LA Games Conference Provides a Crystal Ball

The 15th annual LA Games Conference assembled a sage group of speakers and a diverse audience eager to exchange viewpoints and get a glimpse of where the industry is headed.

Here are some of the key takeaways for me.
Looking at the younger gaming demo, Jesse Divnich (Vice President, Research & Strategy at Interpret) pointed out the sub13 year old sector shows a growth in female participation, with the ever present Fortnite showing a 50/50 split. He also highlighted that a “dual customer base” is an important development; parents’ permission is needed for in-app purchases. This is dramatically unlike the prior generation, when the platform and game were purchased by the parents and the kids went off and played. Kids are now showing interest in playing with parents, another generational evolution. Riffing further, Divnich pointed out that parents would not let their underage kids attend a Marshmellow concert, but the latter’s Fortnite concert opens the door for such online alternatives.
Grady Miller (VP of Strategy and Innovation at National Research Group) presented solid data underneath Fortnite’s explosive popularity, mostly about safe self expression and a link to real world connections. That growth has been at the expense of participation in traditional social media like Facebook. We are in the declining era of consoles, which means the fundamental business model will be changing dramatically.
Subscriptions and micro transactions will become dominant. This model cheapens what games are worth, which is what the music business confronted.
Aaron Loeb (President of Studios at FoxNext Games) pointed out that influencers are critical for a certain kind of game, but as a marketing technique influencers won’t be effective for all game launches.
Estimates are that 20% of gaming time is actually people watching, and that number is perhaps higher in Asia. Such a consumption model portends changes in the business and design models as well. When the code is cracked about blending watching and playing the game, much money will be made. Gifting will be important, much like busking in music. The revenue created by intellectual property in games is equivalent to the music or film industries, but games have no back catalog equivalent to classic rock.

Most panel members agreed with the assessment of Travis Boatman (CEO at Carbonated) that there is no plateau in mobile hardware performance, and the greater excitement is the promise of 5G delivery; the bigger pipe will better enable multiple players.
Bringing a capital raising perspective, Delilah Panio (VP, Capital Formation at Toronto Stock Exchange) cautioned companies from going public too soon. But when they are ready, US-based companies can still look north for funding options. She garnered a knowing chuckle from the audience when she referenced Canada’s ‘different’ approach to immigration.

Some other eye-popping data points presented by Ned Sherman (Partner & Leader, Digital & Technology Transactions at Manatt) include:

  • 3 Billion gamers across the globe are projected to spend $180.1 Billion on games in 2021
  • Adult women represent a greater portion of the video game-playing population (33%) than boys under age 18 (17%)
  • 67% of parents play video games with their children at least once a week and 70% of parents feel video games positively impact their child’s life
  • The global esports market will exceed $1 billion in 2019
  • Mobile gaming revenue is projected to top $100 billion globally by 2021
  • China alone accounted for more than one-quarter of all global game revenues, reaching $34.4 Billion in 2018

 

 

 

 


Brad Auerbach has been covering the media, entertainment, travel and technology scene for many years. He has written for Forbes, Time Out London, Village Voice, LA Weekly and early in his career won a New York State College Journalism Award.

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