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Each week I compile a gaming industry insights newsletter that I publish broadly. Opinions are mine.
Hi, my name is Kenny Liu, and each week I compile a gaming industry insights newsletter that I publish broadly. Opinions are mine.
See more or subscribe at: https://tinyletter.com/kliuless
A Decade of LoL
Yesterday, Riot celebrated a decade of League of Legends by announcing multiple new titles
At the same time, Netflix also released League of Legends Origins, a documentary following the game's ascent and dominance
During my tenure at Riot, there always seemed to be this maniacal obsession over delivering "player value," a concept that was likely originally indoctrinated by founders Marc & Brandon, but I personally had always found it to be nebulously difficult to quantify
However, today, after reading Matthew Ball's essay, Disney, IP, and "Returns to Marginal Affinity", I instantly drew parallels between Disney and Riot, and wanted to share this unique approach of reframing "player value" aka "marginal affinity" into tangible business outcomes:
Businesses based around storytelling franchises (rather than “movies” or “media”) excel based on an intangible sort of operating leverage. Because it doesn’t actually “cost more” to make someone “love your content more”, but the “value of this love” is substantial, companies like Disney benefit from enormous “returns to marginal affinity”. And the more opportunities to exploit this love – and the better you are at doing so – the greater the leverage. Today, Disney leads on both. [...]
Even the smallest and hardest to quantify elements of a creative product will have a powerful effect on affinity – affinity that spans time, products, and failures. And it costs nothing. As a result of this leverage dynamic, a 5% increase in “affinity” can, say, drive 10% more revenue and 15% more profit. Consider, for example, that while Disney’s studio revenue has grown over the past several years, its operating income has grown far faster. The leverage is profound. [...]
So, the right frame for Disney is not really an “IP” play, but an “affinity leverage” one. And this dynamic goes both ways. Marvel Studios has clearly overperformed forecast “affinity” over the past decade and the results have been extraordinary. [...] For similar reasons, falling short of anticipated affinity can become expensive quickly. Earlier this year, Disney admitted that its newest theme park attraction, Star Wars: Galaxy’s Edge, had underperformed. [...] And as films, like theme parks, are mostly fixed costs, the results of declining affinity are significant [(e.g., Episodes VII & VIII, Rogue One, Solo).]
One of the challenges here is that just as affinity picks up momentum, the reverse affect occurs, too – which I call “accrued disappointment”. Whether it’s a movie, album or book, unit sales in media are typically referendums on prior releases. In 2016, for example, DC boasted about the irrelevance of critical reviews and exit polling after Batman v. Superman (27% Rotten Tomatoes, B CinemaScore) and Suicide Squad (a barely known franchise in the DC universe that also earned a 27% and B) opened to massive $166MM and $134MM grosses. Two years later, DC’s signature film, Justice League (40%, B+), cratered with $93MM despite starring the three most popular DC characters (Batman, Superman and Wonder Woman). We saw a similarly precipitous decline with Fox’s X-Men. [...]
A good storyteller must constantly challenge and shift audience expectations – otherwise there’s no surprise. But to subvert, you have to then delight by an equal (if not greater) amount. And the more (or longer) you subvert, the more precarious the execution and the more endangered the affinity.
Using Ball's insightful perspectives on Disney now as a lens through which to evaluate League's 10th anniversary announcements, Riot's big reveal is an incredibly bold, but highly levered gamble. Time will tell as their titles release one by one whether the fun of each game's play can actually match Riot's grand publishing efforts, and whether "player value" ultimately translates to affinity leverage or accrued disappointment
Business
Podcast interview with Jim Collins, famed author of books Built to Last and Good to Great
Ex-Bungie chief’s ProbablyMonsters raises $18.8 million for two triple-A game studios
NorthEdge Capital acquires Curve Digital parent Catalis for £90m
Hiro Capital is "determined to fill the post-seed gap" with new €100m fund
Creative England launches new £24m investment fund
Esports
Meta Games raises $2 million for esports mobile games
Millennial Esports acquires YouTube channel LetsGoRacing
Nerd Street Gamers raises $12 million for building esports facilities
Layoffs
Sony Interactive Entertainment lays off dozens in UK and US
Bendy and the Ink Machine studio Kindly Beast lays off just under 50
Daybreak Games lays off multiple employees in company 'realignment'
Art / Design
Mark Brown: Pac-Man | Design Icons
How Google designed its Stadia game controller
Killer Queen Black had to adapt to leave the arcade
Telling Lies - Making a mechanic out of scrubbing video
Matthew Ball: Why Fortnite Went Down During the Season X Finale
David Gaider’s Summerfall Studios is staging a musical in video game form with Chorus
Playing Your Song: The Evolution of Dynamic Music in Games
Eight essential ways to use sound in video games
The real buildings that inspired Control's Oldest House
Cross-Platform / Multi-Platform
Google Stadia will officially launch on November 19
Roblox’s masterplan to enable young game devs to make $50 million a year on its platform
Apple starts selling Microsoft’s Xbox controller after adding support in iOS, macOS, and tvOS
PC / Console
PlayStation 5: The 4 features that matter (and 4 that don’t)
Warner Bros. signs publishing deal with Hitman dev IO Interactive for new game
World of Warcraft’s next big update adds new races and long-requested changes
Steam's 'Remote Play Together' will introduce online support for all local multiplayer games
Mobile
Google officially reveals $799 Pixel 4
Sensor Tower: Lineage franchise bags over $4 billion on mobile
Sensor Tower: Global App Revenue Grew 23% Year-Over-Year Last Quarter to $21.9 Billion
XR: AR / MR / VR
Google discontinues Daydream VR
Opinion: The problem with PC VR is the PC
Microsoft Filed Patent for a Virtual Reality Mat
Scientists Develop Artificial Skin That Allows You To Feel In VR
Apple’s AR plans may come to life after acquiring iKinema motion tech
Niantic announces Wayfarer program to improve in-game play locations
Gameboard-1 digital board game console launches Kickstarter campaign
Universal’s free VR Holoride features Frankenstein’s bride
Tech / Entertainment
Matthew Ball: Hollywood’s Video Game Blind Spot
Arm partners with Unity to make 3D run everywhere
Atomontage raises $1.95 million for microvoxel-based 3D graphics
Tinder’s interactive series ‘Swipe Night’ gives users new ways to match
Ubisoft Planning Animated TV Adaptations of Popular Game Franchises
Bloomberg: Facebook's Libra Loses Mastercard, Visa in Cascade of Exits
SEC Halts Telegram’s $1.7 Billion ‘Unlawful’ Token Issuance
Stratechery: Google and Ambient Computing
Overtime
The First Video Game
The Best Video Games of 2019 (So Far)
The 30 best video games of the decade, ranked
German regulator begins process to ban Coin Master game
Giphy Arcade lets you play, remix, and share GIF-based ‘microgames’
Analogue Pocket offers a modern way to play and make Game Boy games
Bloomberg: Now There’s a Degree Designed for Those Who Want to Become an Influencer
HBR: Entrepreneurs Who Sleep More Are Better at Spotting Good Ideas
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LinkedIn: @kliuless
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