November 3, 2020
Photo: Getty Images
This week in Protocol Gaming, your weekly guide to the business of video games: The esports phenomenon, the sharp divide in game earnings last week, and five questions with the Among Us creators.
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When it comes to esports as a consistent global spectator business, there is League of Legends and then there's everything else. Last weekend, Tencent's Riot Games wrapped up what has become this year's dominant esports event: the LoL world championship in Shanghai. South Korea's DAMWON Gaming won, and the scale of the event was immense.
"League of Legends is a cultural phenomenon in China," Tom Martell, Riot's director of operations for global esports, told Protocol on Monday. "It's our largest region in terms of fans and players. The passion they have for League just transcends in sheer scale what we see elsewhere."
"There is no esport without a fantastic game, so it begins and ends with the quality of the game and its resonance with our fans globally," Martell said. "As an esport, the presence natively in all these regions is a huge part of this. We operate 12 professional leagues around the world that are supporting full-time professional ecosystems there."
- Seth Schiesel
Today's online marketplaces gather millions of sellers, hundreds of millions of buyers, and generate billions of dollars in economic benefits. Specifically, the Connected Commerce Council (3C) research shows that the value marketplaces bring to small and medium-sized businesses exceeds $145 billion annually. Read more on why we should celebrate the benefits of digital tools and the businesses using them.
There was a sharp divide in game earnings last week: While the outlook's good for console manufacturers, things are less peachy on the software side.
Both Sony and Microsoft's gaming divisions had pretty good quarters. While PS4 sales dropped, unsurprisingly, software and subscription revenue soared. An optimistic outlook for the PS5 — Sony's hoping to sell 7.6 million by the end of March — and the subscription and software sales that should entail also led Sony to raise its full-year operating income forecast by 13%.
But buried in Microsoft's release was one worrying number. While a 30% boost in content and services revenue is good, it's a far cry from the 65% growth it reported in the previous quarter. That's reflective of a broader trend: Gaming's COVID-accelerated growth is slowing down.
The situation isn't awful: Growth is still strong. But it does seem that the huge boom from earlier in the year is coming to an end, and we're approaching something more like normality again. In a market with consistently high expectations, normal often isn't good enough.
— Shakeel Hashim
Among Us, created by the three-person team at Innersloth (who prefer not to use last names), is the breakout hit game of the moment and perhaps the breakout hit entertainment franchise of the year.
What was your first gaming system?
Amy: I believe it was the Nintendo Gameboy Color via Pokémon Red, though I was playing educational computer games on PC and playing N64 games when visiting my friends.
Forest: PC. I grew up on hand-me-downs: Commodore and Tandy 386 and 486.
Marcus: N64. Mario Kart and Super Mario 64 were the first two games I owned.
What is the most important trend in the game business in 2020?
Amy: I'm not as well in-tuned with game business trends, but I feel like memes and drawing in different references and making it humorous has been more frequent and more successful from what I've seen!
Forest: Wholesome games that are also massive successes make me so excited for more wholesome games on the horizon.
Marcus: I don't know much about game business :\ Seems like F2P mobile is becoming a huge market.
What has been the most overlooked aspect or development in the game business over the last year?
Amy: The humans making and working [on] anything game related. Remembering these are normal ordinary human beings, not machines churning out whatever people want.
Forest: Not sure if this is overlooked, but with social distancing increasing the number of games people are playing, games also have more opportunities to help players through tough times, give deeper insight on tough topics, or just bring people together.
Marcus: I can't think of anything. I don't follow business that much. I just like making games.
What new technology or technical development are you most looking forward to?
Amy: I feel like this is a silly answer but games being cross-platform, people being able to play with their friends on any system. Also more accessible game design and related technologies.
Forest: Haha, Innersloth basically makes fancy Flash games, so I don't have many desires in tech … Ruffle.rs is going to be pretty handy though …
Marcus: I'm looking forward to VR getting more stable. I think there's a lot of cool things that could be done in VR that haven't been yet.
What games are you playing recently that don't come from your company?
Amy: Hades, Animal Crossing and hopefully someday [I have] some more free time so I can beat Death Stranding!
Forest: Hades or Genshin Impact when I have the time. Mini Metro when I don't.
Marcus: Overwatch and Sea of Thieves. Multiplayer games are fun. I've started Assassin's Creed Origins to get the single-player fix.
PC gamers are focused this week on AMD releasing the new Zen 3 CPUs on Thursday that AMD CEO Lisa Su revealed last month to rapturous response. The new chips appear to outperform comparable Intel processors, which is a huge triumph for AMD after years of languishing in second place.
AMD last week also revealed its new "Big Navi" video cards, which appear comparable to Nvidia's new Ampere series.
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