Epic Games acquisition of Houseparty and the future of collaboration in gaming
Epic Games, owner of Unreal and Fortnite, just acquired Houseparty, a video social network. Why have they made this acquisition, and how is this going to change how game developers and the ecosystem look at communications in gaming?
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Epic Games announced its acquisition of Houseparty recently (or more accurately, Houseparty announced Epic Games acquired it). This is an interesting acquisition. Houseparty is a communication platform, allowing people to conduct group video calls on their smartphones, while Epic Games is… a gaming company. Most widely known for Fortnite these days. What exactly does that mean and how will this playout in the industry moving forward?
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I think it was about 12 years ago. I worked at a large corporate, doing my product management work there. In a chat I had with a colleague, he stated that his kids are playing online games and in parallel talking through Skype with the friends they are playing with.
Times have changed since then. Gamers often resort to Discord instead of Skype, discussing games before, during and after they play.
WebRTC and gaming
Voice (and video) communications has become part of the gaming experience, and in part, this has been driven by a technology called WebRTC. Simply put, WebRTC is an open source technology that is now embedded in browsers and can also be placed inside any kind of an app on any kind of device. At its heart, it enables sending and receiving voice, video and arbitrary data in real time. Discord and Skype? They use WebRTC today as part of their technology stack.
Other interesting uses of WebRTC in gaming?
Google Stadia - Google’s cloud streaming platform that enables people to play games on their devices without installing them locally by rendering the game in the cloud makes use of WebRTC. In a recent interview about Stadia, Majd Bakar stated:
“It's compression and it's networking, so we are piggybacking on a lot of the networking work done that has been done by Google infrastructure: BBR, QUIC and WebRTC are the foundation of what we're building on top of, so we can provide not just low latency distribution of the IP packet but also provide feedback to the source [...]”
Not WebRTC, but relatively similar technology comes from HQ Trivia an online trivia game show where questions are broadcasted in realtime to a large number of players. Many of HQ Trivia’s wannabe’s ended up using WebRTC.
Then there’s the genre of watching people play games. Twitch is the leader here, but there’s also Mixer by Microsoft. Mixer started with low latency broadcasting using WebRTC.
These together cover a wide gamut of interactions while playing games:
Gamers playing a game streaming from the cloud (a-la Stadia, and to some extent HQ Trivia)
Gamers communicating with each other while playing (Discord, Houseparty)
Viewers watching gamers and even interacting with them in real-time (Twitch, Mixer)
Voice Communications and Gaming
When it came to adding voice communications to games, there were 4 paths a game developer could take: in-house DIY, use a third party, use the platform’s option or rely on external services.
In-house DIY
Companies could theoretically develop and embed communication technologies on their own into their games. The main challenge with this approach though, is that doing so requires a lot of effort and technical skill. Especially once you grow in scale.
For most game developers, communications is secondary. It isn’t the core of their game, but rather part of the overall experience. In the same way that game developers rely today on frameworks such as Unreal and Unity (more on these later), they’d probably rather rely on a third party for their communications than develop and own that piece of technology. At least for most of them that’s the case.
Those who want to take that route can still rely to some extent on third parties such as Mumble, an open source voice chat server for gaming.
Use a third party
Game developers can decide to use third parties and integrate an external communication SDK into their product.
There are a few alternatives available in this category, the two most notable ones are Vivox and Teamspeak. While Teamspeak offers a self hosted server alternative for adding voice to games, Vivox is a managed cloud platform that does roughly the same. Vivox has also been the more dominant player.
It is important to mention here that Fortnite (=Epic Games) has been a publicly known customer of Vivox - it appears first in most of the marketing and sales material of Vivox. Just look at their partners page:
Use the platform’s option
XBox and PlayStation both offer voice chat capabilities. The challenge here is that most high end games end up on both platforms, and having committed to one platform or another for communication offer a rather disparate experience.
Think of it as a messaging system that works only on one smartphone. Something like… Apple’s iMessage. Only that it wouldn’t shift to using SMS when sending a message to a friend with an Android device - it won’t be able to communicate with an Android device at all.
With gaming, that’s crossplay - the ability to play a game across multiple platforms. Game developers want crossplay, in order to get their game title in front of a larger audience as possible. Console makers hate it, as it reduces the lock-in factor they have on both players and game developers. Many (most?) games today offer crossplay, but what do you do with the communication part of it? Gamers shouldn’t think about the console or device their friends are using when they want to play and communicate with them.
Rely on external services
The last alternative is the “default” when it comes to games. If you don’t offer any in-game communications, then your players can still go and use Skype. Or Discord. Mostly Discord today.
You won’t be part of the experience, at least not directly, but players will still be communicating.
The success of Discord also led Steam, a gaming distribution platform to add voice chat to their SDK.
Unreal and Unity
The two most popular gaming engines today? Unreal and Unity.
You can call these two platforms direct rivals. Developers will end up using one or the other, and as these platforms want to grow, their own intent is to have as many developers use their own platform and not the competitor’s.
Unreal is owned by Epic Games.
Unity acquired Vivox earlier this year.
Fortnite is an Epic Games game. And is undoubtedly using Unreal. But it also uses Vivox. Which is now owned by Unity. A direct competitor of Unreal.
Epic Games couldn’t continue in this way and let Unity own the voice technology used by Fortnite, and in many ways, let Unity know the popularity and the trends in popularity of Fortnite (and other Epic Games titles) with its players.
It had three alternatives in front of it:
Develop the technology in house. A long and risky proposition, especially at the size and level of engagement they already have
Find a new partner to replace Vivox. Discord maybe. But then, a potential future acquisition of that partner would leave them stranded again
Acquire someone that has the technology, which is what the acquisition of Houseparty is about
It is important to remember that Epic Games has decided last year to go its own way and own its own destination already. It has started competing directly with Steam by introducing its own games store and is decided to bypass Google Play when launching Fortnite for Android. Why? Mainly to forgo the 30% revenue share that Google and Apple extract from their stores. It could do that with Google’s Android, but not with Apple’s iPhone.
Houseparty’s path with WebRTC
Houseparty rose out of the ashes of Meerkat. Meerkat was a live streaming service that was popular on Twitter - right until Twitter decided to block Meerkat and launch its own competing service - Periscope.
Houseparty was launched as a mobile group video chat type of a service instead of the Meerkat live video streaming service. To get that done, two decisions took place @ Houseparty:
Use WebRTC as the underlying technology
Not own the technology, and instead use a third party
The third party that was used by Houseparty was TokBox, now part of Nexmo. As time went by, and the service grew in popularity and use, Houseparty decided the need to own that technology. They built out the team and brought the knowledge and infrastructure inhouse.
In the past year, like other social networks, Houseparty has been doubling down on features that relate to gaming. The three announcements that come to mind include:
Desktop browser support - Houseparty went from a mobile only service to mobile first with native browser support on PC machines. It started by offering a Mac app and later a browser based experience. This hints on possible future Twitch/Mixer-like live broadcasting capabilities that might be in the works, as they make sense for gamers
Heads Up - in collaboration with The Ellen DeGeneres Show, Houseparty launched the heads up social game inside its own app. This isn’t Fortnite, but it shows an attempt to marry games with the social network
Screen sharing - both mobile and desktop is something that was announced by Houseparty a few months back, when they stated a strategy shift towards games and media
The next chapter of Houseparty will be written along by Epic Games, and gaming will most definitely be an important part of it.
Epic Games + Houseparty
The need to ditch Vivox and move to its own technology, led Epic Games to search for an alternative. It has found that in Houseparty.
Why pick Houseparty and no other?
Houseparty has voice and video communication technologies that run and operate at scale. Epic Games needed to own proven technology that already runs at scale
Houseparty has both voice and video capabilities. By having video as part of the offering, it lets Epic Games leap ahead of the curve and what Unity+Vivox has on offer today (which is mostly voice)
Houseparty used to be Meerkat, a live video streaming service. While the tech has changed since then, the understanding of that market, the behavior of it, still exist at Houseparty. It will enable Epic Games in the future offer its own Twitch/Mixer experiences of streaming players online
Houseparty already has its own scars to show. It has switched from using TokBox to its own technology when it already had scale. This is akin to replacing an engine of a Formula 1 car while racing at the World Championship without using the pitstop for it. Houseparty knows how to do that effectively and can repeat that feat by switching Vivox off while keeping Epic Games running
The replacement isn’t going to be an easy one. To that end, Epic Games will first need to fill in the missing gaps in the Houseparty technology stack. Mainly, a bit more focus on its voice only capabilities and the addition of 3D spatial audio support. In essence, it needs to develop Houseparty to have feature parity with what it uses from Vivox today.
What’s next in communications for Epic Games?
Here are several quick thoughts/suggestions of where Epic Games can take Houseparty:
Replace Vivox. An obvious thing to do, and in a way, Epic Games was forced to take that route by Unity
Become Discord. It can (and should) start offering its players a platform that offers the whole gaming experience. It should let players meet and discuss the game before, during and after they play. This can then be further monetized
Add voice and video communication capabilities to its Unreal engine, letting third party game developers use the Houseparty technology as well. For a price of course
Push their gamers towards using Houseparty as their collaboration space, growing the size and engagement on Houseparty while increasing Epic Games stickiness with its players
Develop more games targeted and suited for a Houseparty experience, like the Heads Up! partnership with The Ellen DeGeneres Show
Introduce live broadcast capabilities, which is where the recent mobile screen sharing feature of Houseparty can come in handy. This can get them into the domain of Twitch and Mixer
Use the technical experience at Houseparty to build their own cloud gaming service, competing with Google Stadia and Microsoft xCloud
Communications in/with/around gaming is HUGE
Which is why we see companies big and small trying to figure out how to fit communication technologies such as WebRTC with games. This trend isn’t specific only to gaming - it happens across many market segments where WebRTC gets adopted to support new use cases.
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