Gaming ... risks and opportunities

Updated: Jan 9

by Aila (with the help of Joe McPhail)


Video games are now bigger than the movie and music industries combined! (1) The world’s largest companies like Google, Facebook (now Meta) and Apple along with dozens and maybe hundreds of other companies are investing in video games. What was once a niche industry is starting to permeate many aspects of our lives in ways that make “Gaming” hard to define. This is helped by “Gamification” which is the process of including game-like features into everything from social media to education.


When people talk about “Video Games” it is not always clear what they mean. Gaming has been evolving since the creation of the first video ever, “Tennis for Two” back in 1958. This was a console game that two people could play using a customized remote specific to Tennis for Two. Watch this video to see how it works!



The first thing I noticed is that it looks really boring. The graphics are about as basic as one can make them. None of the colors we expect today or fancy graphics. But hey…it was the first ever!


Console games continued to dominate for decades before the personal computer starting gaining widespread adoption in the 1990s. Steve Jobs got into computers in part because of his work on video games. Here is a clip from the movie “Jobs” (2013) of Steve Jobs working at Atari … which at the time was a leading video game maker. Notice how simple these games like "Pong" were over 20 years after the first video game.


Games today are becoming increasingly immersive and available on demand. We can have games in our pockets, our glasses, computers, TVs, watches, and tablets. We can play with people anywhere in the world in real time and stream them to thousands or more if we want.


Gamification is so powerful at increasing engagement that aspects of games are coming into many activities that I never previously thought of as “gaming” like education. My sister and I are using gamification at WEquil.School to help incentivize students to create projects. For example, students at our school can create customized 3D animations using our modified Minecraft server "WEquilCraft".


These animations are a form of digital art that can be sold as Non-Fungible Tokens. Students are not only learning about games and entertainment...they are also learning how to write software such as in our Java in Minecraft class and about new technologies like the Metaverse, Blockchain, and decentralized applications that allow the sale of digital property. You can see our livestream on this subject by clicking the image below.


What are the implications of the booming video game industry and gamification for kids like me?


That is the question I am trying to answer in this article.


Video Game Industry


The video game industry generated $160 Billion in revenue in 2020. That is larger than the movie and music industries combined. Mobile video games were the most popular … capturing $77 Billion of 48% of the total. Other major categories include console games at $45 Billion and PC games at $37 Billion. New types of devices are coming into the gaming world creating new ways to play. Two decades ago it was just PCs and consoles. Then mobile games came in the picture with the adoption of smartphones. Then tablets came…and now virtual / augmented reality devices.


Source: NewZoo.com


New games and devices appear to be expanding the user base of gamers. One might expect that new devices like tables and mobile games would substitute for consoles and PCs, but the trends suggest that new devices are just creating new ways to have fun with new appeals for new people. More options means more personalization of experiences so while some people prefer the immersive console experience like Xbox others may prefer the passive convenience of mobile games on their pocket smartphone.


Growth in gaming continued in 2021 even as the world started to roll back many social distancing activities and get back to a new normal. Growth in 2021 grew by about 13%



New devices create new opportunities, leading to faster growth from a small base. For example, mobile gaming revenue grew by 13.3% during the pandemic while PC and console grow was only 4.8% and 6.8% respectfully. However, the key takeaway from this is that all gaming trends were increasing really fast! Ark Invest estimates that the gaming industry will continue to grow at a 16% cumulative annualized growth rate (CAGR) through 2025.


Virtual + Augmented Reality


New devices like Virtual + Augmented Reality headsets could be the next big growth area for gaming. Ark Invest estimates that augmented reality could surpass $120 Billion in revenue by 2030. Like we have seen with mobile and tablet gaming … the entrance of new devices will likely continue to expand the adoption of gaming to a wider audiences rather than take away interest in existing gaming experiences. We may even see a merging of various devices such as the use of virtual reality headsets combined with console gaming.



This video shows the power of using VR/AR technology in a wide range of different applications. For example, using a AR headset to create personalized displays for games like flight simulators. Another example from the video below is creating personalized computer setup with as many screens as you want positioned how you want and the ability to move these around digitally at ease.


Watching these videos makes me think that perhaps Ark Invests growth projects are plausible. With so much flexibility why would kids and adults not want to use augmented reality to improve games and other activities like virtual work meetings. I could imagine myself having a lot of fun virtually working with classmates at WEquil.School using something like an AR or VR headset that transports me inside a virtual world.

One big problem right now is that all my friends and family are spread out across so many different platforms. Another problem is that people don't usually have much control over the games they play. Games are traditionally controlled by companies that control all the property. Governments also have a lot of power in some countries like China which recently restricted gaming for kids to just an hour a day.


If only there was a solution!


Metaverse and Blockchain


These two problems, fragmented gaming platforms and centralized control, are being solved by innovators right now!


Imagine a virtual world that connected many games and social media platforms. That world has a name..."Metaverse".


Mark Zuckerburg recently changed the name of Facebook to "Meta" ... part of a broader company push to combine their investments into virtual and augmented reality with their dominant foothold in social media. YouTube is not particularly social ... and Instagram is owned by Meta. So if we take the data from Pew Research below at face value it seems Facebook already is best positioned to try and create a "Metaverse".


Many companies are likely to be involved in the creation of the Metaverse besides Facebook (now Meta). Some of the companies often cited as leaders in this space are included in the video below such as Nvidia, Roblox, Microsoft, and Unity to name a few.

Combine the Metaverse with Blockchain technology and you have a seamless virtual world controlled by no one. Gaming on the blockchain has the advantage of allowing gamers to own their own property such as skins, weapons, property, and avatars. This property is typically owned by keeping NFTs in a crypto wallet such as Metamask which is then linked to the game. The game then verified that you have ownership over these NFTs to confirm that you indeed are the true owner in game.


In conclusion, games are being so much fun and so engaging that many parents (and some kids) are understandably concerned about addiction. Games provide a lot of opportunity...but they also include a lot of risks.


Addiction Psychology


One concern on many parent’s minds (and some kids like me) is the increasingly addictive qualities of games. But before getting into video games, lets take a look at addiction psychology in general so we know what we are talking about.


Dr Brandon Bergman from Harvard Medical School came to speak at WEquil.School last year to discuss student projects about Psychology. One of the projects was from Antigone Stark who wrote an article about "Addiction and the Brain".


Antigone provides some useful background on the nature of addiction. Here is one excerpt... "Addictive behaviors and substances make changes to the brain by affecting the pleasure center. Medically referred to as the nucleus accumbens, the pleasure center reacts to all pleasurable stimuli by releasing a type of neurotransmitter called dopamine ... When the brain is flooded with high levels of dopamine, it gets overwhelmed. To cope, it will stop producing as much dopamine or eliminate dopamine receptors to subdue the extreme effects of the dopamine." - Antigone Stark - Psychology Demo Day July 19, 2021


In other words, activities or substances that cause extreme levels of pleasure can potentially cause the body to create less dopamine. This can make people dependent on these activities / substances.


So how does this apply to video games?


Gaming Addiction


The World Health Organization (WHO) defines a gaming disorder as a person who experienced "significant impairment in personal, family, social, educational, occupational or other areas of their life over the course of 12 months".


This definition of "Gaming Disorder" is similar to what I learned at WEquil.School from Antigone Stark's article and confirmed by Dr Bergman. Video games can cause long and uncontrolled use by being so much fun that they suppress the brains natural dopamine creation from other activities leaving some people dependent on the video game for finding pleasure.


That sounds like it could be a problem.


Also reminds me of the time I stopped eating sugar with my sister for several years. The first month or so it was hard. But then my brain started learning to appreciate healthier foods.


So how serious is Gaming Addiction?


In the United States kids spend an average of about 2 hours a day, and teens spend 3 hours a day or more playing video games. That's HUGE!


Moreover this doesn't even count the amount of screen time generally. Gamification is also blurring the lines such that it is becoming harder to know what is a "Game" and what is socializing vs what is "School".


The longest study on the topic of video game addiction was conducted by Brigham Young University. After six years this study found that 90% of gamers, "do not play in a way that is harmful or causes negative long-term consequences". Nearly every kid I know plays at least some video game some of the time so it seems that this study is suggesting that one in ten kids is playing games in a way that could have harmful consequences.


No wonder "Kids are Taking" wants to talk to kids about gaming and addiction.


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My sister and I are going to be talking about this tonight on YouTube. You can watch at the link below!



Sincerely,

Aila (with help from my dad Mr WEquil)

Co-Founder of www.WEquil.School


References


  1. Investopedia - How the Video Game Industry Is Changing.https://www.investopedia.com/articles/investing/053115/how-video-game-industry-changing.asp

  2. https://www.wequil.school//post/addiction-and-the-brain

  3. The World’s 2.7 Billion Gamers Will Spend $159.3 Billion on Games in 2020; The Market Will Surpass $200 Billion by 2023 https://newzoo.com/insights/articles/newzoo-games-market-numbers-revenues-and-audience-2020-2023/

  4. Tennis for Two - https://www.aps.org/publications/apsnews/200810/physicshistory.cfm

  5. Gaming Addiction - https://spectrumlocalnews.com/tx/south-texas-el-paso/news/2021/09/27/research-shows-gaming-addiction-rare-in-u-s--