The DeanBeat: Joe Russo and Donald Mustard interview – Hollywood’s new game-centric focus

Gaming is the new Hollywood. Or so that is the latest interpretation now that games like Uncharted are supplying the themes and plots for blockbuster movies.

At the Dice Summit in Las Vegas, we heard that this week from Joe Russo, co-creator of Marvel’s The Avengers movies, and Donald Mustard, chief creative officer at Epic Games and one of the leaders of Fornite. Mustard’s company has invested in Agbo, the latest entertainment company formed by the Russo brothers (Joe and Anthony). They gave a talk and I interviewed them afterward.

Transmedia is alive and well in Hollywood, but now it’s moving in the reverse direction. Instead of movies supplying the stories for games, it’s the other way around now. Russo said that he fully believes that the interactivity of games is going to be more compelling for fans of the future.

Agbo recently raised $400 million from online game company Nexon at a $1.1 billion valuation. Epic Games also invested in Agbo, which is putting together new kinds of entertainment, and it is designing them simultaneously for different media.

Russo also took questions from the audience and found, oddly, that a question about nonfungible tokens (NFTs) was intriguing to him because it represented a kind of generational change to him. But I found his interest in games, the metaverse, and the changing of entertainment to be the most interesting topics.

Here’s an edited transcript of our interview.

GamesBeat: What did you think of the audience questions?

Joe Russo: The NFT question is probably the most interesting, because what does that represent ultimately? It represents something. Gen Z’s desire to move away from physical real estate into virtual real estate? That’s why I think movie theaters are doomed, ultimately.

GamesBeat: The other interpretation of the Web3 side of it, whether or not decentralized is better–

Russo: It’s interesting. I see positives and negatives to it. I’m a liberal. Everyone should have the same rights and freedoms. Democratization of storytelling is critical to the future of the world and people getting along. There are some things I think are great about it, and other things–humans have a difficult time controlling their base desires, right? You can wind up with some scary shit with decentralization. That’s the problem.

GamesBeat: You can look over to the next industry near you with gaming and see Epic’s battles with Apple. It feels like platform politics is always something interesting. On the Hollywood side, do you feel like creators and platform owners have similarly difficult relationships?

Russo: Yeah, I would say that perhaps the Scarlett Johansson and Disney kerfluffle–it’s certainly representative of that. It’s a disruptive moment. Studios are looking around saying, “How do we make money going forward? We’ve invested a lot in the physical world, the brick and mortar world. Our costs are escalating. Movie stars are expensive. Directors are expensive. IP is expensive. How do we get these costs down?”

You see a couple of things. One is a pushback against A-list contracts, which are really expensive and eat into revenues. Now they’re having to take a movie they would traditionally put in a theater and recoup costs on it – they know how to do that – and put it on a digital streaming service instead. We’ve gotta get costs down, but we expect the same level of quality. We’re going to have to beat up the artists to get the costs down. Or we do trick deals where we pay them less up front and promise them more on the back end, but then we’ll take that movie that should have made money on the back end in a theater and we put it on a digital streaming service.

That’s what’s happening now, and that’s what that fight was really about. It’s a bit of a three-card monte that they played on Scarlett Johansson. And she said, “Whoa, hold on a second.”

GamesBeat: As a creator do you feel like, in the alliance with Nexon, with gaming companies–is there an interesting opportunity there. Is it a different power relationship?

Russo: I think there’s more compelling potential aligning with gaming companies. Epic is also an investor in Agbo. Tencent is an investor in Agbo. All of our investors are gaming companies. It’s because of the way our brains work. Like I said, I see the future coming from gaming. The things I want to do and the technology I want to use to tell stories, the kind of stories I want to tell, they’re more aligned with gaming companies, the way that they think, than studios. I keep trying to bring innovation to more traditional studios, and I find that I keep running into resistance. It’s a waste of energy.

After a couple of years of that I thought, “Maybe I should start aligning myself with people like Donald.” We can innovate and come up with–it’s hard to drive innovation at corporations, so how can we as a group of artists drive innovation?

GamesBeat: I had a chance to talk to Jason Rubin at Meta/Facebook. He had an interesting observation. He thinks the metaverse will be built with game engines, and therefore the people who are best suited to build it are game developers.

Mustard: That’s kind of what we were alluding to up on stage. I believe that. I do believe that so many things in the future will be rendered in real time, which means game engines. It means real time technology. That’s everything from entertainment to commerce to a meeting. Sports. In 10 years, when we’re replacing our eyeballs with the Apple iEye or whatever and that just projects stuff and I’m walking through the grocery store and it shows me the exact dimensions and calorie count of an apple, where it was sourced from–it’ll have that. That’s going to be a thing.

Russo: You like this variety and you tend to eat it about 10 percent more often than this other one

Mustard: Right. That’s going to be everywhere, and that’s all going to be powered by–that’s why I say that Unreal Engine is the operating system of the future.

Russo: That’s been Tim’s whole thing, right? Tim started a gaming company so he could get to the metaverse. The energy and investment that all of you make at Epic toward Unreal Engine is to be the driver. We keep saying the inflection point is photoreal real time. But it also has to be photoreal real time on this, on something tiny. It has to be something portable. That’s when it will all change, and you’ll spend a lot more time in a digital world than in the real world.

GamesBeat: As a filmmaker do you think you’re aligned with that vision for the metaverse, or do you think yours is different from a gaming vision?

Russo: I’m completely aligned, because that’s what I want to see. I want to participate in that metaverse and know that–look, I think there’s a healthy future where there’s a metaverse. And I think there’s an unhealthy future where there’s a metaverse. There are companies that will lead us to an unhealthy future, and I’ve talked about those companies. And I think there are companies that can lead us to a healthy version of that.

Mustard: Also I think that’s been us as humans forever, with every technology we’ve invented. The internet has been used for some of the greatest good ever and some of the most horrible things you can imagine.

Russo: Connecting sex traffickers around the world. Making drug distribution easy. Stealing identities. Go down the list.

Mustard: The wheel let us move food more efficiently, and let us kill more efficiently. Technology is not the problem. We’re the problem.

Russo: But I want to participate, because I see the companies out there that I’m worried about, and I’m trying to advance this in a more virtuous way.

GamesBeat: What more do you want the metaverse to be, then?

Russo: Storytelling has always been essential to civilization. It’s how we communicate with each other. It’s how we communicate our identity to other people around us. Stories that are regional that get told to other cultures.

Mustard: It’s how we contextualize existence. World War II wasn’t a story. It was something that happened. But we tell stories about it. We even gave it a title. We called it World War II. It was a sequel! We do that to frame, contextually, what’s happening through linear time.

Russo: You can’t get dropped into a virtual space and spend more than, I don’t know, a half hour to an hour without a narrative. It starts to become formless after a while. No matter how cool it is. But a narrative is even just getting dropped into Tatooine. As long as you have a lightsaber and guys come after you with lightsabers, it’s a story. If you just walk around in the sand, it has about the same value it does in the real world.

GamesBeat: Would you look forward to taking story threads across the whole metaverse, from world to world to world?

Russo: I think so. And I think they have to be interconnected. We crave symmetry, I think. We’re going to want some connective tissue. That doesn’t mean they have to be the same thing. We talked about it up there with Marvel movies. Taika does stuff that’s very different from what we do, that’s very different from what James does. You can afford all kinds of expressions. But you want some kind of unifying–maybe it’s a home base. Maybe it’s your home that you walk out of every day and then the world is Beetlejuice over here, Star Wars over here, Avengers over there. Your school life is here and your work life is there.

GamesBeat: What can you do with a billion-dollar valuation?

Russo: You can get experimental. I think there’s a point where–it’s part of why Donald and I talk all the time. Our brains are aligned on something that we see down the field, and we’re trying to get everyone else to move toward it. What’s compelling is–I don’t know that the two-hour narrative is anything more than Prozac for the masses at this point. It’s so predictable. I don’t care whether it’s an art film or a commercial movie. They have the same level of predictability. Commercial film is going to end optimistically. Art film is going to end neutrally or pessimistically. The expectation going in is–I have a fair idea, after 10 minutes, of where I’m going. For the most part I think I’m over it. I’ve seen enough of them that I’m now just doing it to keep my brain occupied. I’m not surprised by the format and I’m not compelled by it.

I’m looking for what’s next. If I’m feeling that, my assumption is that everyone else is. Even if they can’t say what it is that specifically, they’ve had enough. It’s time to innovate. A hundred years of a certain kind of format or medium is a long time.

Mustard: It’s interesting. If every novel that was written had to be 150 pages or whatever, three acts–that time constraint of two to three hours max, it’s so constricting.

Russo: It is. And I think that’s part of why comedy has died at the box office. They’re so predictable that at a certain point people said, “I just don’t want to pay $20 for this. I love it, but I’d rather sit home and watch stand-up on Netflix.”

GamesBeat: This idea of creating things simultaneously, does it feel like that’s working? Not making the movie first, but making movie, game, everything–

Russo: It’s getting there. We’ll see. But like I said, I think it’ll come from gaming before it’ll come from studios. Agbo is out there in the market, and what we do is cross-platform, transmedia. What we sell to studios is this notion that you can do all these things. You can unify your assets. You can save a lot more money. You can be more efficient in your storytelling. You get better quality on television. There are a lot of things we just see as inefficiencies.

A lot of it is, there’s a governor. Our governor at the moment is who’s buying from us. Their ability to see the future the same way that we do. Truth be told, it’s a lot of money. If you’re saying, “I’m bringing you a best-in-class piece of IP that’ll cost best-in-class money and I want to make a best-in-class movie, and I want a best-in-class TV show and a best-in-class video game,” at that point we’re at $2 billion.

Mustard: And you have to take all the risk at once to build all the assets at the same time, to make all the things. This is where traditional thinking is entrenched, and that’s difficult.

Russo: Our patience is exceeding their appetite, right? We’re both like that. “We should have done this yesterday. Don’t you get it? Don’t you get how explosive it’s going to be when you do that?” But these are risk-averse companies.