Logitech's streaming adventure

Does buying StreamLabs really make live streaming more accessible?

I couldn’t believe my eyes.

Yesterday I watched the 6-year old play Zelda: Breath of the Wild and coolly take down Calamity Ganon and Dark Beast Ganon. Without. Taking. Damage.

They grow up so fast.

On to this week’s update.

NEWS

Sony’s head of studios moves on, PS Now issues price reduction

Its PR department must have thought that serving everyone a teaspoon of sugar would make some bitter news go down easier. The latter here, of course, is the announcement of Shawn Layden’s departure. I don’t have any strong opinion about the man himself, because I barely got to know him on a personal level other than the occasional run-in at some publisher event.

However, having been to more than my fair share of games conferences, I’ve always appreciated how under his leadership the largest incumbent console maker would still try to shake things up, even if it wasn’t always received with enthusiasm. I like that: big firms taking seemingly unnecessary risk. It's easy to judge, but difficult to accomplish, especially, I imagine, at a firm like Sony. As a result, it is the biggest console platform holder today in large part due to its Layden's content strategy. Not a bad track record. It leaves me with the question how new leadership will change, if at all, its existing direction.

Sony also issued a price reduction on its PlayStation Now service. By doing so it puts its pricing in line with what consumers are paying digital entertainment services elsewhere. It's basically getting ready for the upcoming cloud gaming wars.

This is a smart decision. Sony has repeatedly indicated that it is aiming to make more money from services. The effort to offer a broader array of paid-for services has been a strategic differentiator as much as it is has served the console maker as a means to extend the life-cycle of its hardware. A few years ago, many industry observers believed that mobile gaming would put an end to the console as a category. It is through cloud gaming and other content subscriptions that Sony has managed to prove those critics wrong.

The addition of several high profile titles will be attractive to the typically risk-averse consumers that dominate the market at this stage of the hardware cycle. And it previously proved a successful way to drive subscribership for the PS Now service: Sony added 51 PS4 Games to the service in July 2017 which resulted in overall subscriber numbers jumping over 60% compared to the same month a year earlier and triggering continued momentum.

In a recent study, we found that PlayStation Now has the most awareness among console gaming audience (49%) and that 26% of subscribers have been using the service around 18 months. That’s pretty impressive. The growing importance and investment in cloud gaming are great for consumers who can expect to see major platforms competing over their dollars and subsidizing content. I anticipate there to be even more deals and aggressive discounting toward the holiday season. Link

Google Android releases Play Pass service. I am whelmed.

Not to be outdone by the Apple Arcade announcement, Google released its own mobile gaming subscription bundle. Obviously trying to outdo big A by putting together 350 titles, the Googs is going for volume. I don’t know Android gamers to be high spenders, so bulk content access may very well prove worthwhile. But here’s where things get sticky: a few cynics have told me that the service is actually demonetizing creators. Like Spotify, payouts are based on how much time people play your game. Remember Amazon Underground? Anyway, the whole point of offering a premium-only, subscription bundle is to cater to audiences that see no merit in micro-transactions. A large part of that disdain has to do with the constant interruptions and deliberate retardation of a player’s progress. Paying developers by the minute means their interests in direct conflict with the most likely customers for such a service. I’m told there are two things the Google’s Play Pass is not: (a) it’s not a one-on-one competitor to Apple Arcade, and (2) it is not indicative of what’s the come with the Stadia next month. I really hope so. Link

Platform strategy: selective promotion of complements

Here’s an exaggerated article about an otherwise worthwhile study on how platform holders subsidize and cultivate the success of complements. In the authors’ words:

Through selective promotion, a platform sponsor can reward successful complements, bring attention to underappreciated complements, and influence the consumer’s perception of the ecosystem’s depth and breadth.

Succinctly, Sony and Microsoft spent resources on their big titles, of course, but also invest in promising content to drive engagement and spending.

Platform studies is a relatively new and growing field of inquiry and attracts attention from senior decision-makers. You should ready the actual article. Link

Virtual reality is back on the menu

As the in-house skeptic of virtual reality, I can’t wait to be wrong. After playing the Oculus Quest recently, I was terrified when I was jumped by a squad of droids. That sh!t is immersive as hell. Despite my proud abstinence of VR, I now feel that the days of disbelief may be numbered. Several of the major tech firms seem to think so.

First there was Facebook with its announcement of Horizon VR. You see, here’s where I feel I’m right in my skepticism. From the presentation all the way to the technology itself, Facebook’s interpretation lacks the mystique and aura. The wireless Quest is awesome, yes, but its application to have some kind of social wonderland is wildly unappealing. We don’t really need all this tech so I can spend time in a crossbreed Second Life 2.0 and a horde of Wii avatars.

Next there’s Verizon, which just bought Jaunt VR. As telcos go, Verizon has been on a spree. No doubt in the lead up to become the top provider of 5G telecom in the US, it’s been investing in a string of content avenues, including virtual reality. I recall seeing Jaunt at a conference a few years ago and was already impressed with the technology then. Since then, Jaunt VR laid of a "significant portion" of its staff to pivot into AR. But that makes all the more sense for a telco that is trying to get people to use faster bandwidth and data plans. The consideration is, of course, that a ridiculously low latency due to the magic of 5G will trigger demand for different experiences. My challenge here is (and has been) whether we’re just looking for a problem to solve now that all the major telco’s have invested billions in new network infrastructure. Are we expected to walk around a virtual mall and buy clothes? Meh.

And then there is Apple with its iPhone-dependent AR glasses and handheld controller. Not much news on this yet, but Apple is apparently in a testing phase. This is part of its response to the slowing of iPhone sales, which forces it to look for other areas of growth such as accessories.

Much of VR’s promise still exists in the future, however. So if I add it all up, it looks like the rollout of 5G and cloud computing will keep growth steady for a few years to come and allow VR to simmer to perfection. Let’s not take the lid off too soon, though.

Tencent buys a 29% stake in Funcom

Like Softbank does with tech firms in Silicon Valley, Tencent continues to invest in medium-sized game companies and thereby effectively blocking competition from getting in on it. It’s a great opportunity for Funcom, of course, and its success makes this accelerant well-deserved. But I’m starting to wonder whether all these partial investments will long term cripple true innovation because (1) it doesn’t make sense for anyone else to invest, and (2) it creates a potentially inflated environment where if you don’t take the money, such a large investor will go to your competition. Does such an environment allow for true creativity and innovation? And, should any of its subsidiaries be concerned about Tencent’s growing inventory of patriotic games? (Paging Ian Bogost) Link

Logitech buys StreamLabs but at what cost?

A publicly traded manufacturer of PC and gaming hardware that generated $2,567MM in 2018 just acquired a streaming software company for $89MM (plus a $29MM earn out). The strategy ostensibly is one of vertical integration. Logitech already sells a bunch of other things relevant to streamers such as microphones, headphones, and “gaming devices for the serious gamer.” But there is a considerable risk that may negatively impact the streaming landscape. What has made StreamLabs a favorite among 15MM or live streamers, including, yes, Ninja, is that it offers a superior service than the freely available Open Broadcaster Software. By raising venture capital and developing better software, StreamLabs has done a great job making live streaming more accessible. Logitech is looking to become a platform and in that model StreamLabs serves as a complementary. This is a company that sells consumer electronics, which makes the purchase a marketing effort: Logitech will seek to leverage the reach that StreamLabs has among streamers and gamer audiences. More so, Logitech’s track record in software development isn’t exactly stellar: G Hub leaves a lot to be desired. That puts the innovation and ongoing improvements we’re used to seeing from StreamLabs at risk. What makes the timing of the sale noteworthy is that Twitch just released its own broadcasting software, Twitch Studio. Knowing how long these things can take, it probably wasn’t an immediate reaction, but I suspect that StreamLabs knew something was brewing when they signed the LOI. Link

PLAY/PASS

Play. Mario Kart Tour. It’s not a race. It’s a downloadable insight into how Nintendo is starting to wrap its head around mobile.

Pass. Apparently some people are still partying like it’s 1982. Last week we saw Pitbull’s closer at Adweek and the fraternity beer table at TwitchCon.