Key Takeaways From the Variety Leaders in Gaming and Entertainment Breakfast

Top gaming business leaders converged to talk about the exciting state of the industry at the Variety Gaming & Entertainment Breakfast Presented by Pixel United on Oct. 4 at the Palm in Beverly Hills.

Across keynote conversations and panels with representatives from Riot Games, Pixel United, Meta and other companies, executives dished on the immense film and television crossover potential of gaming intellectual properties for mediums like television and film, the financial dominance of the mobile gaming industry and future metaverse opportunities for video games.

Read on below for the key takeaways from each of the breakfast’s three conversations.

Investing in — not exploiting — intellectual properties will yield positive results for business.

Riot Games struck an intellectual property goldmine in late 2021 when “Arcane,” from creators Christian Linke and Alex Yee, premiered on Netflix. The series was spawned from the massively popular online multiplayer game “League of Legends,” which Riot sought to tap into from a narrative standpoint when they took note of how invested the gaming community had become in its playable characters.

During a conversation with Andrew Wallenstein, president and chief media analyst for Variety Intelligence Platform, Riot’s Marc Merrill, co-founder and president of games, and Shauna Spenley, head of entertainment, underscored the sincere importance of investing in IPs such as “League of Legends” as opposed to exploiting them for a quick dollar. The pair spoke about the six-year process that marked the development of “Arcane” from idea and conception stage to worldwide premiering on the streamer late last year.

“There’s a ton of creative entrepreneurship inside the company,” Spenley said. “In order to create something of that caliber, you really have to give it a ton of space to figure out its identity. That’s what they did.”

Prior to “Arcane,” Spenley noted that there wasn’t a previous market for adult-minded animation stemming from the game. The ambition behind the project and expanding the world of the already-beloved property convinced Riot to expend the time and financial resources toward the series. She also explained that audiences for the game resided in markets where Netflix wanted to grow their subscriber base, such as Korea — a perfect fit for the animated series.

On the assumed risk of transitioning a gaming IP into the traditional entertainment realm, which Wallenstein noted the industry’s troubled history of lackluster video game movie and television adaptations, Merrill remarked how skeptical the “League” community initially was of the series, but its positive reception and awards recognition (“Arcane” won outstanding animated program at this year’s Emmys) has been relieving to them.

“I’m just so proud of Christian and Alex, along with the writers who have poured their hearts and souls into building this world and IP,” Merrill said. “It’s just really meaningful to them, and to our players, to not feel the often-times skepticism and stigma of the broader mainstream. People have really embraced [Arcane.]”

Of the show’s second season, Spenley noted that scripts were just finished for the new season. Riot and Netflix are aiming for a release sometime in 2024.

Gaming is a labor-intensive industry with a global talent pool — giving it more expansive reach and potential than other industries.

In conversation with Variety co-editor-in-chief Cynthia Littleton, Pixel United CEO Mike Lang remarked how much more of a wide-ranging industry gaming can be when compared to mediums like television and film, which are largely centered in metropolitan cities like Los Angeles. The mobile gaming company, which is comprised of three cornerstone developers — Big Fish, Plarium and Product Madness — has identified developer talent pools globally in countries like Ukraine, Poland and Barcelona, with more than 3,500 employees across the world.

For a game like “Raid: Shadow Legends,” which Lang noted puts up about $450 million of revenue every year, the team behind it consists of 250 full-time employees, developing new content to continue the game’s lifespan and keep users engaged.

“Not only is it to retain the audience that loves those games, but it’s also to keep the spirit of that organization going and allow them to extend out in other areas,” Lang said about the company’s philosophy. Pixel United’s big three game developers angle toward different areas of mobile gaming, with Big Fish prioritizing casual games, Plarium offering more fleshed-out experiences and Product Madness working on social casino-based games.

With a demographic that spans across all ages, Lang emphasized the importance of keeping a broad global network of employees based throughout multiple countries to fulfill the needs of its wide-spanning audience. Comparing the gaming industry with traditional entertainment industries, which Lang has worked within previously, he shared insight into the general openness and growing potential of the business.

“I feel like there’s much more open-mindedness within the gaming business toward new ways of thinking than there probably was within traditional media 20 years ago around digital entities and what that meant,” Lang said. “I think the media industry now understands it because it has hit them in the head, but in the gaming business, there’s much more of an openness and I think it comes from a desire to grow the pie and broaden the audience.”

In order to keep up with its expansive global audience, the company also announced a “Responsible Gameplay” initiative to promote positive, safe, fair and compliant gaming experiences for its players. Anastasios Dagkos will lead the initiative in the new role of director of responsible gameplay, where the company’s priorities of protecting and supporting its players will be evident throughout different in-game features, player communications and tools, industry partnerships and employee education.

The developer-intellectual property holder relationship needs to be tight-knit, or problems will arise.

The final conversation of the morning, titled “Building a Franchise Through Gaming and Experiential Entertainment,” explored the booming market of gaming, in addition to future opportunities for video games and in spaces like the metaverse. The panel was moderated by Variety Intelligence Platform correspondent and media analyst Heidi Chung. Participants included Sean Shoptaw, SVP of global games and experiences, The Walt Disney Company; Gio Hunt, VP Oculus Studios for Meta; David Baronoff, founder and chief cross media officer at Bad Robot Games; and Helen Chiang, corporate VP at Minecraft.

“Our big focus is on the metaverse. From a gaming perspective, we’re really looking at virtual reality as the next big platform for gaming,” Hunt said of Meta’s priorities. “We see a tremendous and growing opportunity in that space, but we really do believe that the next new frontier is in VR.”

Hunt continued to elaborate that Meta has been developing games that are their own original IP, but have also tapped into collaborating with other companies to develop new games for existing fanbases. Shoptaw noted that, even though a company like Walt Disney has an extensive array of existing intellectual properties, it does not immediately translate to making great video games.

“Our focus has been on making sure that what we do, there’s a passion for it on the developer side,” Shoptaw said. “If there’s not an affinity or a passion for what you’re trying to build, you’re probably not going to make a successful product.”

Baronoff continued on the theme of developers needing to uphold and keep a proper working relationship with the holders of the intellectual property, understanding why fans enjoy it and making sure to implement it into their work.

“[Our games] need to be a unique window into a world, it can’t just be a retelling or recreation of what was already available,” Baronoff said. “It’s making sure that the gameplay itself is a really good fit with the core themes and pillars of the IP.”

On keeping a generally fickle consumer base satisfied and engaged, Chiang said the most popular developers and creators today are typically the ones that are building universes around their games and IPs, across different platforms.

“I think it’s world-building, especially paired with a strong narrative backbone, that really allows individuals to imagine themselves inside those worlds. That’s where the future is,” she said.

Though the panel jokingly refused to offer a definitive explanation of what the metaverse is, all of the panelists shared an excitement for the possibilities that exist within gaming and crossovers with other mediums. Due to Meta’s Oculus Quest VR technology, Hunt has worked closest with the metaverse and shared that the company has been working hard at exploring how to incorporate its capabilities into the gaming medium.

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