Games are the antidote to Covid-19
But it's not because of the penguin strip club
We already knew that people are playing games a lot more. Everywhere publishers and platforms are reporting spectacular growth now that we’re all cooped up at home.
What surprises me, however, is that most of the people I talk to have been playing especially old games. You know, the kind that gives you that warm feeling of comfort and nostalgia. Nintendo’s Animal Crossing is providing everyone a sense of safe, relaxing interaction with others. My students have been playing MapleStory and Pokémon. And Club Penguin is back in vogue (although not as we now it: penguin strip clubs are a thing now apparently. Enter at your own risk.)
Long vilified for its ability to offer escapism, people now embrace games for that exact reason. My wife just blasted her way through all of her remaining Dispatch crime puzzles (a boxed game where you must crack a series of codes and puzzles to advance a crime narrative that arrives in the mail) and then ordered five more.
Trivial to some, I think it’s crucially important to clear your head, take a break from your family or roommates, and try to move your mind past this paralyzing pandemic. Alcohol helps a little. Food and cooking helps more but has its own downsides. And you can only read and watch TV for so long.
After this is all over I’m going to build a stash of games to ‘open in case of pandemic’ right next to my go bag and emergency medical kit. As benign as many of the games we play today may be, they all have very high stakes.
On to this week’s update.
NEWS
Facebook Gaming mobile app is coming
Launching several months ahead of schedule, Facebook has revealed its plans to capture a greater piece of the games market. Historically, they’ve dominated first as a social networking based platform, which drove the success of firms like Zynga and Playfish (remember that one?). After mobile took off, Facebook by and large became a mere traffic funnel. Now it’s back with a hook into live streaming.
Facebook makes most of its revenue from advertisers. That’s where its loyalty is and will be. A lot of brands and advertisers are having a difficult time reaching audiences currently because apparently all broadcast television has been replaced by the corona show and no sports. Facebook’s decision to launch early, I think, comes from brands looking for a way to stay relevant and its own need to attract younger consumers.
Facebook hopes to compete with Twitch, YouTube, and Mixer, of course. It will have a relatively easy time passing Mixer, but given how little younger audiences care about the platform I don’t expect Facebook to beat Twitch or YouTube any time soon.
So is this a flag on a mudship for millenials? Probably. But Facebook does have scale and may yet a chance to at least capture ad revenue since Twitch is terrible at that currently. I mean, TV ad spend is $70bn and the largest live streaming platform in North America with a highly desirable audience only captures 0.4%?
Hopefully FB has learned from Oculus and present an offering that is less vanilla. Like Mtv back in the day (not anymore), consumers look to gaming for an ‘edge’ and a degree of authenticity, especially in live streaming. Facebook has to walk a finer line with brands than its competitors, so we can expect professionalization of talent to accelerate in the coming year and a lot more programmatic content to make it easier to advertisers to target, attract, impress, and engage audiences. Link
Fortnite announces concert with Travis Scott
When Marshmello held a concert in Fortnite in February 2019, it was a massive success because (1) it was a cool, new experience that a lot of people enjoyed, and (2) it gave mainstream press an opportunity to understand what motivates people that play online: other people. I’ve written repeatedly about Tim Sweeney’s vision of games as a social platform is an important part of the industry’s future and I’m glad to see Epic is continuing to build it. Last year’s acquisition of mobile social app HouseParty managed to rack up 50MM installs across different devices over the past month or so. And now a Grammy-nominated rapper is releasing a new song in Fortnite in a series of concerts.
In the short term it is a clever differentiation from other titles and competitors (where’s Unity with its concerts, yo?). Longer term it raises the question for creatives how to design a game that isn’t just fun because of its game mechanics, but also facilitates a broader range of experiences (think theme park, perhaps). Currently I don’t see a concert in Call of Duty happening, but ATVI is going to have to start experimenting at some point. Meanwhile, according to Billboard, performing artist Mr. Scott’s in-game avatar is “ripped” so we have that to look forward to. Link
Cyberpunk 2077-branded headphones, Xbox, vacuum cleaner
Okay, I made that last one up. But, sheesh, that’s a lot of limited edition, branded hardware and accessories for a game that isn’t out yet. Everyone has either played it already and knows it is a monsterhit, or they’re all taking a collective bet that the Keanu hype will pay off.
CDPR is performing really well, of course, and presented some enviable earnings figures two weeks ago. Strategically, of course, they do not own the Witcher and, in fact, had to increase their payment to the author for use of the IP after he started to act out. The challenge ahead is to build a similarly successful franchise that they wholly own. That’s a tall order, not in the least because you’ll want to retain control over how your brand is managed. There is substantial risk in prematurely pimping out your brand to third parties because you don’t control the tone as well. No amount of glow in the dark controllers is going to help if your game doesn’t deliver.
GeForce Now to lose titles Xbox Game Studios, Warner Bros
It is not entirely surprising that as the industry transitions to cloud gaming we’re seeing a tug of war around content. Publishers are likely pulling their titles because, well, they’re not getting their cut. The service itself works well for me personally, and according to the firm has “millions” of subscribers. Much like its bigger peers Apple and Sony, NVIDIA is trying to figure out how to establish recurrent revenue rather than just sell devices. It did extend its Founders plan and won’t start billing until June. They better get some of those pubs to sign soon though, or they’ll get snowed under by the noise of the new platform releases. Link
Sony’s short, medium, long term approach to 2020
In an immediate response to challenges faced by small creatives, good guy Sony announced a $10MM fund to help indie devs make rent. An excellent decision for one of the major platforms and, of course, great press. To optimize for the medium term and the launch of the PS5 during coming holiday season, the Japanese firm has lowered its anticipated hardware output. It’s a recurrent point of discussion: will the 9th gen suffer because of all this increased risk and supply chain disruption? Short answer: No. Console manufacturing won’t kick off until several months from now, and given Sony’s size (not just as a console maker but consumer electronics firm), they have enough leverage to reduce the initial number of orders without alienating their suppliers. It’s also managed to ramp up the hype with that white DualSense controller. For the long term, finally, Sony has some more wonky stuff planned, as evidenced by their patent application for this this robot buddy that will accompany you while you play. Stuff that thing in my custom dakimakura and you got yourself a customer.
PUBG in Iraq
Often overlooked as a consumer market, the Middle East is, in many ways, not dissimilar from western economies. Politicians similarly regard video games with skepticism, and try to prevent the “pubg generation” from playing titles because young people spend too much time playing them. My favorite sentence from this article: “In-game voice chat is often a mélange of Arabic dialects and Farsi, in a space where young people can socialise away from prying eyes and ears.” Turns out that there, too, do we find a generation of teenagers and young adults now stuck at home with their parents with nothing to do. Ramadan 2020 is going to be a doozy. Link
MONEY, MONEY, NUMBERS
Republic acquires Fig. Started by industry vets, Fig sought to improve on the crowdfunding model pioneered by Kickstarter and bring some discipline around expectations as startups began gaming the system. Link
Team MakersFund (who were series A investors for SuperData) is taking on a string of positions: it invested $4.7MM in Finnish mobile dev Superplus Games and another $9MM in Popdog, an esports/talent firm.
Nordisk Film Games invested $4.5MM in Nitro Games.
Nifty Games raises $12 million to make mobile sports games NFL Clash.
Riot acquires Hypixel. There’s a lot of movement around games that revolve around user-generated content. We already saw Roblox’ new valuation and high-end investor, and given the winner-takes-most dynamic in online gaming it will be difficult to compete. But Riot is not just anyone and strongly motivated to capture lightning for a second time. Link