Sunday, October 9, 2016

Birth of an Industry - Only in America

I’d like to depart from politics for a day.

Last week, I went to a large conference in San Diego, where my company had a booth. What's interesting is that it was for an industry that didn’t even exit three years ago. I mean nothing, zip, and now it’s huge. If you’re a regular reader of this blog, odds are you don’t even know it exists.

I’m talking about game streaming.

What, no idea what that is? Allow me to give you the brief history.

What if someone had come to you, say, four year ago, and said they had an awesome investment opportunity for you: they were starting a website where you could go and watch other people play video games live.

I’ll tell you what you would have said: move along. Next idea, please. I would have reacted the same.

Well, we all would have been wrong. Really wrong. A billion dollars wrong.

There is a company called Twitch that did exactly that. A year and a half ago they sold to Amazon for a cool billion. That turned out to be cheap, and over the last couple of years, an entire industry has grown up around the idea. It turns out that people, mostly young and male, love watching video games. Many of the more popular “streamers,” the people who send live streams of their games to Twitch, are minor celebrities and make six figures. I saw some of them at the conference, and people were lined up to get selfies with them. 

Nearby, there were endless rows of booths with specialty streamer products like microphones, chairs, and endless accessories. Shaq and Snoop were there, avec entourage, playing in a “celebrity vs. streamer” match.

The way it works is that “streamers” start playing a game of, say, Call of Duty, and upload the action in real time to Twitch. Viewers can watch and type in comments. The streamer can be seen and heard by everyone in a little box in the corner. It looks like this:

Viewers can also make spontaneous donations to the streamer, to which you no doubt say, pfft!, who would do that?

A lot of people, as it turns out. The largest donation to date is $45,000. What do you get? Nothing, really, except maybe a shout-out from the streamer. Seven seconds of derivative fame.

No one over maybe 35 can possibly get any of this. I don’t, and I’m in the industry. 

Here's how much I don't get it. I went to an “unboxing” of a new game, called Breakaway, in a huge theater where I watched as the game was “revealed.” Two thousand people shrieked and whooped around me with every detail. Two teams were introduced on stage, to much fanfair. They then competed in the first ever match, which played out on a huge screen. 

This was a good test because like me, none of the people in the theater were familiar with Breakaway. We were starting on equal footing, and I made a good faith effort to follow the action. Here’s what I saw: eight characters flitting around in all directions with light and objects flying everywhere faster than I think anyone could reasonably process. It was like watching chaos, and I could only follow small portions of the action, missing important developments elsewhere.

Well, apparently my visual processing is wanting, because the shrieking and whooping around me continued. Sometime it would reach audible crests when something happened that I invariably couldn't make out. I'm officially on the wrong side of the digital divide.

If you want to see the whole event, it’s here (the gameplay is towards the end): 

You’re probably wondering what the heck I have to do with any of this, so allow me to explain. If you’re not interested, now would be the time to move on to the Drudge Report.

My new company, LiquidSky (I am co-founder), does cloud computing. Specifically, we let you rent a high-performance Windows PC in the cloud which can be accessed from any device. Got a clunky old laptop? No need to replace it, we turn it into a badass computer with monster bandwidth. Simply use your clunker to connect to your “SkyComputer,” and we stream the experience to you fast enough such that you can’t detect any latency. It looks and feels like your own computer, but it’s not.

We think this will be a big deal, generally, because we’re breaking the model of buying a new machine every few year as your old one obsolesces. We let you keep everything up there, in the cloud, including your files and programs. It’s pretty cool, I gotta say.

But for gamers, it’s particularly cool. Every new game requires ever more demanding hardware specs, and gamers have trouble keeping up. A good gaming PC can run $2,000, but then it’s struggling to keep up a year later. With LiquidSky, gamers and others never need to update their hardware again. Heck, you can even play Call of Duty on a phone, if you get our app.

At our booth, we had two laptops, loaded with two different high-end games, which were connected to our nearest servers in San Jose, which was 500 miles away. The gaming experience was flawless, and most people had trouble believing it was possible. One even looked under the table, thinking we were hiding a server there.


Anyway, it was an interesting experience. I’d call it a subculture, but that would be unfair. It’s too big. Gamers spent $91 billion last year. Did you know that more people watched the League of Legends Championship Match last year than the World Series?

Yup, it’s their world now.

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