Wednesday, November 20, 2019

Dungeon Dragons and Netflix.

Virtual economy is an emergent economy existing in a virtual world, usually exchanging virtual goods in the context of an Internet game. Now we are talking of an economy worth $160 Billion that does experience the dynamics of real economics. I mean, the prices of items do fluctuate as per the demand and supply convention, have an exchange rate, and even experience hyperinflation (Diablo III Auction House). We are talking about the items like a special sniper available for a price in games like Counter-Strike, skin, stickers, or surf boost that you may get while playing Subway surfer. People are buying these stuff with real money. Virtual markets for In-game goods for a 2018 estimate is roughly at $ 45-49 Billion while the Global box office collection for that year was worth $ 41.1 Billion(Just to put in perspective). Well, that’s how Pokemon Go made $795 million of revenue in 2018 even though you didn’t pay a cent for downloading it. (Freemium Model) 

Recently I came across a group that had two exciting opinions on Reddit: 
1. Disney Plus is not a competitor to Netflix. If a person wants to stream House of Cards, Stranger things, or something similar, he will go for Netflix. Period. It's more about the content than the platform. 
2. Twitch (Video live streaming service) is a real threat to Netflix. An average twitch user spends 95 minutes daily on the platform, keeping you hooked. That’s what is making these streaming platforms a kind of worried. (Twitch was acquired by Amazon in 2014 for $ 970 Mn)

Games are changing the landscape. Google Stadia got launched on November 19, 2019. The concept of playing heavy games right away from your chrome browser without downloading the actual content (size of GBs) irrespective of whether you have an i3 machine or i5 is very fascinating and a real deal. Google is also exploring further ways to reduce latency, using an idea called "negative latency," which involves prediction of user input through various means so that any apparent network lag between controller and game response is minimized. The service has received mixed reactions, but it will get improvised for sure, given that expertise that Google does have with their software arm. 

The gaming industry is already making a lot of waves in the contemporary world. China has announced a curfew on online gaming for minors to curb video game addiction. Under the new rules, gamers aged under 18 will be banned from paying online games between 10 p.m. and 8 a.m. On weekdays, minors can only play for 90 minutes, while they may play up to three hours per day on weekends and public holidays. A heavy blow to Tencent, perhaps. 

Though a lot of behavioral science goes in behind the scenes. Now we all know that you never purchase any kind of item with real cash. You buy virtual coins/gold bar at a certain exchange rate by paying real cash. And then with those coins/gold, you purchase the in-app goods. When you pay cash for something, you see it leave your hands, and you get a very immediate sense of depletion, but while paying for cards, that’s already saved in your google account, you tend to spend more in comparison to real cash for the same utility and item. Also, developers do analyze the data about the time stamp when the users closed the application or game. The developers try to answer these questions: Did the user quit because the level was difficult?  They are unable to kill the dragon or what? The pain points are analyzed, and developers then may incentivize you to keep on playing by offering that the entire level may be skipped by paying this amount, or you may unlock a special weapon at this stage. 

Some of the other facts are: 

a.    2018 DOTA 2 Int’l prize money was $ 25.2 Million, and that puts it ahead of Daytona, Tour de France, or even US Open (Golf) in comparison to prize money.
b.     Global e-sports audience is approaching 500 million by the end of FY202
c.      According to TwitchTracker, 560 billion minutes of Twitch was watched over 2018 – rising from 255 billion minutes in 2017 – an increase of 58%. And that’s too when the site is banned in China.

The bottom line is this simple line that Mr. Ben Gilbert used in his article on Business Insider. 

“I've been playing games on Google's ambitious new Netflix-like game service for the last week, and it's clear the service isn't ready for primetime.” 

So if a person got hooked, he would be less switching for media content. Right?  And if he got caught again, would he buy all those Predator, Razor, ROG series? 
And I would conclude by quoting,  “Are you getting it?”


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