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As GamesBeat Summit 2023, our biggest gaming event of the year, arrives on Monday, I’ve been thinking a lot about the state of gaming. Or, rather, I’ve been listening to some of our smart speakers talk during prep calls about the games industry’s future.
One of the takeaways is that gaming isn’t invulnerable when it comes to the state of the world economy and megatrends like the desire for people to travel and do other things with their time besides playing games. Gaming grabbed a lot of time from outdoor things during the pandemic, causing user numbers to skyrocket in 2020 and 2021. And now those outdoor things are grabbing a lot of that time back, as the industry shrank in 2022 and suffered the slings and arrows of a weakening global economy.
But there is still some inexorable growth that comes from the fact that gaming didn’t give up all of the gains that it made during the pandemic. While mobile has lost some of its momentum, the hardcore gamers who increased their hours during the pandemic are still playing. And so, even during a recession, there is a good chance that gaming is going to grow in 2023.
Ampere Analysis recently estimated gaming revenues declined by 5.6% in 2022, and it predicted that gaming will grow 2.2% in 2023. That is expected to happen despite a slowdown in the world economy and continued chaos in the banking, cryptocurrency, and tech sectors.
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However, it’s clear that not all sectors within gaming are going to benefit. Blockchain games accounted for half of all game startup funding last year, but that money might be drying up. Drake Star Partners reported blockchain games were only 20% of funding in Q1.
That will encourage critics to say that blockchain gaming is going down with the speculation and scams around Web3, just as some are saying the “metaverse is dead” because one big company in that space is faltering.
But there is always a counterweight to such arguments, and more than a dozen companies will make their case at the GamesBeat Summit that players are simply waiting for the high-quality blockchain games that are taking a long time to cook. I would love to know if better times will come in the second half of the year, or if more challenges await us in our chaotic world.
I’m going to discuss some of these numbers and challenges with Chris Hewish, president of Xsolla, at our event. But here’s a little secret from my decades of game business journalism. It’s not so much the numbers that matter, but the people behind them.
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The human side of resilience
Do we have a slowdown because the crypto crashes and scams have taken the life out of the non-fungible token (NFT) and metaverse markets? Certainly, those investments look riskier in the context of an economic slowdown.
We have a couple of sessions where the speakers will say that AI hasn’t killed the metaverse as the next big hype train.
Rather, they will argue that the real metaverse will get a big boost from AI because it will enable the technology development of the metaverse to move faster. These people, like Benjamin Charbit of Darewise and Susan Cummings of Tiny Rebel Games — who both came from Europe to speak at our event — have resilient dreams and that makes the game industry more resilient.
While they have very different backgrounds Charbit and Cummings are kindred spirits with other blockchain game speakers like Paul Bettner of Playful/Wildcard Alliance, Mark Otero of Azra Games, Brooks Brown of Consortium9, Gabe Leydon of Limit Break, Canaan Linder of Stardust, Yat Siu of Animoca Brands and Peter Kieltyka of Horizon Blockchain Games.
These people are Web3 underdogs who are fighting against the tide at the moment, as we all know the struggles of crypto and blockchain. Are they all a bunch of scammers? Hmm. I don’t think so. They’re committed to the blockchain even though the market is no longer as easy as it once was. Some investors like Miko Matsumura and Angela Dalton believe in these people.
Is the metaverse dead?
I get the feeling that the AI and blockchain folks don’t believe they’re killing each other or the metaverse.
And they believe that great tech trends can feed each other, rather than tear each other down. For instance, if you marry AI and user-generated content, you put more talent into the hands of fans, who normally don’t have a way to execute on their own grand visions for games. But with better AI, the fan-created stuff will get better and will become easier to populate a vast metaverse with stuff.
At our event, the GamesBeat community will debate these subjects. And it doesn’t necessarily matter whether the advocates for free non-fungible tokens win or the advocates for expensive NFTs win. I think it’s important that we first get exposed to these ideas and give them their due attention.
People often wonder why I write so much about these things at the edge of the gaming universe. Maybe I should write more about the things exactly at the center of gaming, like The Legend of Zelda: Tears of the Kingdom, which has sold more than 10 million copies in three days. And that’s what our GamesBeat Summit event is supposed to focus on: the core of gaming. But Zelda doesn’t need my help.
I like to focus my attention on things that need it, like diverse companies or the startups of the industry that are just sprouts. Sure, there are weeds among those sprouts. But time — and an economic downturn — sorts them out. It burns off the bad ideas.
Strength through diversity
I love how we’re celebrating the industry’s diversity with our first-ever Diversity in Gaming Breakfast (use this code to get in GBSDIV23) at our GamesBeat Summit 2023 event, alongside our sixth Women in Gaming Breakfast (used this code to get in: GBSWIGB23). I’m very proud that companies like Visa and Facebook Gaming have stepped up to sponsor these sessions.
The talks at those breakfasts should be inspirational, like the story of Lual Mayen, who spent the first 22 years of his life in a refugee camp in Uganda before becoming a game developer. He’s got a charity to give back to that camp now.
When you spend time among the sprouts, that’s when you hear the best stories. Don’t get me wrong. The successful people like our speaker Robert Kirkman, creator of The Walking Dead, can be inspirational for entire generations of gamers and game developers. Kirkman is notably lifting up a lot of small-time creators. And the folks at TikTok, who generate billions of views on videos of such folks, play a part in turning these inspirations into something memorable.
But there are people you haven’t heard about who can inspire as well. Like Jenny Xu of Talofa Games. I wrote about her wacky dream of combining marathons and games. That dream turned into the venture-funded Run Legends fitness battle mobile game that I wrote about yesterday. She started with a small family operation and had to toss out the first narrative idea. Then she had to pivot into something that worked, and she thinks she has found it with Run Legends. There aren’t many people in the world who could marry the passions of fitness and games together like this.
I learned a while ago that stories like this can be more interesting than interviews with CEOs who tell you nothing because they’re hamstrung by regulations and policies from saying anything important. People have criticized me for being a corporate mouthpiece. That comes with the territory of being a business writer who loves games, rather than a pure game critic.
I don’t paint people with a broad brush — not even the corporate CEOs — because you can still find straight shooters like Strauss Zelnick, CEO of Take-Two Interactive, who will speak during the online part of our event on day three. Through his Rockstar Games label, Zelnick is going to bring us Grand Theft Auto VI one of these days — hopefully in 2025, a full 12 years after the creative genius of Grand Theft Auto V. Such amazing things are still possible in gaming, and that’s why it’s so resilient.
Zelnick’s talk with Mike Vorhaus at a previous conference was memorable because he drew a picture and said he would sell it as an NFT. He’ll talk about that subject again, as he keeps that picture on his desk as an inspiration. I’d put John Riccitiello, CEO of Unity and another speaker, in the same boat of being a CEO who has interesting things to say.
I like to focus on inspiring stories. And I write my share of negative stories when needed, since even in 2023 we must confront the negative subcultures of gaming like toxicity and extremism before they rise with gaming into mainstream culture. Leo Olebe of YouTube Gaming and Moonlit Beshimov of Google for Games will speak to these challenges.
23,000 stories and going
With 23,000 stories behind me in 15 years at VentureBeat/GamesBeat, I’ll wager I have written far more inspiring stories about game startups than soul-less tales about big companies.
I love it when some of these stories span decades in the telling. David A. Smith’s dream to take the ideas of Smalltalk, a programming language of the 1970s, and apply them to multiplayer gaming resulted in the startup Croquet, which I spotlighted a few days ago because it aims to put 500 players into the same web-based game.
I never ran into Smith before, but I love it when I run into people over again. Jordan Freeman was a dear friend of one of the legends of the game industry, the late Bernie Stolar. I wrote about one of their ventures together that didn’t work out. But Freeman persisted and found a niche reviving vintage games from the past for PC gamers of today who never encountered these games. This week, I wrote about how his company Jordan Freeman Group acquired Wanderful and the cartoon character Arthur franchise.
A community of dealmakers
One of the things I’ve been doing for a while is introducing people. I think of the GamesBeat Summit as a place to do deals. Part of our job, besides chronicling the industry, is to introduce people to each other. Sometimes that’s a pretty casual thing.
But it can be momentous. While he was at EA, Michael Chang met Mark Otero at KlickNation at a GamesBeat event. EA acquired Otero’s company and turned it into Capital Games, which became famous for Star Wars: Galaxy of Heroes, which became EA’s most successful mobile game. To date, that game has grossed about $1.32 billion globally since launch, according to Data.ai. Chang is one of our advisers and Otero is speaking at our event.
Rovio, which was recently acquired by Sega for $776 million, raised $42 million years ago after Peter Vesterbacka met Rich Wong of Accel at our GamesBeat event more than a decade ago. Tim Morton, CEO of Frost Giant Games, got about 80% of his investors with assistance from me. And we recently introduced Richard Garfield’s Popularium to more than a dozen gaming VCs after writing about them.
These are examples of our community in action and the kind of deals that can happen if you brave the in-person crowds.
Decades in the making
One of the people you should meet is Jamil Mullen Higley, another person whose story has been decades in the making. She’s going to moderate a roundtable for us on mental health and games, and what game makers can do to ease our existence and contribute to our joy and well-being.
She has been part of that well-being for 20 years because she was the model — the face of Alyx Vance — from the legendary game Half-Life 2. She started a nonprofit in 2005 to develop leadership skills and emotional intelligence in young people.
Her vision has always been to reach a large audience, merging education and entertainment to explore how emotions evolve in young adults. And her time as Alyx might be her ticket to reaching people with her message. I met her at SXSW Gaming, and she’ll moderate a roundtable with Nanea Reeves of Tripp and Ryan Douglas of Deepwell, who are both dedicated to healing us through games.
We’ll also close our conference with our Visionary Awards, where we’ll give some awards to people who probably never expected to get recognized for their work. Tammy McDonald of Griffin Gaming Partners is hosting that session, and I’m expecting it to be a great way to finish our event.
It is because of the resilience of these people, who have toiled sometimes for decades without recognition, that the game industry is as strong and diverse as it is today. I hope you join our community at the GamesBeat Summit on Monday and Tuesday in Los Angeles, where you’ll run into some of these people and hopefully catch some of their resiliency and inspiration.
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