Platform alliances and fragmented user experiences

As a bit of funny context, I’m writing this post amidst one of the biggest stock sell-offs in recent decades. US stock markets actually triggered their circuit-breakers after opening 7% down, and paused trading for 15 minutes. I thought I’d try to be a bit more constructive with my time (while sipping some scotch), instead of just fidgeting in front of my portfolio dashboard.

Nvidia’s GeForce Now has been a steady thread of gaming news in recent weeks. Despite (or rather, exactly due to) what feels like a more compelling end-user value proposition (stream the games you previously purchased), numerous publishers large and small (Activision Blizzard, Bethesda etc.) have pulled their content from this service. Publishers’ perspective is simple: they really don’t like it when a new service generates revenue off their content, without their permission or share of profits. (This The Verge article gives a good overview and analysis of the situation.)

One interesting development today – on one hand, another large publisher, 2K Games, pulled their content; on the other, Epic Games endorsing the platform with the full weight of their store.

The Epic decision is interesting partially because how transparent Tim Sweeney is with his intent. To quote him directly:

Epic is wholeheartedly supporting NVIDIA’s GeForce NOW service with Fortnite and with Epic Games Store titles that choose to participate (including exclusives), and we’ll be improving the integration over time.

It’s the most developer-friendly and publisher-friendly of the major streaming services, with zero tax on game revenue. Game companies who want to move the game industry towards a healthier state for everyone should be supporting this kind of service!

Cloud streaming services will also be key players in ending the iOS and Google Play payment monopolies and their 30% taxes. Apple has decreed that these services aren’t allowed to exist on iOS, and therefore aren’t allowed to compete, which is megalomaniacal and won’t stand.

Some quick observations. First of all, Sweeney caveats/acknowledges that this support still requires publishers’ participation. So the actual impact / enrollment still needs to be seen. (When I first saw the headline without reading Sweeney’s original tweet, I thought it was an unilateral move and wondered how that would work.) And if it does not result in a great majority of the store’s titles becoming streamable, it could mean a very fragmented (and confusing) end-user experience – for example, would Epic Game Store (EGS) add a platform tag on each title that shows which ones are compatible with GeForce Now?

Second, Sweeney discloses his motive is at least partially (if not primarily) about forming an alliance against iOS / Google Play. This makes theoretical sense, and is the sort of classic partnership that gets discussed in business strategy classes. The reason Epic is so eager to rally support against iOS / Google Play platform rules is simple – across the entire video-games vertical, mobile (due to its sheer scale) is generally the biggest opportunity for revenue growth, and the 30% platform fees are likely the biggest opportunity for profit (bottom-line) growth. This logic is the same whether Epic sees itself as a games developer or a publishing platform for 3rd parties.1

For this particular partnership, I’m a bit dubious whether it will meaningfully move the needle. I’m generally bearish on streamed gaming – I think it’s cool technology in search of a problem / audience, and if the strategy is to reach multi-billion gamers, I’d argue mobile-first (or mobile-only) remains the best path over the next 5 years.

Anyway, the other part I wanted to write about is the fragmented user experience in this age of multiple co-existing / overlapping games platforms. What do I mean? To use AAA games as an example – to date, publishers have all built their own launchers / platforms (Uplay, Origin, Rockstar Social Club) alongside distribution platforms such as Steam, GOG and EGS. Players are all familiar with the experience of launching a Ubisoft game on Steam / EGS, just for it to pull up Uplay and the game itself. Putting aside the obvious overlapping functionalities (duplicate social features, overlays, platform achievements, cloud saves), I’ve also seen cases of weird hand-offs – for example, the initial game download was handled by Epic, but during the first launch Uplay initiates a huge patch.

Also – alliances can be temporary, and every break-up is a chance for fragmentation. When Bungie exited its partnership with Activision on Destiny, and moved over to Steam, what did that mean for players’ friends-lists? (They stayed on And how long will Bungie keep its PC migration service up? (Not that it matters that much, as inventory rapidly devalues with new expansions.)

There can also be player-caused fragmentation. Again using Ubisoft as an example – I bought The Division 2 on EGS, but purchased the Warlords expansion directly on Uplay. Would this cause any weird experiential issues on EGS? (I don’t know because I’ve not launched the game via EGS since, which I’m sure is exactly what Uplay prefers.)

Similarly, there are (and will be more) fragmented experiences when we talk about “cross-platform-play”. Experiential fragmentation is not going away (at least without a huge fight), because it’s not fundamentally a technical problem, but rather a business model / strategy problem – just as it is in the above case of GeForce Now. In theory, the combination of cross-play and free-to-play monetization is exactly opposite what large platform incumbents like Microsoft and Sony want: they want to have a monopoly on network effects, and they certainly don’t want out-of-network spending. In practice, there are complicating motivations,2 and some games like Fortnite have a big enough audience to force the issue, though as we have seen these games remain the exception.

From the end-users perspective – a lot of this is exactly an argument for a vertically integrated platform with monopoly market share, in exchange for an user experience guaranteed to be seamless. For PC, that sounds a lot like Steam, which I guess partially explains the player anger towards EGS. But Steam’s monopoly was always built on shaky grounds (the underlying attributes of the PC platform), and Steam’s margins were Epic’s opportunity.

  1. By the way, if it’s not clear, I am not being critical of Epic’s motives.
  2. Microsoft as the also-ran to Sony, has an incentive to open up and share the network.