Abstract
The last decade has seen tremendous growth in the use of social media, and online gaming has embraced streaming, allowing for more and more spectators each year. Streaming can generate viewership and ultimately revenue for more accomplished gamers. Individuals can stream live and record their exploits across a variety of gaming experiences, and this provides an opportunity for eSports athletes to turn their hobby into a growing source of income. In addition, elite players can find national or global sponsorships and contribute to charities on the basis of gaming tournaments and worldwide events. The landscape for creating entrepreneurship opportunities is developing over time. This chapter discusses the practical considerations for building a business around game streaming, sponsorship, and competition. The chapter should be beneficial for both beginning and accomplished gamers.
TopIntroduction
Imagine…
You are noisily teleported to an alien derelict in space, and as you become aware of your surroundings you realize that the only way forward involves taking great leaps of faith with your gas thruster and relying on your teleportation device to revive you if you fail at any point. You have been tasked with stopping a new evil that is barely understood by your leadership, and your two companions have just as little knowledge as you do. You each have several innate abilities that you have developed over decades of practice, and you carry three kinds of weapons, all with different types of ammunition that you’re hoping to pick up along your way.
You and your friends represent three archetypes of warrior. The “tank” is there to confront the enemy directly and protect his companions, the “thief” is a master of stealth and accuracy, and the “conjurer” is the magic user and healer of the group. Ideally your strengths will complement one another and your weaknesses will not leave holes, but you won’t really know until the mission is completed. This time you were fortunate to be deployed with people you know, but that isn’t always the case. You’re also fortunate that a commlink connects you for this adventure, because many times they do not. The enemies you encounter may not even respond to your weapons, but you don’t know that either. All you know for sure is that without your success the enemy will be able to make one more assault towards your world and toward everything you care about. They are intent on destroying your planet and your species, and you and your friends must stop them.
Next week it will all happen again, right after reset (for this game, reset is Tuesdays at noon). This is the life of a dedicated gamer.
This chapter introduces the opportunities available to the entrepreneur who has a passion for gaming and gives them the information they need to understand the requirements of the gaming industry and how to be successful as a business owner.
Key Terms in this Chapter
Break-Even Analysis or Revenue: For a particular business model, how much revenue is necessary to cover both basic fixed costs as well as the variable cost per unit facing the firm? After the break-even point any new revenue can start contributing to profitability.
Compulsion Loop: From cognitive psychology, the mechanism that keeps gamers engaged with a game. It involves many design elements that have been created in order to make a player more likely to remain engaged in a game or game system over time, including periodic and hierarchical rewards. See “The Grind.”
Intellectual Property (IP): The legal rights to a particular brand or idea. For example, any game or media involving a certain talking mouse with four fingers would be the intellectual property of that studio. “IP” is also used to indicate a particular character, brand or series of titles. Until recently it was popular for IP holders to serve as game publishers in order to tightly control their brand and intellectual property, although many properties have been farmed out to specialized developers and publishers over time.
BRAND: A player or team’s brand are the images, impressions and reputation that they cultivate in order to build a following over time. The brand can be thought of as a storehouse of value – some things add to it and some things take away from it over the course of the player’s progress. Along with overall reputation, in general, the brand is the most important consideration for professional gamers and their organizations. For an established organization, the brand and its associated value and permanence are often referred to as the “franchise” value of the organization. Ideally, the brand should be separate from individual players or team members or even the managers or owners, but that is difficult to achieve until the team or player has evolved. In eSports, branding is key, and sponsors and viewership will be important in creating a recognizable brand.
Marketing: The business functional area responsible for promotion and advertising and maintaining the outward brand characteristics for the business or franchise. This will involve brand management and development activities and a marketing plan that accounts for sponsorship and positive exposure over time and in the face of competition.
Grind, or The Grind: Within a game, the process of building a character or team’s characteristics such as power, abilities or equipment by repeatedly playing and replaying similar game content is referred to as “the grind.” Game developers often start “the grind” in a segregated area where players are expected to build their most basic characters before moving on to bigger challenges such as player-versus-player tournaments. The grind is an inevitable part of building a character or team, and it must be repeated whenever offered in order to stay competitive. For example, a game may have updates periodically that allow players to move to a more competitive level, but to take advantage of those updates players will have to perform repetitive tasks such as follow “missions” or complete a certain number of “bounties” during routine play. This is a key component of a game’s compulsion loop, or the psychological mechanism that keeps gamers engaged.
Player-Versus-Player (PvP) and Player-Versus-Environment (PvE): Many games have a competitive mode which pits the player against others by skill level or ability level. This mode is referred to as “player-versus-player” or PvP. This is in contrast to content designed to challenge the player again artificial intelligence opponents, or PvE. In games such as Bungie’s Destiny , for example, the computer-controlled PvE content is designed to give the player “the grind” necessary to increase the character’s abilities and status. Once they have built their character up in PvE, the player can then try to excel at the PvP content in a play area called “The Crucible” against other players.
Business model: A firm’s business model is the way in which it creates value for its customers and owners and denies or reduces costs and the influence of competitors and the business environment within an industry.