Author Topic: Video Gaming Industry  (Read 3030 times)

Patmo

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Re: Video Gaming Industry
« Reply #10 on: July 11, 2019, 04:41:37 PM »
I would look at the e-sports area as well.

There was a blog post a few years back on the favorable economics of businesses which run industry conferences. I think it was in relation to Nielson or Reed Elsevier (now RELX). I forget the exact company.

But the jist was, organizing these trade conferences was a good business as you get paid up front by vendors and attendees, and it's a recurring item.

To that end, if I were to invest here I would invest in the growth of these e-sports event organizers.

The thing with gaming is, it's a lot like VC investing. Every year get tons of trash games but a few massive hits. It's difficult to know which will be the hits beforehand. But event organizers are getting paid after-the-fact, once these hit games have been established. Takes the speculation out of it.

I'll lay off the sarcasm pipe here and add a bit of empirical/anecdoctal evidence (although I know that is useless and uninteresting, just ask the Great Guru about his research for real, tangible knowledge).

Angel Munoz did so well organizing the CPL (a biannual tournament) years ago that he had to hide where he lived, in fear of community backlash at how nice his (main) residence was compared to the tournament purses. Organizing 2 tournaments a year in some basement was his full time occupation at the time. There was a minor scandal around it when people found out. That was long ago though, other parties may have sharpened up and driven margins down.

Plenty of events go bust though. I wouldn't be surprised that it's one of those things that do really well or really poorly. Certainly no one I've ever talked to who organized tourneys has ever expressed regret, even 15-man doritofests crammed in a single office down in Podunk town, right by Nowhere City.

Anywhoo.


Smile

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Re: Video Gaming Industry
« Reply #11 on: July 12, 2019, 12:34:33 AM »
Longtime lurker here to tell you I gained almost no useful information but a lot of laughs from this thread. Stop pulling each otherís ties lads! The hall monitor is coming! Heíll grab you by your lapels, shake you round and hang you up on a coatrack!

So.. which companies are the reliable moneymakers in this industry? I donít know enough to have an opinion.

Jurgis

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Re: Video Gaming Industry
« Reply #12 on: July 12, 2019, 07:50:58 AM »
writser wanted a riot on CoBF.

HE GOT IT!

Stop pulling the punches guys. Get your BFGs, grenade launchers, fireballs and nuke each other into smithereens. Preferably live on Twitch. With smack talking.

We want to see your rigs! We want to watch your skillz!

We'll pay some good (in-game) money for that!

Let's Ruuumble! #letsRUMBL
« Last Edit: July 12, 2019, 07:52:49 AM by Jurgis »
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Spekulatius

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Re: Video Gaming Industry
« Reply #13 on: July 13, 2019, 05:15:27 AM »
I am not an expert of gaming, but it seem to me that the industry has a lot of tailwinds. The move to digital distribution and having the game essentially in the cloud saves costs, makes them more platform independent and probably over the long haul cheaper to develop. It also increases the game longevity by keeping users engaged with small updates etc. The ubiquity of smartphones allows for more gaming time. EA for example looks like a decent value. They have the FIFA franchise, which has been a money maker forever and probably will continue to be.

I am also curious how GOOG stadia platform works out. This could become a nice subscription based business and also be beneficial to game producers.
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cameronfen

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Re: Video Gaming Industry
« Reply #14 on: December 19, 2019, 08:54:32 AM »
Just spitballing, but I wonder if what Netflix and the like is currently doing to media especially in the area of lowering ARPUs, Stadia and other subscription cloud gaming services will do to these big title video game titles.  I have been somewhat negative on video game companies for some time (and wrong although not short), I don't see why something like Stadia doesn't become the default way to play video games and how big titles escape being goods on a platform.  As far as Netflix goes, it was the content companies that lost out allowing Netflix to do what they did, and even when they entered in the SVOD players, the ARPU that business generates is significantly less (although for many TV companies they have the benefit of globally exporting the content with SVOD, something that video game makers already do).  Games with monthly subscriptions like MMOs probably escape this as you can't access with another platform (but how many games other than WoW is that?), as do freemium model games.  However big titles like Starcraft or COD don't.  I think this takes 5+ years to happen at least, but you look at all the media companies and they trading at 5x FCF because of SVOD.  I don't plan on being long or short so I don't really care investment-wise, but the thought occurred to me so I thought I'd bring it up. 

Castanza

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Re: Video Gaming Industry
« Reply #15 on: December 19, 2019, 09:09:05 AM »
Just spitballing, but I wonder if what Netflix and the like is currently doing to media especially in the area of lowering ARPUs, Stadia and other subscription cloud gaming services will do to these big title video game titles.  I have been somewhat negative on video game companies for some time (and wrong although not short), I don't see why something like Stadia doesn't become the default way to play video games and how big titles escape being goods on a platform.  As far as Netflix goes, it was the content companies that lost out allowing Netflix to do what they did, and even when they entered in the SVOD players, the ARPU that business generates is significantly less (although for many TV companies they have the benefit of globally exporting the content with SVOD, something that video game makers already do).  Games with monthly subscriptions like MMOs probably escape this as you can't access with another platform (but how many games other than WoW is that?), as do freemium model games.  However big titles like Starcraft or COD don't.  I think this takes 5+ years to happen at least, but you look at all the media companies and they trading at 5x FCF because of SVOD.  I don't plan on being long or short so I don't really care investment-wise, but the thought occurred to me so I thought I'd bring it up.

Input latency is a big issue that has not been solved yet. Anything over 60ms basically renders any competitive game useless. Not saying they wont figure it out, but you're going to have a hard time getting people to switch from physical local hardware allowing them to play games in 4k to a cloud based system when you're hearing things like "Stadia works better on a smaller screen."

edit: This is especially important to streamers. In competitive gaming you have to have basically zero latency to be "good." Well being good affects your social status. Ninja would not be Ninja if he was playing it on Stadia (not actually available on Stadia).
« Last Edit: December 19, 2019, 09:13:28 AM by Castanza »

kab60

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Re: Video Gaming Industry
« Reply #16 on: December 19, 2019, 12:19:15 PM »
Keyworks Studios is a decent way to bet on gaming. Works for all major studios, outsourcing provider. Sells shovels instead of digging for gold. Great numbers, high valuation, other might copy their playbook.

cameronfen

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Re: Video Gaming Industry
« Reply #17 on: December 19, 2019, 01:04:31 PM »
Just spitballing, but I wonder if what Netflix and the like is currently doing to media especially in the area of lowering ARPUs, Stadia and other subscription cloud gaming services will do to these big title video game titles.  I have been somewhat negative on video game companies for some time (and wrong although not short), I don't see why something like Stadia doesn't become the default way to play video games and how big titles escape being goods on a platform.  As far as Netflix goes, it was the content companies that lost out allowing Netflix to do what they did, and even when they entered in the SVOD players, the ARPU that business generates is significantly less (although for many TV companies they have the benefit of globally exporting the content with SVOD, something that video game makers already do).  Games with monthly subscriptions like MMOs probably escape this as you can't access with another platform (but how many games other than WoW is that?), as do freemium model games.  However big titles like Starcraft or COD don't.  I think this takes 5+ years to happen at least, but you look at all the media companies and they trading at 5x FCF because of SVOD.  I don't plan on being long or short so I don't really care investment-wise, but the thought occurred to me so I thought I'd bring it up.

Input latency is a big issue that has not been solved yet. Anything over 60ms basically renders any competitive game useless. Not saying they wont figure it out, but you're going to have a hard time getting people to switch from physical local hardware allowing them to play games in 4k to a cloud based system when you're hearing things like "Stadia works better on a smaller screen."

edit: This is especially important to streamers. In competitive gaming you have to have basically zero latency to be "good." Well being good affects your social status. Ninja would not be Ninja if he was playing it on Stadia (not actually available on Stadia).

Thanks ya thatís something I didnít know. 

RVP

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Re: Video Gaming Industry
« Reply #18 on: December 19, 2019, 02:34:04 PM »
Matt Ball, a media exec/ analyst offers some good (at least as far as I can tell) perspectives on the video game industry.

Regarding cloud gaming and distribution:
https://redef.com/original/how-cloud-gaming-will-and-wont-disrupt

He argues that cloud gaming is less about frictionless/ low-cost distribution than opening up the market to "spectator-participants".

Regarding gaming production:
https://www.matthewball.vc/all/videogameblindspot?curator=MediaREDEF

He makes the case that traditional studios (TV, movies) may want to get into the game of video game publication directly in order to capture more upside in a larger and growing market. 

cameronfen

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Re: Video Gaming Industry
« Reply #19 on: December 19, 2019, 07:56:11 PM »
Matt Ball, a media exec/ analyst offers some good (at least as far as I can tell) perspectives on the video game industry.

Regarding cloud gaming and distribution:
https://redef.com/original/how-cloud-gaming-will-and-wont-disrupt

He argues that cloud gaming is less about frictionless/ low-cost distribution than opening up the market to "spectator-participants".

Regarding gaming production:
https://www.matthewball.vc/all/videogameblindspot?curator=MediaREDEF

He makes the case that traditional studios (TV, movies) may want to get into the game of video game publication directly in order to capture more upside in a larger and growing market.

I saw the second one on his blog, but not the first.  Thanks.  Reading the first article intrigued me because he sees so much potential in cloud based gaming, but he doesnít discuss any of the threatís even if to just debunk them.  He does make a good case that video gaming hasnít saturated the market.  But thinking about the downside, after you include hardware costs I think itís easy to make an argument that margins will likely be lower at 20 a month, versus your own computer and 60 dollars a game for people that play enough to sign up for stadia etc.  On AWS, a single GPUs costs 75 to 90 cents an hour.  Not hard to see most gamers playing 20 to 30 hours a month with Stadia, which doesnít leave any margin even for the content producers.  But as Castanza pointed out the latency issue is also still a problem. Regardless it was interesting analysis as to be expected from Ball.  Thanks for posting this!