent and endearing. I think the lesson from all of that is that humans talking.

to humans and being together in the real world. or virtual world is. a naturally empathetic medium at which naturally leads. to bonding and though conflict sometimes occurs, it's just generally so much more promoting. of our social norms. and good interactions between people. and positivity promoting. Whereas kind of the, you know, typing angry message is thing at each other. as a self-reinforcing negative dynamic that's negative.

And then I think you though, you look at social media. and you look at gaming that is increasingly social. and I couldn't see a bigger divide between any two medium. as I see there in terms of the actual social dynamics. One super positive, one super toxic at times. - Yeah, that's actually really the text-based medium. Now that could even be around gaming. You could look at Discord, it could be a real toxic in text, but you place humans together.

in the real world, here in the room. I literally have never, like, I very rarely see humans not get along. in the physical space. And the degree to which you can create a digital space, like a metaverse type of space. where it's sufficiently immersive, where you feel the other person, the empathy comes out. and then the joy that's derived from the empathy comes out. And it's just a reminder that humans like,

I don't know that humans are good. and they wanna see the good in others, they wanna share the goodness. And then, you know, like when they get in. that group together, there's love there. Now they might talk shit about some other group, this is the dark side of humans, (laughs). but together in terms of the dynamics. of that group, is joyful. So yeah, that gives me hope as well. And the more degree which we can create those worlds. online that make it super easy for us to connect.

in that empathic way, the better. And I am grateful that you are pushing the boundaries. of what's possible in creating such worlds. And I'm grateful that you would talk with me today, Tim. This was amazing and it's an honor to talk to you. - Oh, thank you very much, it's been fun. - Thanks for listening to this conversation. with Tim Sweeney. To support this podcast, please check out our sponsors in the description. And now let me leave you some words from Benjamin Franklin.

"We do not stop playing because we grow old, we grow old because we stop playing.". Thank you for listening, I hope to see you next time.