The Secret Behind the Success of ‘Baldur’s Gate 3’

Games have evolved beyond Hollywood-style releases to become live services that can thrive for years. These “games-as-a-service” are continually reshaped by user feedback, dramatically extending player lifetimes.

Despite skepticism, gaming is big & rapidly growing: $152bn and ~10% CAGR. Netflix said “We compete with (and lose to) Fortnite more than HBO”. Very few business models work in gaming other than simply building successful games: most of the money in the industry stays with the game developers/publishers and the major gaming/streaming platforms.

“The condition is extremely rare that a market is simultaneously large and technologically demanding. It is usually the case that the markets that require really powerful computers are very small in size, whether it’s climate simulation or molecular-dynamics drug discovery. The markets are so small, it [sic] can’t afford very large investments. Tha... See more

Investors consider the gaming industry unpredictable: building a “hit” game is a mixture of art/magic, a bit like investing in movies.

Companies that attach themselves to a specific game early in their development process run the risk of being shut out by publishers or becoming niche products unable to break into other games. Some of today’s most successful gaming companies such as Twitch or Discord can attribute much of their success to being game-agnostic.

What’s fascinating, though, and I alluded to this earlier, is that it’s a fluid community. We have a community where creators come in. We have creators who are designers, artists, musicians, and businesspeople. They dynamically form teams in our community. As studios, they produce an experience and then can reform into other teams. It’s an evolving... See more