VIRTUAL

Ready Player Won

April and May were some of the biggest months for the gaming industry ever. Let's run through the numbers. 

⛏ Minecraft recently topped 200 million in unit sales. Microsoft, which paid $2.5 billion to acquire Minecraft in 2014, says the sandbox game has 126 million monthly active players. 

 Travis Scott drew a record 12.3 million concurrent viewers to his concert in Fortnite in late April. Fortnite also launched Party Royale, a no-weapon, no-battling mode that allows players to just...hang out. In early May, Dillon Francis, Steve Aoki, and deadmau5 held a concert in Party Royale. 

 Sony CEO Kenichiro Yoshida sent a memo to employees after Scott's Fortnite concert, saying that live virtual events could be a big opportunity for the company (per the FT). 

Call of Duty: Modern Warfare became the best-selling game of the year. "Call of Duty is the Guy Fieri of gaming franchises: Everyone likes to dunk on it, but it seems here for the long haul," Inverse writes. 

Animal Crossing: New Horizons has over 12 million players speculating on turnip prices and navigating virtual interest rate cuts from the Bank of Nook. The game has also boosted Nintendo Switch sales.

Behind every virtual world is a real economy 

Virtual marketplaces are generating very real economic activity in these video games. That's why I spent hours digesting The Virtual Economy, a new report from L'Atelier, an independent foresight subsidiary of BNP Paribas. 

"Just out of reach, behind a digital curtain, exists a galaxy of activity. A new economic frontier that may be the answer to the generational wealth gap," L'Atelier writes. While I don't necessarily see virtual economies as a viable engine for upward socioeconomic mobility, the foresight company does profile individuals who have reinvented themselves or made a fortune inside digital third places. 

Breaking down the Virtual Economy: 

• "It is a place frequented, with varying degrees of immersion, by some 2.5 billion people through phones, consoles, laptops, desktops, and headsets," L'Atelier writes. 
• Multiplayer games, virtual simulation platforms, and "interactive media" revenue was ~$109 billion in 2019, up from $62 billion four years prior, per SuperData. Revenue is projected to hit nearly $129 billion by 2021.

Roughly 85% of the revenue earned in virtual marketplaces is comprised of repeated purchases of currency, avatars, weapons, and other goods, such as Fortnite "emotes" and Travis Scott digital merch. Those repeated purchases, called microtransactions, form a recurring revenue stream that would make any B2B SaaS company jealous. 

Commerce in the virtual economy goes beyond personal items: Someone paid $200,000 for a plot of blockchain-based virtual real estate in Genesis City. Brands like Star Wars and Quibi have launched marketing campaigns within Fortnite.

• And there's the black market players: "Some are digital gun runners, counterfeiters, and thieves who use the vast and largely unregulated gaming universe as cover for their illicit activities. They are earning large sums of real-world money," L'Atelier writes. 

Who to watch going forward

The game studios and publishers who make the rules, oversee economies, set capital controls, mint the creation of new virtual assets, and control the supply of resources. Think Epic Games and Roblox. 

If you want to learn more, read the full Virtual Economy report. L'Atelier looks at the "pirates, producers, and pioneers"; tie-ins with cryptocurrency, VR, distributed ledgers, and computer vision; and gig economies that have formed within the virtual economy.

BREW

ICYMI

Emerging Tech Brew has been shipping new projects like it's an early stage software startup. If you missed any, here's a roundup.

Last week, we published The Brew's Guide to 5G, a primer on one of the biggest tech upgrades in the 2020s. The reviews are in: 

• "This is a great one. People say 5G this, 5G that, but nobody really knows what it means!"
• "You 150% did not fail to deliver."
• "Brilliant work on 5G"
• "This is a great guide—especially for me, as I'm still trying to get a complete understanding of the 5G landscape." 

We also hosted Emerging Tech Brew's first virtual event—head here for a recap on six possible futures for AI. 

Two weeks ago, I interviewed C3.ai CEO Tom Siebel about building data lakes for COVID-19 research. 

Last month, I interviewed Cloudflare CEO Matthew Prince and venture capitalist Josh Wolfe...and published The COVID Traffic Report. 

From the archives: Last November, I wrote a longer feature about U.S. service members transitioning into the tech workforce.

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GOOD READS

Of course, there are plenty of other interesting things on the internet. What I've been reading:

1. The first teleoperated e-scooters have arrived in Peachtree Corners, GA. 
2. Bloomberg goes deep on the state of the U.S. self-driving industry. 
3. Alphabet CEO Sundar Pichai spoke with Wired about remote work, antitrust probes into Google, and diversity. Pichai also did a podcast interview with The Verge.
4. OnePlus, a Chinese smartphone manufacturer, is suspending an "X-ray" camera filter that lets users see through plastic. 
5. Not tech-related in any way, but here we are: "Coronavirus couldn't have come at a worse time for Japan's yakuza gangs" from Sky News. 
6. "The Drones Were Ready for This Moment"—the NYT writes a story that Emerging Tech Brew has run with several times in the last two months. 
7. Facial recognition companies are pitching coronavirus "Immunity Passports" in the U.S. and U.K. Bonus: the state of facial recognition around the world. 
8. VentureBeat interviewed Nand Mulchandani, the CTO of the Pentagon's Joint AI Center. In the next two weeks, Mulchandani takes the helm of JAIC. 
9. A longer feature on how Alphabet's Sidewalk Labs smart city project unraveled.
10. The U.S. needs to stand up a digital currency to create an alternative to China's digital renminbi and ensure the dollar remains the world's reserve currency, Hank Paulson, former Treasury secretary and Goldman Sachs CEO, writes in Foreign Affairs.

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WHAT'S BREWING THIS WEEK

Monday: Hopefully you're wrapping up a relaxing long weekend and celebrating National Wine Day

Tuesday: Augmented World Expo runs through Thursday

Wednesday: SpaceX launches two astronauts into space from Florida; earnings (HP, Box)

Thursday: Earnings (Salesforce, VMware)

Friday: There are 216 days left in 2020.

THE TECHLARATION

Two new TV shows I'd like to endorse.

Recommended by a reader, Amazon's Upload is a sci-fi comedy show about a near-future where consumers can upload their consciousness to a luxe virtual afterlife. Think of it as an optimistic counter to Black Mirror in which VR has taken off.  

TNT's Snowpiercer is set seven years after a geoengineering scheme runs amok and Earth becomes a frozen wasteland. Humanity's survivors are riding a 1,001-car train that constantly crisscrosses the world. The show is inspired by the Snowpiercer novel and movie (directed by Bong Joon-ho of Parasite).