Background on Gigaverse’s Gaming Career Course

While these guides are primarily designed to help individuals make a living working around game IPs, they were also created as part of an independent research project for Stanford Business School. As such, I will include some background information to help individuals without any experience in gaming get their bearings.

The world of gaming is big. Really big. In the US alone, the gaming industry brought in 38 billion in revenue last year, compare that to the entire US television production market which brought in only 35 billion. It also employs many more individuals than related industries 156,500 compared to the US television production’s 85,000. On top of its relatively large size, the gaming industry is also light years ahead of the other entertainment industries in terms of both audience engagement and its ability to adapt to changes necessitated by an increasingly digital world and a growing online community.

Take piracy as an example. Piracy has plummeted in the video game industry through the implementation of delivery systems like Steam (sort of like an iTunes that people enjoy using) and extreme price discrimination systems. The new pricing systems utilized in the gaming world, such as the free-to-play model perfected by companies like Riot, show a key understanding of how millennials value digital IP.

The industry’s close relationships with modders, those that subtly transform their media, even adapting these mods into full games, also exhibits refreshingly forward thinking. (Currently the most popular game in the world, League of Legends, is an evolution of a mod.)

Even the organizational structures of game companies, like the flat organizational employment models employed at companies like Valve, which attract top talent by removing bosses, are radical and revolutionary. If one wants to understand the future of the entertainment industries, the best place to look is the gaming industry.

Among all the companies in the gaming industry, there are two large companies that stand out in terms of their revolutionary innovativeness: Riot Games and Valve. Of the two, Riot has shown more innovation in fan interaction, deployment, esports, and payment structures while Valve has shown more innovation in platform design and internal company structure. In working on this paper, I had the privilege  of working closely with one of these two companies, Riot Games.

Riot Games was founded in 2006 and released their first and only game, League of Legends, in 2009. League of Legends was modeled after the popular mod of Blizzard’s Warcraft 3, DODA (Defense of the Ancients) and included a number of people on the mods team (a mod is when a fan of a game modifies a games code to make it play differently; this can take the form of anything from graphics improvements to radical changes to gameplay). The DODA mod had created a new kind of gameplay known as MOBA (multiplayer online battle arena) this style was uniquely suited to esports (professional gaming viewed by spectators) as it did not involve character progression, required heavy teamwork, was easy to learn, and had sessions that were short (30-45 minutes) and completely contained. This allowed Riot to build their game from the ground up for esports.

The fact that Riot has focused on one IP alone since their inception is unconventional, but has been remarkably effective. Instead of putting money into R&D on new games they have put their development into regularly expanding their core game with new champions (characters gamers use to play League of Legends that boast different abilities), constant small changes to the balance (how powerful the different champions are), and the development of their esports infrastructure. This consistency and attention to balance has enabled League of Legends to become the most played game in the world by a wide margin (there was a press release that contested this early this year which has since been retracted as unsubstantiated). As of 2012 League of Legends had 70 Million registered players, 32 million monthly players,12 million daily active players, 3 million peak concurrent players (average number online), and 1 billion play hours a month. This audience is almost exclusively male (over 90%), between 16 and 30, and highly educated with 60% having completed some college or being in college now.

Recently, Riot has continued to build up its esports at an extremely rapid pace.   In October 2012, the League of Legends World Championship match drew 8.2 million viewers. The All Star game in May 2013 drew 18 million viewers. The Championship match in October 2013 drew 32 million viewers. This escalation isn’t just happening year over year, but month over month. To put those numbers in perspective, the Americas Cup had approximately 1.9 million viewers watching it’s final race, NASCAR’s sprint cup in 2013 had about 5.8 million viewers, and the peak average concurrent viewership on ESPN 0.75 million viewers. (Note: The above paragraph is largely identical to a paragraph in the Professional Gamers guide.)

Riot’s Games work off of a FTP model (free to play). In an FTP model the game itself is free, company typically makes money off of small in-game transactions. Riot is careful to not make it a Pay to Win game, in which players can become more powerful and win more often. Instead most of their transactions come through things like “skins” )which allow the character one is playing to look different) and the ability to access champions when they are not available for free Privileges that can be purchased can also be obtained for free through playing and winning a certain number of matches.