Maybe Entertainment is Just a Game

Content Insider #889 – Game View

By Andy Marken – andy@markencom.com

“Source Code is not time travel. Source Code is time re-assignment. It gives us access to a parallel reality.” – Dr Rutledge, “Source Code,” Universal Pictures, 2011

Every so often, you’re walking down the street, feel a squish beneath your foot and know even before you look … you’ve stepped in it.

That’s about what it felt like when we “reviewed” a movie – Borderlands – and the series – Fallout – with a couple of intellectual (really smart) friends.

Both came down on us like a sledgehammer, saying the two really weren’t “decent” video game adaptions. 

O.K., one of the two was the founder and past editor of BabelTechReview site and the other knows more about the computer graphics industry than anyone should know.  

Yeah, that smart.

When it comes to films/shows, we probably should have anticipated the two were derived from game IP (intellectual property) since more than 26 percent make their way to the big or home screen.

That made us wonder why the film/show industry either can’t come up with its own storylines or has such a hard time starting with a successful video game storyline and changing stuff to weave a film/show series but just can’t seem to attract eyeballs and make a profit.

The potential audience has to be there because according to Exploding Topics, 3.3B + folks on the planet or about half the population are active video gamers.

So, we decided to get a new look at gaming.

First of all, the industry is a helluva lot different and bigger than in the days we worked with the Tramiels and Atari.

Let’s start with the obvious…

Game Growth – Compared to any other form of entertainment. video game sales/subscriptions silently overwhelm the reach and penetration of video games into people’s lives.   The hunger for more profits could be brutal.

The industry has changed/grown in almost every way… the variety of games, playable devices, players, quality, earnings.

We were surprised – and a little demoralized – to see that the gaming arena outstrips not just the content industry but also the music industry and the two combined aren’t even close to the gaming industry.

Participants – Much of the overpowering growth of video games compared to other entertainment is that it’s active rather than passive entertainment.

The industry is projected to generate about $193B this year and is projected to surpass $426B by 2029.  In comparison, the music industry delivers $26+B and the global movie industry should sneak in with about $100B.

Gaming has come a long way since the days we’d walk into the developer area and folks were asleep under their desk after pulling “another” all nighter or sitting there buzzed on double espressos and surrounded by Twinkie wrappers.  

Yeah, that won’t happen again.

The new breed of developers is the same but different from older developers.   

According to GDC (Game Developers Conference) organizers, the younger crowd is157 percent more likely to support unionization, especially in light of the latest rounds of layoffs as well as the impact of Generative AI on game play and player data acquisition/usage.  

We see AI from both sides of the screen.

Tough Days Ahead – If you think you’ve had a tough day at the office, tomorrow could be even worse if AI is actively deployed in the frey.

There are a lot of similarities (and differences) in animation and game development. But Jeff Katzenberg, former head of DreamWorks Animation and Disney Studios, has noted that 90 percent of the cost and work involved in animation could be replaced by AI.

We haven’t heard Jensen Huang, Nvidia’s boss and the leading producer of GPUs (graphic processor units) for gaming and content development, address the issue but the two forms of entertainment are just too similar and so are the costs.

We would classify both of the experts as serious gamers.

Heavy Iron – Serious video gamers expect leading edge/bleeding edge performance from their game play.  While off-the-shelf systems are okay, many prefer to craft the performance from the bare frame inward.  Many are mini-super computers.

They’ve both built monster computers that can handle even the most processor intensive game flow to enable them to flawlessly play through the night and change game scenarios to try a growing range of activities and outcomes.

Game AI can make high-concept storylines even more compelling.  

It can make small characters more complex, more dynamic, more spontaneous and more natural.

It will also enable them to try different/alternative scenarios in the games to achieve the successful conclusion they want.

As for whether AI will be able to write a good game storyline, the question isn’t can it but should it.

It’s similar to the quandary of AI writing a good movie.  

A soulless machine might write something decent, but does it have emotion, empathy, feeling?

Games are even more important because you’re not just watching the content flow by, you’re in it.  

You’re controlling, changing, guiding it.

See It – V/AR (virtual/augmented reality) has been a work in process for years.  It’s not here yet, but it is getting better and better.

When it comes to real VR (virtual reality) these advanced capabilities won’t be just nice, they will become vital.

The games are becoming better, more real and more immersive with each new generation.  At the same time, the hardware has made major improvements in recent years and it is becoming more affordable.

When the two do arrive, you’ll have a difficult time knowing which world you’re in until you look in a mirror.

If you see the headset markings on your face, you’re back in the real world.

But video games are more than just about power systems and VR headsets.

Don’t Kid Yourself – Macho Gen Zers like to believe that video games were developed just for them.  They forget that some of us were masters before they were even thought of and often that play master was a she.  

We know guys think video games are a guy thing but gawd are they wrong.

There are more than 3.3B video game players worldwide.

Gaming Bridge – Video games may be one of the few forms of entertainment that is enjoyed by young and old, males/females, local and globally.  

Across all ages, video game players identify as about half female (46 percent), half male (53 percent) and one percent don’t pick sides.

The average video game player isn’t some young punk, he/she is 32 years old and has been playing video games for 21+ years.  

In the Americas – and it’s probably similar the world over -26 percent are under 18, 35 percent are 18-34, 11 percent are 45-54 and 14 percent are 55 and older.  

In other words, age is just a number kid because the Gen Xers (40-54) and baby boomers (55+) are about 36 percent of the gaming population, and they’ve played the best and worst before gaming was cool. 

And she’s just as good – and probably better – than he is.

Gaming Everywhere – The US and China have the most video gamers per country but the Asia Pacific clearly dominates sales.  But once games moved to the cloud, they immediately became the entertainment of choice for iPhone and other smartphone users.  

It turns out she (and he) live/play across the globe, speak a wide variety of languages, play on a variety of platforms and are partial to specific genre.

The smallest percentage of gamers are like our friends who prefer to buy and download games for their systems.  

Far more prefer Xbox (Microsoft), PS4 (Sony), iOS, Android and Switch (Nintendo).  

The Asia Pacific represents the largest market, thanks to China which is both the biggest potential audience as well as the largest content producer (Tencent with more than $7B in revenues).

Sony is the second largest producer with more than $.5B in hardware and software sales followed by Apple that isn’t huge in the game development area, but the Apple Store contributes more than $3B in Mac/iPhone game sales/subscriptions to the company’s bottom-line.

Microsoft is in fourth place after dodging antitrust issues and successfully adding Activision Blizzard to their line-up.  

Obviously, they’ll be adding their AI technologies into the game and are looking long and hard as to how they pare development costs with the technology. 

Cloud and mobile gaming have quickly become the largest and fastest growing market segments.  

Mobile games have given iPhone (and other smartphone users) something to do beyond creating TikTok videos and taking selfies.  

Mobil Action – Video gamers want to take their games with them everywhere and the development of game controllers to your smartphone delivers the action folks expect today.  

According to DFC Intelligence, more than 3+B people are paying video game users and about 44 percent only use their smartphone.

To handle the needs of the console players who want to/need to connect with their games when they aren’t in front of their large screen, several third-party producers have also developed controllers to put all of the gameplay in their hands, regardless of where they are.  

And since “everything was being stored in the cloud and delivered over the internet, the logical question before the pandemic was which of the giants – Microsoft, Google, Amazon, Apple – was going to reshape the industry and become the “Netflix of Gaming.”

So, while each of them was trying to figure out how they could retain their gaming revenue stream and capture digital natives, Netflix surprised the gamer folks and made Wall Street question management’s sanity by announcing Netflix Games.

Entertainment Streams – While large video game firms worked to protect their franchises and become the number one choice for streaming games, Netflix seems to have decided that entertainment is entertainment and the best way to reduce churn is also offering video game streaming.  Seems to be really, really working.  

They set up a Netflix Games division (structure is important), acquired a decent roster of gaming studios and started creating games based on some of their shows/movies.

Whether you play the games on your big home screen, computer or smartphone; they didn’t care, as long as you regularly visited Netflix for any/all of your entertainment.  

A helluva move!

Everyone in the streaming video industry – and their stakeholders – has been sweating the huge problem of churn.

It’s relatively easy – and painless – to sign up with a service, watch what you want of their new stuff, drop them, move on to a new set of shows/movies and then maybe, eventually return.

You know, how hard it is to give up a couple of games you’re really into?  

Yeah, 50 or 60 hours of play is just … a good start–especially when you take a break from the trials, tribulations, battles to watch a horror/shark flick, K-drama or anime story and never have to leave your service.

There’s a very low chance you’re going to take a break from gaming to watch a film/show based on video game IP according to film/show industry analyst Stephen Follows.  

 Lost in Translation – The move to base movies, shows on video game IP has proven to be anything but a success for studios, networks, streamers.  

Follows takes us back to the original discussions we had with our video game experts.

Sure, some adaptations like Mario Bros, Sonic the Hedge Hog and a few others do well at the box office and on the home screen but not many.

According to Follows, most video game adaptations aren’t very good. In fact, they’re often very, extremely, very bad.

Almost universally, critics pan them, and audiences shy away from them.

Of course, there are still people like us didn’t know the film/show was based on a video game and we still wonder WTF when we can’t make sense of the project.  

But as Colleen Goodwin said in Source Code, “The program wasn’t designed to alter the past. It was designed to affect the future.”

That’s probably why Sony does so well with its film and game divisions.  

They each do what they do best without trying to mess with the other’s business.  

It’s tough because everyone knows the other guy (or gal) has a sweet thing going there and they want/deserve a piece of it.

Sorry, even we know a great movie/show is a great movie/show and a game … is something else.
Andy Marken – andy@markencom.com – is an author of more than 800 articles on management, marketing, communications, industry trends in media & entertainment, consumer electronics, software and applications. An internationally recognized marketing/communications consultant with a broad range of technical and industry expertise especially in storage, storage management and film/video production fields; he has an extended range of relationships with business, industry trade press, online media and industry analysts/consultants.