Winds of Change: Large gaming studios have had decades of clout over gaming since developing games involved large sets of developers, working for years together, and big budgets to create massive game franchises. However, with the advent of mobile games, the industry has become extremely fragmented. Kids in their basements quickly write a mobile game that could go viral while big-budget games fail to generate enough ROI. To use a cliché, mobile games have democratized game development. Consequently, it has become extremely difficult to project which gaming studio will create the next big hit. Hence, if we are not sure who would win the war, we focus on the weapon suppliers; here we don’t care who wins the war since no matter who wins they all need the weapons. The weapons of the gaming industry are gaming engines and we will discuss how an oligopoly is developing in the gaming engine space.
What is a gaming engine? Simply put, it’s like an operating system for game developers so that they don’t have to modify games for multiple variations of Android, iOS, different versions of Windows, Play Station, Nintendo, etc. Technically, it’s a middleware software layer that sits between the gaming app and the underlying device operating system. Having worked on porting mobile applications to various Samsung phones in my engineering days, I’m well aware of what a pain it is to modify an application for every new phone model and subsequently fix the issues that arise with it. We used to have a Samsung internal porting layer which is the equivalent of a gaming engine but only for Samsung phones; it couldn’t be used on say Nokia or a BlackBerry (yes, once upon a time……). Coming back to modern-day gaming engines: they provide an interface so that the developer writes game application code only for that engine and the game would work seamlessly without any changes on all Android, iOS, Windows, Play Station, etc. devices. The gaming engine provides the underlying conversions to different operating systems as well as different devices. Finally, the gaming engine lets the game developers focus on the creative side while the more device-specific coding part is taken care of by the gaming engine. It allows non-engineers to easily develop games. For e.g, my ten-year-old easily creates a game over a weekend without any knowledge of coding or computers.
In the past, we have discussed existing oligopolies; in this case, there are many gaming engines but given our in-depth understanding of software stacks, we think a select few will gain market share over the next few years to create an oligopoly. We will discuss the pros & cons of different gaming engines to conclude why we think the oligopoly will be formed and by which gaming engines. We will discuss all this and more in Part II of this series of articles.
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Link to similar Oligopoly in Chip Design Tools Industry articles:
- Part I: Chid Design Tools, Triopoly – https://www.linkedin.com/posts/ketuls_nvidia-synopsys-cadence-activity-6975015392578555905-qYc-?utm_source=share&utm_medium=member_desktop
- Part II: EDA TAM – https://www.linkedin.com/posts/ketuls_synopsys-cadence-mentorgraphics-activity-6977506349010038784-ir2R?utm_source=share&utm_medium=member_desktop
- Part III: EDA Risks – https://www.linkedin.com/posts/ketuls_semiconductors-eda-nvda-activity-6981552643856846848-YtUr?utm_source=share&utm_medium=member_desktop
- Part IV: AI in Chip Design – https://www.linkedin.com/pulse/ai-simulation-next-frontier-chip-design-software-eda-ketul