Emerging Trends in Gaming

Even before COVID, gaming and virtual entertainment was a rapidly growing and innovative industry. Today, gaming is a $150B industry globally with mobile games representing $70B of the market. The global lockdowns and work from home for many has served to pour rocket fuel on the industry and accelerate a number of trends in gaming and interactive media that I am following:

A Person’s Community is in Game: The next wave of social media, networking, and community is being built in and around games as seen by Roblox, Fortnite (millions of people watch their virtual concerts), and Animal Crossing. COVID has just served to accelerate this trend of game communities becoming people’s Third Place. Epic Games realized this trend early on and pivoted from the legacy gaming business model of selling the actual game, to offering the full featured game for free and monetizing based on virtual goods within the game itself. This insight has made them wildly successful with most not realizing that Fortnite’s revenue per user ($96) is double that of Google, Facebook, Twitter, and Snapchat’s revenue per user combined.

Dramatic Shifts in Advertising Spend: Viewership of traditional sports is aging dramatically (the average age today of a baseball fan is 57) and younger generations tend to watch eSports in lieu of traditional sports while spending more more time in games. Expect to see new monetization methods in games based purely around advertising as advertisers desperately seek to reach that coveted younger demographic. Advertising dollars have already started entering the space and will grow rapidly in the coming years.

Cloud Gaming’s Rise: Cloud gaming is initially facing a host of challenges, with the technology just not being good enough yet, and the business model not figured out (a lot of publishers push against the subscription business model since you cap your whale customers). Google’s Stadia offering has publicly had a very rocky start as Google wrestles with these challenges. Over the coming years these challenges will be ironed out with 5G adoption strengthening the case for cloud gaming as it goes mainstream. Cloud gaming enables greater scale, turns games into ever-changing live entertainment platforms, and enables infinite complexity in games while removing the hardware constraints.

Apple as a Catalyst: The leaks from Apple are that their first VR/AR headset will be out in ~2022. I expect this will act as a catalyst for VR and AR gaming, and bring these games to a mass-market consumer, just as Occulus brought VR games to the hardcore gamer demographic. Mobile games existed before the iPhone, but it acted as the primary catalyst for mobile game adoption by the mainstream.

Game Infrastructure & Tools: Roblox and others have shown that by providing tools and an environment for creators to create games, amazing things happen. I am very excited at the new wave of startups providing game makers infrastructure and tools for everything from enabling competitive multiplayer to in game economies with unique virtual goods built around blockchain technology.

Deep Tech Trends 2019

SOSV recently put out an awesome look at Deep Tech Trends. Take a look HERE.

Emerging Trend: The Potential Future Role of Virtual Assistants

A fascinating trend I recently came across is the humanization of virtual assistants that seems to be emerging in Japan and South Korea. Line, through its subsidiary Vinclu last year released a holographic virtual assistant called Gatebox that initially seems to have sold rather well. It’s basically a limited virtual assistant that has a 3D avatar in a box you keep in your house that can interact with you. The video below explains it better than words could. The company right now markets it as “living with characters”.

Currently virtual assistants are seen as tools or utilities, but it is a fascinating thought that eventually they might be seen as friends or confidants. The loneliness epidemic, especially among Generation’s Y and Z is very well documented and publicized with data showing 13% of the country has 0 close friends. This leads to all sorts of negative health effects from additional stress, substance abuse, suicide, etc. This might be a technological answer to coping with the issue, especially as the algorithms become better and more lifelike.

I am curious to see how this type of technology/interface develops and especially if AI virtual assistants become a health tool and as common in a household as a television is.

Emerging Trend: Carbon Capture

With global warming from climate change accelerating there are a set of technologies and solutions emerging to hopefully address the challenge. NASA keeps a real time tracker of the effects of climate change here. One of the most direct and more science fiction like that is still nascent but in the pilot phase is carbon capture. Carbon capture is a set of technologies that is able to pull carbon dioxide from the air and store it back underground, hypothetically turning the clock back on global warming.

There are three startups on the cutting edge of carbon capture technologies - Global Thermostat, Climeworks, and Carbon Engineering. Their technology is based around exposing filters to air, that once saturated, are heated to free the carbon dioxide and pump it into tanks or back underground.

All three have working technologies that do this, the challenge right now is to find a business model that makes this a profitable activity. Substantial progress has been made in the last several years with the average cost falling from $600 per ton of captured CO2 to $100 a ton.

Critical to this effort right now are government tax credits that give back up to $50 for every ton of carbon stored underground. The improved efficiency of the technology and federal tax credits has captured the attention of big oil, who can use the recaptured CO2 to increase well pressure for oil extraction.

The next wave of carbon capture includes using the reclaimed carbon dioxide in transportation fuels by mixing it with hydrogen, reducing the carbon emissions of vehicle fuels by up to 20% in the next decade.

Currently the scale these firms are operating on is esmall but as they become profitable the hope is to scale up and start capturing noticeable amounts of greenhouse gases, hopefully slowing down global warming.

Emerging Trends: EMG, the Upcoming Human-Machine Interface

One of the coolest areas of frontier tech that is starting to emerge is Electromyography (EMG).  It’s part of what some firms are coining neurotechnology which is a set of technologies designed to digitize nerve and brain activity. 

EMG is hardware that uses sensors to record electrical activity from muscles.  A more thorough explanation of the science can be found here.  The technology was initially invented for medical applications but lately has been used in computer technologies by using nerve signals from muscle and hand gestures to interact with computers.  On the consumer side this type of technology is being coined intention capture because it interprets electrical impulses from nerves in a user’s muscles. The user doesn’t even need to make the motion but simply think it for their intention to be captured. Seeing is believing as the videos show. 

Two startups that are leading in this space are Thalmic Labs and CTRL-Labs.  The Myo armband from Canadian startup Thalmic labs was on the market for $130 per unit before the startup pivoted and discontinued the product. Reports from users were a lack of use cases and accuracy.  CTRL-Labs technology is still in R&D mode but seems to be able to interpret finer muscle impulses allowing users to type by capturing their intention rather than an actual movement.  They are releasing an SDK and hardware soon. So far the interface is via some sort of control armband, like a big watch band.  However, as the technology evolves its easy to see this shrinking in size and locations available to place it.

Challenges of course remain here, with one of the big ones being humans who have more body fat don’t give accurate reading to the sensors. Another is picking up signals precisely among the muscles in your body.

Most neurotech is to early for any sort of commercial application, but EMG is much closer to mainstream commercialization than the others such as direct brain-computer interfaces. This is because there is no need to break the skin-barrier or insert any sort of chip to create the interface.  I expect to see it talked about in the press and by average people in the next ~5 years.  The market and number of applications for this type of application will also be huge.

I will be watching this area develop closely and am extremely curious as to the applications that are created.