Things of Internet: Why is the gaming space so hot right now?

Things of Internet
Things of Internet: Why is the gaming space so hot right now?
By Deepak / Chuck • Issue #83 • View online
Before we start, a new project: A friend and I started a free an-article-a-day Telegram channel. Join in! More about this at the end of today’s edition.
Are you into gaming?
I can’t claim to be, apart from obsessions with Contra (school), International Cricket Captain (high school) and weirdly & briefly, NFS Mobile (2020). I’ve never been into console/online gaming, partly because I was wary of getting sucked into another hobby time or money-wise (my NFS phase saw me pay for quite a few car upgrades).
But recently, I’ve had a revived interest in gaming. Not for playing itself, but for observing from a marketing point of view (and I realise just how hip that makes me sound). Let’s jump into it. Expect many rabbit-holes.

This generation's rock music, but with great P/E ratios.
As someone who is fascinated by the intersection of technology and pop culture, I loved this Guardian article from last year which had the simple headline: “Video games have replaced music as the most important aspect of youth culture”.
Recent developments in the gaming world only confirm this: The $69b Microsoft-Activation Blizzard megadeal was followed by Sony’s $3.6b acquisition of Bungie, makers of beloved franchises like Destiny and Halo. I do not expect this to stop - and neither does the stock market. Valuations of other gaming companies jumped in the expectation that Big Tech has found another space to swoop in on. Gaming pulled in $180b in revenue last year so expect consolidation and a gaming arms race.
On the surface, the two deals might look like just another battle in the long XBox vs Playstation war, but it seems to be much more. One clue - Microsoft’s head of gaming reassured fans that games are not going to be exclusive to a platform, and this really good analysis of the entire gaming industry on the Financial Times has ‘Xbox’ mentioned twice.
The rest of our pals from Big Tech is also involved in gaming, at different levels. From the FT piece:
Some of the biggest tech companies already have significant stakes in the gaming world, even if they haven’t pushed far into trying to produce games themselves. These include the Apple and Google mobile app stores, which act as the main shop front for the single largest segment of the gaming market. Amazon’s Twitch and Google’s YouTube attract mass audiences for viewing video games. And through its Oculus headsets, Facebook holds the lion’s share of the nascent virtual reality market.
Here’s a criticism of Big Tech x gaming, BTW.
So, why is everyone getting into gaming?
One reason could be the metaverse. We have no idea what that thing actually is yet, but we do know gaming will be a big part of it and certainly the primary use case for a lot of early adopters of VR headsets. For a $2t company (Microsoft), spending a small portion of its reserves to get a strong footing in, just makes sense. Satya Nadella said as much.
A second reason could be casual gaming. You really wouldn’t think women who are 45+ would form the second largest demographic of gamers in India, but there you have it.
Source: An excellent Inmobi report on gaming in India
This was a wake-up call for me not necessary because older folks like to play games, but because of the shifting definition of games themselves. Video games are no longer expensive, expansive, high-intensity, resource-draining shoot-em-ups played on consoles and gaming rigs, they are also, well… Candy Crush. Which was developed by Activation Blizzard. Meaning its new owners are… Yup. Casual gaming drives volumes and while it’s unlikely that uncle playing Ludo on Mumbai’s local train will upgrade to a Playstation in the near future, it does bring other benefits like screen time, potential for advertising and more. From the above FT piece, again:
Fifteen years ago, you had about 200m gamers in the world and today you’ve got about 2.7bn,” says Neil Campling, tech analyst at Mirabaud Securities. “It’s become the biggest form of media. 
One example of this is the biggest “game” acquisition of the last week: NYT buying Wordle for a 7-digit dollar amount (if you’re worried about the impending paywall, you can download the next 2000 days’ Wordles).
One more example of this, is another big tech player looking to break into gaming: Netflix. They’re less keen on building consoles and just have games to keep people hooked to their franchises. This leads me nicely to the next point…
A third reason could be an ecosystem play: Over the last few years, Big Tech has moved from trying to dominate one sector (Google - search, Facebook - social media, Apple - phones) to owning a little bit of everything and frequently trampling on each other’s toes. For example, Apple is now as much a services company as it is a devices company. A look at Meta’s acquisitions show everything from gaming to music to shopping. Microsoft acquiring a gaming company will result in something more than the sum of its parts: There will be better offerings for XBox customers, Microsoft will probably develop more hardware and niche offerings, online offerings will benefit with Azure integration… And who knows, MS Office might develop elements of gamification. But an ecosystem goes beyond tangibles.
Microsoft could gain even more legitimacy among gamers. I don’t trawl r/gaming enough, but I assume there will be scepticism. However, Microsoft is already a gaming giant with XBox - so it should seem more natural and obvious than say, Salesforce or Oracle (actually, the idea of Oracle owning Call of Duty is hilarious). Anyway, this could mean more content, more presence in the burgeoning gaming-creator economy intersection, more money through advertising, possibility for more franchises and properties, and so on. This is exciting. And you see why an ecosystem play makes sense for Netflix too, to milk existing love for franchises.
That being said, Netflix also has exclusive access to a League of Legends spinoff.
A last reason could be data and analytics: There’s tech that allows video games to analyse behavior. This could be used for everything from bettering robotics to selling you stuff. What all those algorithms could do with billions of hours of dedicated play is… I don’t know, really. I don’t want to speculate more about that - I’ll leave your imagination to do the work here.
I’ve probably left out a lot - I haven’t even mentioned NFTs once above, so I’ll end this section on gaming with the most 2022 possible headline: Crypto Enthusiasts Meet Their Match: Angry Gamers
Even if my own ignorance of gaming was obvious, I hope the above gave you lots to check out. One reason I am sending this late is that I ended up reading so much about this myself. And no, I didn’t end up playing any games, thankfully.
The updates section
The reads section
  • Ok, so you’ve heard a lot about the metaverse (possibly thanks to this newsletter) - but where can you actually experience it now? One such platform is Decentraland. Here’s a nice look into what it is.
  • An excellent Mint Lounge article on music in the age of the algorithm, with an India focus. Superbly researched. This is the article I shared on that Telegram channel today.
  • A good primer of Topics, Google’s proposed replacement to FLOCs (which itself was a replacement for third-party cookies). If you don’t work in marketing, skip this - nobody outside that fraternity gives a hoot.
  • What’s the role of an ad agency in the metaverse?
  • Apart from crypto bros, most people seem sceptical about NFTs and crypto as a whole, and for good reason. It should be a sign of the times that a 2.5-hour-long explainer video went viral, as did a long technical blogpost. So here’s Casey Newton with a few things web3 needs to fix in 2022 if it has a future or be taken seriously by people other than those with pixelated monkey Twitter DPs.
  • The evolution of “link in bio” websites.
  • Meet America’s crypto-happy mayors. Among them, NYC’s Eric Adams, who accepted his first paycheck in Bitcoin and Ether.
  • A heavy but terrific read: We should aim to make AI adequate, rather than complete.
  • There’s “domain squatting”, and then there’s holding the world’s billionaires’ private flight details for ransom. Of all people who would annoy Elon Musk, who’d have thunk a 19-year old kid with coding skills would be it? Actually, that sounds about right. It’s 2022.
  • The missed opportunity of the Spotify boycott: Higher payments, not Joe Rogan. Tweet of the week, however…
James Blunt
If @spotify doesn’t immediately remove @joerogan, I will release new music onto the platform. #youwerebeautiful
Extra content for marketers!
Outtakes from two events that happened this week:
An article a day: A new Telegram channel
A friend (Nitin of Project Bibliotherapy) and I started a Telegram channel where we’re sharing one article a day. Chances are, much of the links I share here will make it there but also many things I don’t share here. I’d love it for you to join in. It’s free!
See you next week!
Phew, that was a long issue - thanks for making it to the end. See you next week with more things from the internet!
Want to refer someone / subscribe if this was forwarded? Yay.
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Deepak / Chuck
By Deepak / Chuck

A weekly newsletter with some cool digital stuff. Something a brand did, a nice new app feature, something from the world of entertainment, an occasional editorial... Ideal for those who are in marketing, or simply love the internet and trivia. Every issue also includes something from the archives. It'll be insightful / useful / fun. Hopefully all three!

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