Level 63: Is a Ban On The Horizon?

A potential ban for one of gaming's biggest backers, problems with underpaying at Blizzard, and Ninja's Hollywood aspirations.

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📜 This Week’s Notable News

First TikTok, Then What? The tech industry has been closely watching the fate of social media platform TikTok ever since Donald Trump announced his intention to ban the app a few weeks ago. Trump claims that TikTok’s Chinese parent company, ByteDance, is unlawfully gathering data on U.S. citizens and presents a national security risk. Taking a step back from the situation, there are some massive implications on the gaming industry if this ban actually goes through.

Holding up a mirror to TikTok and it’s Chinese parent ByteDance, we can draw quite a few parallels with gaming multi-media giant Tencent and its myriad of investments across the U.S. Gaming industry. To put it into perspective, Tencent owns at least 5% of the following gaming-related companies: Riot Games, Supercell, Epic Games, Snapchat, Ubisoft, and Activision Blizzard. On top of that, they have deep investments across the entire mobile gaming industry, and are heavily financing services like Discord. In a world where the U.S. government is concerned about the growing influence on Chinese investments into the economy, Tencent, as a Chinese based company worth well over $500B and responsible for some of China’s biggest messaging, music, and gaming apps feels like an obvious target. We could theoretically be looking at a complete divestiture of the major owner of companies behind games like League of Legends and Fortnite. 

If we look over to countries like India, the impact is already being felt. The country recently banned 59 Chinese apps, including TikTok and the massively popular mobile game Clash of Kings. With the country reportedly looking into more bans, which include the likes of PUBG and other titles, it's not hard to imagine a world without Tencent-backed titles isn’t far away.

To be realistic, the likelihood of this happening is minimal - it would require an exercise of power from the U.S. government that would set a very dangerous precedent, and no one in the White House is exactly pinning poor rally turnout on video games like they are TikTok.  What is much more feasible than a ban, however, is regulation that would pressure these companies with restrictions and fines that open the door for U.S. companies to steal market share. TikTok is a perfect example of this, with Facebook/Instagram launching a very similar product called Reels in the midst of all of this legal uncertainty. A little competition isn’t bad, but losing one of gaming’s biggest backers wouldn’t exactly be great for continuing to build an industry already dominated by questionable monetization tactics like loot boxes.

💡 Industry Content

Gaming’s Pay Disparity: This week employees at World of Warcraft developer Activision Blizzard organized an internal, anonymous document highlighting just how large the pay gap is between a majority of the company’s employees and its senior leadership. The details are stark: Blizzard CEO Bobby Kotick is making nearly $30M a year while many employees are making minimum wage. With all the news in the last few months around poor company culture and harassment, it's disappointing to see another industry leader taking advantage of its employees. Wage inequality is a massive barrier to creating an equitable industry and work environment, and companies like Blizzard will need to take a hard look at how they're taking advantage of one of the world’s most passionate communities.  Link

At the Forefront of Artificial Reality: Niantic COO Megan Quinn has one of those resumes that you dream of: helping build Google Maps, leading Product at Square, and investing in companies like Slack, InVision, and Handshake. Sufficient to say, she knows the tech industry pretty well. In this rare interview with Protocol, Quinn discusses how Niantic, creator of AR games like Pokemon Go, have been fairing in the times of COVID-19, and what she thinks about the future of Artificial Reality. Link

Alibaba’s Foreray into Gaming: This idea of a gaming as part of a larger “super-app” keeps appearing across our Twitter feeds. Companies like Tencent, and most recently e-commerce giant Alibaba (highlighted here) are making investments to centralize their gaming experience as part of a larger business ecosystem. The billion dollar question still remains: Is something like this repeatable in Western Markets? If a company like Microsoft or Amazon can use gaming (i.e. Twitch and Xbox) as an entry point into their larger businesses (Windows, Azure, AWS) without setting off anti-trust alarms, gaming investments and integration into big tech will happen much faster than we ever anticipated. Link

🎮 Fun & Games

Spiderman (Sponsored by Playstation): Earlier this week the media got its hands on a first look at Marvel’s Avengers,  a superhero themed fighter set to release next month on Playstation and Xbox. The game looks decidedly average, which is disappointing given the serious momentum superhero content has thanks to the Marvel Cinematic Universe. What is interesting, however, comes in the form of a press release posted earlier this week related to everyone’s favorite web slinging superhero, Spiderman, and his relationship with the Xbox version of the game. Namely the fact that he isn't in it. It makes sense that a Sony owned console, like Playstation, has exclusive access to Sony-owned IP, like Spiderman, but it just feels a little catty on Sony’s part to not include the character on both consoles. So much for the “console wars” being over.  Link

Ninja’s Hollywood Aspirations: Tyler “Ninja” Blevins has become the poster child of video games. Like it or not, the 29 year old blue-haired content creator has leveraged his massive audience to chart new territory for gaming; including exclusive brand deals and partnerships with valuations in the tens of millions. It’s becoming abundantly clear gaming has been cemented as a piece of modern popular culture; but what does that mean from someone like Blevins, who commands the attention of millions of people on a regular basis? In this piece, Blevins outlines his grand aspirations, a return to live streaming, and even some potential Hollywood work in his future. Link

The Moral Quandary of Leaks:  Nintendo has historically been one of the most secretive game developers in the world. Their obsession with polish and perfection has ensured that nothing reaches the hands of consumers if they don’t want it to. Which is why it was so surprising to see 20+ years of Nintendo game data leak to the masses a few weeks ago. The depth of content is clearly not something Nintendo would just hand out to consumers or media. You have to wonder, is consuming content about your favorite Mario game really worth it if you have to break the law to get it in the first place? Link

The Game Design Behind Valorant: Counterstrike put the tactical FPS-genre on the map, and has been defining what “good” looks like for the last 20 years. But with the release of Riot’s recent FPS Valorant, the traditional formula is getting turned on its head. New mechanics like the ability to shoot through walls and strategic map design have led to play experiences that feel fresh and new. Check out game developer and start-up founder Alexander Mistakidis’ full break down on what Valorant does right (and wrong) from a game design perspective. Link

😎 Other Cool Reads

The Problem with Moral Ambiguity in Gaming: In the modern era of gaming the idea that heroes and villains “aren't so different” is a concept that’s played out countless times, most notably in series like Bioshock and The Last of Us. But in an increasingly polarizing world, what value does making characters morally ambiguous even have? In this piece for Polygon, author Khee Hoon Chan proposes that there’s more to be learned from placing objectively “good” characters into morally questionable situations than vice versa. Link

Twitch’s Problem with Underage Streamers: Twitch is no stranger to policy problems. The live streaming platform has a history of inconsistent rules, opaque explanations, and questionable favoritism. In this expose from Wired, author Cecilia D'Anastasio outlines Twitch’s most recent unchecked policy: underage children streaming to the world. The clear predatory risk of letting an eleven year old stream online feels somewhat obvious, so why doesn’t Twitch have an answer here? Link

📊 By The Numbers

Microsoft made a lot of money off gaming in the last twelve months: $11.58B to be exact, up 2% from the previous year. Link

Not to be outdone, Sony also had a monster quarter: setting new records in digital games sales and PS+ subscribers, while still selling nearly 2M+ more consoles. Link

😍 Our Current Favorites 

Fawzi (@fawzitani)

Gone Camping! Be back next week! (P.S. If you don’t like this issue it’s Max’s fault)

Max (@MaxLowenthal)

One of the most common parallels I see in the industry is that of competitive video games to traditional sports. It’s easy to see connections: there’s commentary, league structures, and now…betting? One of our readers shared a site with me that tracks your performance on PC games and pays you out based on wagers you paid for ahead of time. The concept sounds simple on paper, its just like gambling on real sports right? In reality, I think it’s not that simple. The only time I’ve put money down on gaming is when I was intentionally entering (and then losing) competitive tournaments, not casually playing with friends. The idea of a “prop” bet in video games just doesn’t seem like something most gamers do, but I’m always happy to be proven wrong! Link (Thanks to Pause Button subscriber Will H. for sharing this site with me)

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