DEAR EXPERT
Stepping Up Their E-Game
JOOST VAN DREUNEN explains the significance of two of the newer behemoths
in the esports business.
Dear Expert, What are your thoughts about Microsoft’s Project xCloud and Fox’s investment in Caffeine.tv? Will either one be a game changer? Streaming in Seattle Dear Seattle, Little Lies, #swoon) or a Netflix-type expeMicrosoft’s xCloud promises to deliver rience (“I bet you I can find something in on what I think is the holy grail of cloud here to keep me entertained right now”)? gaming: delivering console-quality gaming As for Caffeine.tv: I never expected one that is platform agnostic. What we’ve seen of the Murdochs to say they’re planning to so far is a lot of PC gaming services that involve a lot of extra steps. We haven’t seen the ultimate (and arguably only) form that matters: console-quality games that can be played around the world on mobile devices. Project xCloud is a tactical response to Google’s Stadia release. To not have Google dictate the narrative and set consumer expectations around cloud gaming, it is critically important that Microsoft keeps pushing. For us mortals, it is a great benefit Microsoft's xCloud is expected to feature Halo 5. to have an eager and well-funded tech firm “deliver compelling experiences in esports, trying to muscle its way into this category. video gaming and entertainment.” 21st It puts everyone on notice and makes them, Century Fox’s $100 million investment quite possibly, try a little harder. in Caffeine includes funding for Caffeine It’s easy to dismiss the Microsoft’s foray Studios, jointly owned by Fox Sports and as a reaction to Google’s imminent release Caffeine, which will produce esports and in November. But team Redmond has been live entertainment content for the social working on this for years. When Phil Spen- broadcasting platform. cer, Microsoft’s executive vice president of It’s a bit on the tardy side, given that Disgaming, started reporting directly to CEO ney+ is launching this month (November); Satya Nadella, the company showed how AT&T’s WarnerMedia recently dropped serious it was about gaming as a cornerstone $500 million on The Big Bang Theory; and of its long-term strategy. Apple TV has stepped up its game. There are some key questions here: once The strategic question is obvious: does it the tech kinks have been worked out, what make sense for Fox to go it alone, or will it type of offering can audiences expect? find out 18 months from now that it should Whenever I log into my cloud service, will just syndicate its content through a more I find a HBO-type experience (high-end popular platform? An important part of content with superstar creatives, OMG Big the answer will have to do with whether it will be different enough. Fox does have a lot Do you have a professional puzzle that of live sports, although much of that may MFM and BCCA experts might be able to already be tied to services like Fox Sports answer? We’ll mine the contact base and find Live and Fox Go. Nowadays everyone has the right person to answer your question. Just contact TFM editor Janet Stilson at their own subscription video on demand TFMeditor@mediafinance.org.
6 The Financial Manager • November/December 2019
offering. (It’s much more exciting to bring new services where there currently are none, like Apple Arcade, the iPhone game subscription service. But I digress.) There's another question: will Caffeine convince the existing audiences for Twitch and YouTube to move over. Just recently we saw Ninja packing up and moving over to Mixer, which worked well for Microsoft. And Twitch barely skipped a beat. I believe that the pedigree of Caffeine’s leadership will likely result in the most beautiful, intuitive live streaming interface as one would expect. Last year Caffeine snagged Jen Folse, a lead designer of Apple TV, and installed her as vice president of product. (Caffeine was founded by two other former Apple TV designers, Ben Keighran and Sam Roberts, in 2016.) Since Folse’s arrival, the emphasis at Caffeine seems to be on delivering the coolest product. But who’s going to watch it? And, most importantly, what are they going to be watching? Yes, there are currently around 900 million people that watch gaming video content globally. And yes, this audience is an obvious early adopter that will help media companies work out the kinks as they transition away from traditional broadcasting to internet-based television. But that means Caffeine will be competing head-on with YouTube, Twitch, Mixer and every other media streaming widget. Fox is investing in a product that is not even live yet while every single one of its competitors has already f leshed out a multi-billion-dollar content strategy. I suggest they order themselves a triple shot of espresso and catch up. Joost van Dreunen leads the global games team at Nielsen and teaches at the New York University’s Stern School of Business. He can be reached at joost.vandreunen@nielsen.com.
