Four Things that Will Change the Future of Gaming
Sam primarily covers entertainment and media for dot.LA. Previously he was Marjorie Deane Fellow at The Economist, where he wrote for the business and finance sections of the print edition. He has also worked at the XPRIZE Foundation, U.S. Government Accountability Office, KCRW, and MLB Advanced Media (now Disney Streaming Services). He holds an MBA from UCLA Anderson, an MPP from UCLA Luskin and a BA in History from University of Michigan. Email him at samblake@dot.LA and find him on Twitter @hisamblake
The gaming industry is poised for further growth, even after lockdowns ease, but insiders expect its future will look far different as companies add more social and interactive features and expand their worlds beyond a single platform.
That was the consensus from a panel at dot.LA's recent summit, where four heavy hitters from L.A.'s gaming industry traded thoughts on what they're preparing for. Panelists included Ophir Lupu, head of video games at talent agency UTA; Lisa Anderson, SVP of studio operations at Jam City; Rob Ricca, VP of corporate development at Scopely; and Gregory Milken, managing partner at March Capital, where he focuses on gaming investments.
Here are four key takeaways:
Gaming Less About Winning, More About Partnering
Already, games like Fortnite and Animal Crossing are providing users with virtual experiences that one would be hard-pressed to call a "game." Fortnite has hosted virtual concerts attended by millions, while Animal Crossing has provided a virtual venue for weddings, graduations and funerals.
"What's come to the fore in the pandemic is really that gaming is social," said Milken.
More than that, Anderson noted that COVID has underscored players desire to find meaningful connections through their consoles and apps. As a result, Jam City is exploring ways for players to find their friends more easily and join social groups, whether with IRL friends or ones they meet online.
Similarly, Ricca noted that many players of Scopely's "Star Trek Fleet Command" have turned the game's "Alliances" feature into "their core experience in the game," opting to partner up with others to game on an ongoing basis rather than linking up with an ad hoc group or going it alone.
As to how this trend will shape Milken's investment strategy, he said he'll be looking to place bets on cooperative gameplay experiences in the future.
Gaming Will Be Everywhere
As Anderson put it, "the ultimate goal is that players can experience their favorite game on the device of their preference. Looking to other mediums (like streaming services), consumers can already do this (PC, TV, Mobile, tablet, etc.) and it feels like gaming is a natural extension of that conceit."
This sort of "cross-play" already exists to an extent, but the industry is evolving further away from the closed ecosystems that rely on a single console. That reality won't fly with younger generations, who've grown up with a more open ecosystem that has shaped their expectations.
"They will expect all game environments to be open for all of their friends and other players to join and experience rich social interaction with each other, regardless of where they are physically located and the number of other players they want to interact with," Ricca said.
Lupu surmised that as more game-streaming services come on the market to rival incumbents like Playstation Now or Google Stadia – which give console and PC gamers near-instant access to titles without requiring downloads – the industry may see large platforms build better access for players to move across different platforms and interact.
As a hypothetical example, Lupu said: "You could imagine how Amazon's new streaming game service Luna could connect with Twitch and allow viewers to 'jump in' or somehow interact with their favorite streamers playing games. (Same with Stadia and YouTube, etc.)."
Esports Will See More Cooperation and, Possibly, Consolidation
For all the hype that esports generates, it's a rather small business, generating just north of $1 billion per year – a fraction of the $150 billion-plus gaming market. Its function often appears to be more of a marketing tool than anything, whether for the game titles themselves or for teams that leverage their roster's followings to sell other items like merchandise.
Unlike a traditional sport, games have an owner – Riot Games owns League of Legends, for instance, but nobody owns soccer. This potentially weighs the scales of influence in favor of game developers and publishers, and away from esports teams. But as the teams grow more famous and build more brand equity of their own, their leverage will continue to grow.
This leads Milken to conclude: "I think we'll see further development between teams that operate and game developers and publishers and thinking about how they jointly work together to create value."
Fans Mix with Celebrities in the Metaverse
Although it's still anyone's guess what will be the ultimate version of the metaverse – a parallel virtual world, kind of like a more immersive version of the internet – what appears unambiguous is that the metaverse offers a unique opportunity for IRL stars to engage with their fans.
"It creates incredible touch points for non-gaming clients – certainly mostly in the music space," said Lupu. "It provides a really unique and interesting opportunity for talent of all types to interact with their fans." Expect these to continue, in other words.
But such interactions won't be exclusively between fans and stars. Milken said he sees the metaverse introducing a new level to in-game interactivity that is an increasingly important component of what gaming offers consumers.
"The metaverse as a hangout place, where you're experiencing things together, is really interesting to me," he said.
When asked to place their bets on what consumers are most likely to see in the industry, the panelists unanimously chose the concert of the metaverse, agreeing that in their various lines of business it is a future that has to be taken seriously. That nobody has much idea of what exactly it will entail suggests that the metaverse will emerge over a prolonged period, with a series of incremental changes that eventually transform gaming. See you there.
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Sam primarily covers entertainment and media for dot.LA. Previously he was Marjorie Deane Fellow at The Economist, where he wrote for the business and finance sections of the print edition. He has also worked at the XPRIZE Foundation, U.S. Government Accountability Office, KCRW, and MLB Advanced Media (now Disney Streaming Services). He holds an MBA from UCLA Anderson, an MPP from UCLA Luskin and a BA in History from University of Michigan. Email him at samblake@dot.LA and find him on Twitter @hisamblake
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