In this segment of "The Gaming Show" on Motley Fool Live, recorded on Feb. 7, Fool contributors Jon Quast, Jose Navarro, and analyst Sanmeet Deo discuss what the future may look like in the gaming industry for PC, console, cloud, mobile, VR, and blockchain.
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Jon Quast: So PC gaming is leading the way with game developers. So 62% of game developers say that the PC is the platform that they are most interested in developing games for. I was actually really surprised by this maybe I shouldn't have been because we did talk last week about the growth in PC gaming here of late. I think we're going to talk about Corsair Gaming (CRSR 1.02%) next week, but I don't know Jose, you're close to this, the developer world. I mean, is this surprising to you that this is the go-to platform, at least the preferred platform if you were a game developer, that's where you want to develop something. You're muted.
Jose Najarro: This was interesting. I thought I would have seen mobile instead. But the more I think about it, I think we're moving a little bit more into cloud gaming to some extent. Originally, what was the weakness of PC gaming is that you needed to have a strong computer and that was limiting a lot of people coming off selling games there and moving into the mobile market. But maybe if we're seeing a growth in cloud gaming, where now it eliminates the need of having a high computer for the consumer. Now, it seems cloud gaming is probably given the advantage for people to focus on PC games instead.
Quast: That's a really good insight and like you said, I would've expected developers to be going where the growth was, which is mobile, but in reality, the preference for developers making games on mobile was declining. Even though sales are growing in mobile, they're not chasing the dollars there as far as their preference, I guess maybe they have a more range of options available to them to create a more powerful, visually stunning game when it comes to PC versus mobile.
Even though the dollars are there not necessarily, that's where the preferences are. The other thing I thought interesting here was that previous versions of Nintendo consoles used to be in the single-digit percentages of people who wanted to build on those Nintendo consoles. So whether that was Wii or something else, 3Ds was mentioned as well, but the Switch now 20% of developers saying that they're making games for the Switch. This is actually, I don't know, maybe bullish for Nintendo (NTDOY 1.21%) that more game developers are actually actively developing something for the Switch. Go ahead.
Sanmeet Deo: Yes. The Switch is quite a cool platform and the fact that you can plug it into your TV and then you can take it out and go with it gives it so much flexibility you have people engaged on it for a longer time than just one or the other, so that's why.
Quast: It bridges the gap between mobile gaming and console gaming. It's a hybrid. That's a trick. Fifty-six percent of game developers are not currently making anything for VR, but of the ones who are, Oculus by Meta Platforms (META), that is leading the way as far as preferences go. They want to be building on the Oculus.
Najarro: I'm guessing because Oculus is probably the cheapest out of the options. I think the cheap version is $300 where Vive if I think it's the other main VR headset, that one goes for almost a thousand dollars. I think game developers know that hey, the consumers if they're focusing in virtual reality, they're focusing probably with the Oculus headset in mind.
Quast: [laughs] If they spend money on the other one they don't have any money left for games.
Deo: [laughs] Yeah. I'm not like a hardcore gamer by any means, but as a person interested in the gaming industry, just a normal consumer of electronic gadgets and stuff. Quest has more of now like more of a prominent mainstream name for someone like me, I couldn't name another VR gaming headset. Vive, I think I've briefly heard of, but it wouldn't be in my wheelhouse. That might be one of the reasons it's so well-known now and so many people bought it this past holiday season as well.
Quast: Yeah, totally. Then finally, here, I'm bad at projecting how much time [laughs] topics are going to take. I really thought we were going to get the blockchain gaming today, but I guess we'll just tease it a little bit here.
I thought that this was really interesting, and we're just talking about Roblox (RBLX -4.25%) and incentives for creators and all this stuff, but blockchain gaming looks to be a very big thing, but 72% of game developers not interested at all in cryptocurrency, 70% not interested in NFTs or non-fungible tokens, and we're talking about those things on the crypto show as well.
Let me just read it real fast. I'm going to read from Square Enix's (SQNNY 1.63%) CEO and what he was saying he says, "We will see a major strategic theme starting for us in 2022, an increase in social literacy in crypto assets." He hopes that NFTs will become a major trend in gaming going forward and basically the reason that Square Enix's CEO believes this is because he believes that more people are going to want to find a way that they can profit in gaming and participate. Blockchain gaming is seen as a way that more people can participate. In reality, you can do it with Roblox though as well it doesn't necessarily have to be a decentralized platform to allow more participation.
Deo: That's interesting. I'm surprised by that, the interest in crypto and NFT would be higher. But maybe they see it as a competitor or threat?
Najarro: I actually thought it would be the opposite. I felt that percentage would be a lot lower. In theory, it's about 30% of game developers right now are maybe somewhat interested in it. I thought that was pretty high, I thought we were expecting more in the low teen digits just because it's still such a very new market in there.