Disruptive Technologies For eSports: 3D Printing

DISRUPTIVE TECHNOLOGIES FOR ESPORTS:  3D PRINTING

3D Printer (Photo: KaboomPics)

3D Printer (Photo: KaboomPics)

TNL Industry Guest Post 007: Over the past 13 years, Anton Ferraro has helped develop numerous esports focused properties including tournament broadcasts, television programs, streaming platforms, branded campaigns, digital products & live event activations.

Anton began his career in 2004 by organizing and playing at local Halo events and shortly thereafter joined Major League Gaming to assist their media efforts. After 8 years with the company Anton transitioned to the West Coast and helped build the Azubu streaming platform as Director of Content.

Anton currently resides in Brooklyn, New York with his wife and pug. Too much of his time is spent playing Overwatch. You can view his work at www.AntonFerraro.com


TNL Take:  In the last post I explored the potential impact of the Ethereum Blockchain across a few different verticals and will have a follow up post shortly.  Today we’ll examine opportunities 3D printing can provide within eSports.

 

A CASE STUDY IN STREAMING

In the late 00’s a group of entrepreneurs saw that the cost of delivering a video stream over a network was falling exponentially. At the same time, the proliferation of high speed internet and Moore's Law were allowing an increasing number of hobbyists to engage in the activity.

After a few years of hard work, a few pivots and the ever-needed bit of luck, Twitch sold to Amazon for ~$1B and currently sits as one of the top websites in the world.

3D printing is an industry which mirrors that of streaming.

The technology for printing is becoming exponentially better while the cost to participate is falling. This is allowing an increasing amount of hobbyists to create increasingly more impressive offerings. Digital hubs like MyMiniFactory and support networks like Patreon are allowing some of these hobbyists to generate revenue.

The decentralized nature of the activity will provide opportunities for content creators while challenging IP owners.

The situation parallels the early days of YouTube when video creators utilized IP’s belonging to publishers to create their own content. Heavy handed reproaches by the IP owners were not effective for a multitude of reasons and it took years for the platforms, creators, and IP owners to find a balance all three parties could accept.

Ultimately the IP owners aka Game Publishers realized that free content was an ongoing advertising campaign they could use to greatly increase revenue [Edit: Read this line again and again]

Publishers shifted their product development cycles and created DLC (Downloadable Content) and the GAAS (Games As A Service) business model started padding their bottom lines.

Early movers like TSM and OpTic Gaming built highly engaged followings off the video niche and are still reaping the rewards of that effort. While I expect it will take a few years for the 3D printing vertical to mature, as always early movers may score similar gains.

 

THE IMPLICATIONS OF 3D PRINTING

3D printing will impact eSports by improving the product design and distribution aspects of merchandising. The current merchandising model imposes limits on experimentation and requires long turn around periods for heavily customized gear.

eSports owners are frequently limited by the options offered by their suppliers which has caused a glut of similar items such as the same t-shirts, hats, keychains, hats, and posters.

 

PRODUCT DESIGN

Adding a 3D printing capabilities will allow eSports teams to capitalize on time sensitive tentpole events. Having a subject matter expert designing the gear in house will both shorten the design cycle and increase the authenticity of the item:

  • Custom bobble heads for new roster additions
  • Commemorative medals based on tournament victories
  • Supporting merchandise for viral content

The latest generation of 3D printers are also capable of printing complex electronic components. Once this tech hits the prosumer level it will be possible to create merchandise that can interface with digital libraries to provide additional value to the customer. [Edit: Hi Amazon and the NFL]

http://tnl.media/esportsnews/2017/8/22/ea-madden-nfl-amazon-mobile

http://tnl.media/esportsnews/2017/8/22/ea-madden-nfl-amazon-mobile

DISTRIBUTION

The current model is a pipeline of injection mold design, mass production, and distribution via international shipping.

Injection molds are expensive to produce.

Only after selling a specified amount of merchandise does the designer hit a break even point that pays for the injection mold.

The 3D printing model does not require injection molds and eliminates the risks associated with minimum product and the need to accurately forecast demand. This makes it economically viable to profit from small batches of items and scale up if and when a greater demand materializes.

3D printing is already seeing factories and prosumer level printers offering their services in many areas around the globe. This moves the responsibility of distribution costs and logistics away from designers and allows them to focus on the product.

 

CHALLENGES

Would You? (Photo: Someone On The Internet)

Would You? (Photo: Someone On The Internet)

As with any disruptive technology there are legal and hardware hurdles that need need to be overcome:

  • 3D printing is the perfect storm of patent, IP and privacy law
  • Printers need to get faster & cheaper
  • The technology needs to be more consumer friendly

 

Despite these challenges I believe the momentum of the 3D printing industry will force the existing status-quo to be transformed as it was with eSports video and live streaming.

Amazon's Twitch Prime Move Is Genius

AMAZON'S TWITCH PRIME MOVE IS GENIUS

Twitch Prime Launch At TwitchCon 2016 (Photo: Twitch)

TNL Take: 767 days after buying Twitch for $970M, Amazon is finally integrating the platform deeper into their ecosystem.

And it wasn't just one product.

Friday at the start of TwitchCon 2016, Twitch CEO Emmett Shear revealed a slew of new initiatives of which the biggest was the launch of Twitch Prime.

 

This is a huge move from Amazon.

 

Here's how Twitch Prime will impact the platform:

/01 FREE GAMES AND LOOT AKA DEVELOPER LOVE

Twitch Prime Exclusive Hearthstone Character (Photo: Twitch(

This is the main key to Twitch Prime.

For Twitch Prime Members, they will receive monthly freebies of games and in game items.

Forget the games and focus on the in game items.

  • In October, Twitch Prime members will get a branded skin for Hi-Rez Studios’ SMITE
  • Until November 6, Blizzard's Hearthstone will receive an Exclusive Hero and custom card pack only for Twitch Prime members
  • There will also be continual supply of Boosts and Characters as well

This is so smart.

It not only provides value to the end consumer, but also huge bonus for developers to get more involved with Twitch as a platform - more on that - outside of just live streaming.

If Developers have both marketing + monetization + consumer engagement across Amazon/Twitch; the overall ecosystem becomes much stronger.

 

Twitch Prime Member Game Discounts (Photo: Amazon)

/02 GAME DISCOUNTS AKA MORE DEVELOPER LOVE

Twitch Prime members receive Exclusive discounts on New physical games sold by Amazon during the pre-order period and for the first two weeks after launch. 

This is also ties directly into potential deeper Amazon Sales channel relationships, revenue sharing and further cements developer relationships.

 

Twitch Prime Member Free Monthly Sub (Photo: Twitch)

/03 FREE SUBSCRIPTIONS AKA STREAMER LOVE

Twitch Prime Members get 1 Free Subscription to any channel on a monthly basis. This is again a Win-Win for Twitch: Users get a Free Channel but more importantly - Twitch Streamers get 1 Month of "Free" Income.

This is a further push to keep Streamers on Twitch vs. moving to other platforms.

Another smart move. 

 

/04 AD FREE EXPERIENCE AKA USER LOVE

Twitch Prime members also get the benefit that Twitch Turbo provided, an Ad-Free experience.

You can also say goodbye to Twitch Turbo at this point.

The interesting aspect to me: Obviously based on the number of Amazon Prime/Twitch Prime members, this reduces the US Users from an Ad Sales perspective. Further, Twitch won't show Ads to the Users but will still pay the Streamer as if the Ad played.

Whatever potential Ad Sales revenue losses will easily be offset by the Prime revenue.

So how many people are actually going to sign up? Lets try that next.

 

Amazon's Money Machine (Photo: Amazon)

/05 IT'S ALL ABOUT AMAZON PRIME

All of these features tie together in one master stroke:

To get Twitch Prime you have to have Amazon Prime.

So what's the potential upside of Amazon Prime subscriptions based on including Twitch Prime?

Without having internal data it's very, very, very difficult to quantify - but I'm going to take a quick 1 minute stab:

  • Twitch Users = 100M (Jan 2015)
  • Twitch US % Estimate = 50M (The Next Level)
  • US Prime Users = 55M (Jan 2016)
  • US Prime % = 50% of US Households (July 2016)

Assuming the Twitch user base hasn't dropped in almost two years - it more than likely has - you still can't assume all Twitch users (50M) have Amazon Prime (55M).

A very rough, very quick estimate: A 5% potential increase in Amazon Prime Subscriptions.

Again, just take that directionally if not at all.

Regardless, plenty of number crunchers in Seattle have spent a lot more time, with a lot more data doing this and Amazon is one of the few companies I don't bet against.

Let's wait till the next Quarterly earnings to see if there's any uptick.