AI: The Extinction-Level Event for Game Studios (Here's Why) - GOAT Gaming CEO
Insights from GOAT Gaming's journey to 5.5M users with AI-powered, skill-based games on Telegram
Simon Davis, Co-founder and CEO of GOAT Gaming, reveals why AI is an "extinction-level event" for legacy game studios. His team builds games in just 2-3 weeks and reaches 5.5M users on Telegram.
Learn why AI is an "extinction-level event" for legacy studios and how AI-native teams are shipping games 5-10x faster at a fraction of the cost
Discover why Telegram (with 1B users) is the next gaming frontier and how GOAT Gaming reached 5.5M users
Get actionable insights on implementing AI across your entire studio - from code generation to art creation to operational automation
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🎧 Listen on Spotify, Apple Podcasts, or Anchor
Speakers:
Joseph Kim. CEO at Lila Games.
Simon Davis. CEO & Co-founder at GOAT Gaming.
🎙️ AI + Telegram Gaming: The Next Gaming Frontier?
I don't want to sound hyperbolic, but I really view this as an extinction level event.
Simon Davis, CEO at GOAT Gaming, wasn't talking about climate change or asteroids – he was referring to artificial intelligence and its impact on game development.
The statement might seem dramatic, but it's hard to dismiss when you hear how his team is leveraging AI to ship new games every 2-3 weeks on Telegram and has grown to 5.5 million users. This post breaks down the key insights from Simon's experience building an AI-native game studio.
The Rise of Telegram as a Gaming Platform
Why Telegram?
Massive untapped audience: Close to 1 billion monthly active users "starved for quality content"
Parallels to early Facebook gaming: Simon compared the current Telegram opportunity to Facebook circa 2007-2009, where a "massive captive audience" had limited entertainment options
Easy social distribution: Built-in contact lists and sharing mechanisms make viral growth more achievable
Native monetization: Through both in-app purchases (Telegram Stars) and crypto payments (with crypto payments avoiding app store fees)
Crypto-friendly: The platform already has integrated wallets outside the US, with US wallet support announced for this year
Monetization Breakdown
According to Simon, across the Telegram gaming ecosystem, approximately 80% of payments come through crypto and 20% through traditional app store payments
This skew doesn't appear to be fee-driven but rather from users' comfort with spending crypto balances more freely than fiat currency
Agentic AI: A New Gaming Paradigm
Simon's team is pioneering what they call "AlphaGoats" – a collection of AI agents players can:
Collect and configure
Train for specific skills and behaviors
Have battle on their behalf across various games
Watch develop emergent, unpredictable behaviors
This isn't just theoretical – they're launching the first version in the next 2-3 weeks.
Misconceptions About AI Agents
Some skeptics ask: "Isn't this just the game playing for you?"
Simon points out that management sims like Football Manager have offered similar gameplay for 25+ years
The key difference is the emergent, unpredictable nature of modern AI agents
The Appeal of Emergent Behavior
Simon shared an example from a friend's game where:
An AI agent wanted to establish a romantic relationship with another agent
Feeling awkward, it asked a third agent to come along on the date
When prompted to tell the third agent not to come, the third agent responded indignantly
These unprogrammed, human-like interactions create "moments of delight" that keep players engaged
AI's Revolutionary Impact on Game Development
GOAT Gaming has embraced AI across its entire studio workflow:
Development speed: All games in their Telegram ecosystem are built in 2-3 weeks using internal AI tools
Code generation and auditing: They use AI to both write and review code
Workflow automation: Everyone from the CEO to the marketing team builds AI tools to solve workflow bottlenecks
Art generation: Their team combines Western AI tools with Chinese AI art platforms
Content creation: Previously created 37 new Fortnite maps in 37 weeks using AI pipelines
The Extinction Event for Legacy Studios
Simon predicts a fundamental shift in the industry:
New "AI-native" studios will ship content 5-10x faster at a fraction of the cost
Legacy studios (especially larger ones) will struggle to adapt quickly enough
The end of decade-long, hundred-million-dollar development cycles with mediocre results
A shift in focus from production capacity to distribution and curation
AI as the New Essential Skill
Simon views AI proficiency as equivalent to "being proficient in Office in 1995-1996"
At GOAT Gaming, everyone from executives to marketers is expected to build AI tools
He now dictates to AI for 60-70% of his working hours instead of typing
Launching and Scaling on Telegram
GOAT Gaming has reached over 5.5 million users with a skill-based gaming approach on Telegram:
Key Growth Mechanisms
Solid referral mechanics: Leveraging Telegram's contact lists for viral growth
Social features: Leaderboards and collaborative objectives
Low entry barriers: First crypto purchase priced at sub-$0.10 to convert users
Tournament model: Players pay entry fees and compete for prize pools
Cross-promotion: Their games promote each other within their gaming ecosystem
Why Skills-Based Gaming?
Their previous game "Mighty Action Heroes," showed 80%+ D1 retention for competitive modes with entry fees and prizes
Financially-motivated players showed exceptionally strong engagement
"The users, Web3 users, are financially motivated, and this is like a very clear hook"
Operational Insights from 9 Years of Studio Leadership
Beyond the technical and product strategies, Simon shared candid insights from building and running a game studio for nearly a decade:
Location Strategy
Started in Singapore not for strategic planning but because that's where their initial team was located
Later developed a thesis around bringing Asian gaming trends to Western markets
Singapore is now recognized as advantageous for access to both Western and Asian markets
Funding Challenges
Faced over 150 rejections before securing initial funding
Had to personally fund the team's salaries from savings when promised funding fell through
Initial investors (Rocket Internet) weren't traditional gaming investors
People Management Lessons
Biggest challenges were always people-related, not product-related
Early mistake: Expecting team members to self-report when workloads became too heavy
Cultural differences in how team members express disagreement or concerns
Retention reality: Some people have a limited "tour of duty" while others stay for the long haul
Letting go decision: "There's never once been a case where we let someone go where I didn't wish I had done it sooner"
The Path Forward
Simon believes we're at the beginning of a fundamental shift in how games are made:
The cost of content creation and coding will decrease by orders of magnitude
More experimental, niche experiences will become financially viable
The key challenge will shift from production to distribution
His goal: Make GOAT Gaming "the dominant messenger gaming company globally in the next five years"
Key Takeaways for Executives and Product Leaders
AI adoption is no longer optional: Teams that aren't building AI proficiency today risk being left behind by competitors who can ship 5-10x faster at lower cost
Messaging platforms represent a massive opportunity: With close to 1 billion users on Telegram alone, these platforms offer Facebook Canvas-like distribution potential
Skill-based gaming + crypto creates strong retention: The combination of competitive gameplay and financial incentives has driven 80%+ retention metrics
Organization-wide AI integration is crucial: From executives to marketing, everyone in future-focused studios needs to be leveraging AI tools
Distribution and curation will become the primary challenges: As content creation becomes cheaper and faster, standing out in the crowd becomes the new bottleneck
The future of gaming may well be determined by which studios can most effectively leverage AI, both in their development processes and in creating new player experiences. Those who move quickly have an opportunity to reach massive new audiences on platforms like Telegram. At the same time, those who wait may find themselves unable to compete with the speed and efficiency of AI-native studios.