emily: i'm emily chang at the e3 conference in los angeles. this is "bloomberg technology." over the next hour, we will speak to some of the biggest nas gamg d on the latest trends and how they are keeping up with them. usthe ceo of i-4's arena joins us from e3.

and highlights from apple ceo tim cook that you don't want to miss. first, here are our top stories. we are in los angeles at the videogame industry's biggest sh of the year. the electr entertainment expo. the hottest names in gaming are here showcasing the latest gaming trends. it is the-year-old free hit fortnite that is the main event. it has become a cultural phenomenon. the ceo is saying this game is actually benefiting the entire industry. this is gamers to start looking fo fortnite, they will start looking for other titles as well. fortnityou think about shaking up the industry?

>> it is a great thing to have for the industry. think there is eviwe bringing in a younger audience. if people are introduced to video games, that is great for all of us. is that change how free to play games are for business? >> we have free to play games in china. our acquisition of social point was to make the point that in addition to free to play titles, we wanted to have a broader footprint. social point makes games that are made for the free to play business. emily: could it be a flash in the pan? >> i don't think it is at all. it has been a huge success and they have a lot to be proud of. emily: three big titles coming out in. how do you make sure yours is

the winner? >> the way we create success the , entire focus is on the quality of our titles. we have begun to put mash ups in the market place and people seem to love them. we are feeling really good about "red dead redemption." ' not very many western theme titles in the business. when we released it for the first time, it was that westerns cannot work. we feel really good about it. emily: it is just a few months away, why are you not showing it at e3? everyone wants to see it. >> we are not showing any products here. this show for as is a great place to connect with our retail cume, and with industry analysts and investors. our products are widely

marketed and people have a sense of them. it is not primarily a consumer show. our focus over a long time is engagement. we want to give consumers an opportunity not only to fall in love with the product, but to stay in love with it. if we do that, revenues and profits follow and we don't lead with monetization. it is not our binary concern. we are concerned about engaging consumers over a long. of te.ily: i am curious on your thoughts on the latest controversies. is that healthy for the industry or is it exploitive? >> i don't believe it is exploitive. entertainment is not a must-have good. we choose to be entertained.

the randomization mechanics have been used by us in the past. it is not a mechanic we typically use. we do not have any problem with it however, and i think the bottom line is do your game mechanics fit with your creative offering? if they don't, consumers won't show up. there may be concerned and the international marke in the samehat weave your freedom speech re in the certain international markets we are constrained with what we can do creatively. or twoossible one countries will have a point of view about what kind of mechanic can be used. i think it would be wrongheaded, and it hasn't happened yet, but it may. emily: last month, the supreme court struck down a law on gerling and sports. how optimistic, are you doing things to prepare for legalizing

e-sports gambling? >> we are open-minded. we are an entertainment company. we are a gambling company. it is a different mechanic and business at it requires regulation. regulation. regulation. i think we would have to think long and hard, but it clearly creates opportunity. emily: there is concern about addiction and apple ruining their careers. should a videogame industry be doing more? >> i think you can always do more. if people need help, it is our job to help them. our products are not meant to be consumed 24 hours a day. thk a very small part of the populace doesn't exercise moderation with any number of things that they do. many things ok in moderation are not ok in excess. said, we don't seek to soak

up people's free time. we seek to entertain people over a moderate. of time. i would also observed that the media day is very long now. video games on average, lyaboutt day. video games are a small part compared to say, television. emily: some folks are saying this could be the last generation of consoles, do you believe it? >> i don't actually. we want toere the consumer is. 10 years ago, the pc format was nonexistent. today, it could be 40% of our sales. clearly, the market is opening up and consuls are not the only game in town. however, microsoft, nintendo, sony our key partners of ours. they deliver great products and we think they are going to keep doing that and we continue to support them. take? vr, what is your

>> so fait is about a zero billion dollar business. emily: is the fact that your take into due to be proven true making even more pessimistic about the ability or opportunity to make money? >> we have pe ut in vr. we want to be ready for anythin. arus barriers for a virtual-reality videogame experience, not the least being that if you are moving around in pecea nauseatingeadset on, thate experience for most people. it is exciting. mo people n't consume entertainment and a solitary way and people don't generally like visual and hearing, including headsets. i think in an arcade setting, ar might work. ar is an exciting technology.

i think like every part of the technological landscape, the question is, what you do with it. ar does not requires you wear a headset. it doesn't include your vision or hearing. you can interact with others. i don't see any that are working. the only question is what do our competitors do creatively with it? if i were to guess, i think someone will come up with a great execution. emily: great to have you back. >> thankfor having me. coming up, remember when farmvie was all your friends posted about. can it compete with the likes of twitter? if you like bloomberg, check us out on the radio and on sirius xm. this is bloomberg. ♪

emily: women in gaming. they are also part of the community building games. diversity in the gaming indust is still lacking. of --ing to a survey, 42 42% of developers feel that divey in the gaming industry needs to be increased. facebook recently launched its women in gaming initiative and it begins with the facebook page where women in gaming can come together as a community. here to terethe facebook head of global business marketing and gaming. thank you for joining us. what does this actually involved?

>> we launched our initiative this year and our goal is to champion of diversity in the industry and encourage more women into the industry. we feel women have a reallyimrts indury. all around the world, half of all gamers are female. when you look at the workforce, only 25% identify as female. we think we can change that. we like to encourage more women. emily: how do you get them ther it is about convincing companies to hire them and create more hospitable environments for women to work. >> one of the ways is we are launching an initiative where we gointo the industry and interviewing women about what is like to work in the industry today. we believe by showing the diversity of careers and opportunities open, we can encourage more women to me joined us. emily: are you running into any resistance?

i recently wrote a book where one of the chapters focuses on women in gaming and e lack thereof. are you feeling any resistance from the gaming industry to be more inclusive? >> i think what is interting the amount of women stepping forward and wanting to share their story. it is a really exciting industry to be in. yowomen can learn a lot. we feel that their presence would enhance our opportunity to grow better games. emily: talk to me about the would you think diversity have in creating games. with video games be as violent or so many first-person shooters? morefeel like having

voices of the table will create a better variety of games. emily: what are u doing at facebook to put your money where your mouth is? >> our overall mission is to bring the world together and we feel there is value in helping women build community. first and foremost, it is about showcasing the amount of careers and opportunities open to young women and also giving them a network so that when they join the industry, they have people they can lean on to encourage them to go further. emily: in general, facebook has had a complicated relationship with the gaming community. you are trying to change that. why should people choose facebook over others? our can only speak to overall mission which is to bring the world cultures together and help people build community and that is a we think about when we think about gaming. we want to build the world's largest community for gamers. emily: thank you for stopping

by. coming up, microsoft has plans to make gaming the center of the universe. that is next. check out our global news network at tictoc on twitter. this is bloomberg. ♪

emily: when it comes to the console wars, the top two names are playstation and xbox. tort cye,is using e3ound in the

announce a major push to bridge the gap here it they are -- gap. they are doubling its number of videogame studios and it showed off 52 games, 15 of which were world premieres. re to tell me more including news that microsoft is building a game streaming service is their head of studios. this idea, netflix for gaming has been talked about for years but has never been accomplished, why do you think it can be done now? >> i think right now, we are really focused on player choice here it there are more ways than -- choice. there are more ways than ever for people to find games. we see people finding games they might not have known about, trying to play games they might not have othwise engaged in and it has just been for us, about the community, a bigger

audience and about player choice and a way to find games. emily: sony launched their streaming service four years ago . what makes you think you can do better or ay catch-up? >> we have ace that dials five fan -- fans are after and access to big games. we announced at e3 that it is a wonderful lineup of games. emily: when it comes to software, how do you continue to compete with sony? that really is the question. >> it is a wonderful time in the game industry. i think we are headed into one of the most amazing falls terms of linux across all platforms. the technogy is mate. we see teams that have been able to deal with it. i'm excited about all the innovation going on in our

studios. halo team showed off some of the work they have been doing. the way you do business? has become so profitable and i think it has brought in a whole new class of players. it is a game that young women are engaged in. again, it comes back to player choice. it has a certain way of playing at a certain way of engaging. and laboring do think it is going to be a long-term hit or just a moment? >> i wish i had that crystal ball. the industry is full of things that have come and gone. and the things that have lasted for decades, we will see. emil how doou think it will change your business? how is it changing how you think about how you make money? >>or us, games take quite a while to make. while we look at things like

to inform what our players like and are engaging in, the games have to start with an idea and a way to connect with the player. are people out there saying this is the last generation of consol. would you agree? we think people love playing games in their living room. we know that pc is growing, but we are committed to console. emily: so there will be a new xbox? >>e are mm nse. emily: you made a number of acquisitions. tao us about strategy. >> we went out to find creators. ninjank about the team at with a a really starts

creative core and what we could do to bring them into our family and support them to do more of that. emily: windows 10 is playing a bigger role inut microsoft still has not made any money from it. there are talks about a buyout. rumors of a partnership, what -- there? >> we are fortunate toe part of microsoft and all the folks working on windows 10. being part of microsoft is an advantage for xbox. fory: youve to pl the future and out your strategy, especially since the lyft -- lifecycle of the development of the game is so long. when you look at gaming five years from now, what is the same and what is different? >>hink we will see advancements in grapcs. one of the things we talked about is our fast start technology. i think the use of artificial intelligence machine learning

will play an increased role. we're so lucky at xbox to be sitting so close to microsoft. emily: is the future cloud-based? >> i think it wi be a pervasive technology. pervasive tech in most games i think. in five years, do you think people will still be buying physical games. >> for us, we are about player we sti see people wanted to -- wanting to buy physical games and we are going to follow where people want to buy those games. we are more about what is the most choice for the player. emily: i know addiction has been a topic for the gaming industry r a long time. recently, we saw apple making moves to curve tech addiction under some pressure. a touring tools, new ways to measure your screen time. is that something the videogame industry should be taking more seriously?

>> we have very sophisticated tools for parents to set limits on what kinds of games can be played. our core belief is that games can bring us together and there is something we can all engage in. o bencou parents involved in the games their children are playing. we fill really proud about the tools that we provide so that people can make choices about how they want to spend their screen time. the ceo of microsoft has tied hate to diversity outcome. pay to diversity outcome. what are you doing at xbox to hire more women, hire more minorities and make sure they are represented in games as well? >> if we start with the idea that games are global and our

-- we are pretty committed to making sure that our teams deflect the the varsity we want to see in our games. there are alst 2 billion players on the planet today. if that number grows, it will absolutely certain reflect the number of people who live on the planet. emily: thank you for joining us. coming up, the gaming craze of -- upending industry. te is heading to the nintendo switch. and, later on, tim cook talk to -- talks to bloomberg making a big promise about the company's investments and looking back at apple's growth since taking over as ceo.

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that's why xfinity mile can be included with xfinity internet which could save you $400 or more a year. it's a new kind of network designed to save you money. click, call, or visit a store today. emily: this is "bloomberg technology." i'm emily chang at the e3. the biggest names in gaming are showing off what they have in store. one company that annually makes a super smash at the event is nintendo. llf the main content displayed during the show was either announced or leaked in the prior weeks and months including fortnite, pokemon, and a super smash brothers ultimate. went to all their market gains in eight years. joining us now is nintendo of america president. let's talk about stocks.

investors seem to believe there are no more surprises. would they be correct? >> they would not. nintendo loves to surprise people. when we approach an event like e3, we show content from the next six or nine months. no more. we always have more surprises. there is always more in store. so why the analysts reacted the way they did, who knows, but we know from a company perspectiv there's a lot more up our sleeves and a lot more we have to shoover the weeks and months ahead. emily: tell us the surprises. >> right here, right now. for us, we believe there's a lot alue for the consumer to te tabt content and a -- launch it, just like we did for fortnite. fortnite already has 2 million downloads, specifically on the nintendo switch. by driving excitement, we are able to drive the business forward.

that is what is most important to us. emily: super smash brothers, fortnite, new pokemon game. which will move the needle the most? >> we have an opportunity to continue driving momentum. fortnite, mario party watching in october. pokemon launching in november before black friday, and super smash brothers ultimate in december, it is the pacing of news. the pacing of launches that will drive the business forward. emily: 's talk about th online service coming in september. that means it is cloud-based and mes th you have beenrmance tiling have been bad. some players and say it is unplayable. will that improve? >> absolutely. when we do a trial event with s we are as much learning , about the technical infrastructure as well as the

way the game is going to play. you have to expect challenges when you do that. when we launched the game, it is going to perform. just like it did for fornite. emily: let's talk about the switch. you added some incentives to make it cheaper for people to buy a second one. either going to be more incentives? >> those are incentives specifically to the japanese market. so it is not coming to the north american marketplace. this reflects the difference in culture and the difference in living situations across the world. japanese homes, small, typically one tv in a household. for that market, offering an additional sku that takes out hdmi cables and things like that, makes sense. here in the americas, three big tv's for household. selling a fully configured switch into th ie are focusing on and we are seeing that happen. we especially expect to see that happen with pokemon, let's go pikachu.

that: there are concerns the switch cant rr torch for both. at e u doing it more attractive? >> let's focus on americas in -- and the u.s. marketplace. in december on our dedicated handheld business grew by 27% year on year. so fs year, our two ds and three ds is up this year. -- up 10% this year. the switch is not all on its own. it is getting strong support from a dedicated handheld business in the americas. for us, we want to connu drive both of those platforms. the dedicated business for 2ds and 3ds is for kids and families to get engaged for the first time potentially in videogames . the nintendo switch will be the game where consumers want to play smash brothers and zelda and these big, epic games. that is what we're looking to do. emily: speaking of epic games, fortnite, pokemon, it is great

these games are a success and free to play. how are they going to get money -- make money for nintendo? >> the way tmoneze is the consumer buys attire or lonas tse most -- rchande well, there is a process for the developers themselves. about what do you think pay to win tactics? >> sloot boxes have gotten a bad rep. the game mechanic of buying something that you're not quite sure what is inside is as old as cards for example. what we believe, at nintendo, a gameplay mechanic that offers a consumer something to buy that they are not sure what is inside can be interesting as long as that is not the only way that you can get those items. i think that is where maybe some developers have made some mistakes. for us, it is one of many mechanics that we can use to drive ongoing engagement in the game. emily: tell us about the new president and what might change r you.

>> the president is a veteran of 25 years with the company. what is great about him is he has had some fairly extensive experience outside of japan and was one of the first financial people that nintendo of america was dealg with back in our early days. he spent 12 years in europe so he has an understanding for th overseas subsidiar he loves our content, place our games. from my perspective, he is a great choice to be our next global presidt. emily: you have told me nintendo will do e-sports in a uniquely nintendo way. what does that mean? could the olympics involved? >> potentially, the first time thatports will be an olympic sport will be in the tokyo olympics, 2020. that will be an interesting venue. but, look. when we talk about doing e-sports uniquely, like we did at e3, we held a global splatoon 2 tournament.

we had an invitational for super smash brothers. what we want to do is create the content that enables consumers to come together and these professional players to come together and play. we create consistent rules, consistent structure and encourage the community to go from there. so far that is working for us. it is building from the ground up these fantastic gaming communities that support our games. emily: when it comes to making money, especially from these free to play games, i know you won't tell me the exact revenue breakdown, but how would you describe the relationship between you and publishers? are you makiore than half? >> the relationship with developers, we are the platform holder. so the relationship with the developers, from my standpoint, is a fair relationship. we have invested to create the platform infrastructure, the profit split is a fair construct and it enables company like epic to drive their profibility and enables companies like us to enable profitabilities.

emily: what would you say to those skeptical? >> as you look at nintendo over these many years,u look at the number of analysts that is actually gotten it right, it is fairly small. it is because we as a company hold things close to the vest. we lov to surprise the overall community and environment and when we do, we look at switch, look at some of the other games. what i say is don't worry, we are driving the business forward, driving engagement on the platform and that is what is important. emily: you heard it here. nintendo of america president reggie, thank for stopping by. in an inrvloomberg television, tim cook says the company will inject $350 billion into the united states economy over the next five years. >> we're going to create a new site, a new campus within the

united states in a different location thatwrrt huge campuses in california and texas. we are going to hire 20,000 people and we're going to spend $30 billion in cutbacks over the next several years. number one, we are investing and investing ton in this country. then, yes, we are also going to buy some of our stock because we we view our stock is a good value. from a shareho point of view, if we can buy stock from people that think it is worth less than we do, then that is good for the company. it is good for the economy as well because if people sell stock they pay taxes on the , gains. emily: halso discued app's growth since he took over as ceo nearly seven years ago.

take a listen. >> you have now been the ceo of apple since july 2011. the earnings are up about 80%. have you ever thought you can't do better than this and maybe you should just say, i've been a great job and now i will do something else with my life? we have used the stock price and revenues and profits as a result of doing things right on the innovation side, on the creativity side, focusing on the right products, treating customers like they are jewels and focusing on the user experience. i don't even though the numbers you just quoted. imethinthat is myrbit, to be honest. >> when you announce your quarterly earnings, analysts say they did not sell as much of this producthoughtthey eshat bother you? >> it diat one te, it does not anymore. weun apple for the long-term.

it has always struck me as bizarre that there is a fixation on how many units are sold in a 90 day period. we are making decisions that are multiyear decisions. we try to be very clear that we do not run the comnyor ople that want to make a quick buck. long-term. company for the >> one of the shareholders who recently surfaced as having bought $75 billion additional shares is warren buffett. are you pleased to have him as a shareholder? >> i'm overjoyed and thrilled. [laughter] because war and is focused on the long-term. -- warren is focused on the long-term. we are in sync with the way we run the company and the way he invests. i could not be happier. >> have you thought about this, warren still uses an old flip phone. [laughter]

have you thought how much more your stock would go up if used the product? [laughter] >> i'm working on him. i told him i would personally come out to omaha to do tech support for him. [applause] [laughter] emily: apple ceo, tim cook there. you can watch the full interview david new season of the of peer-to-peer conversations tonight at 9:00 p.m. eastern on bloomberg television. coming up, the big bucks and even they are competitive video games. any sports take over traditional sports? we will take a look, next. and later, twitter stock is skyrocketing over the last year thanks to the company's turnaround efforts. they are making more changes to the platform. this is bloomberg. ♪

emily: playing video games is big business and the number of watching gamers compete is skyrocketing along with prize money. look at how many people watch the league of legends world championship. 60 million. that is more than who watched game seven of the world series. one company places to be at the front -- forefront of this explosion, and a dedicated host and provider of facilities across north america, gamers can play in its drive stagwhh is basically a truck with multiple gaming stations. joining me now, e-orts arena ceo, tyler. thank you for joining us. put your business into context for us based othe tren you are saying. -- seeing. tell us how fast things are growing and how you are making money.

tyler: i wake up every morning with something new happening in e-sports. i said the same thing about three years ago. the context around it goes to how we started the company and why we started the company which is because we wanted to play video games with each other. me and a bunch of college buddies build our apartment out to be a lan center so we could all be on the same area connection. i can watch his screen and my buddy's screen next to me so i could see the whole map and have a good competitive in the point of what was going on. emily: now you're making a lot of money d this. how much money? how?>> we started by doing a membership program where people pay a monthly fee to play video games with us. we take that and also run our own leagues as well. you can co o on wednesday, thursday, friday night, anytime of the week and pay to be part of the tournament. pay to compete. then, we host our own event on weekends as well where we get

sponsors to come in, pay a good chunk of change and have us do a full e-sports event for them from tournament to production. emily: the olympic council of asia recently accepted six videogames as official exhibition sports. how excited are you about this as a step toward may be becoming a medal sport? tyler: it's incredible. it justifies viewership for one and justifies the fact that being an e-sports competitor is very similar to being an athlete. i'm not going to say i'm getting go outnd run the decathlon, but there are certain things, there is mental preparedness that you have to do, training you have to do, and a strategy. whether it is a team sport where you have to strategize based on what move you're going to do against your partner, it is the same thing any sports. -- in e-sports. that is where the highly competitive nature comes in. i think athletes have the second edge that we do not have that creates any sport athlete versus a normal athlete.

emily: epic games is providing millions of dollars for people to play fortnite. how do you adapt to a hit like this? tyler: i love adopting to something like that. i do not think it is a hit, i think that is a benefit. unless they do a $50 million tournament, it is hard to go through $100 million in the next 12 months. to me they are going to be utilizing tournament organizers around the world to be running events for this. we hope to just like we did with , las vegas, we hope to be one of the e-sports tournament organizers where they can supply the prize and we can provide the tournament. emily: what you think about how big viewership is now and how big it can be? >> viewership is so big for individual streamers. guys like this are incredible

talented and super fun to watch. emily: ninja is getting like 600,000 viewers? >> it's insane. the viewership for that is growing. the best part is he will average about 150,000 viewers on his own in his own bedroom. but, when he competed and came on our stage in las vegas, and -- in an e-sports format event, he got 600,000 viewers. the viewership is growing when there is something on the line and a competition at stake. status to compete withate your traditional sports? do you think e-sports could surpass other sports? >> it depends on the videogame industry i league of legends has pioneered the industry when it comes to watching video games on televisions. we are mostly watching it through computers. the e-sports viewer is not someone who is sitting on a couch and watching tv. he is somebody who is sitting on a computer and watching tv on his computer because he can also play video games at the same time.

or he is watching it on his phone. that model is changed from what traditional viewership model is which is turning on your tv and flipping through channels. the accessibility of viewership will make it so it surpasses traditional sports. emily: what are the challenges that lie ahead for you in terms of what could prevent e-sports from becoming the next big thing? tyler: the foundation. we at e-sports arena are lking build a foundation, region regionality.y -- we have three arenas now and our mobi drive. what we are planning to do is create regionality between oakland, orange county, and anywhere else we decide to go next. that will build the foundation om amateur little league players. baseball is successful because you have a little ague sysm, college system, professional system. you always have a way to build itp. e-sports can have the method of building up instead of grabbing from the top down. i think it will be incredibly successful and that is what the

arena is here to do. it will be amateur competitive base, build up originality to it and see how that can grow. emily: e-sports arena ceo, tyler, thank you much. we will be watching. coming u twittering out new features to better predict what events you want to know about. could that move bring more viewers to the platform? we will discuss. this is bloomberg. ♪

emily: twitter has announced it will personalize the users and send them notifications about events trying to attract a broader audience with one of its biggest product update in years. for more, we get to selina wang in san francisco who covered twitter for us. selina, what is going to make this time any different than previously?

selina: this is one of the most comprehensive overhauls they have had in years. jack dorsey is talking about personalization, orienting the brand around topics and trends rather than forcing people to have to figure out how to curate their own timeline.ofime and effort to create the perfect newsfeed. they want to shift the burden to twitter to find out what people want to know, when they nt to know it. for instance, the volcanic eruption in hawaii, instead of having to follow the hawaiian government officials, commentators about it, etc., they will send you a paying and ping and take a you to this events page that will sell you a live a feed of what is happening that will ert you to what thtest is. emily: how are they doing this? better ai, actual humans working behind-the-scenes to say this

-- there is a volcano in hawaii, this is a huge story, i think people need to know? selina: it is a big process to be able to organize information in lifetime which is what this is all about. about organizing the content that is already coming through the platform. i spoke to the director of cure ration yesterday and really -- curation yesterday and really waed to understand how they are choosing the top news stories that someone should be looking at. the ending stories personalized. it is all about a blend algorithms and humans. in terms of picking the top tweet that should be and that particular fee, that is going to be done by all rhythms. in terms of organization, and pushing the button, to place that content on the website, i believe that would be done by a human. it is a very integrated blend twn e. emily: kim kardashian we tweeted, i had a very good conversation with jack this birthday andnye's i think he really hurt me on the edit button. like, what? could this happen? will we able to edit our tweets?

selina: asuch as users would like to be able to implement th feature, it seems unlikely. twitter at its core is supposed to be a platform for live and real-time information and they don't want to give people itto willy-nilly edit their tweet. i spoke to someone yesterday who brought up a great point that being able to edit tweets could bring in a lot of harassment and abuse problems. for instance, someone could edit a tweet that they already posted a few days ago and introduce some potentially abusive information. twitter's algorithms would have to be able to go back and catch that change. emily: this as they are battling bigger harassment problems across the platform. selina wang, the biggest product update in years. we will see if it works. bloombg lp operates on a global network on twitter called tictoc. that does it for this edition of "bloomberg technology."

from los angeles and the e3 conference. we will be back tomorrow. this is bloomberg. ♪

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