Back in August, I was on a call with a group of gaming executives where we eventually discussed Fortnite. The conversation inevitably revolved around the question of “how long will this phenomenon last?”, and as we were going through the arguments (which I’ll share as an epilogue since this blog isn’t actually about Fortnite), I had this creeping sense of déjà vu. That’s when I realized that it was happening again; every time something new and exciting comes along, some of us get over-excited and inflate its potential way out of proportion.
A couple of years ago, it was about VR. Lately it’s been about eSports, the Nintendo Switch… and most recently Fortnite. And, by the way, I am not saying these are not successful nor do I think they won’t last. Instead, my issue is with the over-estimation of their future potential, the resulting over-investment toward these “fads (for the desperate lack of better words)”, and - most importantly - how that diverts resources away from where they could actually matter.
As an industry, we actually have a long history with this. But more of these have happened since the turn of the century as videogames became mainstream, and outside money started flowing in. World of Warcraft triggered an MMORPG tsunami, the Nintendo Wii made casual gaming and motion controls “the way of the future”, OnLive had people thinking Game-streaming would replace consoles, Farmville started the Social Gaming explosion, League of Legends had people thinking that MOBAs were the only hope forward for gaming. These examples go on and on… and it feels like every 2 years we collectively decide to repeat this cycle. Unfortunately, almost everybody who tries to jump into these new areas ends up failing.
So, I’d like to share how I feel about these situations in general, and some of the things to consider when trying to assess the potential of that new shiny thing, and your own chances of success by jumping on that bandwagon.
Don’t rely on your kids for your business decisions
Kids ARE a great indicator for what’s hot with consumers. Same for TV news. But they can only represent what’s hot TODAY. People who do not play videogames themselves, but have kids who do, often overestimate the longer-term potential of a product. And it’s even worse when even the TV news starts to cover the hype (this happened with the Nintendo Wii, then Pokemon GO and most recently with Fortnite); they get swept up in the apparent excitement of the new thing and begin to think it will take over the entire world and stay that way. Like a stock-market bubble.
Scenes from a Pokemon GO gathering. Chicago, 2016
The thing is, in many cases (and certainly in the three examples I provided), if you want to find out whether or not the hype is justified, all you usually have to do is try the product yourself. That first-hand experience usually yields a lot more information than what you’d get from listening to someone else’s description.
Examples: Motion-Controlled gaming, Game-Streaming (circa 2010), Social Games, Location-Based AR Games, Battle Royale
New Technology takes a while to learn and use properly
When new technology is introduced (and especially when it’s a new piece of hardware), it generally takes years (and sometimes decades) for people to find a ground-breaking application for it. To say it another way, it takes a very long time for game developers to come up with a “killer app” which uses that new technology.
My favorite example of this is the mouse.
Douglas Engelbart, holding the first computer mouse
Invented in the late 60s, it wasn’t until the 80s that people found some practical application for it (in paint applications). But it was finally in the early 90s (whooping 20 years later) that game developers found intuitive ways to apply that interface to games; FPSs (First Person Shooters), Point-and-Click Adventure games and Real-time Strategy games (precursors to MOBA games).
Dune II (1992), one of the earliest Real-Time Strategy (RTS) games
To be fair, progress in other computing technologies enabled those “innovations” (e.g. FPSs would not have been possible in the 80s due to the simple lack of computing power), but the key point remains; it takes a while for people to find an intuitive application for new hardware or technology.
So, when any new technology released, know to tamper your expectations around WHEN the promised future may arrive. Because it’s usually not a question of IF that future will arrive, but when. And that “when” is typically a long time away, especially when it comes to new hardware technology.
Examples: Human-machine interfaces (Mouse, Touch-screen, Motion controls), VR/AR
Every new tech was built on top of what came before it (<-> so you first need to understand what came before it)
There’s a famous saying in the industry: “Every game is a sequel to another”
It essentially means that we’re always building on top of someone else’s work. Over time, the games industry becomes collectively more knowledgeable about how to develop games and apply various technologies.
But while as an INDUSTRY we may possess an ever-growing set of expertise, that does not mean that every individual developer and team knows everything. In fact, this is a large part of building a games studio: establishing key areas of expertise, and continuously expanding the range of technologies your studio can integrate into a cohesive game product.
As an example, in order to build a VR game, the developer first needs know (1) how to use motion controls for games as well as (2) how to build compelling games with 1st-person perspectives, in 3D. They’d also need to know (3) how to optimize their game to run stably at 90 FPS, which is an unprecedentedly strict performance requirement. For a team that has only made “pixel-art 2D platformers” in the past, this knowledge gap would present a colossal challenge if they decided to make a VR game as their next product.
From a recent Facebook post of mine. This is a head-mounted display that Sony released over 20 years ago, called the "Glasstron". Sony borrowed many of its designs for 2016's Playstation VR headset.
So, those who have expertise (or just familiarity) with previous-gen technologies will have an inherent advantage in the races to monetize new technologies. Conversely, those who haven’t been keeping up with technologies are highly unlikely to compete effectively in these new spaces created by new technologies.
Examples: VR/AR (prerequisites: 1st person 3D world building & motion-controls), Blockchain (prerequisite: Distributed Systems, P2P networking), Games as a Service (prerequisites: Online Games, Post-release product strategy & pipeline)
The New doesn’t always replace the Old
People love an underdog story, and tend to enjoy seeing the status quo be challenged. Perhaps because of it, there’s a tendency for people to cheer for the new thing to replace the older. But too often they do so without understanding the core value propositions of the old vs. the new.
If the new thing can do everything the old can, while also doing things the old can’t, then it makes sense to predict the eventual doom for the old (the transition from flip-phones to smartphones would fall under this category).
But more often than not, the new finds success by serving those who were previously under-served and/or were not fully satisfied with the older alternatives. These types of new products usually drive broader industry growth by bringing in new audiences. However, they typically can’t completely supplant the status quo; because they typically cannot satisfy the entire existing market while innovating at the same time.
One of my favorite examples is the console vs. PC debate (even though not the best example since both are “old”, the broader argument still applies IMO). Over the last decade, there was a time when people were predicting the death of PC gaming; “PC gaming will disappear and everyone will be playing on consoles soon”. This was right before Steam became the de facto replacement for retail PC game sales and before “digital distribution” was considered a legitimate option. There was also a time when people predicted the death of console gaming; “Consoles will become obsolete because PCs (and mobile phones) can do it all”. This was when top PC and Mobile games were flaunting multi-billion dollar annual revenues, while the PS3 and Xbox360 were in their twilight years with no notable big hit titles (as it usually goes in the console space).
Ironically, that shift in tone happened within a span of only 5 years. But neither future came to pass. In fact, both are thriving today. This is because PCs and Consoles have their own strengths that their counterparts simply cannot match. For Consoles, it’s the fact that games “just work” on them, thanks to the strict platform compliances. For PCs, it’s the freedom, thanks to the lack of such strict platform compliances. And so as long as they keep those strengths, they’ll continue to co-exist (and even co-strive, like they do today).
The same could be said against arguments that “Mobile phones will replace both PCs and consoles”. In my opinion, that is pure nonsense. PCs and Consoles will maintain very stable and strong positions for the foreseeable future, because mobile phones still cannot compete with them in two essential areas; hardware performance and human-machine interfaces (i.e. input and display).
This principle applies to many other cases as well, so be sure to first understand both the weaknesses and strengths of the new as well as the old before you make any predictions about impending demise of the older.
Examples: Mobile/Casual games vs. Core games, Battle Royale Shooters vs. Traditional Symmetric Shooters, Game-Streaming vs. Locally-run games, Digital vs. Retail, Console vs. PC, Mobile vs. Stationary Devices
You’re already too late (for a quick-and-easy win)
This *should* be common sense. The mere idea that you can somehow successfully enter a market after it has already become “a thing” that gets mentioned on TV news is… quite naïve. Yet we cannot seem to fight the temptation when everyone gets excited about something. Maybe it’s just the fear of missing out that makes people jump on that overbooked train anyway.
But putting together a team and building a product takes time; and usually a much longer time than it takes for the window of opportunity to close. So, unless you’re investing in it (whether it’s your money as an investor, or your resources as a developer) with a longer-term faith in that new field or technology, just don’t. Your product simply won’t hit the market soon enough to ride that wave. Not even the tail end of it.
Examples: just about everything
In Conclusion: What to do?
Depending on who you are, the message I have for you is different.
For outsiders (i.e. non-game companies, investors, analysts, etc.), I hope you’ll consider some of these additional perspectives when the next exciting thing comes around. Do your own research, and experience the new product for yourself. Don’t just try it out at a tradeshow or rely on what you heard over cocktails at a networking event; go ahead and BUY IT, PLAY IT and EXPERIENCE IT yourself until you get tired of it. THEN, introspect why you got tired of it and see how that may translate to its longer-term potential.
And if, even after playing for a few weeks, you still haven’t found yourself getting tired, try to picture yourself playing it EVERY DAY or every week for the next year. Or two. Or five. If you can’t picture the game lasting that long for you, again take note of the reasons and ask yourself what that means for its long-term investment potential.
Be the consumer.
Note: If your response is “Well I don’t have enough time to play games myself”, then with all due respect, I would advise you to find someone who does whom you trust with his/her business intuition. Frankly, I believe that if you are not a genuine consumer of your own industry’s products (regardless of industry), you’re at a severe disadvantage when it comes to making the right business decisions for your company.
For game devs, my advice is to not stop learning those new technologies as they come. Reserve a small portion of your resources/attention toward learning/understanding new tech as they come out. But at the end of the day, always keep your attention and passion firmly on your own game.
If you happen to be a large organization (publisher or large studio) with resources to spare, it makes sense to hedge your investments and put some resources toward creating a game using that new technology (Ubisoft’s Eagle Flight being an excellent example). But for the vast majority of studios/teams who face enough resource constraints already, rudimentary R&D (i.e. don’t actually make a game with that yet) will generally be more than enough to keep you in the loop and aware of any upcoming opportunities. And ONLY start a project with that technology if your R&Ds have organically led you to a new kind of product that you genuinely believe can stand on its own right (i.e. without needing to depend on some golden market opportunity/timing to coincide with your product’s launch).
In my opinion and historical perspective, the games industry doesn’t evolve and innovate as quickly as people may think. Yes, every day and every week, another new game will innovate in another new area. Some new game mechanic, a new rendering/art style, some new business model… But plenty as they are, these innovations rarely ever depend on the latest and greatest technology. In the vast majority of cases, they were new IDEAS that combined existing know-how and available technologies in ways that people simply hadn’t tried before. In other words, and IMO, you have a better chance at success by focusing on your own strengths and vision than following the latest exciting fad that every other insecure developer is also trying to “adopt”.
I realize this is cliché, but it doesn’t mean it’s not true: When in doubt, focus on making your own game fun.
Epilogue
As promised, I’ll share my take on Fortnite (& Battle Royale).
It’s a huge success for sure.
I believe this will do great things for the industry in the longer-term. Fortnite has brought in a MASSIVE new audience (and YOUNGER) to the world of First Person Shooter (FPS) gaming, which is arguably the genre with one of the highest barriers of entry. A whooping 21% of Fortnite players were not even gamers prior to trying Fortnite, which is an absurd figure at this day and age considering how mainstream videogames have become.
But many seem to overlook some of the bigger reasons for its success; it’s the first AAA quality Free-to-Play Shooter with near 100% platform coverage, making it far more accessible than any other AAA quality game out in the market. Even the art style is more approachable than Fortnite’s only competition until recently, PUBG. And speaking of PUBG, the Battle Royale format was by far the greatest catalyst for Fortnite’s success. The FPS genre was becoming very stale with its insistence on symmetric (balanced) multiplayer, and Battle Royale flipped that script in a creative way to offer gamers an entirely different way to enjoy FPSs.
From my perspective, this whole phenomenon is less about Fortnite (which is a great game!), and more about the shift in the multiplayer game design paradigm. It represents a transition from 100% symmetrical game design philosophy to an asymmetrical one. And that “simple” change in perspective is opening up vast opportunities for game developers to explore.
As another example, Destiny 2’s new multiplayer mode “Gambit” is also being received very well by its players, and I attribute that to a similar reason; gamers are appreciating the new multiplayer modes that introduce new ways to enjoy what is otherwise the same game.
Destiny 2's Gambit Mode. It's awesome.
And there were earlier examples where people tried to introduce asymmetrical modes to multiplayer gaming; most notably, 2015’s Evolve by Turtle Rock Studios. While that game was not a commercial success, the player’s initial reaction to the game had already hinted at the possibility that gamers were looking for something different.
So, if I were to predict how this phenomenon will play out, I’d say Battle Royale will become the next “MOBA”. That is to say, it will establish itself as a solid new genre, but it won’t entirely replace the current landscape. It *will* steal some players (and revenue) away from other FPS titles, but it won’t (and CAN’T) entirely replace the existing landscape, as even shown in the launch numbers for the latest Call of Duty title.
...and, in two years, we’re going to have this same set of conversations about the next big thing.
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