How Epic Games and Game Engines Are Disrupting Media / Entertainment. (Asia Tech Strategy – Daily Lesson / Update)

The following link is to a 6 Part Primer for Epic Games by Michael Ball. Michael is a highly regarded thinker on US media and entertainment. And media is a space that tends to change quickly with digital. I encourage you to read this.

You might have noticed Epic Games in the news lately:

  • They launched a fight with Apple about payment terms for the App Store. And this has a lot to do with Fortnite, their ridiculously popular and profitable game.
  • Epic is also +40% owned by Tencent. This is probably why Tencent is staying completely silent on the WeChat ban in the US. Tencent can lose WeChat US. But they do not want their ownership of Epic (and other gaming companies) on the radar of the US government.
  • The Mandalorian TV show has become a big hit. And it heavily relies on Epic’s Unreal Engine to create its virtual worlds (in real-time).

There is something really important going on here. And it is worth your attention. The implications of Epic’s Unreal Gaming Engine for media and entertainment are huge. And likely beyond that. This technology could well end up being the defining tool and platform for content creators everywhere.

From the writeup by Michael Ball.

“What Is a Game Engine?

Games, virtual worlds, and digital simulation run on foundational code, or “engines”. These manage everything from the processing of decision logic, rules, and physics (e.g. the X button was pressed, so a bullet was fired, which traveled from point A to point B, hit player 2, etc.), to real-time visuals, sound production, artificial intelligence, memory and network management, and so forth.

What Are Game Engine Specialists?

While every game requires an engine, the majority of game makers (developers and publishers) build and operate their games based on a third-party engine.

A good way to think about this is to consider movies and TV shows. Companies like Marvel and Disney don’t need to manufacture, let alone design, custom cameras, editing software, digital storage, etc., to “make” their films and TV series. Instead, they use off-the-shelf equipment, physical technologies, and software designed by third-party specialists, such as Red Digital Cinema (cameras), Maya (computer animation software), and Technicolor (color processing).

…In a simplified sense, Unreal Engine is an extensive suite of tools and technology that allows third parties to produce virtual experiences without needing to engineer the code that’s needed to make them “work”. In fact, they need not even know how they work. Instead, a developer can just focus on the creative. Just as a writer doesn’t need to know how film is captured from a camera, or how video files are streamed over the Internet.”

So fine. It’s a suite of tools that lets developers create video games. Why has that become so important?

Because for the past 100 years, visual media (photos, video, tv, movies) has been the following process:

  • A camera captures an image of the physical world. Photo or video.
  • This is transferred to a 2D image. Which can be increasingly manipulated with software.
  • This image is then shown on a 2D surface. Movie theater. iPad.

But this process for creating content is very limited.

  • It is asynchronous. There is a gap in time between capturing and seeing. There is a gap between creativity and visualization.
  • The content is static. It stays the same.
  • It is 2D.
  • It is non-interactive. The end user cannot interact with the content. Or with other end users.

Now, consider how gaming is different from the end user experience:

  • It is interactive. End users can actually interact with the content. They can pick up objects in the game. And they can interact with each other. Hence, gaming and multiplayer gaming.
  • Content is dynamic. The content is constantly changing. Based on what users or designers are doing.
  • It changes in real-time. These changes can happen immediately because the software can update quickly. The pixels can be drawn and re-drawn faster the 120fps (which is how fast the human eye can process images).
  • It is 3D by original design. You create the content in 3D so it can be viewed from any angles you choose. This lets you interact with objects, other players and the virtual world. And you can increasingly enter this world with VR / AR.

It is also different for creators:

  • The creative process is becoming one of live edits and instantaneous adaptation. Directors, game designers, artists, etc. can create and visualize in real-time. It is much faster.
  • It enables seamless collaboration between lots of people. Everyone can make changes to the virtual world together.
  • It has software economics. It is dramatically cheaper than hiring film crews.
  • Anyone can do it. It empowers everyone from lone artists to big studios to create.

Now, what happens when you apply this approach to TV shows? Here is nice short video of how the Mandalorian is doing that.

According to Matthew Ball:

Game Engines Are Eating All of Media & Entertainment
— Matthew Ball (@ballmatthew) May 13, 2020

This of how disruptive this is. Gaming Engines are making upending how media and entertainment are created.

But I think it is likely much bigger than that. I think it is a technological disruption for most all content creation. Media and entertainment. Writers. Artists. Musicians. Painters. Architects. It is making the process of content creation and usage interactive, real-time and 3D. And Epic is using its strong position in gaming to launch this disruption on the rest of content.

Anyways, that’s enough on this topic for today. It doesn’t fit within the Learning Goals but I wanted to put it on your radar. There are a ton of important strategy implications. And I encourage you to read Matthew’s summary.

Also, the primary competitor for the Unreal Engine is the Unity Engine, which just filed for an IPO this week.

Cheers, jeff

I write, speak and consult about how to win (and not lose) in digital strategy and transformation.

I am the founder of TechMoat Consulting, a boutique consulting firm that helps retailers, brands, and technology companies exploit digital change to grow faster, innovate better and build digital moats. Get in touch here.

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