The Price of a Pandemic: Video Games Rule All

Not all industries are suffering from the virus. Gaming and streaming are seeing more usage now than ever before. How did a billion dollar industry emerge from people playing video game? We talk to an industry expert about how we got here, and where we’re going.

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Not all businesses are suffering during this pandemic. Specifically, video games and streaming are thriving during times of social isolation. People are gaming more now than ever before. It's keeping us busy, entertained and connected. Gaming has come a long way, and has created multiple new revenue streams for professionals. It's a multi-billion dollar industry that reaches millions of people.. In today's episode, we talk to Ludlow Ventures investor and industry expert Blake Robbins. We learn:

  • How far gaming has come since the launch of multiplayer gaming over the internet.
  • How the industry has thrived during the pandemic.
  • What eSports is, and how professional gamers are seeing success similar to professional athletes.
  • How streaming has created new forms of content and entertainment on platforms like Twitch and Youtube.
  • The discipline and skill needed to make it as a professional gamer.

For more of Blake's work on gaming and the future of media, check out his newsletter- blake.substack.com. If you want to know why millions are turning in to watch people play video games, check out some of his streamer recommendations:

  • Ninja
  • Courage
  • Dr. Disrespect
  • Summit 1G
  • Breaking Point- A Youtube Documentary

Episode Transcript

 Hi everyone, Mesh here from Talk Money. Welcome back to The Price of a Pandemic, our series where we discuss how the coronavirus is affecting the economy, business, markets & investing.

As you may have guessed, not all businesses are suffering in the wake of COVID-19. In the case of gaming, streaming, and esports, that industry is thriving, now more than ever. Videogames. They’re there when we need them most. And a lot has changed since the days of two player gameplay on Sega Genesis, or a group taking turns on an N64 playing Goldeneye, or Halo on an Xbox….Man, I sound old. Now, we can play alongside millions of people and immerse ourselves in interactive worlds. And in times like these, when we’re alone with our housemates AND our thoughts, video games let us vanish into a digital crowd and find the community we’re missing.

During quarantine, gaming has been big. And to give you context, viewership - yes, people watching people play videogames - is hitting record highs on platforms like Twitch, where you can watch your favorite streamers make an art out of playing Fortnite, Call of Duty, League of Legends, and more. The numbers are insane. Riot Games, a leader in the video game industry, released a new multiplayer game in early April, called Valorant. It hit 1.7 million views on Twitch in a single day. To learn more about the massive popularity of gaming and streaming, I talked to investor and industry expert Blake Robbins. Let’s get started.

(SFX_mario kart start simple or start music)

Blake: [00:01:01] My name is Blake Robbins and I'm a partner at Ludlow Ventures here in Detroit. We are an early stage venture firm that focuses on all types of technology companies. I personally have a huge interest in the future of media and gaming. [00:01:24] I am in that world out of personal interest, and we've made quite a few investments in that space as well.

Mesh: [00:01:31] Okay, so tell me about gaming. What was it about gaming that got you interested?

Blake: [00:01:38] Yeah, gaming for me, it has has sort of always been an outlet that I've leaned on when I have long days, even when I was in high school or middle school it was just always a place where I would go and play games and and hang with my friends or even meet new friends. [00:01:56] I remember in high school, I used to hang [00:02:00] with like these four kids that I had no idea if they were actually real people. But I became good friends with them and played Call of Duty with them almost every day. And that has just always stuck with me. And so as I started to get older and, and spend more time as an investor, um, it became more clear to me that like gaming was only growing and people were starting to take it more seriously. [00:02:22] I think when I was a kid, gaming was more associated with, with nerdiness or nerds or something like that. And I think now it's become more [00:02:30] pop culture and become maybe even cool to some people.

Mesh: [00:02:34] And when you say hanging out with your friends, you mean like it was Xbox Live.

Blake: [00:02:44] Yeah, for sure. I would hop on Halo or Call of Duty and we would talk and play normal public matches or maybe more competitive matches, whatever it might've been. But we were [00:03:00] always just talking for like four hours straight. I remember my parents would be like, who are you talking to on the internet? [00:03:04] And for me it just felt normal. 

Mesh: [00:05:10] How would you explain the gaming industry now and you know, how it relates to esports and streaming?

Blake: [00:05:27] So gaming has [00:05:30] evolved. I guess Xbox Live is probably the real sort of inflection point. When you were playing on a PlayStation One was probably playing like single player whatever the game might be, like Crash Bandicoot or whatever it is. [00:05:52] Those single player games were a really popular genre. There was still Doom and Quake and things like that, but they [00:06:00] weren't nearly as popular as a Mario or anything like that. And so what's happened was when Xbox Live came out. We started to see a real boom in multiplayer games. [00:06:12] which has opened up a whole new world of gaming. And which [00:06:30] enables you to play. [00:06:31] With basically not just your friends locally. You can actually play with people across the world So that's when // there was a real sort of uptick in gaming, and Halo and Call of Duty and StarCraft and Counterstrike were sort of that 1.0. [00:07:01] You fast forward to today where streaming is really popular. You think about when you might've used to watch your friends play video games you thought they were good you now have a real representation of how good they actually are I as an example used to think I was really good at Call of Duty and then when I went online and played it became very clear. [00:07:25] I was not as good as I thought.

Mesh: [00:08:07] To dive into esports specifically can you describe to us the emergence of esports and when it started being taken seriously as an industry?

Blake: [00:08:22] Yeah, for sure. // [00:08:50] When games like League of Legends came out // I think // probably about 10 years ago // they had a real // opportunity to // foster // these esports ecosystems and [00:09:00] actually invested in it // as a game developer and said, hey // we're actually going to build a real league and we're going to try and I guess build an NFL // around this [00:09:09] // So, League of Legends is played professionally. // in all of these different regions. // I mean, there's so many different leagues.

(clip_league of legends world championship finals game 1)

Mesh: [00:09:47] // So there's a league with teams, and the teams have owners and they're paid salaries and there's prize money if they win. // Can you give an analogy to [00:10:00] // physical sports and how esports is potentially in the same realm?

Blake: [00:10:06] Yeah. I would say each game is different. I would say League of Legends, just for the context of this conversation is probably pretty close to like an NBA or something like that where there’s very famous real owners. A lot of them are NBA owners and investors that invested in these teams as well and then you have players that are getting paid very well. // Some of them are getting paid millions. There is prize earnings, but a lot of them actually have sponsorship deals. [00:10:50] They're able to stream on Twitch and, and make YouTube videos and monetize through that as well. But uh, yeah, it's very real. These players are actual celebrities. [00:11:00] And if you're not familiar with these players, and then your kids probably are because they watch them on Twitch or YouTube. [00:11:08] Like you have Ninja who's one of the biggest streamers in the world he was signed to a team and being paid a salary for that team. He's since left that team and now is an individual streamer and basically playing under his own banner.

(clip_ninja music + clip_ninja masked singer)

Mesh: [00:15:45] So given everything that's happening with the pandemic people are staying indoors but in terms of [00:16:00] the gaming industry, Verizon posted that video game usage has gone up 75% since folks have been at home. What do you make of what's going on right now and what's happening for the industry? Is it something where more and more people are going to be turning to video games given social isolation?

Blake: [00:16:30] I think where we're at today is not just video games going up. I think we're seeing just consumption of media more broadly going up. I'm [00:17:00] sure all their games are hitting record numbers as well. People are lonely and there's no denying that, especially when you're inside your home for the unforeseen future you're looking for ways to connect with others. We're actually seeing a lot of celebrities or athletes go on to Twitch because they're like, [00:17:30] okay, well, I still want to engage with my audience or my fans. In tough times people typically rally around sports and when sports are completely cut [00:18:00] off they turn to something else. We've seen with NASCAR and Formula One, what they've been doing with their tournaments and races is really interesting.

Mesh: [00:18:15] Can you tell us about that in more detail?How exactly have industries like them pivoted to get to their audience in a digital way?

Blake: [00:18:29] Yeah. So I, I believe NASCAR is, I forget what game they're actually playing, but they're, // having their race car drivers actually play the games at home and broadcasting that. Formula 1 did something very similar as well as like, let's actually just play the racing games // and we'll broadcast that on Twitch or YouTube.

(Clip_nascar)

I remember reading yesterday // just on Reddit // there was one commenter and it was just like // we're going to remember this like for the rest of our lives, like that this sport stepped [00:19:00] up and tried to deliver us entertainment, uh, in a time that we desperately needed that. And I think that // is very true. // As a country or just as a world right now // we need something to rally behind and just give us something to at least try to escape // for a little bit from the horrible reality we're living in. //

Mesh: [00:22:13] Do you have any updated 2020 predictions on // what you see happening with esports? 

Blake: [00:22:33] // I actually think streaming as a category is going to have a defining moment // for the next couple of months. // I think we're going to see // streamers emerge that aren't just playing video games. I think we're going to see streamers that are cooking or doing fitness or whatever it might be. We're going to see new types of [00:23:00] creators emerge in those spaces. I think for esports specifically // like esports for the longest time has tried to mimic traditional sports leagues whereas traditional sports leagues wished that they had the agility and // flexibility // that esports leagues and esports games have. // And I think it's really a time for // esports, [00:23:30] // organizations and leagues to lean into the digitally native  audience that they have // and try and embrace that.

Mesh: [00:24:02] Let's talk about the actual gamers themselves. // In the past, to your point,  they'd been called nerds, like, oh, they're just staying at home. They're playing video games. My kid is lazy, X, Y, Z. And now we're seeing this billion dollar industry with millions of people watching these folks, and they're doing it professionally. I would love for you just to share how much work, dedication and [00:24:30] discipline goes into this.

Blake: [00:24:42] For sure. I'll speak about it in the context of League of Legends. These pro players for League of Legends are scrimmaging during the week, Tuesday through Friday from 9:00 AM till [00:25:00] 7 or 8:00 PM. So that's usually the practice. And then after that's over, they're going and practicing solo or  duo with another person on the team  for another couple of hours. And they continue to repeat that. And then on Saturday and Sundays, they're playing actual matches. [00:25:24] And then Mondays there's day offs, and that's a life of a pro gamer. And that's one element. The other is a streamer where you look at Ninja or Courage, they're playing for on average probably eight to 12 hours a day. Most of them are doing that for [00:25:45] almost seven days a week and they're taking basically no breaks because // when they turn off the stream, they lose all their viewers. So they're going for 8 to 10 hours straight. Some of them go even [00:26:00] longer. And it's exhausting. I challenge people who // say that streaming would be easy and that'd be a great job for them. I challenge you to try and talk into your microphone or // your web camera for 10 hours straight with literally no response, and they're still trying to play a game on top of that at the highest level. [00:26:38] They're real entertainers, and I think they're finally getting at least the respect they deserve from their fans. I think the respect from the broader community will come over time and I think that actually stems from just the wealth that they're creating. [00:26:57] I mean you have [00:27:00] Ninja who's probably making multimillion dollars a year off of streaming and his YouTube channel and I think that is just like a stamp of approval in and of itself.

Mesh: [00:32:15] For those look into [00:32:18] even dip their toes in this. They have no idea what we're talking about, but they're very, very curious. Who do you think that they should be watching?

Blake: [00:32:39] Well, the big streamers I love watching Dr. Disrespect // and then there's Summit One G, Ninja, Courage, and maybe a couple others that float in there, but if you just go to Twitch [00:33:00] and click browse and click on any of the games there you'll quickly find the biggest streamers streaming at any given time. I would say on YouTube there's a great documentary called Breaking Point // which covers just a team sort of falling apart  in the middle of the North American League of Legends // professional [00:33:30] scene.

Mesh: [00:27:18] And so to someone who wants to potentially have a career in this. Is it only for the outliers, for the Ninjas of the world to make a living, or could [00:27:30] you do it? 

Blake: [00:27:43] I think there's a lot of different ways to get involved in the industry more broadly, but if you're trying to go as a streamer or content creator, I think it’s really, really hard. And just like anything at the highest level, [00:28:00] it's going to be hyper competitive and it's going to be a grind. [00:28:03] this is sort of the blessing and curse of gaming there's essentially an illusion that if I played as much as as Ninja then maybe I would be at the same level as them. That's obviously a fallacy, but it's also the real hook of why games are so addicting, I guess and why people // always come back to it.

(Music)

MESH VO: I myself am not the best gamer. A few years ago, I checked out YouTube to find streams of games I wanted to play. Instead, I ended up watching someone else play them better than I ever could. They’re entertaining, and I got the same fix I would've gotten playing them myself. Mastering an absorbing game is deeply gratifying - but if you can’t spend 12 hours a day practicing, watching streamers is the next best thing. 

So I’ve started taking Blake’s advice and going down Twitch rabbit holes. And this means creators - all over the world, of all different races, gender, ages - can hone their talents and have the potential to make a living from gaming. Whether it’s streaming for an audience or actual competitive gameplay in esports, your parents were wrong - you can play video games for a living.

I want to thank my guest Blake Robbins for teaching me so much on this subject. If you want to hear more of his thoughts on the future of gaming & content, check out his newsletter blake.substack.com. Link in the show notes.

This episode was edited and produced by Olivia Briley & engineered by Maia Tarrell. Our music is by Blue Dot Sessions. Sign up at the¡talkmoney.com for further deep dives and to hear other episodes. We appreciate you sharing this with your friends, and of course subscribing to us on Apple, Spotify, or wherever you choose to listen. Until next time.


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