Jon Lai: Why Gaming is Becoming Mainstream
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Episode Summary
The stereotypes and cultural norms of gaming have been shifting dramatically in the last few years. Gaming used to be heavily associated with a young and male stereotype, now that’s far from the truth. Games are appreciated by people of all genders and ages, and increasingly becoming the next gen social platform.
In this episode, I explore with Jon Lai, who has been an instrumental figure in bridging the gap between the gaming and consumer tech industries, the factors that are making gaming become mainstream and his predicted trends of the trajectory of the industry.
The first cause of change has been access and distribution. In the 70s/80s, video games were played in arcades. That evolved to gaming consoles playable at home in the 90s. In the 2000s, social, free to play games were enabled by the internet. All these shifts widened the pool of people we had access to games. The second cause of change is the creators of games. Earlier on, game producers were largely males, which resulted in lots of fighting and action games. As the demographics of creators started to skew, more types of popular games emerged (ex. Candy Crush, puzzle games).
The third cause is the core principles of what makes games fun and engaging. Jon distills it down as the mastery of the self determination theory and a focus on intrinsic motivation as the key component of successful game creation. The specific components:
Autonomy - people want to be in charge of their life and make decisions for themselves
Competence - people want to improve and be on the path towards mastery
Relatedness - people we want to connect with others and socialize
The way good games are structured is consistent with what motivates people. That’s also why non-gaming products (like TikTok, Robinhood, etc) that also leverage self determination theory see a lot of engagement and retention from users.
When it comes to the future of gaming, Jon predicts live streaming and content sharing as a critical component. Imagine being able to create a new form of reality show through the combination of live streaming and gaming where viewers can influence the outcome of games in real time. Moreover, he is a strong proponent that the growth of virtual worlds need to be powered by user generated content, because there simply aren’t enough professional grade content producers to sustain the needs of an infinite and persistent online space. Finally, he is extremely bullish on the emergence of blockchain games. An example is Axie Infinity, which created the play-to-earn concept of gaming, rewarding wins in the game with digital currency that can be converted into fiat currency.
About the Guest
Jonathan Lai is a partner on the consuming investing team at Andreessen Horowitz, focusing on games, next gen social, and the creator economy. Jon serves on the board of Singularity 6, StarStock, Elodie, and Mountaintop. Before a16z, Jon led the North America business development & investments team at Tencent. Prior, Jon was a product manager at Riot Games, the developers of League of Legends, before the company was acquired by Tencent. Jon is a lifelong gamer and can often be found roaming the fields of justice after hours.
Show Notes
[6:20] Historical context of gaming, what does a gamer looked like before and now
[9:00] Why stereotypes around gaming changed
[10:30] Core elements of game psychology and gameplay
[16:40] Rise of streaming and why it’s so appealing
[21:45] Capturing and sharing content gaming and virtual experiences
[27:30] User generated content’s role in building the metaverse
[29:40] Blockchain and NFT games, Play-to-Earn model