The NFX Podcast

AI is transforming gaming — not incrementally, but fundamentally. In this episode of The NFX Podcast, James Currier sits down with Nick Walton, CEO of Latitude (AI Dungeon, Voyage), to break down what it really means to build an AI-native game company — and why traditional AAA studios may be unprepared for what’s coming.

Nick was experimenting with GPT-2 in 2019 before most people had heard of it. Since then, Latitude has become one of the earliest and most advanced players in AI-powered games, pioneering dynamic storytelling, infinite RPG worlds, and multiplayer AI experiences.

This is a deep dive into the future of interactive entertainment.

Topics We Cover:
- What “AI-native” actually means in gaming
- Why AI games improve overnight (and traditional games don’t)
- The shift from scripted content to infinite, dynamic worlds
- Building Voyage: a genre-agnostic RPG platform powered by AI
- How world models (like Google Genie) fit into the future of games
- Why mental models must change every 1–3 months
- AI-native software development and ultra-high talent density teams
- The resistance to AI inside gaming studios
- UGC, long-tail IP, and unlocking infinite fandoms
- The magic of multiplayer AI storytelling
- Why AI games will feel more personal — and more emotional

If you’re a founder, game developer, or AI builder, this episode breaks down how fast this space is moving — and what it takes to win.

Episode 6: Why Video Games Will Never Be the Same

Nick Walton (CEO, Latitude Games)

AI isn’t just improving games — it’s fundamentally changing how they’re built.

In this episode of The NFX Podcast, James Currier sits down with Nick Walton, CEO of Latitude (creators of AI Dungeon and Voyage), to explore the rise of infinite, AI-powered RPGs and the shift toward self-writing codebases.

Nick was experimenting with GPT-2 in 2019 before most people had heard of it. Since then, Latitude has operated at the frontier of AI gaming — building systems where worlds evolve dynamically, stories adapt in real time, and small, high-agency teams ship at unprecedented speed.

This conversation goes deep on both the player experience and the engineering revolution happening underneath it.

What We Cover:

What “AI-native” really means in game development

Why AI games improve overnight (and traditional games don’t)

The shift from scripted content to dynamic, infinite worlds

The architecture behind persistent AI-powered game engines

Building multiplayer RPGs with AI at the core

The “world engine” layer vs. raw AI models

Why mental models in engineering must change every 1–3 months

AI-native coding workflows and self-writing codebases

How small, talent-dense teams move faster than AAA studios

Resistance to AI inside traditional gaming companies

Why players will embrace AI when it delivers real value

About Nick Walton

Nick Walton is the CEO and co-founder of Latitude, the company behind AI Dungeon and Voyage. Latitude has been building AI-driven interactive experiences since the GPT-2 era and is one of the earliest companies operating at scale in AI-powered gaming.

Subscribe for more conversations with founders building what’s next.

The NFX Podcast explores how technology shifts create new categories — and how founders can win in them.

Key Points:
- 20% of what you build in tech drives 80% of the willingness to pay, making it crucial to identify and monetize this core value early on.
- Framing POCs as business case validation exercises rather than just technical validation can help ensure that you are engaging with customers who are serious about the value your product provides.
- Outcome-based pricing can align incentives between the customer and the provider, ensuring that the focus remains on delivering measurable value, but it requires high autonomy and clear attribution to be effective.
Timestamps:
(0:00) Introduction to pricing in the AI era with Madhavan Ramanujam
(1:13) Transition from services to VC and the impact of pricing
(2:56) The role of pricing in scaling innovation
(4:35) AI monetization and go-to-market strategies
(7:29) Evolution of pricing models in the tech industry
(9:37) Early conversations on willingness to pay
(12:17) Value capture and margins in AI products
(17:16) Monetization strategies for seed-stage startups
(19:02) Tactics for successful POCs and enterprise deals
(24:01) Communicating value and the importance of simple pricing
(28:07) SaaS pricing evolution in the AI context
(31:10) Pricing models: Understanding and applicability
(34:14) Outcome-based pricing: Challenges and benefits
(41:23) Adapting pricing models as products evolve
(43:58) The future of outcome-based pricing in AI
(45:30) AI's role in reducing bias in pricing
(46:23) Innovative pricing against incumbents
(49:56) Founder archetypes in pricing strategy
(55:51) Achieving profitable growth in startups
(57:49) The 20-80 axiom in product development
(59:15) Overcoming resistance to price changes
(1:00:06) Acquiring and retaining customers
(1:01:21) Validating leads with charged POCs
(1:05:14) Durability of AI startup revenue growth
(1:07:34) Segment-based cohort analysis and KPI evaluation
(1:09:43) AI adoption in different market segments
(1:10:50) Network effects and revenue durability
(1:11:36) Episode conclusion and future topics

Key Points:
- The journey of founding and scaling startups often involves leveraging unique technical expertise to address emerging market needs and seizing serendipitous opportunities for growth and acquisition.
- Data-driven startups face the dual challenge of innovating with sparse data and navigating complex go-to-market strategies, making strategic partnerships and early customer wins crucial for success.
- Empowering product teams within large corporations to actively engage with innovative startups can accelerate technology adoption and drive significant business growth, particularly in rapidly evolving fields like AI and data collaboration.
 
Timestamps:
(0:00) Introduction of Kamakshi Sivaramakrishnan
(0:25) Kamakshi's journey from AdMob to Drawbridge
(3:42) Joining AdMob and the mobile advertising revolution
(7:37) AdMob's success with the iPhone launch and Google acquisition
(13:00) AdMob's company culture, legacy, and reactions to acquisition
(21:21) Founding Drawbridge post-Google and navigating ad tech
(29:23) Drawbridge's value proposition and the impact of regulations
(34:01) LinkedIn as an early customer to acquisition considerations
(38:27) Founder advice on customer relationships and board management
(47:08) Acquisition process, investor alignment, and personal reflections
(55:25) Tips for first-time founders during acquisitions
(57:40) Transition to LinkedIn and insights on startup costs and rewards
(1:06:04) Leadership lessons from Microsoft and founding Samooha
(1:11:02) Vision for Samooha and data collaboration in enterprises
(1:14:20) Building a well-rounded founder team and navigating the ad industry
(1:17:51) Early wins, raising capital, and corporate investment considerations
(1:27:21) Data collaboration complexities and the acquisition by Snowflake
(1:35:01) Advice for founders and corporates in data collaboration
(1:38:26) Encouragement for female founders and empowering product teams
(1:41:05) Product innovation and episode conclusion

Timestamps:
(0:00) Introduction of Russ Heddleston
(0:40) Russ Heddleston's early career and founding Docsend
(2:02) Microsoft internships and Maru Networks experience
(4:38) Ideation and approach to selecting startup ideas
(6:54) Docsend's challenges and pivots
(10:11) Struggles with enterprise sales and self-serve model
(13:51) Product positioning, pricing, and packaging evolution
(16:12) Identifying target segments and use cases for Docsend
(19:04) Comprehensive pricing strategy for Docsend
(22:17) Docsend's growth mechanics and viral marketing
(24:30) Utilizing fundraising content for Docsend's marketing
(27:00) Considering and deciding on acquisition offers
(29:42) Reflections on the sale of Docsend
(32:11) Aligning stakeholders and understanding investor perspectives
(34:24) Emotional journey of selling a company
(36:05) Acquisition dynamics: private vs. public company considerations
(38:22) Post-acquisition founder sentiments
(40:27) Founder advice on liquidity options and growth
(45:01) Russ Heddleston’s post-acquisition role at Dropbox
(48:21) The significance of taking a break after company acquisition
(50:59) Planning the next venture and reflecting on motivations
(54:01) Establishing values and principles for a new company
(57:44) Iterating on startup concepts and finding the right idea
(1:00:39) Intrinsic motivations for founders and long-term commitment
(1:02:37) The fulfillment of creating sustainable value
(1:03:27) Founding Distill and the vision behind it
(1:04:21) Distill's concept of people and company profiles
(1:05:03) Innovations in search, information, and indexing with Distill
(1:05:32) Wrap-up and closing remarks
 
Key Points:
- Russ Heddleston's journey with Docsend highlights the importance of pivoting and perseverance, as the company transitioned from a product-led growth model to enterprise sales and back again, ultimately finding success with a self-serve approach.
- Effective pricing and positioning were crucial to Docsend's turnaround, as increasing the price and better targeting their messaging to specific user segments significantly improved conversion rates and revenue.
- Heddleston's post-acquisition insights emphasize the importance of intrinsic motivation and aligning personal and business values when choosing the next venture, ensuring long-term commitment and satisfaction.