The DeanBeat: Watching the Darwinian competition of E3 unfold from afar

We’re on the cusp of another Electronic Entertainment Expo (E3), but this is one that we haven’t seen before, as the game industry’s big trade show is an online-only event. I was looking at a post about E3 I made on Facebook five years ago where I talked about my checklist. I had my plane ticket, two laptops, phone with battery case, clothes, camera with multiple memory cards, extra battery packs, MiFi, charging cables, identification, comfy shoes, voice recorders and their batteries, headphones, USB cables, watch charger, and more. I also had my signature roller bag that rolled over a lot of feet at E3.

This time, I don’t have to get on a plane. I can roll out of bed, turn on the computer, and watch the press events. Some of the early events have already started, with Electronic Arts showing off its first small glimpse of Battlefield 2042 on Wednesday and Thursday’s Summer Game Fest.

EA has four studios working on the new Battlefield, yet it jettisoned its single-player version and focused on delivering just three multiplayer modes for when the game debuts on October 22. That should tell you how huge an undertaking it has become to make a triple-A game, and how the money is really made in multiplayer. Even without getting on a plane, I can see the Darwinian competition unfolding from afar.

If you love or hate E3, if you are glad you aren’t going to encounter the traffic of Los Angeles, or if you miss your friends, we all still have to watch it, because it tells us so much about games.

Battlefield vs. Call of Duty

Above: Here’s a view of one of the maps of Battlefield 2042.

Image Credit: EA

I’m already starting to discern the strategies of the big companies. As you recall, EA canceled a single-player Star Wars game and set the internet ablaze with talk about how it was focusing on live operations and microtransactions instead of single-player experiences, which cost a lot of money to craft but were often skipped altogether by players who went straight to multiplayer. While some players may see this as a betrayal of gamers, I see EA facing reality, as its four studios are a paltry force compared to what Activision Blizzard — with nine studios and maybe 2,000 developers working on Call of Duty — brings to the table. EA is struggling to compete, and it has to focus on delivering the things that can differentiate it, which in this case includes the power of destructible environments that the Frostbite engine can deliver.

EA’s short trailer showed how tornados can dynamically rip through the map of Battlefield 2042. Players can improvise by turning the tables on a pursuing jet by bailing out of a plane and shooting a shoulder-launched rocket at the pursuer in midair. EA wants players to know that it put these Battlefield moments into its short trailer because it knows that this is something you can’t do in Call of Duty.

Activision doesn’t want people thinking about Battlefield for more than a day, and that’s why yesterday it announced Season 4 of Call of Duty: Warzone and Call of Duty: Black Ops — Cold War. That season is coming fast on June 17, even though the previous season launched April 22. It’s amazing how fast teams can produce new content when they’re compelled by the competition.

But Activision chose not to reveal its new Call of Duty game for the fall yet, and we don’t expect to see it next week either. By opting out of the E3 news cycle, it has chosen to skip the opportunity to get in front of a billion eyeballs.

Microsoft casts down a gauntlet

Above: Phil Spencer (left), head of Xbox, and Satya Nadella, the CEO of Microsoft.

Image Credit: Microsoft

We will also soon see how some of the major platform companies are revealing their plans and are facing their competition. Microsoft tipped its hand yesterday by announcing its business news in an hour-long conversation so that it could focus its E3 event on Sunday on just games. That was a wise move because gamers just want you to shut up and show the games. But Microsoft courted its game publishers, developers, brand partners, and shareholders on Thursday by trotting out its biggest voices. Xbox head Phil Spencer held a conversation with Microsoft CEO Satya Nadella, who said that Microsoft is all-in on games.

“As a company, Microsoft’s all-in on gaming. We believe we can play a leading role in democratizing gaming and defining that future of interactive entertainment, quite frankly, at scale,” Nadella said.

He said Microsoft has a competitive advantage in three areas. First is its leadership in cloud computing; second, the resources Microsoft has to build out the subscription value with Xbox Game Pass; and third is the overall focus on empowering creators, he said. For me, this felt like a memorable moment when we saw one of the giants flex its muscles.

“I’m really excited about the opportunity in gaming,” Nadella said.

Those were some monumental words about how the CEO of a major platform company — one of the big tech giants — grasps the opportunity in gaming. He understands that it has the chance to capture just about every soul on the planet, and that his faith in the spread of gaming and the capabilities of Microsoft’s game leaders shows how Microsoft gets it in a way that other CEOs, like those at Google and Amazon, don’t get it. This is like throwing down a gauntlet at the other tech companies, whose leaders may or may not be able to speak eloquently and authentically about games.

Above: Xbox Game Pass is Microsoft’s subscription service for games.

Image Credit: Microsoft

Nadella and Spencer articulated a strategy to go after gamers wherever they are. Only hundreds of millions of players play on consoles and PCs. Microsoft will continue to make games for them, but it has to be more clever to get billions of players. It has created cloud gaming solutions that let you enjoy a high-end game on any device, and it is adapting that so you can play Xbox Series X games on internet-connected TVs with just a game controller and no console. It is building cloud gaming so it can run on browsers on iPhones and other mobile devices. It has made its Xbox Adaptive Controller to go after the estimated 400 million disabled people in the world. And it is delivering games to all via its Xbox Game Pass subscription, which has a magical effect on the buying habits and engagement of gamers.

“When I was a kid, it was crazy to think about having a Galaga machine or a Ms. Pac-Man machine in your house,” Spencer said. “You had to go to the arcade. More recently, if you couldn’t spend hundreds of dollars on a game console, potentially thousands of dollars on a high-end PC, you simply couldn’t participate in the global gaming community in a significant way. The cloud will allow us to completely remove these barriers to play worldwide.”

Earlier this year, the company said its Game Pass subscriptions had passed 18 million. Microsoft said that Xbox Game Pass members play 30% more genres and 40% more games. And more than 90% of members said they played a game that they would not have tried without Game Pass. The result of games going into Xbox Game Pass is that they get a lift at retail, Spencer said, and publishing partners see the benefit of being on the service. On average across the Game Pass library, partners see engagement go up by more than eight times when they enter Game Pass. Whether it’s purchasing games inside or outside of what’s available in the library, or purchasing additional content for the games they like, members spend 50% more than non-members.

Those numbers represent some staggering wins. And thanks to a buying spree that began in 2018, Microsoft has 23 game studios worldwide creating games for Xbox, compared to 13 for Sony. Microsoft’s goal is to release at least one new, first-party game into Xbox Game Pass every quarter. The company has provided the financial support to make both small acquisitions like Double Fine and huge deals like the $7.5 billion purchase of ZeniMax/Bethesda. It’s starting to feel like Microsoft has checkmated rivals Sony and Nintendo, and it could head off the likes of Amazon, Google, Facebook, and Netflix.

But the games

But let’s not let the scene turn into the part of the James Bond movie where the villain talks about his master plan just yet. After all, at this E3, I haven’t played any games yet.

Showing us games and letting us play them are two different things, though. We still have to see how good Microsoft’s games, like Halo Infinite, will be. Sony is skipping E3, but today it is launching what GamesBeat’s Jeff Grubb called Sony’s best exclusive yet, Ratchet & Clank: Rift Apart, from its Insomniac Games division. While all of the eyeballs are on E3, Sony has shown up with an actual game that players can play. That reminds me of how Bethesda launched the mobile game Fallout Shelter at E3 2015 and got 12 million downloads in a day because so many people were watching.

And we know that Sony has a lot of other big games coming that other companies don’t have the fortitude to make, like God of War: Ragnarok, which will presumably be a single-player game of the sort that EA is afraid to make. Sony is also making a bet that virtual reality will pay off and its PlayStation VR peripheral for the PlayStation 5 will also pay off as a way to differentiate its games from the competition.

I have been impressed with ambitious games like Elden Ring, coming from From Software and Bandai Namco — with the help of Game of Thrones author George R.R. Martin — in January 2022. That one showed up yesterday at Geoff Keighley’s Summer Game Fest. Major third-party game companies like Take-Two, Square Enix, Ubisoft, Capcom, and Bandai Namco will show up with cross-platform games that will bring balance to the console wars so that all three major consoles can continue to thrive.

And Nintendo will close out E3 on Tuesday with a presentation that I am certain will surprise us all.

Chasing the mainstream

Above: Streaming has helped make gaming more mainstream.

Image Credit: Razer

Among the smaller presentations will be Intellivision’s bid on Monday to position itself as the family-friendly console that encourages couch play with your friends and family. And then we have Mythical Games‘ presentation the same morning where it can talk about bringing nonfungible tokens (NFTs) to mainstream gamers. NFTs are a kind of monetization wild card for games, as they can uniquely identify digital items and authenticate their rarity. That will enable players to own and sell their own game items and treat their money spent on games as investments. And it could generate a whole new revenue stream for game makers based on item rarity.

Mythical is making its own game, Blankos Block Party, but it hopes to enlist all of the bigger companies to license its NFT platform. We’ll find out in the next year or so if NFTs are a tsunami that overwhelms the game industry or a little wave that gets our feet wet. I suspect it will be somewhere in between in its importance to growing gaming.

We’ve seen games double in size in the past decade, and they could very well double again in the next decade. So many things have to go right for that to happen, and if it does, we’ll see how games will become bigger and more important in mass culture than Hollywood. But perhaps we’re not ready to declare yet that Hollywood is dead and we’re the Bond villain that has put it in its coffin. It’s just a little too soon for that, and we should stay humble.

“When you talk about the traditional media and traditional modes of entertainment that people gravitate toward, gaming is the largest medium,” said Stanley Pierre-Louis, the CEO of the Entertainment Software Association (which puts on E3), in an interview with GamesBeat. “Whether you look at it by revenue or by the number of people who are playing, which is 1-in-3 around the world, it’s an enormous amount of people playing games.”

If E3 provides any benefit, it is that it will have a lot to do with making the mainstream realize that games are so massive. I spoke with this cultural growth of games from nerd culture to the mainstream with Razer CEO Min-Liang Tan, whose company positions itself as the king of cool. It’s noteworthy that Tan chose to double down on E3 this year by doing a talk in the official program to catch the gamer eyeballs around the whole event.

Like me, Tan misses the networking and running into fellow E3 travelers at the local Starbucks and the parties. And he told me that he believes that things like E3 and gaming have grown so much that it is no longer the case of games and gamers chasing the mainstream. Rather, he thinks it’s inevitable that the mainstream is coming to us.

“Many people ask me when are we going to go mainstream. I would say that gaming is already at that cusp. We’ve got our own subculture, we’ve got our own language, we’ve got our own inside jokes, and memes and things like that. But I think it’s inevitable. As we keep growing, ultimately, we feel the mainstream will come to us. eSports is going mainstream. And it’s just this growth, which is inevitable. I think pretty much every tech company is all in on gaming one way or the other, whether it’s the cloud, whether it’s accessories or hardware or software, it’s the main form of entertainment for youth. It’s not us going for the mainstream. The mainstream is coming to us.”

This is the battle that gaming needs to win for all of the industry’s plans for world domination to come true. Rather than conquer each other, the game industry has to capture the world.