From Galaga to Esports, Video Games are Changing

Gaming Industry Interview

    Video games have been around for nearly 60 years, and today, you would be hard-pressed to find someone that has never played before. They have evolved from giant arcade games to something that can fit into your pocket or be played on your phone. My generation (millennials), have gone through some of the most prolific changes in the industry. We have been around them our entire lives, many even spend a large portion of our adult lives still playing them for entertainment. Because of their significant role throughout our lives, I wanted to interview several gamers to understand broader views on the industry and where they predict its future lies.

    In order to preserve their "confidentiality" I have assigned them pseudonyms. For gamer 1 it will be: Jane; gamer 2 will be: John; and gamer 3 will be: Joe. And, for ease of reading, I will present the question first, then summarize their answers & my response, and finally present their answers. Enjoy the interview!

    Question 1: “How long have you been playing video games?”

    Summary: Most of us Millennials have been playing video games since our early years, probably from the age of 4 or 5. You may have been tricked into playing educational games
like Jane and I, or maybe you were lucky enough to play the cooler stuff like John and Joe. I remember my first video games being played on an old MS-DOS computer, but my first actual gaming system was the Nintendo-64 with James Bond "Goldeneye".

    Jane: “If we're counting computer games, then since I was in 1st grade. My parents used to buy us those learning video games like "Jump Start" and Mario Typing to trick us into learning. It was pretty effective. If we're not including those then probably about 10 years old.”  

    John: “I have been playing video games since my brother brought home his brand new Nintendo Entertainment System, complete with Mario Brothers, Duck Hunt, and Mike Tyson's ‘Punch Out.’"

    Joe: “Not counting those terrible Bandai handhelds they released in the 90's, probably when I was four or five when my parents bought me a Sega Genesis for Christmas.”

    Question 2: “What is it about video games that makes you love them?”

    Summary: While the answers vary across the board, they all have a very similar underlying idea. Joe really sums it up the best in his oh-so-honest, almost depressing, response. Basically we want to fantasize about another reality and take a moment to take a break from our lives. However, this break from reality can't take place unless there is a captivating storyline and immersive game play scenario.

    Jane: “Not to give a cop-out answer, but that really depends on the video game. This is going to sound weird, but chiefly I like video games for the social, team-work aspect, getting to play them with my friends or siblings and working together to win. When I'm playing on my own, though, it's that they're kind of like movies or books you get to play out rather than just watching or reading. I can play my favorite characters- like who doesn't want to be Aragon from Lord of the Rings or Obi Wan from Star Wars? My favorite types of games are the critical-thinking, problem solving kind though, like King's Quest. I just really enjoy the creativity and the sense of accomplishment at figuring it out and moving through the story. But even those that aren't that type, I think we all enjoy them just because they give us an opportunity to do and be things that we just couldn't otherwise. I'll always want to fly. I can't do that in real life, but in a video game I can. Or I can trounce 20 guys or use magic, it's the same reason we read books or watch movies but we get to be more involved with video games.”

    John: “In the last few years I've been more interested in engaging story lines, nothing beats being told an amazing story. The video game mainstay, however, is solid game play. It doesn't matter the genre, if the game mechanics work and are engaging, I will absolutely play it. Examples of this: The Dark Souls series, Duck Game, Half Life/Half Life 2, Smash Brothers Melee, the Total War series, Myst series, The Last of Us.”

    Joe: “The ability to immerse yourself in another reality and distract oneself from the void that is life.” (I appreciate the honesty on this one.)

    Question 3: “What are some of your favorites?”

  

  Summary: The favorites vary from person to person depending on the type of genre of video game they want to immerse themselves in. However, the industry standards are Call of Duty, Diablo, Starcraft, Halo, Grand Theft Auto, and Minecraft, among a few others.   

    Jane: “King’s Quest, Undertale, Resident Evil 6, League of Legends, White Day”

    John: “Including the list above [his last answer], I’m a big fan of games that challenge me, not just to beat the game itself but to think differently than I already do. Riven was eye-opening to me as a kid, I became a lot better at problem solving because of it. The original Halo holds a special place in my heart because throughout high school, pretty much every weekend was devoted to 16-player brawls in Mark Johnson’s garage. Pitting yourself against another person is the best way to improve yourself. I learned that from games.”

    Joe:  “Call of Duty Modern Warfare 2, Final Fantasy IX, Empire, Earth, Europa Universalis IV”

    Question 4: “Do those favorites really embody what you love about video games?”

    Summary: Obviously yes, that’s why they’ve become favorites, but it seems that it’s hard to find one specific game that encompasses every quality that a gamer enjoys. Video games already offer a wide range of purposeful experiences, it is just difficult for a company to make an all-encompassing game that is also marketable enough to create a profit.

    Jane: “Creativity, problem-solving, and teamwork, yeah! ;) League of Legends, not as much….I like playing it because the teamwork is fun, but it’s still fighting with no story.”

    John: “Absolutely. Half Life and The Last of Us have two of the most engaging storylines in modern gaming. There are whole websites devoted to discerning the sparse clues given throughout the Dark Souls series as to what is really going on in the world. Video games don’t have to be a time-waster, they can force you to think and feel in very meaningful ways.”

    Joe: “Yep.” (Clearly he appreciates brevity.)

    Question 5: “Do you see the industry moving away from why you love video games or getting closer to it?”

    Summary: For the most part they think things are moving away from what they really love about gaming. Jane & Joe believe it is toor focused on creating billion dollar franchises in just a few genres. While some see this as a bad thing, others see opportunities.

    Jane: “Meh, I don’t know the industry well enough to really comment on this, but I’d say it seems to be moving away from it. Everyone’s into the “versus” games, combat-shooters (Halo, Plants vs. Zombies, Mass Effect) and fighting games (Injustice: God’s Among Us, Mortal Combat, etc.) or solo-games (Fable, Skyrim, Assassin’s Creed). It seems to be less and less story and more just beat-people-up/shoot-them-in-the-face. ”

    John: “I think of it less as a movement away from one side to another and more of an expansion outwards from a center. Sure, there are games like Call of Duty and [insert yearly EA Sports title] that are released primarily for a paycheck. But there is also the resurgence of independent developers whose games have become classics very quickly. It works the same way in any industry, there will always be people trying to sell for quantity and others for quality. I can’t fault them for trying to make a buck, I also don’t have to buy their products.”

    Joe: “Moving further and further away. As with all media, not just games, it is a safer and better financial bet to re-release a game/movie with some updated features because there's a core audience that will buy the game no matter what. That'd be fine if the sequels added something new and interesting but most are unoriginal with their content. Everything in the gaming industry is moving towards franchises because the publishers know that people will buy them no matter what. For example, Call of Duty and Battlefield have essentially become the Madden games of the FPS world.”

    Question 6: “Does that thought apply to Activision/Blizzard games?”

    Summary: The verdict really isn't out on this one yet. Activision/Blizzard is trying to achieve a balance between making money and the creative game development dichotomy occurring in the industry. They are making  money off the masses with their highly popular franchises like COD but also trying to stay true to very serious gamers.Activision targets mass consumer markets while Blizzard develops games targeted towards the "serious" gamers. I see an issue arising in either market if they continue to try to squeeze every possible dollar out of their consumers.    

    Jane: “Yeah.” [Very thorough contribution by Jane here]

    John: “Some of them. The Diablo series is one of the best and most iconic in the world, same with Starcraft and Warcraft.  I’m not a huge fan of monthly subscription gaming though, and micro-transactions/pay-to-play gaming ain’t my thing. At the end of the day, for me it boils down to content, game mechanics/playability and storyline.”

    Joe: “It's hard to say, because on one side Activision is releasing one of the worst received Call of Duties alongside a remaster of Call of Duty Modern Warfare 1. On the flip side, Blizzard is listening to their World of Warcraft player base and meeting with gamers who ran one of the most successful privately held servers to see where they can improve.”

    Question 7: “Since Activision/Blizzard has become popular, how many of their games have you purchased and/or how many have you downloaded?”

    Summary: This varies depending on the type of gamer, but if you have ever been truly interested in video games then you have played an Activision/Blizzard game.

    Jane: [No answer]

    John: “Blizzard and Activision have been making popular games since before I knew games were prevalent outside of my mom’s computer, it’s hard for me to put an actual number on it to be honest. More than a few but less than a lot.”

    Joe: “I've purchased games made by them from Lost Vikings to the Call of Duty franchise.”

    Question 8: “How much have you spent on in-game content?”

    Summary: Reluctantly Jane, John, and Joe have all spent money on in-game purchases but stopped because they felt guilty.

    Jane: “Not really much, I mostly play them through friends :p I’ve spent probably like $50 on League of Legends upgrades and skins and stuff, which is part of the reason I stopped playing.”

    John: “I’d like to say $0, but I’m sure somewhere down the line I’ve bought something, so I’ll say $10.”

    Joe: “Aside from the DLC map packs on the first two Modern Warfares I don't think I've purchased anything in-game, which was seven years ago, so I'm unsure of the amount. Fuck microtransactions and half finished games.” [I'll apologize for his use of language, but I like to think it adds to his point, lol.]

Activision Blizzard also recently acquired King Digital,
maker of Candy Crush

    Question 9: “Do you see yourself as ‘loyal’ to Activision/Blizzard or any other content producer, or are you unbiased and purely play games that fit your interest?”

    Summary: From all three gamers the answer is a resounding, “No!” It seems that if they are interested in it, they will play it regardless of who makes the game. As for myself, if I spent enough time playing video games I wouldn't care either even though I am a share owner of Activision/Blizzard.

    Jane: “No, I just play what I like.”

    John: “My thought process is a little bit mercenary, if I’m interested I’ll give it a shot.”

    Joe: “I don't particularly see myself as loyal to any game publisher. I own over 15 consoles and a gaming computer, so I'm not exactly a picky gamer.”

    Question 10: “Let’s move our questioning to mobile gaming. Do you partake?”

    Summary: All three gamers have partaken in some form of mobile gaming, but most don't currently do it because it is seen as quite a distraction by them. I personally agree with them, but every now and then when I have absolutely nothing better to do I will reluctantly waste time playing Pokemon on my phone.

    Jane: “I have. I don’t currently.”

    John: “I don’t, but I have before. I find that carrying games in my pocket tends to make me less productive during my day though.”

    Joe: “Aside from emulators on my phone, not really.” (Emulators mimic a console system on your phone.)

    Question 11: “If you do, what games?”

    Summary: Jane and John have played some of the most popular mobile gaming games out there, Joe being the only one that hasn't but still plays a very popular adaptation of Pokemon for phones.

    Jane: “I played Clash of Clans, but it took up time and money (because I have no patience, lol) and it wasn’t worth it.”

    John: “Angry Birds, Castle Crashers, Solitaire, Chess”

    Joe:  “Usually Pokemon. Gotta catch'em all.” (I've played this too on an emulator, it's pretty cool, you should try it out.)

    Question 12: “”Have you made in-app purchases via mobile gaming?”

    Summary: Jane is unfortunately the only person out of the three gamers that has succumbed to this addictive facet of mobile gaming. She ended up spending money on Clash of Clans, which many people have. I have friends that have dropped over $100 through in-app purchases for Clash of Clans.

    Jane: “Yes, unfortunately.”

    John: “Not to my knowledge.”

    Joe: “Nope.”

    Question 13: “If you haven't played [mobile games] why haven't you?”

    Summary: None of the gamers play mobile games anymore.Jane and Joe discuss how they are never that interesting and don't have the qualities of normal console or computer based games.  

    Jane: “I don’t enjoy phone games as much. They take up data and they’re never as fun. I like the story and creativity, and you don’t really get that much thought or effort put into phone games.”

    John: “I don’t play them anymore, primarily because I don’t like to play games during the day, when I should be working.”

    Joe: “They're typically terrible and based on micro-transactions.”

    Question 14: “What would change your mind to playing mobile games?”

    Summary: I think John's answer was a bit sarcastic since most people don't like the games for their propensity for time-wasting. Jane and Joe would be willing to play the mobile games if they, for a lack of a better term, didn't “suck.” Jane and Joe are 100% right, most of the games are designed to get people addicted and then spend money on small transactions. If they were geared more towards better storylines and game play then more people might enjoy them, but let's face it, that's not what brings in the money.

    Jane: “If they had more games like I described, with a storyline and cool characters and gameplay that you could follow through. I’m SURE you could make something like the old King’s Quest games or Undertale on the phone, and I would play the hell out of that! But people don’t put thought into phone games, at least not that I’ve seen, but maybe I just don’t know about them.

And they’d have to take less data. Cuz I don’t have that kind of money.”

    John: “An income that allowed me to lounge for the majority of my time.”

    Joe: “Have them not suck.” (My favorite answer.)

    Question 15: “What is your opinion about e-sports? Essentially, people watching people play video games just like you would watch athletes play sports on tv. Have you ever played in an e-sports tournament or competed for money in video gaming?”

    Summary: Jane and Joe are a bit pessimistic about the esports industry that is quickly emerging. John thinks the emergence of e-sports is fantastic because it allows "countless people to connect over a hobby they love." There is now an official esports section on the ESPN website, check it out here.

    

    Jane: “I mean, I like to watch Let’s Plays, you can enjoy the fun and creativity of a game without having to put in the time and money, and go through it with someone who is way better at video games than, say, I am. :p But I wouldn’t pay for it, and I certainly wouldn’t go to a tournament or something. I don’t enjoy that with sports, much less when people are sitting around clicking on a mouse. I’m so impressed….”

    John: “The rise in popularity esports has had over the last few years symbolizes a shift in perspective on gaming. It’s mainstreaming. Websites like Twitch have enabled countless people to connect over a hobby they love and I think it's outstanding. I have never competed in a tournament or made money gaming, but that's not why I play.”

    Joe: “If you're referring to Twitch, it's whatever to me. I'll occasionally watch it when I'm interested in buying a game and want to see unbiased reactions and gameplay from an actual player. If I want to waste my life watching useless content Netflix offers plenty of crappy shows and movies. I've never had an opportunity to play or compete for money, so no.”

$339 million to date, 88% overseas.

    Video games have been around for quite some time now but have only been mainstream for probably the last 15-20 years. Over that time they have changed drastically from games that once operated out of machines the size of refrigerators, to tiny devices that you can fit in your pocket and play against someone on the other side of the world. ESPN even has a section on its website devoted to covering competitive video gaming in which prizes can exceed $1 million. With the advent of mobile gaming, viable options for virtual reality gaming, and esports, the industry of video gaming has barely tapped into it's full potential.

Activision Blizzard (ATVI) and Electronic Arts (EA) are at the top of their game. I would look to the advances they are making in the future and watch closely for them attempting to further monetize their massive franchises through mobile gaming adaptations, movies, and esports. Even more interesting is the fact that Activision Blizzard's recent release of the WarCraft Movie made significantly more money in China than the U.S. Keep the changing society in China as a factor in this Industry as well. With all things investing please do your own research before making any purchases and to disclose I have a long position in ATVI.