AR 1.0 is dead: Here’s what it got wrong

The first wave of AR startups offering smart glasses is now over, with a few exceptions.

Google acquired North this week for an undisclosed sum. The Canadian company had raised nearly $200 million, but the release of its Focals 2.0 smart glasses has been cancelled, a bittersweet end for its soft landing.

Many AR startups before North made huge promises and raised huge amounts of capital before flaring out in a similarly dramatic fashion.

The technology was almost there in a lot of cases, but the real issue was that the stakes to beat the major players to market were so high that many entrants pushed out boring, general consumer products. In a race to be everything for everybody, the industry relied on nascent developer platforms to do the dirty work of building their early use cases, which contributed heavily to nonexistent user adoption.

A key error of this batch was thinking that an AR glasses company was hardware-first, when the reality is that the missing value is almost entirely centered on missing first-party software experiences. To succeed, the next generation of consumer AR glasses will have to nail this.

Image Credits: ODG

App ecosystems alone don’t create product-market fit

Oculus co-founder and games industry vets form Mountaintop Studios

Oculus co-founder Nate Mitchell is heading up a new game development house called Mountaintop Studios, joined by colleagues from around the gaming industry. The company aims to leave the crunch and toxic culture pervasive in game studios behind and make one that’s “collaborative, anti-crunch, diverse, and inclusive.”

The founding team includes Mitchell’s former colleague Mark Terrano, who was creative director at Oculus, Matt Hansen, former COO of Double Fine, and artist Rich Lyons, who worked at Naughty Dog and Vigil.

According to its webpage, Mountaintop will be creating “multiplayer games for players who crave a challenge,” though when I chatted with Mitchell and Hansen, they cited mostly single-player titles. The theme they came back to was growth and a journey: mystery, but also mastery.

As the company’s initial blog post puts it:

It isn’t just the thrill of victory. It’s looking back and seeing how far you’ve come. How you were forced to grow, adapt, and improve. It’s the satisfaction of knowing you’re better than you were before. And sometimes, it’s sharing the joy of the climb with your friends.

While it’s too early for the team to reveal details on their first game, “we think we’re onto something,” Mitchell said. Considering the time and effort it takes to create a AAA game these days, and the fact that Mountaintop is currently only five full-timers, we can probably expect the first details no earlier than next year.

But the founders were clear that the company is also about getting away from the culture problems in game development.

“What we really want to do is have a studio that is people first,” Mitchell said. “There are so many folks across the industry who have just been burnt out by endless crunch. And the expectations around hours don’t allow for any sort of work life balance. We want Mountaintop to be a place where people can come and still have that.”

But it isn’t just labor issues of crunch and overtime plaguing gaming. Racism and sexism that are endemic and evident in both the final products and companies themselves. And it must be said that the founders themselves follow one of the most common and unfortunate trends in the industry: All four are white men.

Mitchell and Hansen declined to make any specific commitments as far as diversity and inclusion go, despite those values being central to the new studio. They did, at least, acknowledge the difficulty and complexity of this pursuit.

“There’s no silver bullet for inclusivity, a lot of it is long term work,” Mitchell said. “Because it’s a fresh studio, a fresh culture, we can start from scratch with the right foundation. We never thought when we kicked off the studio that we’d be launching in the middle of not just a pandemic, but a global conversation about institutionalized racism, police violence, and injustice. So talking about that stuff internally, where we stand as individuals and as a company, that informs how we act as a company.”

“One of the earliest conversations we had was around getting the culture right. Our founders are all aligned in this,” added Hansen.

“There’s a bunch of micro things we can do every day,” continued Mitchell. “Setting our cultural values, making sure people understand those, driving towards inclusivity and diversity training, excellent hiring practices, working with community groups and integrating and supporting them, maybe recruiting from there.”

It’s a lot of promises and few concrete commitments, a common theme in tech and gaming these days. Having one’s heart in the right place is nice, but what the industries need is action. Hopefully the promises are preludes to lasting decisions, but only time (plus real and sustained effort on Mountaintop’s part) will tell.

DoubleDown is going public: Why isn’t its IPO worth more?

Agora isn’t the only company headquartered outside the United States aiming to go public domestically this quarter. After catching up on Agora’s F-1 filing, the China-and-U.S.-based, API-powered tech company that went public last week, today we’re parsing DoubleDown Interactive’s IPO document.


The Exchange is a daily look at startups and the private markets for Extra Crunch subscribers; use code EXCHANGE to get full access and take 25% off your subscription.


The mobile gaming company is targeting the NASDAQ and wants to trade under the ticker symbol “DDI.”

As with Agora, DoubleDown filed an F-1, instead of an S-1. That’s because it’s based in South Korea, but it’s slightly more complicated than that. DoubleDown was founded in Seattle, according to Crunchbase, before selling itself to DoubleU Games, which is based in South Korea. So, yes, the company is filing an F-1 and will remain majority-held by its South Korean parent company post-IPO, but this offering is more a local affair than it might at first seem.

Even more, with a $17 to $19 per-share IPO price range, the company could be worth up to nearly $1 billion when it debuts. Does that pricing make sense? We want to find out.

So let’s quickly explore the company this morning. We’ll see what this mobile, social gaming company looks like under the hood in an effort to understand why it is being sent to the public markets right now. Let’s go!

Fundamentals

Any gaming company has to have its fun-damentals in place so that it can have solid financial results, right? Right? [Editor’s note: A

Anyway, DoubleDown is a nicely profitable company. In 2019 its revenue only grew a hair to $273.6 million from $266.9 million the year before (a mere 2.5% gain), but the company’s net income rose from $25.1 million to $36.3 million, and its adjusted EBITDA rose from $85.1 million to $101.7 million over the same period.

Mobile developer Tru Luv enlists investors to help build a more inclusive alternative to gaming

Developer and programmer Brie Code has worked at the peak of the video game industry – she was responsible for many of the AI systems that powered non-player character (NPC) behavior in the extremely popular Assassin’s Creed series created by Ubisoft. It’s obvious that gaming isn’t for everyone, but Code became more and more interested in why that maxim seemed to play out along predictable gender lines, leading her ultimately to develop and launch #SelfCare through her own independent development studio TRU LUV.

#SelfCare went on to win accolades including a spot of Apple’s App Store Best of 2018 list, and Code and TRU LUV was also the first Canadian startup to attend Apple’s Entrepreneur Camp program. Now, with over 2 million downloads of #SelfCare (without any advertising at all), Code and TRU LUV have brought on a number of investors for their first outside funding including Real Ventures, Evolve Ventures, Bridge Builders Collaborative and Artesian Venture Partners.

I spoke to Code about how she came up with and created #SelfCare, what’s next for TRU LUV, and how the current COVID-19 crisis actually emphasizes the need for an alternative to gaming that serves many similar functions, but for a previously underserved groups of people for whom the challenges and rewards structures of traditional gaming just don’t prove very satisfying.

“I became very, very interested in why video games don’t interest about half of people, including all of my friends,” Code told me. “And at that point, tablets were becoming popular, and everyone had a phone. So if there was something universal about this medium, it should be being more widely adopted, yet I was seeing really clear patterns that it wasn’t. The last time I checked, which was maybe a couple years ago, there were 5 billion mobile users and around 2.2 billion mobile gamers.”

Her curiosity piqued by the discrepancy, especially as an industry insider herself, Code began to do her own research to figure out potential causes of the divide – the reason why games only seemed to consistently appeal to about half of the general computer user population, at best.

“I started doing a lot of focus groups and research and I saw really clear patterns, and I knew that if there is a clear pattern, there must be an explanation,” Code said. “What I discovered after I read Sheri Grainer Ray’s book Gender Inclusive Game Design, which she wrote in 2004, in a chapter on stimulation was how, and these are admittedly gross generalizations, but men tend to be stimulated by the sense of danger and things flashing on screen. And women, in her research, tended to be stimulated by something mentioned called a mutually-beneficial outcome to a socially significant situation. That’s when you help an NPC and they help you, for instance. In some way, that’s more significant, in the rules of the world than just the score going up.”

TRU LUV founder and CEO Brie Code

Code then dug in further, using consumer research and further study, and found a potential cause behind this divide that then provided a way forward for developing a new alternative to a traditional gaming paradigm that might prove more appealing to the large group of people who weren’t served by what the industry has traditionally produced.

“I started to read about the psychology of stimulation, and from there I was reading about the psychology of defense, and I found a very simple and clear explanation for this divide, which is that there are two human stress responses,” she said. “One of them, which is much more commonly known, is called the ‘fight-or-flight’ response. When we experience the fight-or-flight response, in the face of challenge or pressure or danger, you have adrenaline released in your body, and that makes you instinctively want to win. So what a game designer does is create these situations of challeng,e and then give you opportunities to win and that leverages the fight-or-flight response to stress: That’s the gamification curve. But there is another human stress response discovered at the UCLA Social Cognitive Neuroscience lab in 2000, By Dr. Shelly Taylor and her colleagues. It’s very prevalent, probably about half of stress responses that humans experience, and it’s called tend-and-befriend.”

Instead of generating an adrenaline surge, it releases oxytocin in the brain, and instead of seeking a victory over a rival, people who experience this want to take care of those who are more vulnerable, connect with friends and allies, and find mutually beneficial solutions to problems jointly faced. Seeking to generate that kind fo response led to what Code and TRU LUV call AI companions, a gaming alternative that is non-zero sum and based on the tend-and-befriend principal. Code’s background as an AI programmer working on some of the most sophisticated virtual character interactions available in modern games obviously came in handy here.

Code thought she might be on to something, but didn’t anticipate the level of #SelfCare’s success, which included 500,00 downloads in just six weeks, and more than 2 million today. And most of the feedback she received from users backed up her hypotheses about what the experience provided, and what users were looking for an an alternative to a mobile gaming experience.

Fast forward to now, and TRU LUV is growing its team, and focused on iterating and developing new products to capitalize on the clear vein of interest they’ve tapped among that underserved half of mobile users. Code and her team have brought on investors whose views and portfolios align with their product vision and company ethos, including Evolve Ventures which has backed a number of socially progressive ventures, and whose managing director Julius Mokrauer actually teaches a course on the subject at Columbia Business School.

#SelfCare was already showing a promising new path forward for mobile experience development before COVID-19 struck, but the product and TRU LUV are focused on “resilience and psychological development,” so it proved well-suited to a market in which mobile users were looking for ways to make sustained isolation more pleasant. Obviously we’re just at the beginning of feeling whatever impacts come out of the COVID-19 crisis, but it seems reasonable to expect that different kinds of mobile apps that trigger responses more aligned with personal well-being will be sought after.

Code says that COVID-19 hasn’t really changed TRU LUV’s vision or approach, but that it has led to the team moving more quickly on in-progress feature production, and on some parts of their roadmap, including building social features that allow players to connect with one another as well as with virtual companions.

“We want to move our production forward a bit faster than planned in order to respond to the need,” Code said.”Also we’re looking at being able to create social experiences a little bit earlier than planned, and also to attend to the need of people to be able to connect, above and beyond people who connect through video games.”

Newzoo forecasts 2020 global games industry will reach $159 billion

Games and esports analytics firm Newzoo released its highly cited annual report on the size and state of the video gaming industry yesterday. The firm is predicting 2020 global game industry revenue from consumers of $159.3 billion, a 9.3% increase year-over-year. Newzoo predicts the market will surpass $200 billion by the end of 2023.

Importantly, the data excludes in-game advertising revenue (which surged +59% during COVID-19 lockdowns, according to Unity) and the market of gaming digital assets traded between consumers. Advertising within games is a meaningful source of revenue for many mobile gaming companies. In-game ads in just the U.S. drove roughly $3 billion in industry revenue last year, according to eMarketer.

To compare with gaming, the global markets for other media and entertainment formats are:

Counting gamers

Of 7.8 billion people on the planet, 4.2 billion (53.6%) of whom have internet connectivity, 2.69 billion will play video games this year, and Newzoo predicts that number to reach three billion in 2023. It broke down the current geographic distribution of gamers as:

  • 1,447 million (54%) in Asia-Pacific
  • 386 million (14%) in Europe
  • 377 million (14%) in Middle East & Africa
  • 266 million (10%) in Latin America
  • 210 million (8%) in North America

Where to open a game studio

With the game industry booming, more entrepreneurs are evaluating where to base their new startup or open a new office for their existing company. The U.S. government’s block on H1-B and L-1 visas will encourage American game startups to add an office abroad much sooner than they otherwise would have. But where?

This spring, I surveyed a number of gaming-focused VCs about which cities are the best hubs for game studios targeting the Western games market. Several locales stood out as heavily recommended — which I’ve shared below — but the most interesting takeaway was the lack of consensus.

Game studios are far less geographically concentrated than other categories of VC-backed startups. While there are odes on Twitter and conference stages that “you can build a successful startup anywhere,” most investors will push founders to locate themselves in the SF Bay Area, or at least in LA, NYC or London. Meanwhile, the most common piece of advice from those I spoke to: You should probably not base a gaming startup in the San Francisco Bay Area.

Access to the right talent is the top priority, as is the ability to retain them. Proximity to investors matters, but a successful game quickly turns a profit, which reduces the need for outside funding beyond Series A (and U.S. and European VCs who focus on gaming tend to be very international in scope). Quality of life, ease of obtaining visas and access to strategic partners all play into the decision as well and will weigh these recommendations differently depending on who you are and the games you’re developing.

Three notes:

  • I focused on qualitative research, gauging the assessments of top investors who track new startups in the sector about where the action is right now. 
  • The scope of this survey is limited to studios targeting the Western gaming market, so leading hubs in Asia weren’t included.
  • I group cities by metropolitan area so, for example, San Francisco includes Redwood City and Seattle includes Bellevue.

North America

In North America, Los Angeles is the clear favorite with Montreal, Seattle, San Francisco, Toronto and Vancouver all receiving many endorsements as the other top hubs. Regarding cities with the most interesting gaming startups recently, Ryann Lai of Makers Fund said, “It is hard to name a single best location, but Toronto, Culver City (in Los Angeles), Orange County (next to Los Angeles) have gotten increasingly popular among gaming founders lately.”

Animal Crossing’s summer update will let you swim for sea critters

There’s huge news today for Animal Crossing: New Horizons players still devoted to the most pleasantly addictive way to stay kind of sane stuck at home during the pandemic. In the biggest update yet to the Nintendo Switch hit, players will soon be able to explore the water around their island. Oh — and Gulliver is a pirate now.

The free update will arrive on July 3, marking the first of two waves of new content due out in the summer season (for players in the Northern Hemisphere, anyway!). The update invites players to plunge into the ocean and swim around to collect anemones, starfish, eels and other sea-faring creatures, which can then be donated to their museum collection. The mysterious second half of the update is due out in early August.

The game will also add another new character, Pascal, a sea otter who you can hit up for new recipes. Anyone who’s played past Animal Crossing titles will recognize Pascal as a chill guy who doles out equally chill pearls of wisdom while casually treading water.

For a game that revolves around familiar cycles — collecting fruit, pulling weeds, shaking trees to find nice living room furniture — the addition of swimming and diving is actually a pretty big change. And it’s probably a good reason for anyone who went hard on New Horizons in the early days of the pandemic and ran out of things to do to revisit the game. It’ll be interesting to see what else Nintendo has in store for New Horizons, as it’s the first Animal Crossing title in a gaming era that expects plenty of post-release downloadable content already plotted out on the roadmap.

It’s also the perfect time to casually stroll out among your villagers while acting like no time passed at all if, like me, your wife accidentally broke one of your Switch controllers and you haven’t played in three weeks. Lolly, if you’re reading this, I want you to know they were back-ordered and this doesn’t change anything between us. Really.

Animal Crossing’s summer update will let you swim for sea critters

There’s huge news today for Animal Crossing: New Horizons players still devoted to the most pleasantly addictive way to stay kind of sane stuck at home during the pandemic. In the biggest update yet to the Nintendo Switch hit, players will soon be able to explore the water around their island. Oh — and Gulliver is a pirate now.

The free update will arrive on July 3, marking the first of two waves of new content due out in the summer season (for players in the Northern Hemisphere, anyway!). The update invites players to plunge into the ocean and swim around to collect anemones, starfish, eels and other sea-faring creatures, which can then be donated to their museum collection. The mysterious second half of the update is due out in early August.

The game will also add another new character, Pascal, a sea otter who you can hit up for new recipes. Anyone who’s played past Animal Crossing titles will recognize Pascal as a chill guy who doles out equally chill pearls of wisdom while casually treading water.

For a game that revolves around familiar cycles — collecting fruit, pulling weeds, shaking trees to find nice living room furniture — the addition of swimming and diving is actually a pretty big change. And it’s probably a good reason for anyone who went hard on New Horizons in the early days of the pandemic and ran out of things to do to revisit the game. It’ll be interesting to see what else Nintendo has in store for New Horizons, as it’s the first Animal Crossing title in a gaming era that expects plenty of post-release downloadable content already plotted out on the roadmap.

It’s also the perfect time to casually stroll out among your villagers while acting like no time passed at all if, like me, your wife accidentally broke one of your Switch controllers and you haven’t played in three weeks. Lolly, if you’re reading this, I want you to know they were back-ordered and this doesn’t change anything between us. Really.

Sony will now pay researchers $50,000+ for critical PS4 bugs

Think you’ve found a way to consistently brick someone’s PS4, or make it run code that it shouldn’t? Sony wants to know — and now they’re willing to pay.

This morning Sony announced that it’s opening its bug bounty program to the public, and will pay for newly discovered bugs and exploits that impact either the PlayStation 4 or their online PlayStation Network.

Sony is pretty explicit about what kind of bugs they’re looking for: anything that hits “the PlayStation 4 system, operating system, accessories” in its current and/or beta form, or that impacts any of a handful of PlayStation Network domains/APIs. Tactics like socially engineering Sony employees or DDoSing their servers, meanwhile, aren’t allowed.

Bugs found in the PlayStation Network will have base bounties of $100-$3,000 or more (depending on severity), while critical bugs found related to the PS4 itself will pay $50,000 or more. You can see Sony’s breakdown, including what’s in/out of the program’s scope, right here.

(Note the focus on PlayStation 4. Finding a new way to break the ol’ PS2 is cool and all, but Sony won’t be dishing out any money for it.)

In a blog post announcing the bug bounty program, Sony notes that they’ve actually been running this program quietly with a handful of researchers for a while now — today, though, they’re opening it up to anyone with the skill and interest. The program’s HackerOne page says Sony has already paid out over $170,000 to researchers, with an average bounty of around $400.

Microsoft launched a similar bug bounty program for Xbox Live earlier this year.

Confronting racial bias in video games

Protests across the U.S. over police violence and systemic racism against Black Americans have sparked gaming companies like Electronic Arts, Epic Games and Sony Interactive Entertainment/PlayStation to publish statements of their support and make donations to relevant advocacy organizations.

These are positive actions, but the most impactful thing game companies can do is take action internally. Racial bias is baked, usually unintentionally, into games by those who develop them. This creates a recurring pattern of Black and Latinx characters being stereotyped or completely absent in games, which is invalidating and demeaning.

There are 2.5 billion gamers in the world, a group that includes consumers across every ethnicity and age (especially in mobile gaming, the largest market segment). Quartz has noted that “57% of video game players in the U.S. between the ages of 6 and 29 will be people of color in less than 10 years.” Black and Latinx youth in the US spend more time per day, on average, on both mobile games and console games than white youth. For hundreds of millions of gamers globally — particularly in demographics driving the industry’s rapid growth — there are very few games whose stories center on characters like them. That is also a missed business opportunity.

“Telling these stories isn’t as niche as people think it is. Look at [the Marvel movie] Black Panther,” says Rashad Redic, co-founder and Chief Creative Officer of Brass Lion Entertainment, “The content is defined by whether it’s entertaining, period.”

Beyond characters’ skin color, there are subtle aspects of game development that contribute to underrepresentation or misrepresentation. The consistent view among gaming executives and researchers I interviewed for this article is that the lack of diversity among employees at leading gaming companies results in leadership remaining largely oblivious to this.

Raising this simple critique isn’t always welcome. Games industry journalist Gita Jackson, for example, has described the criticism she gets anytime she mentions the race of characters within a game. “I think the presence of more video game characters who are women of color is good … These should not be controversial statements — I’m simply stating something I appreciate, something that’s relevant to me,” she wrote last year, “and yet some readers responded as if I’d suggested that all gamers should amputate their pinky toes.”

Character representation

One of the most extensive studies of racial representation in games was a 2009 study that analyzed 150 of the most popular titles. Black characters comprised 10.7% of characters, roughly on parity with the then-most recent census data that 12.3% of Americans are Black, and only 2.7% of characters were Latinx (relative to 12.5% representation in the U.S. population). But Dmitri Williams, a professor at the University of Southern California and the lead author of that study, says that Black representation is even lower if you only look at primary characters and that in any case “athletes in sports games account for most of the Black characters in those games.”

Kishonna Gray, a professor at the University of Illinois—Chicago, highlights that merely tracking the number of Black characters present in games misses the point of how they are represented. “In film, there have historically been three roles you see Black characters in: Black as violent, Black as the sidekick, Black as the help. This has also been true in video games.”

Furthermore, she argues that “sports games should be removed from those analyses since they are just copying real people from the real world” and mask the statistics that would show how infrequently Black characters arise from the creative process at most game studios.

Casting specific demographics in a certain light in any form of media has an impact on consumers’ perception of those demographics in the real world. At least one academic study found that white participants were more likely to associate Black faces with negative words after playing a violent video game as a Black character than after playing a violent video game as a white character.

When the only option to experience the fantasy worlds of many games is through white characters, it internalizes in many gamers that those fantasy worlds weren’t designed for them. “Anything is possible in games,” Gray told me in reference to her passion for the industry, “But anything is only possible for white characters. When they add Black characters to a game they root them only in their real world context … why can’t Black characters ride dragons?”

Game developer demographics

Data has shown that the representation of different races within games correlates to the racial makeup of the game development community. According to Williams. “It was pretty much a one-for-one representation.”

The International Game Developers Association (IGDA) found in the 2019 edition of its annual survey that among game developers worldwide:

  • 81% identify as “white/Caucasian/European”
  • 7% identify as “Hispanic/Latinx”
  • 2% identify as “Black/African-American/African/Afro-Caribbean”

“People draw their inspiration from their experience,” explained Gray, “that’s why we still have a problem with representation.” Redic said that during his career — which includes roles at top gaming companies like Bethesda and Crytek — he has frequently been “the only — or one of very few — Black guy among hundreds of game devs at a company.”

Tanya DePass, founder of the non-profit I Need Diverse Games, makes the point that for companies wanting to improve diversity in their content, “the biggest thing is diverse staff, and diverse staff at leadership level.” Moreover, her advice to game studios is to hire outside experts who can review their development plans and give feedback on where their content may stereotype or misrepresent an ethnic group: “Bring in diversity consultants in the beginning, not a month before launch, and treat it seriously.”

One company that uses consultants is Niantic, the studio behind Pokémon Go and Harry Potter: Wizards Unite. It has also implemented “Diversity and Inclusion check-ins through a game’s concept, preproduction and postproduction phases,” according Trinidad Hermida, the company’s Head of Diversity and Inclusion. “These check-ins look at everything from character design to evaluating whether the internal Niantic team working the product is diverse,” she explained, “Every new game we publish must go through this process to launch.”

Good intentions, slow progress

That IGDA survey last year also found that 87% of game developers said “diversity in game content” is “very important” or “somewhat important,” which offers optimism that representation can improve as developers are pushed to think of diversity less in the abstract and more in the context of the specific games they work on.

The number of Black or Latinx characters across popular games is indeed growing, even if that progress is quite slow relative to the pace at which the demographic makeup of the gaming community is diversifying. Examples can be found in Moby Games’ list of games with Black protagonists through 2017 and the list of Black video game characters on Wikipedia.

Giving users lots of options to customize their avatar’s appearance goes a long way in helping different demographics of gamers feel welcomed and emotionally attached to a game. This is increasingly common in games, but there are often more limited options for Black avatars, like the ability to choose natural hair styles. DePass says that game developers “are often not thinking about the fact that there are other people who also want to see themselves [in creating their avatar].” And when they do, the homogeneity of their team can lead to foreseeable mistakes. For example, DePass expressed that “If Black hair is available at all, it looks bad. Sometimes there’s 5 inches between braids; or Afros look like steel wool. It’s like, ‘Have you ever met a Black person or seen photos of black hairstyles?’”

Cyberbullying

Cyberbullying is a big issue in games, MMOs in particular, and in their efforts to combat it, gaming executives should recognize that both female gamers and Black and Latinx founders are particularly targeted with abuse, often denigrated with slurs and racist jokes.

A small but important step that developers can take, according to Gray, is giving players the option to mark racist behavior as the reason for submitting a complaint against another user. Many games have added the ability to mark a complaint as being due to gender discrimination, she notes, but the lack of a similar option for racism permits game studios to remain ignorant about how often racism occurs on their platform. Collecting data on a problem allows for more measurement of that problem and more effective action to address it.

Building for an underserved market

As DePass noted in our call, “There aren’t a lot of Black creators of games, but there are a lot of Black buyers of games.” There is business opportunity in creating content that better speaks to often-overlooked segments of the gamer community.

The natural question here is: If making games with narratives that center on Black or Latinx characters is a compelling business opportunity, why hasn’t it already been tapped? Leadership at established gaming companies “have a sense of who is a gamer, and who isn’t, that is very archaic” says Glow Up Games CEO Mitu Khandaker, whose studio is developing a mobile game leveraging IP from the HBO show “Insecure.”

Likewise, she explains, entrepreneurs who found their own studios with this thesis quickly find that the major funding sources (publishers and venture capitalists) are composed of ethnically homogenous teams who are quick to judge such games as niche.

As a result, the game developers focused on building games that speak to Black and Latinx audiences remain stuck in the indie games space, lacking the resources or industry credibility to develop a AAA title.

There’s a long list of societal problems that contribute to the disproportionately small number of Black software engineers entering the games industry or in leadership roles in the industry, from less access to high-quality STEM education in K-12 to employers devaluing degrees from historically Black colleges and universities to the well-researched pattern of resumes with white-sounding names receiving dramatically more job interviews.

Khandaker noted that the perceived lack of representation and role models for Black engineers looking at the gaming industry causes many to avoid the sector altogether, and many who enter the industry leave it in frustration.

Taking responsibility

On our recent call, Williams shared his memory of speaking on a panel about racial bias in games at the DICE Conference for game executives: “In the few minutes of transition between the prior session and my panel, roughly 90% of the audience left.”

A repeated sentiment among several of those I interviewed for this post was that the problem is not gaming executives with harmful intent so much as gaming executives lacking the interest or empathy to treat diversity as an issue that they personally should dedicate time to address. Discussion of diversity, whether at conferences or otherwise, is still too often treated as a token matter for purposes of political correctness, not a pressing business problem to solve.

If the current news cycle is helping change that attitude and energize executives in the industry to step up, the most impactful action they can take is to approach diversity as a product development priority not as a PR issue.