Reshaping Entertainment: Blacknut's Cloud Gaming Revolution and the Future of Universal Gaming Access

Dive headfirst into the gaming revolution with Olivier Avaro, the visionary behind Blacknut, as we discuss how cloud gaming is reshaping the entertainment we live for. Olivier doesn't just share the ins and outs of Blacknut's mission; he opens up about their groundbreaking partnerships with telecom behemoths and tech titans, bringing top-tier gaming experiences to screens everywhere. Imagine turning any connected device into a gaming powerhouse – that's the future Blacknut is crafting, and this episode peels back the curtain on how they're making console-grade gaming universally accessible.

We're not stopping at the what; we're digging into the how, exploring Blacknut's savvy localization strategies that make cloud gaming a hit from Japan to Vietnam. Olivier gives us the scoop on "Le Lab," where gaming's avant-garde concepts come to life, and publishers get a pulse on what makes gamers tick across the globe. This isn't just a chat about what could've been – it's a deep dive into the successes and stumbles in cloud gaming's rise, and why ventures like Stadia didn't make the cut. Plus, get the lowdown on the 5G revolution fueling mobile gaming and the intricate dance of launching new digital experiences alongside complex telecom infrastructures. Grab your headphones and join us for a glimpse into gaming's bold new horizon.

More at https://linktr.ee/EvanKirstel

Transcript

Speaker 1: 0:03

Hey everybody, Really interesting topic today around the business of cloud gaming in this cloud and mobile-first world, with a true innovator in the space from BlackNut Olivier. How are you?

Speaker 2: 0:19

Very good, evan. Nice to meet you. Nice to be on the show today. Thanks so much for being here, nice to meet you.

Speaker 1: 0:23

Nice to be on the show today. Thanks so much for being here. Interesting topic. Personally, as I am focused on B2B tech and telecom and cloud and beyond, but also an avid gamer, so the intersection of these two worlds is really quite interesting. We're going to dive in. Before that, maybe introduce yourself and your vision and mission at Black Nut.

Speaker 2: 0:47

Absolutely. Thank you, evan. So I'm Olivier Varro, I'm the CEO of Black Nut, so we are a cloud gaming company. Basically, we deliver more than 700 games from the cloud and that is basically allowing you to turn any connected screen into the most powerful gaming console basically allowing you to turn any connected screen into the most powerful gaming console. The service is live B2C, but most of our distribution is done with telco partners B2B, which is probably the reason why we're here today to talk about it.

Speaker 1: 1:17

Yeah, and I'm delighted to have you. So tell us you know we're not going to get into games today. Well, that would be fun. But talk about your partnerships, your go-to-market. You have quite a unique strategy when it comes to getting games in consumers' hands.

Speaker 2: 1:37

Yeah, absolutely so. First, in terms of vision, the whole idea of Black Nut is to democratize gaming right. The whole idea of Black Nut is to democratize gaming right. It's basically to bring the best of gaming and the nice value of gaming to everybody.

Speaker 2: 1:51

Okay, and the way we do it is indeed to partner with publisher, with studio, to license their IP and we were talking here about premium games and high-quality games, console-grade quality games, right, and we are actually delivering those games from the cloud. This means that we put the game on the server that is sitting in the cloud, instead of sitting in the house, and we stream the games to the end user. Of course, for doing this kind of thing, you need to have a bit of technology, because it requires, of course, good connectivity, which is provided by the Telco, but you need to master latency, jitter, all these characteristics. That makes the experience look good. I think the service is being. This will be to see but the partnership with Telco basically allow us to access to a very large audience I think we are currently addressing a bit more than 1 billion devices and to stream them from the cloud.

Speaker 1: 2:57

Well, that's phenomenal and I can't wait to sign up personally. But on a side note, I mean you are in a world dominated by giants, giant publishers, tech giants like Samsung, google. Of course, the telcos are giants in their own right. So how do you navigate and partner in this world of mobile gaming and console gaming? It's quite a complex business.

Speaker 2: 3:24

Yeah, it is indeed, but I think, luckily, there has been a growing interest in gaming. Right, I think it came from something that was a niche market, you know, years ago, and probably only targeting hardcore gamers, to something that is now targeting everybody and even, you know, my mother-in-law is playing games these days and we are really surfing on this market and, as you mentioned, we have those tech giants. But you mentioned Samsung, you mentioned your big carriers and so on. They're actually our partners Because they are looking for new content, exciting content, exciting experience to distribute, either through their channels so for Samsung, for IG and so on and so forth or through the connectivity they provide, like technical, so they can bundle gaming with fiber plans, with 5G plans and so on and so forth.

Speaker 1: 4:22

Yeah, great strategy. And let's talk about your platform. We could spend the entire time talking about this as a geek, but I won't bore too much of the audience in the great details. But you have a kind of hybrid public-private cloud platform. Maybe talk about that that you've developed and how it helps with go-to-market and time-to-market.

Speaker 2: 4:43

Absolutely, evan. So this is one of the uniqueness to Blacknet, with go-to-market and time-to-market Absolutely, evan, so this is one of the uniqueness to Blacknet. So I think we have somehow three pillars One is content we can talk about it. The other one is marketing how we bring the service to the telcos. And the third one is, as you mentioned, the platform.

Speaker 2: 5:01

Our platform is pretty unique because it relies both on public cloud AWS, pc, tencent and so on and so forth but we also have a private cloud component, meaning our own servers that we run in several countries and that we deploy by ourselves or with some partners, like Radiant Arc, for example. The public Cloud allow you to go very fast on the market because you can deploy on infrastructure that is here without having to invest big capex, and you can actually deploy a service like Black Knight in the country in less than weeks. The private Cloud component allows you to have cost efficiency, because, of course, public Cloud is a bit more expensive. Cost efficiency, effectiveness and also great partnership with Telcos, because we can put this cloud on the edge of the network.

Speaker 2: 5:50

We can have great connectivity thanks to hosting our GPU servers in the data center of the Telcos. I think the best connectivity, best latency, jitters and monetize basically that connectivity.

Speaker 1: 6:07

Oh, wonderful Interesting architecture you built there. So traditionally, as you know, I mean gaming was a lot about the hardware, the console, the handheld device, you know, the controller, from the Atari 2600, which I had as a kid, through to PC gaming and, of course, xbox and PlayStation and beyond. How is that changing with your service? It's not really about hardware or consoles per se.

Speaker 2: 6:40

So it's somehow. I would say it's about different hardware. Okay, it's no longer about console and PCs. Even the hardcore gamer will still like to have their own console or PC, have the latest and new toy that they can get and smell the smell of the plastic when they open the bag and this kind of thing. So this will still exist.

Speaker 2: 7:02

I don't think we are actually competing with this market, but there is a large range of people that either cannot afford to have basically the latest console or the latest PC, or just don't want actually to buy one more generation of console because they don't have the use of it. It's basically people that have been playing on the console and then the grown-ups have kids and so on, so it will not be worth the investment. So I think these two people are a great target for us, because with BlackNuts you can actually access a large catalog of games all these 700 games without actually investing in dedicated hardware. But they are still using hardware they have.

Speaker 2: 7:44

So this hardware could be a smartphone, it could be a TV, it could be the set-top box of a carrier. It could be a dongle like be the set-top box of a carrier. It could be a dongle like a Fire TV stick or a Google Chromecast and so on and so forth. So there is still a hardware component, but it's a more generic hardware component that is, in general, already in the home. In general, you have many of these devices. There is a couple of TVs now in the home, there is a box, there is PCs, there is mobile phone and so on, and so we reuse this existing hardware to bring games on all the different screens.

Speaker 1: 8:19

That's fantastic. Any screen, any time. What a great concept.

Speaker 2: 8:24

Any place.

Speaker 1: 8:26

Any place. Of course, that's the best part of gaming, including airplanes these days with better broadband Pretty fun, Absolutely. So you have a pretty diverse catalog, but there are so many games it's a little overwhelming in the app stores even to find something interesting. How do you choose which games to include in your catalog?

Speaker 2: 8:45

So the Black Hat platform is a premium platform. So it's not really about working on vanity metrics and having 10,000 games. It's really about having good games right and providing to people a great experience. So all our games are curated okay. They are really selected, you know, from different publishers to match our audience and also to match a different experience people can have. Right, you will have a different experience if you're on the mobile or if you are on the big screen on the TV, on set-top box.

Speaker 2: 9:15

So we try to have a very large variety of games that will match each of these experiences. We also try to match the catalogue with the different kind of audience we have. So we have games that are for kids, games for, you know, teenagers and games from the whole family. So we are really a family-centric, you know, service and family does not mean, you know, not just kids. I think we are really, you know, adult games as well, right, and games for you know, 18 plus. But basically the catalog has been constructed so that you can build profiles, okay, and we can have up to five profiles for the family where you can actually put some rating and just present the right games to the right audience. You don't want your young kids to be exposed to actually 18 plus kind of games.

Speaker 1: 10:03

Fantastic and, as you know, I mean gaming is a global phenomenon but there are various cultural, localized differences you know gaming in Japan very different from the US, for example, and their preferences. I mean you are global. How do you cater to all that diverse audiences and requirements and interests around the world, including in France versus the US versus Italy, for example, the US versus Italy, for example?

Speaker 2: 10:29

Well, there is definitely some kind of fragmentation, you know, and cultural differencing in gaming, but we did find out that actually gaming was much more global than music and TV series.

Speaker 2: 10:42

So actually you can really start with a catalog that is global, you know, and that will basically please a very large population all over the world. And what we do is when we actually go into specific regions. So I think we're currently actually deploying the service in Japan, which is very unique in terms of market and that, you know, very specific interest in terms of game. We can source local games or games that are, you know, basically popular in a certain country and augment our catalog with these kind of games. And that's kind of common thing we do, right, I think we've been doing it for the US, we have presents in Vietnam and we have into source games as well for Vietnam and, as I mentioned, japan, very unique, very specific market and we will actually augment the catalog which are, I would say, japanese-centric games and actually those games could also be of interest worldwide. I think, you know, people are curious when they do gaming. They want to discover, they want to try new things.

Speaker 2: 11:37

So I think it makes our catalog, I would say, kind of unique and very interesting. In addition to this, evan, maybe as an early disclosure, we are opening in Black Nut a new category that we call Le Lab, so the laboratory, where we are going to have, in a very early stage, some new games that people can try and it will be experimental games, you know, a new thing to try, and this is going to help us to understand what are the preferences of the specific usage in specific countries and possibly to help publishers and studios to develop games that will be popular in certain geographies or on certain devices, based on the data that we're going to collect.

Speaker 1: 12:19

Fantastic approach. So I was, early on, very interested in cloud gaming and I signed up for several services and enjoyed them. They worked great, especially on home broadband. They were fantastic, and a number of those players we don't need to mention them kind of pulled out of the market. I still have Luna on Amazon, which is free with Prime members, but they have a pretty limited catalog. What happened? Why wasn't this early start or first wave of cloud gaming successful?

Speaker 2: 12:54

yeah, first wave or second or third wave, evan, I think it's. Uh, as you mentioned, there have been a lot of dead bodies in the in the world of cloud gaming and when, when I started the company back in 2016, I looked at, uh, you know, the earlier or the first wave of cloud gaming with OnLive and Gaikai and talked to this guy that actually was a pioneer in the game and tried to understand why he did not fly and there was always some good reason. I think the first wave was mostly probably on the infrastructure, you know, availability of the infrastructure. Fiber 5G was not there at the time and they were targeting a hardcore gamer audience.

Speaker 2: 13:35

So they were targeting people that would want to play certain games with certain quantity level that would match basically the hardware they have.

Speaker 1: 13:44

So the most demanding audience if you want.

Speaker 2: 13:47

And the hardware infrastructure was not there at that time as well. So you have very high investment in CapEx, very high investment in games, right, and trying to target the most demanding audience with a connectivity that was not, you know, like it is today. So that was probably the reason why this company did not succeed. You know, at first, if you look at, I would say, second wave or more recent in the deployment, the reason why this company did not succeed at first. If you look at, I would say, second wave or more recent in the deployment, such as Stadia, I think the story is a bit different. What Stadia was trying to do is really to be a new console in the cloud, so building a new ecosystem with actually a new hardware that publishers will have to support. And initially they kind of fueled the ecosystem to try to get it working. And that was actually very costly because you have to invest in game and in studio to port their game on this platform. And at the time when they actually stopped doing this, the end user were actually accessing a platform or a new console without an ecosystem. And if you look at the game industry, you know most of these great consoles without an ecosystem basically failed because they didn't have unique IP. They didn't have. You know the Mario of the Switch, you know the Dell down Switch, you know this kind of unique IP. So I think it's kind of. I think the explanation is pretty straightforward why actually this platform stopped.

Speaker 2: 15:13

And if you see what remains on the table today, you have services like Black Nut that provide game as a service. So for a subscription you get access to a very large number of games. It's similar to what Luna is doing, but on very limited geographies and very limited environment. You have then GeForce Now, which is basically infrastructure as a service. You pay for a subscription to play games that you have purchased in some other places, which kind of satisfy a more gamer-centric approach.

Speaker 2: 15:45

That know what Steam is. If you ask my grandma, they don't know what Steam is. Very few people know what Steam is actually outside. You ask my grandma, they don't know what Steam is and very few people know what Steam is actually outside of the gaming industry. So that's what we do, right, and I think that these two categories of service, so either game as a service, like Black Nut or Luna, or basically the infrastructure, or bring your own game kind of service, like GeForce Now Now are currently prevailing and it's still not yet basically a massive market, but it's a growing market and everybody agrees that this is going to be the future of gaming.

Speaker 1: 16:24

Wonderful and I think 5G has probably lit a fire under the mobile gaming market. I've certainly noticed a huge difference in both downloading games and latency and jitter. It's been really fun to use 5G, including voice and video simultaneously. So how do you get started with a telecom telco or partner or a service provider partner? Notoriously they're pretty slow to launch services, and for good reason. There's lots of integration, the back office and provisioning and customer service and branding security, lots of concerns. What does that process look like of bringing on a new partner?

Speaker 2: 17:08

what does that process look like of bringing on a new partner? You're right, it's a complex and time-consuming process, but very much rewarding at the end. And I think, evan, you noticed part of the point. There are big companies and in general, the bigger the more complex they are to work with, but basically the larger the audience and you have several issues you need to work with them. But if you look at the positive side of them, working with carriers allows you to reach a great audience which actually match very well the audience we are targeting, which is the general public, the families and so on, and not only the hardcore gamer.

Speaker 2: 17:44

So it's not that Telco cannot provide anything to hardcore gamers, but basically they will provide great connectivity and they will be happy with it. But this represents maybe 5% to 10% of the population of the Telcos and we are addressing the remaining 90%. This remaining 90% are looking to consume games the same way they are consuming movies, series and audio right, accessing to a catalog very easy every screen I click, I play right. And the carriers actually have been already providing triple-play, triple-play services and they've been launching new way, new connectivity like new 5G and fiber, and they were looking to fuel this new connectivity with great services that could benefit from it. And cloud was actually the ideal use case because it does require great connectivity very low latency and, most important, very stable latency, which is called the jitter.

Speaker 2: 18:46

So working with Stelco allows you to one, access basically a large audience but second, also access to an infrastructure that is very, very relevant to a cloud gaming service. And, in addition to this, with the rise of AI and the rise of lowering down the cost of GPUs and having telcos and other providers providing this kind of infrastructure at the edge of the networks make it a very good fit. So if you start up working with telcos, that you have an audience that you can reach very efficiently in terms of connectivity and where you have servers that you can put at the edge, I think they are basically the ideal partner to work with. Having said that, as you mentioned, they have basically their own constraints to work with. They have big boats to manage.

Speaker 2: 19:38

You need, indeed, to integrate into their network. You need to pass basically all the security if you want to put servers in their infrastructure, and this is the thing that we have been doing with Blacknets. I think we have passed all these securities so that we can put cloud inside the infrastructure of the carriers. You need to integrate with their carrier billing you know of their user acquisition flow if you want, basically, the user acquisition to be efficient, and most of it and this is probably where you know most people fail in working with telcos, and the lack of understanding is that if you do just this, it's not enough. Okay, it's not going to magically bring you users, okay, Even if you have the greatest service, greatest connectivity connectivity with billing and great you know interfaces and reach.

Speaker 2: 20:28

It will not bring users if you don't actually do proper marketing.

Speaker 2: 20:32

It does not work if you're not going to work with the carriers to support user acquisition, to help them marketing a service that in general, they don't know because they are not a gaming company. And what we've been doing in Blackneck is actually to build a marketing team and a customer success team that is supporting the carrier to do user acquisition, and this goes from providing the right assets, new games, new stuff coming on the platform down the line to doing the full user acquisition, so putting money actually to acquire the user into this new channel and that, I think, is a key thing of the market and that you know very few people actually are capable to execute. And we are doing this as well, you know, directly or with some partners.

Speaker 1: 21:19

A wonderful approach, you know, very win-win oriented. So the market again looks bright. You know, even we've seen Netflix getting into gaming and I've tried a few of their games Pretty good. What do you see as some of the trends over the next couple years? What's driving the business forward?

Speaker 2: 21:44

We do see the arrival of what we call silver screen IPs. So it's basically some IP, some media that were successful in their own space and that are basically arriving in the other space. So you can look at, for example, for a game that is becoming a series or a movie, or the other way around, a movie that is basically becoming a game or a series or a movie, okay. Or the other way around, a movie that is basically becoming a game or a series of games. And of course, by doing this you consolidate your IP. You basically provide an experience with the end user which is not only passive, for example, for a movie, but become interactive, so much more engaging. It also allows you to improve retention on your services.

Speaker 2: 22:31

So, if you look at the Netflix example and we are working with a company that Netflix like, right, that, for example, brought entertainment service mostly movies and series to their user and that are looking now to add gaming into their platform right, because they understand that people are not only couch potatoes and, you know, looking at series on TV and more and more looking at interactive entertainment or want to balance, you know, let's say, to be fair the entertainment between social networks, gaming and movies and series.

Speaker 2: 23:05

We are bringing the gaming bits okay, and the way we do it is basically we have a platform that is provided as a Blacknet service, as I mentioned, but can also be provided as an SDK, and the SDK allows you to integrate in any of these platforms to turn out, for example, your movie and series platform to a full entertainment platforms 360, integrating gaming in it and leveraging as well the silver screen IP that we mentioned. So therefore, you are seeing the Star Wars movie, then you can play a science fiction game, so you play an horror game, and then you want to distract yourself and to look at a more distracting movie or play a different game that is a bit more light, right. So that's kind of multi-screen experience.

Speaker 1: 23:52

Wow, very interesting. Can't wait to try that out. So you're all about different events and shows. I'm sure CES and Mobile World Congress are both pretty big for you. What else are you looking forward to in the next few months out in the marketplace? Any events or otherwise that are on the radar?

Speaker 2: 24:12

Yeah, absolutely Evan. So you mentioned it. Mobile World Congress is a place where we meet with the carriers. We met with the carriers back in February. We have the GDC, where we work with the publisher and studio. We have LABsES and so on. Our biggest upcoming event is going to be the Gamescom. So Gamescom is in Germany big event around gaming, and we are going to announce actually a major partnership with a tier one publisher and we are also going to announce what is called Black Hat Plus. Black Hat Plus is a capability to add to your Black Hat subscription a super premium subscription with some key publishers. So I think for X euro in addition per month you will have access to really super premium titles and we will basically announce those publishers in the coming weeks and another big one in the Gamescom. So that will be the major event and the next one, Ivan, is going to be the IBC.

Speaker 2: 25:13

I think the IBC is where we're going to meet the MVPDs, the big providers of entertainment platform, which, as I mentioned, is going to be probably a very big source of growth for Black Nut in the next coming years.

Speaker 1: 25:27

Wonderful Well, so fun, literally, and I've signed up for BlackNut in the next coming years. Wonderful, well, so fun, literally, and I've signed up for BlackNut. It's a great service and really exciting work you're doing and transformation on the technology side Really incredible progress. Thanks, olivier. Thanks for joining.

Speaker 2: 25:45

Thank you, Ivan, for the time. Thanks for the interview. It was great to have you here.

Speaker 1: 25:49

Likewise and thanks everyone for watching and look forward to keeping in touch. Take care everyone.