Category: Gaming

Some thoughts on gaming: urn reel monies

On By Chen Yu YanIn Gaming, TechnologyLeave a comment

Continuing from my earlier lengthy article, I am going to talk about what I think will happen in the future. The trend has been somewhat established and the wheels are now turning. Needs a bit of grease but generally speaking, it sounds pretty good… well, not sounds pretty good since it needs grease but you should be able to come to the correct conclusion despite the bad metaphor. I must admit that I once again succumb to the temptation of bad research (as I have a few deadlines looming chillingly over the horizon) but I will aim to provides links to my sources whenever I feel inclined to do so.

E-sports is essentially the name of the game now (all puns intended). As the name suggests, it is considered a sports, with professional athletes competing for the top spot in global scale events. ESPN has covered the growth of e-sports as well as notable events across different games. With the massive reaction and cheering of TI5 still ringing in my ears (I need to get that checked out), the e-sports community is pushing ahead by organizing not just bigger events, but more events, allowing the general gaming community as a whole to enter. Amateur tournaments are event being hosted in backwater countries like Australia!

Lured by the scent of money, betting companies are now entering the fray. I am not talking about betting hats (please refer to my previous article for an explanation on hats), I am talking about real money. Sportsbet (a major player in Australia) is currently covering the Nanyang Dota2008 2 Championships, LoL World Championships, CS Go Dreamhack Open, and I’m sure there’s more but I got the idea after scrolling through 3 pages. As with fantasy baseball that has been popularized relatively recently (compared to the actual sport I guess), fantasy e-sports, along with gambling is clearly going to be a space worth watching.

Seeing as I live in Australia, I enjoy simple things such as using the metric system, riding in my kangaroo to work, avoiding dropbears while commuting, and using Aussie statistics. From the Australian Wagering Council website, I found some interesting facts and figures. Sports betting only contributes 1.2% of total betting revenue, around AUD$200 million. It has over 2 million Australians involved yearly, which doesn’t sound impressive until you realize that we have a total population of around 23 million. Now, I know that Australia is not something most people would consider as a standard, and that we do have a gambling problem like a middle aged alcoholic found in a casino… which is a fitting simile when you realize that most of our gambling laws are made under the same act as our alcohol laws.

While gambling doesn’t provide much investment opportunities, outside of the current rudimentary system of calculating odds which can be arbitraged by those who are keen enough to accumulate data for themselves, the e-sports community provides other interesting opportunities. One of the more prominent would be Virtual Reality (VR). I assume that it is already common knowledge that some of the larger tech companies are addressing VR as a serious investment opportunity. Looking at Oculus Rift, the version that I’m referring to is due to be released Q1 of 2016, it essentially brings portable entertainment into the real world. I believe I’ve made jokes about how the real world has awesome graphics with crappy gameplay. Well, that’s all about to change if I can be seeing the world through a VR augmented lens. Hot girls? Check. Zero need for human interaction? Check. ability to immerse myself fully and integrate my current technology into it (you can plug in your phone)? Check. Well, I guess this is where the human race goes extinct. Not by nuclear warfare, but by being too obsessed with virtual things such that all productivity drops to a level where only the maintenance of said virtual world is sustained. Kind of like Wall-E.

One step further is the world of augmented reality (AR). Looking at companies like this must truly make one reconsider the concept of reality. I just came back from Melbourne, where I played a VR/AR game. It was a Left 4 Dead styled shoot ’em up zombie first person shooter. Apart from the fact that you cannot adjust the field of view, so the focus makes people like me suffer from motion sickness around half an hour in, the game was pretty good. There are some other problems with the actual aiming and the fact that there were some other restraints, it was a pretty good experience. Nothing good enough for me to actually name them but enough to give them a mention so that if you’re interested, you can go google for it.

Major tech companies such as Facebook, Google, Amazon are all investing in some kind of ‘reality’ technology. Perhaps in the future, all our wants and needs can be fulfilled by virtual or augmented reality. To the point where we can simply sit back and consume virtual products that are delivered straight to our brains via the headsets. Where the world’s only professionals are pretty much those who live in the real world maintaining the servers and creating newer and better ways for the hardware to tickle our pleasure sensors in the brain. It seems that if there is artificial intelligence set out to destroy us, this would almost seem the most logical and fool proof. With everything we want at immediate disposal, the need to procreate etc. all disappear and the human race eventually dies out in this slippery slope scenario. On the other hand, I get to live in a world where I get to sleep all I want and eat everything I want and have fun with whomever I want. Sounds almost fair.

Hmm… the matrix almost sounds like a nice place to live. I’ll take that blue pill thank you very much.

A brief history of the gaming industry in my mind

On By Chen Yu YanIn Gaming, Technology1 Comment

I’ve been a gamer since I was little. I recall it started with the scrolling bullet hell styled games as well as the Pokemon series. Nothing was really quite like that initial experience of holding a Gameboy (and I’m talking about the original black and white brick, none of that coloured crap). And thus begins my boring story of my video gaming history (I swear to god, Pokemon is just a gateway drug). I will get to how this affects money very soon but allow me to indulge myself with the story of my ‘addiction’ first. Final Fantasy, Visual Novels (technically not a series of games but I’ve played far too many for me to name by series), Silent Hill, Dragon Quest, Tower Defence (a lot of different ones), Dota 2, Starcraft, Warcraft, L4D (it’s around this point where I wonder if I possibly overdone it in my last 24 years on Earth), Pokemon, Warhammer, Super Mario, CS, Red Alert, Half Life, and I honestly can go on for a lot more but I’d rather not give any more since my high school will probably want to ask questions (like where I was for an entire year or two rather than in class).

Regardless, the video game industry is huge nowadays. And the industry is not simply just producing games alone now. Derivative products like streaming (where you broadcast yourself playing a game), commentary (often done over streams where you comment on professionals or just simply others playing a game) are also massively popular. Sponsorships from both hardware and software companies allow professional gamers to live in relative comfort while doing something for a living that would make a teenager roll around in envy. Let’s start from the top though.

Games, in the traditional sense, simply makes money for a company from the revenue they generate through their sales numbers. If you think about it, it is similar to how movies are made nowadays. You have research into new technology, you have story writing, scripting, casting (for voice actors, or maybe actors for cut scenes in game), developing, and the sales it self. Of course I’ve given an incredibly brief overview, but you should get the idea by now. So you sit at home, in your soft yet supportive chair, leaning back, taking a quick sip of your dry red, and thinking about what this all means (please correct me if I’m wrong about how I imagine you guys). Quite simply, the size of this industry is starting an exponential growth. I like trends, and I sense a strong trend.

Skipping ahead a little, Dota 2’s The International (pretty much the international championships) had a total prize pool of a little over $17m. By comparison, Wimbledon (something we should all be fairly familiar with) has a total prize pool of approximately $42m. Now, this is a lot more than $17m, but I should also note that the total Wimbledon prize pool reflects both singles men, doubles men, singles women, doubles women, and the singles and doubles wheelchair etc. Not to mention that the winner takes home around $1.6m whereas the winner of TI took home $6.5m (so when divided among the 5 on the team, that’s around $1.3m each… EACH). This is a mind numbing amount of money from just one tournament. Now, Dota 2 has implemented seasonal multimillion dollar tournaments, spanning different continents generating millions for the company each time. How you ask? Quite easily. By selling hats!

Black top-hat
You jest but in some cases, actual hats like these… except not real

I’ll get to the hats very soon.

So back to the original discussion. The concept of computer gaming has evolved past simply buying and playing. There are ‘freemium’ games where it is technically free to play but you can pay to enhance your experience (I’ll expand on it with the hats concept), and subscription games where you have to pay a fee periodically to continue playing, a good example would be World of Warcraft. Other notable ways they make money (other than selling hats) would be DLCs (downloadable contents) where they pretty much don’t release the full game and only a part of it and make you pay for the rest (I understand that I sound bitter but you’d be too if you’ve been where I’ve been… and why are things fundamentally essential to the game in a DLC anyways? Aren’t I essentially paying $100 for a $70 game? What is wrong with you?).

So what about hats? What are hats? If you meant something other than the $300 fedoras you wear, or the ridiculous lighthouse looking things that some women wear to horse races, then it must certainly be in game cosmetics. In game cosmetics are referred to ‘hats’ due to the fact that one of the most famous cases is from a red hat. Possibly the first time people realised that hats are worth hundreds of dollars. Then there are things worth thousands, and even tens of thousands of dollars (rare couriers in Dota 2). What drives people to these purchases? Well, apart from showing off your enormous e-penis and fat wallet, it is pretty much conditioning. Conditioning in the sense that you start with smaller purchases and then splurge big time once you pretty much lose sense of money within the game. I have personally spent a few hundred in it (every last cent was worth it I tell you!). Apparently, making around 50 million is pretty easy that way. They kept 75% of the money from selling hats and only 25% went towards the prize pool for TI. Well, by ‘they’, I meant Steam. Go check it out if you play a lot of games.

I should go back to the trend I mentioned earlier. That exponential trend that is. Using Dota 2 as an example again (I can use things like League of Legends but no), the very first TI only had a total prize pool of $1m. Doesn’t seem like much? It was the largest prize pool in video gaming history at the time (2011). In the next year, 1.6, then 3.8, then 11, and all of a sudden, 17. The growth is unexpected.

Rather, the growth expected.

Here is the issue, this trend is not only with Dota 2. LOL, Starcraft, CS, you only have to go to twitch.tv (no seriously, go there to check it out. The gaming society is amazing) to really understand the scope of gaming. Over 250,000 viewers are watching the streams at almost any time of the day. During large tournaments, there are over 1 million viewers. If we extrapolate to other platforms like Youtube, and we look at videos from famous streamers like PewDiePie (I’m using him because he’s the most famous who reportedly makes over $4m from Youtube revenue alone in a year, check Forbes if you doubt me), the advertisement revenue, the investment opportunities are substantial.

And only now do I realise that my word count is well over what is acceptable… So I’ll end this here. I will write more in a later article when I feel like digging through the endless pages of the secondary hats market (which I indubitably will). So I’ll just wrap this up ASAP.

Newer games, better technology, faster computer processing, it seems that the only way this can possibly go is up…

But… my wallet…