The global games market is expected to grow from $137.9 billion in 2018 to more than $180.1 billion in 2021, according to market researcher Newzoo. The world has about 2 billion gamers now thanks to mobile gaming, which now accounts for half of all revenues.

Just how big is this party going to get? We contemplated that question in a panel about games going mainstream in a session at the Milken Global conference in Los Angeles last week, where 4,000 investors and other VIPs gathered. Games, of course, are already mainstream, with titles like Grand Theft Auto V selling 90 million units and generating $6 billion in revenue.

Will the next big thing be virtual reality or esports or augmented reality or all of the above? Where will the next billion gamers come from? Our panelists answering those questions included Kathee Chimowitz chief revenue officer at BoomBit Games; Emily Greer, cofounder and CEO of Kongregate; Peter Levin, president of Interactive, Games & Digital Strategy at Lionsgate; and Frank Soqui vice president and general manager of virtual reality at the client computing group at Intel.

We also discussed attempts to make gaming more accessible and diverse, and whether the hardcore subculture’s clash with the mainstream casual gaming culture will hold the industry back.

Here’s an edited transcript of our panel.

Above: Peter Levin (left) of Lionsgate and Frank Soqui of Intel at the Milken Global conference.

Image Credit: Milken Institute

Frank Soqui: I’m vice president and general manager for VR at Intel.

Peter Levin: I’m president of interactive ventures, games, and digital strategy at Lionsgate.

Emily Greer: I’m the co-founder and CEO of Kongregate, a games platform and publisher.

Kathee Chimowitz: I’m CRO for BoomBit Games.

GamesBeat: We all know games are big, but they do have some issues. We’ll get into some of that in this session, especially as we think about how we’ll go from about 2 billion gamers on the planet to maybe 3 billion or more. We know, according to Newzoo, that the business is about $138 billion in 2018, and that’s expected to grow to $180 billion by 2021.

Now, I have a trivia question for the audience. What’s the single most successful entertainment product of all time? Is it Star Wars? Is it Gone With the Wind? It’s actually Grand Theft Auto V, which has sold 90 million units worldwide and brought in $6 billion in revenue for a single title in a long-running franchise. Star Wars has had something like $4 billion. Peter can elaborate this on a bit, about the relationship between games and movies and how big things are.

Levin: The fact that we’re having the conversation is fascinating. GTA was able to compile $6 billion in revenue. But when you look at Star Wars, you have other areas of revenue generation: licensing and merchandising, theme parks, all these other extensions of the brand that have been very germane to that IP for decades.

A company like Lionsgate, when we’re able to adapt IP into multiple formats — film, television, and games — they support one another. They can be accretive to one another. A great example for us last year was Power Rangers. The film came out, and we had a very successful mobile game based on that IP that continues to live on. Should we continue to make Power Rangers films, we’ll have a built-in audience that we don’t have to re-create.

Coming back to the stats, the fact that there are titles that exist at the level in the game space — there are multiple titles. It’s not just GTA. There are multiple titles that have lived on for years, or decades in some instances. That’s a part of the narrative that a lot of folks aren’t familiar with, and would not have ever guessed.

Asia more than half of the global game market.

Above: Asia more than half of the global game market.

Image Credit: Newzoo

GamesBeat: A much lesser-known game is Maple Story, from Nexon. It’s been running for more than eight years now. It’s generated $8 billion. That revenue comes from a free-to-play game. We’re getting into some distinctions a bit, but — it’s good to know from the start that gaming is not “going” mainstream. It is already mainstream. It’s already, in many ways, as big as any other kind of entertainment.

For some time, gaming has had a stepchild feeling to it, or some sort of inferiority complex compared to older forms of entertainment. There’s a lot less reason for that now. We can get into whether gaming is overcoming that. But I’ll throw something up in the air for everyone to talk about, starting with Kathee. How do we get to those next billion gamers?

Chimowitz: I’d say it’s mobile. Mobile gaming is 51 percent of that $138 billion this year. Mobile penetration is happening around the world. If you look at a place like Vietnam, it’s had double-digit growth year over year, 12 percent for mobile gaming revenue. Also, messaging. Facebook Messenger has games, as does WeChat. WeChat is the biggest messaging platform in China. A lot of people are playing games through these apps, and that number is growing quickly.

Greer: I agree, particularly when we look at how Android is exploding in developing markets. Android itself is probably going to be the single biggest game platform. As technology continues to improve — HTML 5 in particular is a very lightweight way of making games. It works on PC, mobile, the mobile web, and so on. It’s easy to make small, bite-sized games that are easy to deliver on poor connections. That’ll be important as infrastructure continues to improve. It’s also part of the foundation for messenger gaming.

Levin: I’m showing off my master’s degree in the obvious, but with the metrics we’re talking about, mobile is an enormous force. You have entire markets like the Indian subcontinent, where they are wide open. There is very little uptake of the types of phones and devices that will allow for qualitative gaming experiences. That alone is north of a billion. You’re talking about prospective markets, untapped, that are going to have access to cheaper hardware, software, IP. India is an English-speaking market. There’s a huge opportunity.

When you look at games like Arena of Valor, 300 million monthly active users was I think the last number? I’m sure it’s higher at this point. These are breathtaking metrics.

GamesBeat: Frank, you’re working in virtual reality at Intel. I’m counting on you to talk about something other than mobile games here.

Soqui: I will! Not to discount mobile. It’s clearly an awesome phenomenon. But I think a little differently when I think about the next billion players. I think about content. I think about architecture. When we talk about content, so many times we get to a space where something new is coming around the corner and we wonder if it’ll be the next big thing. Let’s say it’s VR and AR. Name your favorite technology. But what’s more important than the technology is the content. Is it telling a compelling story? We need a lot more content out there.

Sometimes we imagine that the big players are certainly going to win in the area of gaming, but just like you were talking about with movies, I think it’s a segment of the market where indie players are important. Content is important, content that rides across a variety of computing platforms. It’s mobile, PC, notebook, you name it. Anything that lets me play a game the way I want to play it on my favorite set of devices.

Above: Grand Theft Auto V is on fire on Steam.

Image Credit: Rockstar Games

The other thing is architecture. These are crazily immersive games and they have tremendous workloads. I want to stream. I want to capture my gameplay. I want a social experience. I want to interact in ways that I couldn’t interact before. Anything that makes me feel like I’m becoming more a part of that experience — that architecture, not only on the PC or mobile side but from cloud to edge to 5G, that we need to deliver the experience will be very important.

And then audience. We keep thinking about gaming, whether it’s real sports or esports, where it’s about the player. But it’s not only about the player. The audience is a huge part of why we’re doing what we’re doing. The audience being able to interact with the game, we’re on the verge of that, where the audience becomes non-player characters. The audience interacts with other audience members in a social kind of way. There’s a tremendous focus on audience because that’s who you’re serving.

There’s a ton of businesses that end up spinning around that audience, not the least of which is advertising, but also how they connect with each other socially, how they get advice on the latest gaming PC or mobile platform they’re interested in. When you hit all those three, you’ll start reaching those next several billion players.

GamesBeat: I sometimes measure what’s trending by what stories I write in a given week. I’ve written 15,000 stories at VentureBeat in the last 10 years. A couple of years ago I was writing VR stories every week, investments every week. Now esports has taken over. In some ways, VR didn’t live up to all the hype associated with it in its first generation. Frank, can you address what that means for the next generation, or whether VR is viewed by a lot of people as a kind of fizzle?

Soqui: The beginning of any technology hype cycle, there’s always this place in the curve, the “trough of disillusionment” or whatever you want to call it. There’s a lot of experimentation, a lot of high hopes. It goes through some active adoption phases and makes its way through that.

At Intel we view things like AR and VR as once-in-every-20-year phenomena. Before there was a GUI, there was just text. When the GUI came in, people said, “Oh, that’s just for kids. No one wants a GUI.” All of a sudden you can’t live without it. When touch came in, it seemed a little gimmicky. Do I want touch my screen all the time? Now you can’t live without it. When you can’t touch a screen today, if it doesn’t respond to you, you wonder if it’s broken.

The way we’re going to interact with compute is going to be through things like these realities, these immersive types of technologies. It’s going to change the way we interact with each other and interact with compute. To get all worried early on because it’s not taking off the way we overhyped it, that’s not the point. You look for clues about where it’s being used. It’s in gaming, entertainment, retail, surgical theaters. These types of realities are traversing segments like they’ve never done before.

To segue away from gaming a bit, there’s true ROIs that we’re getting on the commercial side. That’s why we’re still pretty bullish on the opportunity around VR. If you ignore the hype, I understand. Sometimes we like talking about things as if they’re going to take off tomorrow. But I believe this is a once-in-20-year transformation of how we’ll interact with compute.

Above: Peter Levin of Lionsgate and Frank Soqui of Intel

Image Credit: Milken Institute

GamesBeat: Peter, you’ve been investing in VR, as well as a lot of other types of games. What’s your feeling about it?

Levin: Very bullish on the medium, as I’ve said a bunch. Very bearish on the timeline for commercial attraction. We’ve invested in some VR vehicles, but at every turn we’ve brought in platform players, hardware players, and endemics to mitigate our financial downside.

There’s a couple of reasons for this. One, very few people have a 10 feet by 10 feet space in their home to enjoy a qualitative VR experience. More and more people’s homes are starting to look like an airplane galley, or Bruce Willis’s apartment in The Fifth Element, compared to having that disposable footprint. For us, location-based entertainment was a priority from day one. You had a lot of aligned interests. You had big retail footprints that were looking for programming and content to house in that footprint as they were losing customers and audience to online retail experiences. You have movie theater chains and a host of other retail footprints. That’s been our priority.

We chose not to pull the trigger on investing in any one particular VR production entity. It was a deliberate decision made early on. For us it was about working with as many as we can, and if we find we interoperate well with one entity or another, we can contemplate a more strategic relationship. Part of our issue fundamentally was, these weren’t necessarily content-driven organizations. For us it’s all about storytelling. We’re a content-driven company, content first. As water seeks its own level within the VR space — again, we’re bullish on what the future has to bring with VR and AR, but we’re trying to be smart about how we can play against it.

Chimowitz: I don’t invest in VR or make VR games, but I’m a user of consumer VR, and I don’t see it as an experience at home. Again, you have to have that big 10-by-10 space. But I’ve been to an attraction called The Void, where you wear a pack and you can have an experience with a friend, just like being in a movie, and have fun being a Rebel soldier in Star Wars, fighting stormtroopers. That’s a good example of where VR is going.

GamesBeat: It’s interesting how some of the VR companies have pivoted into different spaces. They’re getting their games into VR arcades, where they can charge $5, $10, $15 per customer, as a way to get VR out to the public and in the hands of people who aren’t going to pay $1000 for a PC first, and then go buy something else to go with it, hundreds of dollars worth of VR headset. It’s an interesting pivot for VR companies.

Greer: I think VR is magical, but for it to go mainstream, you need to figure out how to make it work with our instinctive bodily reactions to immersion. The trend in media over the last few decades has been away from immersion and toward convenience, away from the movie theater toward home consumption. That’s something that VR needs to take into account. A lot of us feel uncomfortable when we’re disconnected with the world. When you try something like what Kathee’s talking about, where you go someplace and have this magical experience, when you step more consciously out of your normal world, it can work better than an in-home experience, the way the initial versions of VR have been presented.

GamesBeat: This week Facebook finally launched the Oculus Go for $199. It’s a stand-alone VR headset. You don’t have to plug it into a PC. It has no wires. You can take it with you and enjoy VR anywhere. Maybe that’s not the way Frank wants VR to happen, but it helps, right?

Soqui: VR is going to happen the way it’s going to happen. I’m a strong believer in a segmented market. There will be all-in-ones. There will be phones. There will be PCs and notebooks. There will be even more experimentation around headsets. I’m not really that worried about what may or may not be a piece of the ecosystem.

What I tend to think about is, these tremendous immersive interactive workloads put a lot of pressure on the data center, on compute performance, on graphics, on the network, on the edge, on 5G. Intel makes a lot of devices at the edge and we’ll continue to evolve those. I just see a bright future for what’s going in compute and the demands going on there. Every time we produce something new on the compute side, on graphics or storage, something like VR comes along to challenge the heck out of that. It creates more demand for what we’re delivering. But we’re comfortable that all-in-ones will do well.