Why aren’t you doing analysis on your impact?

If A Tree Falls In The Woods And Nobody Is There To Capture It On ...
“If an insight gets delivered and no one acts on it, did it make a sound?”

Performance based marketing makes intuitive sense; of course you want to optimize ROI on spend that compose 30% or more of a your firm’s expenditures. But here’s the kicker: if it makes sense for firms why not individuals? Shouldn’t we be tracking the impact of our output?

Are co-workers actually reading your analysis, concept art or brand pitches? Imagine if you knew how long internal onlookers spent reading or viewing: how might that change future output? For instance, we might be able to find the optimal length of a memo or detail of a UX mock-up. With more widespread read receipts (on email, calendar invites, PowerPoints) I’d think we’d learn discovery of information within firms is rather low because search costs are so high. I’m routinely shocked by low view counts on important internal Google docs while on the other hand observing the willingness of participants to take a firm stance on the conclusions. Many firms haven’t invested in strong intrawebs to create easy ways to access content or for creators to push them to relevant parties.

This means information travels via internal networks via word of mouth. With a given game publisher distributed over many countries and time zones, this simply doesn’t scale well. Easy consumer discovery, regular “pushing” of content, and tools assist rather than inhibit creation are paramount to spreading the gains from Haykiean localised knowledge.

Why does Epic need $1B in new funding? Is this all about Roblox?

Move over Gabe, there’s a new sheriff in town

Bloomberg is reporting that Epic is seeking to raise $500M to $1B in new funding. Tim Sweeney, Epic CEO and provocateur extraordinaire, owns 60% while Tencent owns the other 40%.

Why would Epic need more funding as it continues to rake in Fortnite money? Tim has bigger ambitions, let’s figure out what they are. As we’ve seen with Roblox, there’s incredible (and growing) money to made in user generated game content. Furthermore, consider the games spawned from mods: Counter Strike, the MOBA genre, Team Fortress, Auto Battlers, H1Z1 (which becomes PUBG which becomes Fortnite)… Imagine if you were able to take even 10% of the lifetime revenue of those titles. Despite Tim’s criticism of platform holders, Epic takes a cut of many games that run on Unreal as part of the licensing agreement. This is reportedly how Fortnite pivoted to BR: Epic got an enormous cheque when PUBG was blowing up.

The pieces have been coalescing:

  • Content creation tool in Unreal – which now scales to mobile
  • Direct to consumer distribution – Epic game store – which now scales to mobile
  • User Acquisition engine and revenue bedrock – Fortnite

But I think this play would blur more of the line between gaming and social networking. The biggest evidence comes from Epic’s acquisition of Houseparty, an app that essentially lets users join a Zoom call and play games together. How else do you explain that acquisition? It ties into their already created, but lesser known, Fortnite Party Hub app and recently announced Party Royale.​

The recent foray into non-gaming content via Fortnite concerts makes more sense in this light as well (or they’re trying to keep the Fortnite in the mainstream).

This helps explain hiring as well; in less then a year Epic has setup offices in practically every major gaming hub: Seattle, San Francisco, Stockholm, Montreal, Helsinki and Berlin. Recent jobs ads focus on the social.

Sort of Facebook circa 2010: lots of quizzes & confusion

Competition is spinning up in the meantime. Manticore games has already launched an alpha, and it’s hard to imagine Roblox being content with only owning the 10-14 yr old demo. It’s important to note this is nothing like a ‘metaverse’ as each game on the platform would retain a distinct identity, whereas a metaverse is closer to the failed PS Home or Second Life. Trying to squeeze hundreds of experiences onto one game presents a variety of complications and very little in the way of benefits.

Maybe when it’s all said and done, Fortnite let’s Tim become the social platform holder Zuckerberg always wanted to be at Facebook.

The Economics of Reality TV

The Circle Brazil | Netflix Official Site

In case you haven’t been paying attention, Netflix just re-discovered the reality/reality-doc genre. In 2 weeks:

  • Tiger King
  • To Hot Too Handle (international cast)
  • The Circle (4 international versions already released)
  • Love is Blind

I chuckled a bit when when Netflix remarked that they saw Fortnite as their biggest threat, but after 6 weeks in quarantine, they may have been on to something. Reality television is an awkward, but fun shot back at digital Travis Scott concerts.

The economics of reality shows have always favored cost. Casts cost $0, 1 or 2 filming locations, short shoot time (sub 6 weeks), and strong vitality potential that front loads views (no one is watching the back catalogue of Survivor). But why now, 7 years since House of Cards launched?

I think this is a simple growth parable: they’ve hit diminishing returns on drama, and this is the next highest expected marginal value item on the menu. In other words, they’ve picked the low hanging, high value fruit already. Widespread international distribution expands the watercolor effect and achieves economy of scale. Shows with live elements like Idol and Got Talent are forced in country specific renditions which limit audience reach. Subtitle support for international versions of shows like The Circle helps it reach English audiences and vice-versa. Living in Europe, you’d be surprised of the appetite for English content across non-native speaking countries.

They’re innovating reality game design as well (or at least the 3rd party studios are). Technology play a huge role in all shows, almost always as a form of communication (or lack thereof). To Hot Too Handle introduces of the most interesting examinations of communal property dynamics: a group prize is reduced when individuals act in their short-term private interest. The Circle asks how people make decisions on limited information – contestants can only communicate over text.

If the last last years have been golden age of TV dramas, maybe the next 10 will be the golden age of reality TV.