Thread by @eriktorenberg

Very high-level summarized thoughts on gaming industry:

- How gaming industry has evolved
- Network effects in gaming
- Rise of livestreamers
- Similarities btw eSports & ecommerce
- What media can learn from PC gaming

Thread👇

Gaming is growing significantly:

Despite skepticism about gaming among investors, it is a massive and rapidly growing market. The global market is $152 Bn and growing ~10% year over year.

nfx.com/post/what-vcs-…

E-sports are growing significantly (15% YOY)

League of Legends championship drove more views than NBA, NHL, & MLB championships, second to Superbowl

Global: U.S only 12% of participants

While audience rivals professional sports, monetization lags 10x+ behind. Big opportunity.

Rather than thinking of games as random one hit wonders with short shelf lives, they now have the ability to be social networks, franchises, & platforms.

You don’t build a finished game as a "packaged good", you build a connected game that introduces new updates & experiences.

"1. Games are the new mall

2. Games aren't as much hits as franchises 

3. Platform convergence will create massive hits

4. Game discovery will be organic and social

5. The next Marvel universe will be born from games

6. Consumers are co-creators"

- a16z.com/2019/10/16/tre…

"Network effects have come in force to the industry in a profound way: streaming, in-game social features, gaming influencers,& communities like Reddit/Discord amplify engagement w/ a game"

New network effects (social, competition, UGC) in what used to be pure content businesses

Cloud-Native games solve the "cold start" problem faced by Massive Multiplayer Online games (MMOs), accelerating network effects.

These also shift ad-model from billboards to videos

Also enables real-time content generation (e.g. "Choose-your-adventure"

a16z.com/2020/01/14/clo…

Rise of Livestreaming:

- Not just live-gaming, but live-cooking, live-eating, live-sleeping(!), etc

- Not just making $ on ads, but also:

- Private chat groups (cc bunches.app)
- Expert paid content
- Paid Q&A
- Coaching
- Native e-commerce

a16z.com/2020/04/08/lif…

Platforms need to enable new monetization models if they want to keep their influencers:

- Enables them to collect payment information.

- Diversifies them from ad model

- Strengthens influencer-fan relationship

a16z.com/2019/12/19/mak…

Related:

https://twitter.com/ljin18/status/1225456098531926016?s=20

Similarities between esports & e-commerce:

1/ ppl overvalued IRL

2/ influencer-driven

3/ legacy distributors can’t keep up with digitally native ones.

"Who’s the Shopify, Amazon, the 3P shippers, the packaging companies, etc. of gaming/esports?"

h/t:

https://twitter.com/DCoolican/status/1048297172809256960?ref_src=twsrc%5Etfw

What media can learn from PC gaming

- Experiment w/ revenue models

- Embrace remixing & mods. Steam has about 4500 games but about 400 million pieces of user-generated content. In contrast to music w/ its legal protections

- Embrace crowd funding

h/t: medium.com/software-is-ea…

We've invested in Zelos, 100 thieves, & The Meta.

zelos.gg
100thieves.com
themeta.com

Recorded a related podcast w/ @RohnJobinson & @blakeir:

stitcher.com/podcast/villag…

Curious to hear feedback & more thoughts on where the industry is going.

Amazing how gaming has continued to grow despite wide-spread skepticism such as:

"People will never play video games for hours

People will never play video games w/their friends

People will never watch video games at scale

People will never pay to watch video games at scale"