There was, recently, a session held with former video game exec, Mitch Lasky, on Quora. Lasky is someone who has experience working in the video game industry with companies such as Disney, EA, and Activision. The session included questions on his thoughts of the different aspects in the industry as well as the futures of certain elements of the industry, going forward.

Session with Video Game exec

Below are the highlights to some of the questions asked during the session:

What is your view on the future of eSports in comparison to other major US sports?

“But my definition of “eSports” is very broad. For me, the term eSports means the intersection of three big related trends: (1) the mainstream popularity of competitive, multiplayer gaming; (2) the growth in creation and consumption of game-generated linear video streams (and the corresponding collapse of conventional TV viewing by young people); and (3) the rise of a class of professional gamers who can earn real money competing and streaming. I think a great deal of value is going to be generated at the intersection of these three trends, and some of that value has already been created by new companies like Discord and Twitch.”

“The narrower view of eSports, the one that is focused on the professional leagues and teams, is also compelling, but it has a very different value proposition for me. At the moment, the vast majority of that value is being captured by the incumbent intellectual property owners — the game publishers and platforms. The current eSports leagues are tightly coupled to the games (OWL, LCS), if not owned or licensed by the publishers themselves. The publishers are not dependent on the leagues for revenue — they make money selling to gamers, and eSports leagues are a useful marketing and engagement tool for their brands. eSports teams have access to revenues from endorsements & licensing, prize money, and spectatorship, but it is just a tiny fraction of the revenue available to publishers.”

By comparison, the NBA and NFL don’t own their sports — they serve as governing bodies and intellectual property rights aggregators on behalf of the owners of the league’s franchises. While the NBA itself has considerable value as an entity, a lot of the value in professional basketball flows down to the teams and increasingly to the players. The whole eco-system is fueled by the revenues which team owners collect from stadium ticketing and from big TV contracts — live sports are important in an era of cord cutting, and TV providers are willing to write big checks for broadcast rights in order to keep their customers.”

Is VR the future of game industry?

“No, in my opinion, it’s not. The current implementation of VR (and hardware-dependent AR, like Magic Leap) asks users to make a lot of compromises in exchange for the benefits of 360° immersion. At present, I think these compromises make it unlikely that VR will become a ubiquitous, mainstream platform for gaming.”

The headsets are cumbersome and uncomfortable for sustained usage, it takes a lot of compute to render a satisfying graphical experience, and the UI and controller situation is abysmal. Not to mention the physical space requirements and the fact that you are isolated from those around you while you have the goggles on.”

“I don’t think the unique pleasures of VR are sufficient to overcome these limitations for a mainstream gaming audience. Playing a first-person shooter in VR is not a 10X, or even a 2X improvement over playing on a good gaming PC or console. That doesn’t mean VR won’t develop a core audience and a successful developer community — but it’s certainly not “the next mobile phone” in terms of scale and economic opportunity, as some have argued.”

How important do you think user-created content is to gaming going forward?

“User-generated content is important today and will only get more important in the future. The success of Roblox, Minecraft and the modding community certainly speaks to the opportunity. Game streaming is an important type of user-generated content, too. So are the various user-created modes of play within existing games — like, for example, GTA RPG (shout out to Sheriff Eli, by the way, who has taken GTA role-playing to a new level).”

“I’m really excited about the idea of games-as-platforms. It takes a lot of programming skill and art/design resources to create a game on existing engines like Unreal or Unity. Making compelling games is still really, really hard. Companies like Manticore (a Benchmark portfolio company) are building platform technology to make it easier to create AAA content without the art and coding overhead, which promises to open up new forms of game design by lowering the barriers to entry and enabling one-click publishing.”

How is the video game industry different from the tech industry?

What makes the video game industry fascinating is the way it functions as a hybrid of the tech industry and creative industries. It’s driven by technology innovation (3D, digital networking, etc.) and it has scale economics and distribution patterns similar to other software-based businesses. But the games industry is also driven by creative innovation. It is a popular art. Often the biggest leaps come when that creative innovation takes advantage of technology — including new business models that are enabled by technology.”

“One example is Riot Games’ League of Legends. Riot innovated on the play-pattern of third-person action/RPG from games like Warcraft 3 and its mods, refining the competitive, multiplayer aspects of the genre and going fully online with distribution, multiplayer play, and a virtual goods business model. The success of this approach enabled further innovations in community management and professional eSports.”

What are your top 5 video games of all time?

“Doom — popularized the first-person shooter, introduced the shareware distribution mechanic that would eventually evolve into free-to-play, and augured the rise of the powerful independent game developer.”

“John Madden Football — the 1988 original is laughable by today’s standards, but all the building-blocks of the multi-billion dollar future of EA Sports are there, including Madden as the cover-athlete.”

“World of Warcraft — while Ultima Online and MUDs had pointed in the direction of graphical MMORPG, WoW blew the lid off the genre and showed that a game other than Tetris could last for a decade and be worthy of a subscription.”

“Clash of Clans — popularized the mid-core mobile segment and showed that a mobile game franchise could reach console/PC levels of revenue scale. Also demonstrated the power of the Nordic developer community.”

League of Legends — by demonstrating that you could get to billion dollar revenue scale purely online and direct-to-consumer, without a major publisher, LoL created the modern games business. There is no Fortnite, PUBG or Apex Legends without LoL.”

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