Gaming is a bigger global industry than movies — but that’s not the story

Tyagarajan S April 18, 2017 8 min

Story Highlights

  • GPU makers NVIDIA and AMD are in increasing demand to power machine learning and virtual reality
  • Game engines are now powering virtual reality experiences for corporations and consumers
  • Increasingly, companies are using game mechanics to influence gig economy workers, employees and consumers

Gaming is serious business. In 2016, the gaming industry was estimated to be close to $100 billion. In comparison, the global box-office sales (for movies) was less than $40 billion in the same year. Gaming used be a niche addiction for teenage boys. However, the average gamer today is a middle-aged 35 year old giving both credibility and spending power to an industry long looked at with suspicion from those outside.

But this story is not just about the gaming industry.

It’s about how the building blocks that the gaming industry established over the last few decades is now being used to run our world. Today, gaming hardware is being used to power intelligent machines, game engines are being used for building immersive virtual worlds and game mechanics are being used to engage employees and consumers. In this new world, the gaming ecosystem is bringing its vast experience to craft the future world we are all going to live in.

It’s started to happen already.

Gaming chips power the world

Back in 1999, NVIDIA unveiled the GeForce256 (after months of mysterious speculation about it), a Graphics Processing Unit (GPU), that can run a multitude of mathematical calculations to generate lifelike 3D graphics.

It kickstarted a divergence in the gaming industry. On one side was specialised gaming hardware that the likes of NVIDIA and AMD made GPUs for, and on the other side was the generic, cheaper graphics cards that Intel made and got mass adopted.

Intel swept up the market share (68% market share Q4 2016) while NVIDIA(17.5% market share) and AMD(14.4% market share) commanded a premium to become the de-facto gaming chip makers for serious gaming.

Today, however, the two graphics chip makers, NVIDIA and AMD have found a new calling thanks to two key technology waves: Artificial intelligence and Virtual Reality.

NVIDIA is riding the rising tide of A.I and machine learning. Over the last 12 months, it’s market cap has increased by more than 2.5 times from a tad over $20 billion to more than $56 billion today.

NVIDIA’s market cap and share prices have grown by more than 2.5 times in the last year.

As it turns out, GPUs, specialist performers than can run parallel, repeating workloads, were naturally suited to helping neural networks learn from real-world data. And here, Intel has been found wanting.

NVIDIA is seeing an increasing adoption of its GPUs across the massive data centres powering A.I. for large companies including Amazon, Microsoft, Facebook and Google. It’s data centre revenues have tripled in the last three years to $240 million. Recently, it launched its own deep learning system, the DGX-1, a platform which companies can get a quick start toward building neural networks even without any prior experience.

DGX-1 is a NVIDIA server aimed at accelerating deep learning applications

NVIDIA is also the compute power driving autonomous cars. The NVIDIA DRIVE™ PX 2 AI system is being used by major automotive suppliers like ZF and Bosch who are building self driving systems that would be used by automotive manufacturers. Early this year, Audi announced a partnership with NVIDIA to build a level 4 automatic car (a car capable of driving on its own) early this year. Tesla too is betting on NVIDIA to power its autonomous systems.

Meanwhile, AMD is leading the race in VR. Today, AMD chips power more than 80% of all VR systems globally All the leading console manufacturers, Sony, Microsoft and Nintendo have bet on AMD chipsets considering VR is a big area for the future.

About a month back, AMD purchased Nitero, a texas based chipmaker who has developed a 60 GHz wireless chip to transmit high resolution videos. AMD is looking to reshape the VR experience as it seeks to potentially built a wireless VR headset.

But VR gaming is just the beginning. As VR begins to pervade into more and more areas, from shopping to entertainment to education, major gaming chipset makers like AMD will be powering it.

Virtual reality, along with AI, will be one of the defining pillars of our future digital interaction. And the gaming chip makers will likely power it.

Game engines design the world

An increasingly virtual, immersive world, powered by VR and AR has brought game engines and game developers to the front and centre.

Game engines are sophisticated platforms that help render the game graphics, take care of the physics of the game (including collisions, gravity, etc), coordinate the game script, play animations, and also provide the framework for the game’s artificial intelligence apart from a whole bunch of technical and administrative activities including networking and memory management.

In short, game engines have been creating immersive virtual worlds for years now.

This is the reason top game engines like Unity, Unreal Engine and CryEngine are increasingly in demand from those looking to build VR worlds.

Unity, has been increasingly asserting itself as the engine of choice to power VR / AR based world creation. Last year, Unity raised $181 million in series C funding which valued the company at $1.5 billion. Around 90% of the content built for Samsung Gear VR, the most popular VR headset right now, is built on the Unity engine. The smash hit Pokemon Go was built on the Unity engine. Most recently, Unity announced that it is tripling its workforce in India, in order to support its expanding work on VR and AR experiences.

The insanely popular Pokemon Go was built on the Unity game engine

Epic Game Systems, popular for its Unreal Game Engine, is meanwhile working on VR for companies to create marketing material like films and adverts as well as simulate product features. For instance, Mclaren uses VR to imagine paint jobs and the sheen of the material it is planning to use on its vehicles. BMW too, uses Unreal Engine’s rendering platform to enable its engineers to preview materials and textures over a 3D printed generic prototype.

BMW uses the Unreal Engine to render virtual surfaces on 3D-printed prototype vehicle segments. It allows engineers and designers preview the look of different materials and surfaces without making it.

Most recently, NASA partnered with the Unreal Engine to create a mixed reality International Space Station simulator that in conjunction with a robotic crane helps simulate experiences in lunar- or Martian gravity.

While game engines are naturally suited to rendering 3D worlds, there’s more to it. Over the years, these engines have improved their mechanics to provide the most comfortable experience for the gamers to avoid problems like nausea. Today, their expertise is in demand as the world increasingly adopts virtual reality.

Game mechanics run the world

A recent article highlighted how Uber was using hacks from behavioural psychology and game mechanics, like earning achievements and constantly flashing goals, to keep its drivers driving more. As the gig economy grows, platforms will increasingly rely on these approaches to nudge the workers into behaving in a certain way.

While gamification has been a buzzword of sorts for a sometime now, the rise of deep personal data has expanded its meaning in recent times as corporations increasingly use it to improve efficiency, encourage learning and keep workers happy.

It’s not just the corporations that are employing game mechanics.

The fundamental game mechanic that drives engagement are rewards for good behaviour (in the context of the game world) and in turn the rewards generate ‘dopamine’ that keeps us going for more. The more unexpected the reward, the greater the dopamine.

The social media today is built on this premise.

With little rewards (likes on Facebook), notifications popping up to remind us of new updates and a profile that’s constantly growing (followers or points), the platform we use to interact with our fellow humans is now one big game. Yet, this is just the beginning.

Read: Don’t you forget about me: Ready Player One for a nerdgasmic trip to the 80s

In an increasingly connected world where every movement is tracked and seeded, our life will be a game. We can already see how fitness is getting increasingly gamified, with arm bands that track our goals and apps which offer us incentives to reach them. Tomorrow, it is not difficult to imagine if a connected fridge rewards you for stocking healthy food.

Fifteen Million Merits – a BlackMirror episode set in the dystopian future where most of society must cycle on exercise bikes in order to earn “Merits”. The episode is a satire on a society that’s increasingly gamified.

The rewards are only likely to get even more powerful with the mainstreaming of virtual reality. Zuckerberg has plans to build a social platform on VR. This will take addictive social interaction to the next level.

Let’s play life

Today, gaming is going mainstream culturally.

On one side are the young hardcore gamers who are spending more and more of their time gaming and less on employment. It is an escape from the real world. But it is also increasingly an affordable luxury that is replacing the need for a lot of other luxuries and in turn reducing the shrill demand to earn more and more (and therefore not work as much).

On the other side, games have become so accessible and have begun to appeal to all age groups and genders. This inclusiveness has seen most of the world get hooked to gaming in various forms. The newer generations grow up on gamified interactions that has normalised gaming with life through a digital interface.

Increasingly, the the boundaries of game and life are blurring and if what’s happening is any indication, we are all more than happy to make our lives one big game.

Read other articles from the FactorFuture series.


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