Podcast Summary
Opportunities for Startups in the Video Game Industry: The video game industry offers opportunities for startups despite being dominated by large conglomerates. Early investments in innovative concepts, like those made in Atari, can lead to significant growth.
The video game industry, although dominated by large conglomerates, still holds opportunities for startups. Tim Morton, CEO of Frost Giant Studios, shares his experiences of working on beloved games like StarCraft II and the impact of early investments in video game companies like Atari. Morton's new game and Frost Giant Studios illustrate the potential for innovation and growth in the video game industry. The discussion also highlights the importance of early investments in groundbreaking concepts and the enduring appeal of real-time strategy games. If you're interested in this sector, consider checking out Frost Giant Studios or pitching your video game idea to the show.
RTS games revolutionized strategy and social gaming: RTS games, like Warcraft 2, introduced strategic depth and social interaction, requiring more thought and planning than simpler games, and revolutionized strategy and social gaming in the late 90s
Real-time strategy (RTS) games represent a significant evolution in video gaming, offering strategic depth and social interaction that surpasses simpler games. The speaker's first encounter with RTS was Warcraft 2 in the mid-90s, which introduced resource collection, base building, and army control. RTS games required more thought and planning than reflexes alone. The social aspect of RTS, particularly multiplayer experiences, became increasingly important as gaming became more social in the late 90s. The industry transitioned from startup culture to a studio structure during this period, with larger companies hiring external developers and some even self-publishing. The speaker emphasized the importance of understanding the historical context and significance of RTS games, which revolutionized strategy and social gaming.
Navigating the insecurity of work-for-hire game development: Recognize genre-specific fan bases and potential for creating engaging, seminal games to counteract insecurity in work-for-hire game development.
Starting and running a game studio comes with significant challenges, particularly when relying on work for hire from larger publishers. The business model can be insecure and anxiety-producing, as publishers hold a lot of control over milestones and payments. However, the potential for creating original intellectual property and the loyalty of gamers to certain genres, like real-time strategy, keeps developers motivated. For instance, Starcraft 2, despite not undergoing significant changes, continues to captivate millions of players daily. When considering the market, it's crucial to recognize these genre-specific fan bases and the potential for creating engaging, seminal games.
Real-time strategy games drive industry growth and innovation: Real-time strategy games, like Elden Ring and League of Legends, have large fanbases and esports origins. They led to industry shifts towards digital downloads and in-game purchases, creating new revenue streams and opportunities.
Genres with passionate fanbases, like real-time strategy games, have the potential to reach a broader audience and go big. This is demonstrated by the success of games like Elden Ring, which expanded on a smaller audience from the dark souls series, and League of Legends, which originated from real-time strategy and reached over 100 million monthly active players. The birth of esports can be attributed to real-time strategy games, particularly StarCraft, due to their top-down camera perspective and intuitive understanding, making them visually appealing to both players and casual observers. The gaming industry saw a massive shift from buying CDs to downloading and monetizing through in-game purchases, leading to new revenue streams and business opportunities. Starting a company in the gaming industry requires understanding concepts like SOC 2 compliance and utilizing tools like Vanta to simplify the verification process. The success stories of companies like Vanta, which make SOC 2 compliance easier and more accessible, highlight the potential for innovation and growth in the industry.
From selling products to providing ongoing services: The gaming industry has shifted from selling individual games to providing ongoing content and services, allowing for closer relationships between developers and players and ongoing revenue for studios.
The gaming industry has shifted from selling individual products to providing ongoing content and services to players. This change began even in the days of CD-ROM releases, where players wanted more content for the games they loved. The industry responded with downloadable content (DLC) and eventually moved towards internet distribution, allowing for smaller, more granular pieces of content to be delivered. This model, which is now common in software as well, allows for ongoing revenue and a closer relationship between developers and players. It also provides a feedback loop that helps developers match the content they produce to player needs. This shift from selling individual products to providing ongoing services has been beneficial for everyone involved, as it makes it easier for studios to justify continuing to develop new content and allows players to only pay for the content they're interested in. Examples of this model include StarCraft II and its approach to selling content a la carte, and games with season passes or similar mechanics that provide regular access to content in exchange for a regular fee.
New RTS game Stormgate offers extra content, supports esports, and uses Intercom for customer support: Stormgate, a new RTS game, offers extra content for purchase, supports esports, and uses Intercom for efficient customer support. The team has raised over $30 million and plans a beta in a year and launch the next. Intercom offers discounts to early-stage startups and hosts a customer support event.
Stormgate, the new RTS game from the creators of StarCraft II, will offer additional content for purchase, including campaigns and seasonal events, with a portion of the proceeds going towards esports. The team is considering a connected inbox for customer support, like Intercom, to make the team more efficient and improve customer experience. They have raised over $30 million for the project, primarily from Korean investors due to StarCraft II's popularity in Korea. The game is still in development, with a beta expected in about a year and a launch hoped for the year after that. Interested parties can sign up for the beta on PlayStormGate.com. Additionally, Intercom is offering a 95% discount to early-stage startups for their customer support tools through their Early Stage Academy. Intercom is also hosting a hybrid event, "Localized Your Customer Support Experience," on July 20th, focused on providing effective customer support on a global scale.
Making a great game takes a balanced team, time, and resources: Balanced team, significant investment, and large player base needed to create successful games
Making a great game requires a balanced team and a significant investment of time and resources. The size of the team can vary greatly, from a small team of two to larger teams of hundreds. StarCraft-like games may take several years to develop, with Frost Giant's current project expected to spend around four years in development. The cost can also be substantial, with Frost Giant's team spending about $6-7 million per year, totaling around $25 million over four years. Additional expenses like creating cinematics, localization, marketing, and server costs can add another $5-10 million. To make these investments worthwhile, a game needs a large player base, with hundreds of thousands or even millions of people playing and contributing revenue through subscriptions or in-game purchases. Despite the challenges, some investors have come to view games as a sector with potential for long-term success, rather than just betting on individual titles.
Understanding the numbers in gaming business: Attract passionate users, offer value, and avoid 'pay to win' to reach profitability in gaming business
Creating a successful gaming business involves understanding the numbers, specifically reaching the break-even point and moving towards profitability. This requires attracting a passionate user base, with a small percentage of them spending significantly more than others. These passionate users, or "whales," provide a large portion of the revenue. However, it's crucial not to exploit or frustrate players into spending, instead offering value and ensuring fair gameplay. The business model should not rely on "pay to win," where players are forced to spend money to progress. Instead, early access and other incentives can be used to bring in revenue and engage dedicated fans.
Focused on game experience over financial systems: Frost China prioritizes game enjoyment, avoiding token/NFT distractions and potential negative consequences.
Frost China, the team behind Stormgate, is focused on delivering an entertaining game experience above all else, rather than creating a financial system based on tokens or NFTs. They believe that such systems can detract from the joy of playing the game and potentially lead to negative consequences, such as players winning at the expense of others or the susceptibility to fraud. The team's inspiration for Stormgate comes from a mix of science fiction and fantasy, drawing influences from Starcraft and Warcraft, among other sources. They are aiming to create a near-future Earth setting where advanced technology and horrific aliens coexist. The team is inspired by various films, with a particular fondness for Star Wars and The Matrix. They plan to release cinematics and gameplay information for Stormgate in the lead-up to its release, which is scheduled for a year from now.
Creating an immersive RTS game world with a lower entry barrier: Stormgate, an upcoming RTS game, combines an immersive game world and story with accessibility features to make the genre more approachable for new players while maintaining its high skill ceiling.
Stormgate, an upcoming real-time strategy (RTS) game, prioritizes creating an immersive game world and story while also making the genre more accessible to new players. The developers announced the game early in its development stage to involve the community and gather feedback. They aim to maintain the high skill ceiling of RTS games but lower the barrier for entry, making it easier for newcomers to get started. The developers also plan to make the game more of a social experience, allowing players to learn and enjoy the game together, even if one player is more experienced than the other. The game's visuals have been teased, but the developers have not yet shared detailed gameplay, choosing to focus on community involvement and accessibility improvements.
Learning from others is crucial in gaming, from StarCraft to Twitch and YouTube: Companies explore ways to integrate social learning into games through live tutorials and picture-in-picture videos, but the integration of wagering in esports requires careful consideration due to the diverse age range of the audience.
The "guide on the side" concept, where learning from others plays a crucial role, has significantly influenced the way people learn to play video games, from the early days of StarCraft to the present with platforms like Twitch and YouTube. This social learning approach has become an essential part of game marketing and education, and companies are exploring ways to integrate it further into the gaming experience. For instance, providing live tutorials and picture-in-picture videos within games could be a valuable addition to help new players get acquainted with the game. However, the integration of wagering in esports is a complex issue due to the broad age range of the gaming audience. While skill-based prize pools could be a viable option for certain games, the company is cautious about being sensitive to the age range and the potential implications of wagering.
Rules for RTS gaming competitions and IP usage: Publishers set prize pool thresholds for licensed tournaments, and IP usage requires a balance between exposure and control. Streamers are promoters, not exploiters, and the RTS community looks forward to the new Stormgate game.
The world of gaming, particularly real-time strategy (RTS) games, is a complex ecosystem with various stakeholders, including publishers, streamers, and players. When it comes to organizing competitions or using IP, there are rules to follow. Most publishers set a prize pool threshold for tournaments that require a direct license. As for IP usage, there's a balance between allowing exposure and maintaining control, especially when it comes to merchandise. Streamers are generally seen as valuable promoters, and publishers are grateful for their efforts. However, there's a difference between promotion and exploitation. The creation of an owned platform, like a Twitch competitor, could negate the cross-pollination benefits. RTS games offer strategic thinking benefits and have a strong following among successful individuals like Elon Musk and Toby Shannen, the CEO of Shopify. Overall, the RTS community is excited about the upcoming Stormgate game and appreciates the effort to create a high-quality title.
International Founders' Challenges and Gratitude: International founders face unique challenges but express gratitude for opportunities in the US. Richard, from Ghana, shares his experience founding in both Ghana and the US, and introduces a new program to keep Gen Z talent. Poker enthusiasts are advised to learn Pot Limit Omaha gradually for its complexity.
International founders like Richard Mensa, who co-founded Sally, face unique challenges when working with American VCs, employees, or customers. Despite these challenges, Richard, who came all the way from Ghana, expressed gratitude for the opportunity and enjoyed being a founder in the US. He also had experience founding a company in Ghana. This conversation didn't delve into the emotional labor or difficulties Gen Zs are experiencing during this challenging summer, such as airport delays and crowded music festivals. Instead, Richard maintained a positive attitude. He even started a new program to keep Gen Z talent in the US, recognizing the challenges they face. In the world of poker, the game Pot Limit Omaha (PLO) was discussed, which is a non-intuitive game for hold'em players. It requires hitting two hands at once, with the potential for flush and straight possibilities. The complexity of PLO was described as mind-blowing, and it was recommended to watch streaming or play low-stakes games to build confidence before diving in.
From Ghana to the US: Richard Mentz's inspiring journey to build Sally: Ghanaian co-founder Richard Mentz came to the US for education and a new culture, inspired by his entrepreneurial mother and books like 'Rich Dad Poor Dad'. He values experiences, new ideas, and building impactful businesses.
The co-founder of Sally, Richard Mentz, has a unique background and inspiring journey from Ghana to the US to pursue his dream of building a business and community for content creators. He came to the US for a master's degree in computer science with a passion for startups and a desire to immerse himself in a new culture and ecosystem. His entrepreneurial spirit was influenced by his mother, who despite being a teacher, had a strong entrepreneurial mindset and encouraged him to read books like "Rich Dad Poor Dad" to understand the concept of assets and liabilities. He believes in investing in things that will upskill himself and build something impactful for the world. In his personal life, he values experiences and new ideas, which led him to introduce "ketchup vibe days" instead of sick days for his team to encourage social sharing and positivity.
The Importance of Distribution and Online Presence: Building a strong online presence is crucial for reaching a larger audience, but it requires dedication and consistent effort.
Having a great product is important, but it's equally essential to focus on distribution and building a strong online presence to reach a wider audience. The speaker, who started his entrepreneurial journey as a teenager, shared his experience of building his first app, Swiper, which aimed to combine the features of Facebook, Instagram, and Twitter into one app. Despite having a popular product among his classmates and even his father, he struggled to attract more users. He realized the importance of distribution and intentionally built a YouTube channel to document his journey as a founder. However, he found creating consistent content to be a full-time job on its own. This experience taught him that building a strong online presence is crucial for reaching a larger audience, but it requires dedication and consistent effort.
Helping Creators Focus on Their Craft: International founders can build impactful businesses by having a big vision and utilizing networks, despite starting with no connections in a new country.
Consistency is a challenge for creators, leading Sally and her co-founder to identify a need for a solution that helps creators focus on their craft without the added stress of managing small tasks. They met at a conference in 2018 and after a lengthy conversation, they decided to start a business, initially called Elizex, connecting startups with creators and media. However, they soon realized that creators themselves needed more support and shifted their focus to helping creators produce more content and have more fun in the process. For international founders, Sally advises having a big vision and utilizing networks to build something impactful, as she came to the US with no connections and has since built a remarkable business. The potential of international founders is vast, and the ecosystem in venture capital should work to better support and recognize their capabilities.
Expanding Perspectives through International Friendships and Experiences: International experiences and friendships broaden perspectives, lead to innovation, and provide valuable opportunities for growth. Being open to collaboration and idea sharing can benefit a global company, regardless of its location.
Having international friends and experiences can broaden your perspective and help in building a successful global company. The business environment and cultural norms can vary greatly around the world, and being open to collaboration and idea sharing can lead to innovation. Additionally, being in a diverse city like New York, where talent and creativity are abundant, can provide valuable opportunities for growth. It's important to remember that international founders should not be discounted based on their nationality, as many successful companies have been founded by them. The US tech scene, in particular, values openness and collaboration, which can lead to a larger "pie" of opportunities for everyone. Finally, the push for remote work doesn't mean you have to sacrifice being in a vibrant city with a strong business community. New York, with its diverse talent pool and abundance of content creators, is a prime example of a city that can offer significant value to a growing business.
New York City's Unique Culture of Community and Professional Growth: New York City's melting pot environment encourages taking risks and fosters personal and professional growth through abundant networking opportunities and convenient public transportation
New York City offers a unique sense of community and opportunities for professional growth that other cities like Boston, San Francisco, and Los Angeles may not provide. The speaker shared their personal experience of thriving in New York's melting pot environment, where everyone is an outsider and the culture encourages taking risks. They also highlighted the abundance of networking events and face-to-face interactions that can help individuals expand their professional networks. The speaker emphasized the convenience of public transportation and the lack of need for a car as a reason for choosing New York City. Overall, the speaker's positive experience in New York City highlights the city's dynamic and vibrant culture that fosters personal and professional growth.
Moving to a city with a vibrant tech community can boost engagement and networking opportunities for entrepreneurs.: Embrace discomfort and adaptability when moving to a new city or country for business opportunities. Meet people from diverse backgrounds to expand your network.
Living in a city with good public transportation and a vibrant tech community can significantly increase engagement and networking opportunities for entrepreneurs. The speaker, Sally, shares her personal experience of living in Baltimore and how the long commute kept her from engaging with the community. However, when she moved to New York, she found herself constantly meeting new people and learning from them. She encourages founders looking to move to a new city or country to embrace discomfort and adaptability, as well as expand their network by meeting people from diverse backgrounds. Sally's advice is to take the leap, even if it's daunting, and trust that the experience will pay off in the long run. You can find Sally on Twitter and LinkedIn, and sign up for their newsletter called Story Alley for updates on the Twitter economy.
Empathy and Speaking Out Against Discrimination: Recognize and address discrimination, treat everyone with respect and dignity, and appreciate the support of sponsors and partners for personal and business growth.
Experiencing empathy towards others and standing up against discrimination can lead to valuable insights and understanding. The speaker shared a personal experience of witnessing racial discrimination towards his wife in public places, which made him realize the importance of empathy and speaking out against such behavior. He also emphasized the importance of sponsors and partners in supporting individuals and businesses, and encouraged listeners to show appreciation and kindness towards their employees. The discussion touched upon various topics including social change, empathy, sponsors, and personal experiences. It is essential to recognize and address discrimination when we see it and to treat everyone with respect and dignity. Furthermore, having the support of sponsors and partners can significantly contribute to personal and business growth.
