Game Theory, Episode 1

Hi PCP. To help support the new front page, I’m starting a new episodic called ‘Game Theory’. I figured many others would soon post on individual games, so I’d post on the 10,000 ft. analyst-style view of the industry in a way that was (hopefully) relevant to PCP. Enjoy!

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Game Theory Episode 1: Where’s Gaming Going?

To the top of everyone’s list, that’s where. Last year the industry generated $91 Billion in revenues worldwide, driven primary by mobile games and the growth of mobile gaming in Asia. $502 Million was recently invested in a European startup promising to take us into a video game version of the Matrix which realistically simulates real life. Unity, a company making it easier to build games, just pocketed a $400 Million fundraise. Economists are flipping out about the increase in video game players, fearing that they will lose their will to work and play games all day (I disagree) while other economists are flipping out about the decrease in good paying jobs which is leaving people with nothing to do other than to stay home and play games (I agree).

Stitching all of that together, there’s huge demand for games and its going to get bigger, all while deep-pocket investors are happily pouring cash into technology which will make developing great games easier and advances in high-performance computing drives quality up and cost down. Simply put, the future is bright. We should expect to see more titles, and much more community and culture developed around the titles.

For example, Tom Communitycy’s The Division is set to begin filming a movie starring Oscar-nominated actors (and previously released this ~30 min. episode) We can only hope it will perform better than the Assassin’s Creed movie. Moves by Ubisoft to work with Hollywood on developing movies around the games are just the beginning of releasing the full branding potential a game has. The more immersive the story/game is, the more it sells, the more players it has, the more money (of course) it makes.

So what drives immersion and player base? Community and the social nature of gaming. Remember those economists who were freaking out? It’s because the social nature of gaming is replacing the social nature of working. Humans are innately social, and that social drive used to be fulfilled in adult life in large part by working, now online communities forming around video games are replacing it. What’s bad news for economists (mostly just an over-reaction) is great news for us, because it means the future of gaming will be increasingly socially-oriented.

Thanks for reading!