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Wanna Play?


When I was a kid, our family got an Atari 2600 console. We’d fight over who got to play since there were more than two kids in the family – plus we always had chores to do.

Outlaw – similar to Pong in play outcomes rewarded a tactical angular shot by knocking the cowboy on the other side of the cactus or stagecoach on his butt.

The images were stick-figures, so gaming consoles and game creators would work over the next 40 years to create more realistic imaging and experiences; virtual and augmented reality is enhancing the player’s insertion into the story of the game.

Gamers constantly connect, not just to play but to develop different games, or create spectator Youtube videos watching other people play. Some players rack up millions of views and make money by entertaining the viewers through funny commentary, screams, cheers, and giggles.

Much like other areas of the entertainment industry, investing in gaming startups is like being pitched a movie script by a newcomer director.

Games have been considered a distraction to the generation older than the average player. However, ever since the first PC started including Solitaire over 30 years ago, games have been a staple of computer activity.

Interesting demographics show that older players are entering the play with the 55-64 age group increasing by 32% between 2018 and 2020. Grandparents are playing with their grandchildren, as well as just enjoying the games by themselves. The big draw is story and narrative, playing for relaxation and social interaction. Whether the game is delivered via Nintendo, Xbox, Playstation, download or streaming, the odds of a gamer having purchased a new game in the last month is about 22%.  [source: GWI]

While employers’ concerns take an uptick when Fantasy Football talk around the water cooler creeps into productivity time, some employers actually leverage gaming to encourage team building. One company I’ve seen in action has Friday afternoon gaming, with board games, puzzles, and of course, the team-play streaming games. Over the Christmas-New Year’s break, they have a retreat at a resort where people can bring their families and enjoy winter hiking, cross-country skiing, and other outdoor recreation during the day and in the evening come together for food and fun.

The goal is company culture building and they tell me it really builds a great team atmosphere. So instead of having a distraction, they’re leveraging gaming to their business advantage.

In an advanced learning technology class, grad students were found to be learning how to play Stardew Valley, Minecraft, and Space Engineers, games that not only had players building stuff and fighting battles but they also had to gather materials before they could even build or upgrade tools before they could start to build a dwelling and a community.

Poised for Growth

Gaming has been on an upswing, with part of the industry dedicated to supporting game developers. According to Forbes, just 3 years ago the market generated around $138.7 Billion in revenue. It was expected to grow almost 10% annually with the smartphone games getting the larger credit for that growth, capturing 36% of playtime.

While mobile is capturing more attention, console and downloaded play still get a decent amount of playtime in the market. [source: Forbes]

According to MarketWatch, the global gaming market size is projected to reach $390 Billion by 2027. Top players include Activision, Electronic Arts, Microsoft, NetEase Nintendo, Sony, Tencent, Apple, and Google, all placing in the top 20. [source: marketwatch]

Here are some of the companies capitalizing on the technology-driven play, and taking advantage of interfaces that allow for a more realistic and immersive gaming experience.

Augmented Reality

When was the first time you saw augmented reality accepted as real life in entertainment? Was it Gene Kelly dancing with Jerry? Or Who Framed Roger Rabbit? The actors had to pretend to see the animated characters interacting with them. But actually, the earliest recorded film was The Lost World in 1925. [source: wikipedia]

Then I began seeing augmented reality showing up in games.

Augmented reality in gaming means that we’re accepting digital images in a literal space – kind of like Eddie Valiant being hired by Roger Rabbit in an actual experience.

Today’s games pull players into the story, where you can actually BE in Star Wars, or Lord of the Rings, or Harry Potter, or any other number of huge stories. But to put the story into your own environment takes on a new dimension in gaming.

Niantic

One can’t talk about augmented reality in gaming without talking about Pokemon Go which interfaces with Google Earth. Pokemon Go, created by Niantic is just one of several augmented reality games; including Ingress, Ingress Prime, Field Trip, Endgame: Proving Ground, Harry Potter: Wizards Unite, CATAN World Explorers, and Transformers: Heavy Metal.

Niantic began as an internal startup within Google in 2010 but became an independent entity in October 2015 when it received its first round of funding – $20 Million. Niantic’s most recent round of funding was Series C in January 2019 taking the total funding to $470 Million. [source: Crunchbase]

Niantic’s founder, John Hanke was with Google as the Google Earth project was developed in 2004, but prior to coming to Google was interested in following an entrepreneurial path as well as gaming shortly after graduating from UC Berkeley. [source: LinkedIn]  

During a study of augmented reality games, Pokemon Go was a big part of the engagement discussion; how the game influenced behavior, boundaries got ignored as players chased a character they wanted to capture into the middle of outdoor events, traffic, offices, hospitals and homes (not their own).  Location-based games are not limited to just Pokemon Go; however, this particular game brought in players of all ages and was the most known. In 2019, Pokemon Go developer Niantic agreed to settle a lawsuit over the problem. [source: TheVerge]

One of the key ways Niantic pulls in young adults is that players can actually create their own versions of the games. Considering only their Pokemon Go product, Niantic has reached the hands of over a billion users and was rated “best mobile game” by the Game Developers Choice Awards and “Best App of the Year” by TechCrunch”. [source: nianticlabs.com]

Virtual Reality

My first experience of virtual reality was on a treadmill in a virtual reality lab. Wearing a headset that projected Google Earth on my entire field of vision, I walked down the street from the Great Daibutsu in Kamakura, to the train station, north one-stop and up the street. The only thing missing from the full sensory experience was the sound and feel of the breeze and the smells. And if you go to Disney World “It’s Tough to Be A Bug”, they even manufacture the smell of stink bugs – so it’s coming!

Survios

Have you ever strapped on a virtual reality headset and entered the world of the game? (Make sure you have a lot of clear space around you – you can hurt yourself and possibly others!) Imagine yourself walking into the world of The Walking Dead, or Westworld. Can you feel your heart rate going up as the threat experience is just a bit more real?

These are just two of the lead products offered by Survios. You can enter the boxing ring with Creed or go full sci-fi with RawData. There are eight games plus the opportunity for creators to get involved and bring their ideas to the virtual reality world of Survios. [source: Survios]

Survios emerged out of a shared vision of what virtual reality home entertainment could be. Project Holodeck – Survios’ precursor project was launched by Nathan Burba, James Iliff, Graham Matuszewski, and Alex Silkin while at the University of Southern California in 2012. They built the first full-body and portable virtual reality system in a tech demo that featured “active virtual reality gameplay, full-body tracking and avatar embodiment.” [source: Wikipedia]

Between May 2014 and October 2020, Survios has raised $71.5 Million over 4 rounds of funding and key investors have included MGM, Lux Capital, Shasta Ventures, and others.

A More Realistic 3D Experience

The goal of most entertainment, whether gaming or film is to bring the patron into the story – to make them care – to be a part of it. The more effective a story draws in someone, the more the emotion matches the goal of the writers, directors, and producers, which gets the most valuable word of mouth advertising to bring in a larger audience and more profits.

Sometimes the story is compelling enough to make the audience forget this is just a movie. Do you remember the ending of the original version of Stephen King’s Carrie? I sure do! I think I jumped a foot out of my seat and the entire theater jumped with me.

But then, with the development of IMAX, the theater experience began introducing more 3D films. As theaters went through remodeling with sound and visual effects bringing more of the 3D capability, movies like Gravity, Avatar, Ant-Man, and many science films that take you to a microscopic view of the body or a cell, or into space.

My reference to Disney World can’t go without mentioning 3D – where bugs are flying past your head in “It’s Tough to Be A Bug”, or water droplets when you experienced “Honey, I Shrunk the Audience”. But now it’s coming to gaming. Even a simple block game like Minecraft has enough 3D to arouse depth perception and fear of falling for some players. Minecraft was developed in 2009 by Markus Persson and sold to Microsoft in 2014 for $2.5 billion. Currently, Minecraft averages about 120-160 million players every month. [source: fossbytes]

Epic Games

Unless you’ve lived under a rock, you’ve heard of Fortnite. Therapists heard massive complaints from women who expressed frustration that the game was destroying their marriages. It was said to be extremely addictive, as college students skipped assignments to keep playing. While many games get the diagnosis of “digital disorder”, Fortnite racked up the most buzz in social media conversations and blogs.

But what it really boils down to is that Epic – the creator of Fortnite found lightning in a bottle in the thing that all businesses crave – client engagement! But that’s not the only engagement going on at Epic – they are offering game developers access to their 3D creation tool: Unreal Engine. Unreal Engine is not just for gamers though. They serve the film and television industry, architecture, automotive and transportation, and broadcast/live events, providing support for simulations and more. [source: Epic Games – Unreal Engine]

Epic Games was founded in 1991 by Tim Sweeney. Based in Cary, North Carolina, the company has expanded to more than 40 offices globally. Fortnite alone has over 350 million accounts and 2.5 billion friend connections. has raised $5.1 Billion in over 10 rounds of funding with its most recent round completing in April 2021. Sony Group Corporation was a major participant in this round with $200M toward their shared mission. This last round of funding put the valuation of the company at $28.7 billion.  [source: Epic Games]

Social Media Supported Gaming

Don’t play alone. There are plenty of opportunities to get into group play where it’s fun, lively, and competitive! Gaming parties pop up among friends on campus and in the neighborhoods, where people bring their laptops or game-controls for Xbox and plugins for a 6 player game like Risk. But what if you could bring more? Among Us – a game that brings a 10 player opportunity was so popular last year that now Fortnite has a new Imposter game that looks a lot like Among Us. However, it’s hard to get 10 friends together all at the same time. However, that doesn’t lessen the demand for social play where you get to meet new people inside the game itself.

With platforms like Discord, Steam, Reddit, Twitch, and others, gamers come together to play. But it’s not just games in the way you imagine gaming like Overwatch, Fortnite, Halo, Call of Duty, and others.

What about fantasy football? That’s a game too! And it’s most popular this time of year at the office. What if that could be an expanded social experience with people you know rather than the crowd you don’t know at ESPN?

Sleeper

Sleeper is a messaging app dedicated specifically to sports. “There are many sports companies today building apps for the die-hard sports fan or degenerate gambler. We’re not one of them.” [source: sleeper.app]  Sleeper goes for strengthening relationships and creating memories through shared experiences in the fantasy league play space.

Sleeper is an app that lets you draft your team, play your matchups and get bragging rights for the winning team during the next family reunion. It’s an app you connect with your friends and family.

While fantasy sports used to be dominated by men who loved Moneyball-like stat plays and the idea of putting together their perfect teams, it was a female manager in my department who rocked the competition in the mostly male-dominated organization.

Nan Wang, the founder of Sleeper, hired an all-female team to create the look and feel of the website and app; he points out that women are an untapped audience in the fantasy sports space. Nothing has been directed to bring in the women, who actually make up more than 1 million fantasy sports participants, just in ESPN’s fantasy football in 2018. The fantasy sports market is estimated to be worth $7.22 billion back in 2018. [source: CNBCFantasy Sports, and Gaming Association]

Sleeper has raised $27.3M in 4 rounds; their Series B round was in May 2020 which raised $20 million of that total. Primary investors include Andreessen Horowitz, General Catalyst, and Birchmere Ventures. [source: CrunchbaseSleeper]

The app boasts over 1 million users, with big-name investors like NBA stars Kevin Durant and Baron Davis. [source: Crunchbase]

Bottom Line

Look at where you live, eat, and play, then look around you. If you’re buying it, shouldn’t you investigate it as an investment opportunity as well? Ever since the Cabbage Patch doll run back in the 80s, that had moms figuring out how to make dolls for Christmas presents because there was no way to get them in time for Santa’s deliveries; demand, time, and attention give clues. None of the companies I’ve mentioned here are publicly traded. Which one(s) will go public? And what is the next technology that will flip the way we play?

And the next time your kid wants to play Pokemon Go, get out and have some fun in the fresh air!

Which game captures your time and attention? Have you checked the company behind it? Is it a big name, publicly-traded company? Is there a game producer or a device you think I should have mentioned here? Let me hear from you!