In the midst of an unclear economic climate, the video game industry is remaining resilient. The player and viewership base is hitting all-time highs due to the influx of people staying at home. Gaming is not only providing entertainment but also a social connection, which people are finding especially valuable during this time of distancing.
These last few weeks have also brought non-gamers into the gaming community for the first time. While before they may have thought video gaming was “anti-social” or a “waste of time”, this narrative is reversing quickly. A current employee of Quartz just experienced this and wrote a great article about how, “it has provided me and countless others a safe alternative to socializing—a real feeling of camaraderie at a time when we all could use some.”
In 2020, video gaming is one of the most social, interactive, and engaging forms of entertainment on the planet. Below is a highlight on our portfolio company EQU8, Amazon’s gaming endeavours, and ESPN's NBA 2K.
This partnership is in response to the growing need for affordable and high-quality software for studios while in pre-launch development of their games. In the development phase, studios are bringing in little to no revenue to help offset the costs - and costs are rising.
These rising costs force studios to take on financing (debt and/or equity) to help mitigate these issues. Some studios raise 10s of millions, or even more, before beta, showing how quickly game development costs are rising. Without access to financing, games can quickly become too capital intensive for smaller studios or independent developers to build a highly immersive, online multiplayer title.
EQU8 and Bugsplat built this partnership to help make sure more developers have access to the resources they need while in development.
When it comes to video gaming, Amazon is typically known for their ownership of Twitch. However, Amazon has also built a game engine called Lumberyard, which has resulted in very little to date. Yet it looks like Amazon is now going to enter the game development space with their first AAA (big-budget) game; Crucible.
On top of this development, they are also developing a full-fledged cloud gaming platform under the name Project Tempo (a competitor to Google Stadia). The cloud gaming platform is not a surprise given that Amazon has a robust cloud infrastructure and is the leading cloud service provider holding 32% market share as of Q4 2019.
This move by Amazon to develop AAA games as well as a cloud-gaming service is a continuation of major tech companies (Google, Facebook, Amazon) trying to own the leisure time of billions of gamers.
I fully expect this trend to continue as the largest balance sheets on the planet chase a highly lucrative and growing market.
Given the lack of traditional sports, ESPN is hosting an NBA 2K tournament featuring 16 NBA players tonight. The winner’s prize money is going to charities supporting coronavirus relief efforts ($100k).
How to watch: The NBA 2K20 Player Tournament will begin on Friday, April 3 with a half-hour preshow at 7 p.m. ET on ESPN. The tournament will continue on ESPN until 8:30 p.m. and then will transition to ESPN2 until 11:30 p.m. The tournament will continue on Sunday, April 5, from 12-4 p.m. ET on ESPN2. The quarterfinals will be on Tuesday, April 7, from 7-11 p.m. ET, also on ESPN2. And the semifinals and finals will be on Saturday, April 11, on ESPN, with the time yet to be determined.