A rocket launched into the sky
There are still many who think that video games are a pastime especially for teenagers, a pastime that is sometimes harmful to content, addiction and incitement to antisocial behavior.
In the collective perception, the idea is still strong that video games are to traditional media as comics were to books, that is, a minor sector of purely popular culture and mere pastime. Nothing further from reality.
Today video games are a rocket launched into the sky. They are the media sector with the highest rate of creativity, invention and experimentation. They are the mirror of media in cyberspace, a place where all sylo compartmentalisation between media and roles is erased.
For example, the distinction between author and user will disappear because the technological medium, with its artificial intelligence component, will place them on the exact same level of hierarchy with respect to the content.
That's a good thing, except that there's always a design flaw in these promising innovations.
… to new galaxies
It can already be said that video games represent the perfect intersection between content and new technologies, that intersection that the historical sectors of the media are struggling to find or barely reach after a difficult and painful journey, as happened to music.
Even as an industry, the video game industry is second only to the television business. In the US, the leading market, with its $160 billion in revenues, has largely outpaced established industries such as music, movies and books.
In 2010, the revenues of the video game sector did not exceed 20 billion dollars. In 10 years it has almost tenfold in value.
There is no doubt that the video game is not only displacing other forms of entertainment and pastime, but it is doing much more. The feeling is that he is re-designing the relational model between people and between things as a whole.
At least that's the thesis of Ruchir Sharma, chief global strategist at Morgan Stanley, which he set out in a contribution, People Aren't Reading or Watching Movies. They're Gaming, on the op-ed pages of the “New York Times”.
We follow Sharma's reasoning which comes from one of the best positioned observers to understand the trends of the economy and society.
The push of the pandemic
Even before the pandemic and lockdown, video games were fast becoming one of the world's favorite pastimes. But when live entertainment stopped, virtual entertainment took off.
Weekly box office receipts in the United States have plunged at least 97 percent since April as video game revenues have risen more than 50 percent.
Thanks also to the diffusion of broadband, which allows for the development of a video game on mobile phones, the global revenue of the gaming sector has soared, from less than 20 billion dollars in 2010 to 160 billion dollars in 2020.
The enormous potential of 3D
But video gaming is doing more than just tipping the balance between various forms of entertainment. Thanks to the three-dimensional digital environments of the latest generation of games, people can start interacting freely, developing contents and transmitting knowledge in totally unusual ways.
While built by creatives and developers with a playful purpose in mind, these platforms are reshaping the future of the virtual economy — indeed, the future of the virtual world.
There are already significant examples of this use of video game platforms.
“real” virtual environments
During the lockdown, gaming platforms have turned into venues for all kinds of events. Experienced teachers have held online classes where their students are already spending a lot of time, such as game streaming platforms such as Twitch (purchased from Amazon) and Discord.
People have had beach weddings through Animal Crossing (Nintendo) and concerts in Fortnite.
Students from the University of Pennsylvania, the University of Chicago and other universities have built 3D replicas of their academic environments within Minecraft, and some have hosted graduation celebrations there.
The freemium model
These 3D environments are great business. Consider Fortnite, made by Epic Games. Fortnite uses the "freemium" model, which has long been the dominant business model of this sector. A difficult model to implement, but if it works it can become a gold mine.
In the freemium model, users can enter the 3-D world of the game for free, but once inside, to proceed beyond the first stage, they must purchase virtual accessories - such as equipment, clothing, dances, even branded products from external suppliers such as National Football League.
Fortnite had $1,8 billion in revenue last year, most of which came from sales of virtual goods to its more than 350 million registered players. The game is experienced as a day of shopping in which consumers move seamlessly between physical and virtual commercial spaces.
The metaverse
Aware of the threat posed by game companies, internet giants such as Apple, Amazon and Google have walked over into what is sometimes called the "metaverse". It is a term derived from the 1992 science fiction novel Snow Crash by Neal Stephenson, which depicted the characteristics of a parallel online world.
The metaverse was conceived by Stephenson as a sort of virtual reality shared via the internet, where people represent themselves in three dimensions through their own avatar.
Microsoft has already bought the company that pioneered this type of virtual reality, Mojang Studios, which created Minecraft.
Internet giants have the resources to absorb the technology of the best start-ups developing products in this area.
Applications
Smartphone applications are taking the lion's share. Three-quarters of the $120 billion worth of mobile application market is made up of game apps.
It is natural that strong competition arises between this sort of frenemy: on the one hand the managers of the stores where applications can be downloaded, such as Apple and Google, and on the other hand the game app developers who use these stores as the main channel for distribution.
It's a sign of the times when a company brave enough to take on the tech giants is indeed a game development company, Epic. After Apple and Google banned Fortnite from their app stores for bypassing the 30% commission for purchases through the AppStore and Google Play.
Epic took legal action, calling the fee a "predatory" tax.
Room to grow
The tech giants aren't as invincible as they seem. At one time IBM, Intel and Microsoft were seen as too big to successfully challenge. In fact they weren't. The virtual world is young and rapidly evolving. No company can claim a permanent place at the top of it.
Many game companies have reached the stage where Google and Facebook were a decade ago. They attract millions of users but still not earning for every registered user. In other words, they have plenty of room to grow.
These new companies often have powerful powers behind them. Chinese tech giant Tencent, for example, holds stakes in companies that own 7 of the top 10 most profitable games, including Epic.
A prospect that can scare
The prospect of a virtual world built on gaming platforms can be shocking to those who view video games in a less than positive light; at best, as a waste of time and, at worst, as a harbinger of antisocial behavior.
But this is an outdated view. There is evidence showing the beneficial effect of video games, such as improving perception of space, building motivation and developing new learning patterns.
What the game will likely do is take the 2-D experience and add a richer, more immersive third dimension.
The result could be the complete construction of "virtual worlds" in which people can work, play, study and shop more directly through greater social interaction, creativity and innovation.
