The gaming series part 2: Estreaming - fandom, platforms and tools

in part 2 of our Gaming series, we cover the rise of Estreaming and the key trends stemming from it, with insights from Manish Agarwal, CEO, Nazara Technologies, Thomas Purtell, Co-founder & CEO, Omlet, and Anirudh Pandita, Founder, Loco. Tune in.

Ayush:

Moving on, maybe we can move on next to e-streaming. E-sports and e-streaming for the longest amount of time used to be hand in glove but now i think e-streaming has also evolved from just being about e-sports now has become like a real form of entertainment for people. So, Anirudh, maybe we would love to get your thoughts. Loco is one of the biggest homegrown destination for e-streaming. On how this space has evolved from being that is dedicated to sports to now that is coming up as an alternate form of entertainment.

People are now actually budgeting if i were to spend say 2 hours on TikTok that time is probably being spent here over and above the additional time that is getting created. So would love to get your thoughts on how the overall space has evolved in terms of the viewers, what kind of viewers are seeing it, and also in terms of the streamers, right, what does it take to be the right streamer.

Anirudh:

Yeah, i think the time spent story is kind of crazy. We’re seeing on our platform even someone who’s following ten streamers they’re spending daily time spent is one hour ten minutes which is crazy and it's 15-20 minute sessions so long-form viewing. This is not- versus a TikTok which is shorter form viewing. So it’s a really interesting different sort of if you draw that quadrant which i always draw if you had to divide media platforms into long form and short form and kind of unproduced aka authentic content and produce content. Live is traditionally been very difficult to do well, live and quality are different from each other because you just don’t get time to do something again, you can’t do retakes.

So general live streaming was hard to do, game streaming gave you a prompt and so it was easy. Worst case you could always give some commentary even if you’re not talented. Of course, if you were talented you could do wonders with that sort of prompt. So i think gaming has helped and live is the center of the gaming universe. i think the big thing that’s happened is these games as Manish said in 2019 the fact that the internet went to a dollar a gig from 10 cents a gig you saw a lot of people playing these games. These games have the right mix of skill and strategy that makes them interesting to watch. Once you have fan bases developed for individual streamers then people just want to hang out with them.

When i was a kid let’s say i’m a big Sachin fan then i would love to be in a net with Sachin. You can do that today with these guys, you can go to a custom room. in Loco we have a one-click solution to do that also. So you can get -- and for me, one of the early moments which i was completely blown away by was one of the gamers was in Erangel which is a map in BGMi and people saw him and they started dropping their weapons in front of him like as if they met like Salman Khan or Shah Rukh Khan on a map. And they were like bhai aaya, bhai aaya, it was like, it’s a nuts moment, you’re like wow, what is happening here.

So i think that there is a fandom obviously which is very, very important and i think a lot of streamers are realizing much like sports people before them but with more avenues to build that is that their playing career is now going to be around forever like they’re not going to be the top of the game forever so they quickly have to build a brand for who they are. Like Scout is much more acerbic, he gets angry like he’s more like what i call Virat Kohli 1.2 in terms of his like mindset but then there’s Mortal, Mortal is much more like Sachin Tendulkar, you know, very friendly, the grand old man of the game.

So each person has like a personality, these squads and teams are getting personality so that’s causing tribalism in their fan base, so i think that’s important. And then people are now creating newer versions of that. The other thing that’s happening that is interesting that i’ve seen on our platform is that for example in the South, we’ve seen that people are more PCs or the PC population is more anecdotally. And you’re seeing GTA getting crazy content like you watch that content it is so fun and these guys are all playing GTA all the time. So its newer forms as Manish rightly pointed out has newer forms of content come out, you’re going to see newer and newer content creators also come in and do better and create new forms of content.

The other thing that’s happening is localization is also happening. So you have streamers from different parts of india, they speak a certain way, they tell you about certain things in their life because these are long streams, they’re streaming for eight hours. So they talk about their everyday life, i ate this, i did this. So the relatability factor comes in as well and i think that’s something that only ‘live and authentic’ has because i see the person sitting in a chair like they’re not -- there is no -- the pretense is less, they’re being themselves, they tell you what happened. i didn’t do well in this game or my day is going badly or it’s going well whatever. So that’s there and then they interact with fans a lot and i think that’s where we also as a platform are looking to improve and increase the interactivity with e-streamers and viewers.

And i think the interesting thing is what people have realized and i think Manish touched on it very rightly is that lock down did one important thing which is that seeing a guy in a chair or a girl in a chair speaking is not a weird thing anymore, people are like okay, it’s cool, they’re zoom kar rahe hai. Right, like it’s like just a normal thing. i think that’s important and i always use the lens of someone who growing up didn’t have the resources to travel all the time. The only way i could travel was by watching TV and watching the sports, seeing what different stadiums looked like, watching some NatG or something, and see oh, this is what the rest of the world looks like.

And today you can experience if you play and i play a lot of BGMi it’s like you can find people from around india and they hang out on these maps. So they know each other, some people are competitive so then i get completely smashed and they always abuse me, why did you come in my team. But others will just hang with you saying oh, where are you from, how’s life in Bombay if like Bombay is some other country because they’ve never visited, they don’t know. And they’re seeing it now from the lens of another person often they think i’m younger than i am but that’s a great new form of a hangout as well.

i think in terms of time spend it’s pretty crazy and the viewership trends change so when PUBG Mobile got banned then it became just all about live streaming. Like i want to be hanging out with these streamers. As the games come back the e-sports interest has again improved significantly i would say and we’re seeing crazy numbers on e-sports tournaments right now. it will change again, this is just normal viewership, people will kind of get bored and these role-playing games like i’m saying people are seeing that. But for that newer forms of content have to release, Apex Legends is releasing today so we’re all excited about it.

But whatever, there could be some other role-playing games, some fun games, those things will improve the quality of content and we’re not anywhere close to how many streamers will ultimately emerge in india.

Ayush:

Anirudh, just picking up on this point you mentioned that it seemed like when they spoke about Bombay it was like a different country altogether which points towards the increasing penetration. So you’re seeing streamers coming from not just tier 2, tier 3, tier 4, or what not, it’s coming from everywhere. So from a platform’s perspective how does one think of cultivating some of these streamers similar to say what a TikTok did by building its stars? So how should a platform think about cultivating its streamers?

Anirudh:

This is my theory, i mean i don’t know, other people don’t share it in the market so i’m a bit different on that count. So i believe in the sort of blockbuster theory of entertainment which is that the easiest way to create a star is to align them with another star. You launch Anushka Sharma by putting her in a movie with Shah Rukh Khan. Then Anushka is also a star and you can launch someone else with Anushka. This is the old way, YouTube was also built this way so this is not something like rocket science i’ve come up with.

So there are people who are already popular, the first guy who will win a tournament like Soul which is a very well-known team all the members there, people who cycle through that they’re all famous today because they won the first big tournament. You know, TSM entity which now some people are in this team, they’re all famous because they won the first few tournaments. You remember it’s like the ’83 moment, you remember who won those first tournaments. But they now can give their sheen to other people and so there is a content way to do it and then there’s a productive way to do it.

For example, we look at things like who is getting the most live watch hours with the best quality. Who is carrying the regular amount of chat, is the chat long, and is the chat garbled? And then we have physical people go watch the stream to see is there any -- because some people do some fraudulent methods also on these streams. So removing that and keeping a great quality of entertainment promoting the right people up in fact we have a tab on Loco which i think no other game streaming app had which is only for new streamers. Right, the discovers tab is actually to discover new people versus discover in instagram you get the same 5-10 kinds of genres.

So it’s very important to provide that platform as a platform we needed to -- the interesting thing is if i show you like i was saying earlier the spread of cities and towns you’re going to get tier Z like i don’t even that those tiers exist like. A 100 plus cities and towns have been formed and honestly our geographic precision there is not great because i’ve done user interviews where i’ll ask the guy kya aap Jaipur main ho? And he’ll say nahi bhai main Jaipur se 2 ghanta door hu, mera school Jaipur mein hai and it takes me two hours so most days i don’t even go. So i just play from my home and then 2-3 guys get together and they watch with me because i have a phone. i mean there are crazy stories of this sort, you go to Ashwin my partner was traveling in Kerala during the lockdown all the kids were playing Free Fire.

So it’s everywhere in india and i think the long tail as we call it gets created when there is a head of the tail. So that head is important, it starts creating the sheen that gives access to newer talent from this tail. And that’s what we’re also doing and, if you see today we have a fairly long tail of streamers and a lot of these guys say they want to get the Loco contract, some of them want to show their game so that other people in the teams can watch it. Some of them feel like, okay, and they’re starting small also. i’ve seen people put local guys like some local advertisers' logo on their stream. So there is this sort of excitement of building your own business that’s also coming.

We have streamers who started -- i mean we have 2-3 very famous guys there in small towns, one is in a village near Karnal in Haryana. They started just as one person they had an old computer and they used to just go live and used to use this phone and go live. But he was very regular and he has now become so big on the platform he’s got a sister to become a streamer, his brother to become a streamer. And he used to tell me, hey, doesn’t matter if i’m there or my brother is there i say, yes, the brother you give him a new channel, you don’t have to share your channel give him another channel. So they’re also discovering this form of entertainment and some of it like they have giveaways etcetera are big in gaming so they’re able to use that as a growth lever as they go and then they do local tournaments.

So this is similar to sport and entertainment and they’re becoming Scouts, for example, they start running talent agencies. So very similar to how entertainment is built as well. So all of these things are happening now and that’s why it’s such an exciting time because the talent you see now i think in about two years you’ll see reasonable numbers and people you never thought will reach depths that they can and you’ve seen it on YouTube before. So you’ve seen this movie before where whether it’s Total gaming or whether it’s Ashi Chanchlani honestly Ashi is a good friend of mine and when we launched Loco i was his first advertiser and his largest advertiser. And people used to always make fun of me saying oh, why did you give him business, who watches his content today, he’s obviously like everybody wants to sign him for his show and stuff.

And that’s because i’ve realized that there is entertainment in South Bombay then there’s entertainment till Virar and then there is the rest of the country. Right, and so you have to catch on to what each of these guys likes and watches and what they find related. And you’re seeing that today across the board in streaming as well.

Rahul:

Yeah, Anirudh, just picking up on what you said, right, while streamers are excited to make this a business and the cost of infra has also reduced drastically post Jio do you still feel that there are some limitations to smartphones and data infra, especially in tier 2, tier 3 cities and this could be a good segue into the e-streaming tooling market. is there an opportunity that remains to be solved on the tooling side?

Anirudh:

it’s my personal view that a lot of this is hardware driven and 5G will create new opportunities for this for sure. We’re working with a very large hardware manufacturer right now to do a Loco mode in the phone where you can get the most optimized setting for your phone. But even if you look at the PC market usually the big streamers have to -- PCs one is the PC where they play, one is the PC where they stream from. When you come down to mobile streaming beginner streamers need a streaming solution because they will not invest in a laptop or a desktop. So there we have a solution, there are others also, Omlet, of course, is the most famous i would say in that community when we started that was the name you heard the most and PJ is here so we can talk about it a bit more.

However, i think there is a challenge that there is a significant lag that shows up on your phone, these phones are not offering if they’re not the top end phone you’ll often find that the performance of the phone declines significantly if you’re streaming and gaming because both use resources of the phone pretty heavily. So you need to phone to plug into something else so that that takes away the streaming load if you’re streaming every day. Gaming by itself i think we’re in a relatively better spot. On the streaming side the other problem that you often see is like there’s jitter, right, because people are not on wired internet and even if they’re wired they’re on wi fi so there’s up and down, so how do you know if someone is not disconnected for example.

Honestly most of the problems that exist today, the answer there is not going to be some software solution there has to be a hardware solution that comes in and there are people in the hardware world working on it which is why we’re trying to work with them to say that okay, this is what our streamers need, come test with us, provide those modes. And i think i feel like as you go to 5G and beyond you’re moving rapidly to a world where everyone has a good standard smartphone and 5G internet. So this change in infrastructure will make the market conditions even more conducive for publishers to do what Manish was saying. in 4G and before 4G people watched, after that they wanted to interact and create so you will see the percentage of creators and people who attempt it will also improve.

So whether it’s latency, reliability, or battery usage, all of those will improve but there are issues today it’s not -- i don’t know of any streamer to give you a reverse tag of any quality whose not using a desktop to stream today. They’re playing on their phone but they’re all connected to the desktop. Streaming on phone is hard.

Rahul:

i think it would be a good opportunity to get TJ in here because he’s been running Omlet which was one of the first e-streaming tools out there. TJ, what are the key pain points that you’re falling for the gamers in your geographies?

Tarun:

And TJ maybe if you can overlay that also with ideas, you know, opportunities in markets which are like unique like india with all the sort of challenges around data and bandwidth and smartphone quality it would be helpful if we can maybe sort of weave that in as well.

Thomas:

Sure. So i think that streaming from mobile is little bit of a different sort of experience for people than being a pro streamer. it’s sort of how you get your feet wet a lot of the times and you know, what we see is that people sort of diverged down one of two paths, like one path is they realized that this is a community activity and i’m reaching a small group of people that i really want to play with and show off together. And so they end up forming like kind of not a celebrity community but more like a little local league or they go down the road of they start to get a lot of supporters and a lot of following and they diversify into more channels, they get enough donations, they buy hardware and they’re doing all different kinds of things at that point.

And so i think that like we look at the mobile as sort of the gateway into that and whether you start with the mobile content it’s free to play, lots of people are playing it so it gives you that opportunity to sort of break into that market with that backdrop of something to support you with content while you’re trying to see do i have the personality and the engagement with my audience to do this. But different people will just be able to have that kind of presentable personality and so i think that the actual market of people who’re like interested in this are maybe 10 or 20 percent of people would really go and stream themselves. You know, if you’re looking at sort of the under 30 age group and some of them actually look at it like i could go make a video but that’s really hard like i have to do all this editing and all that crap. Like i don’t want to do that, like i want it to be me.

Like these streamers they get to get up there and be themselves and that’s really fun for everybody whose involved so they actually like that it’s lower production and more earnest. And so there’s going to be so many people trying this out and there’s a lot of opportunity for people to try it out again and again when each game comes out and see if they develop themselves to be able to actually take on that challenge. So i think that just as the hardware and the networks get up to par you just have more people who can break through that boundary because we kind of see it like when the networks are bad maybe like 20 percent of streamers will go try it out have a chance to get their personalities show through. And when the phones are too weak that puts a gating factor on it, that keeps getting more and more and more.

And so the mobile gives the chance for people to show that off, try it out and so it’s important to really capture those folks who do make it and like do something cool with them and make them into an agency or something like that or take a different path and focus on the community side of that and then what you can do out of that.

Anirudh:

i actually wanted to just add, this is the same journey we’ve seen in india as well. Like when you start they’ll start like for example we have Loco studio, they’ll start on Loco studio so you’ll see a lot of people, 10,000 people and we’ve provided obviously incentives to get them started as well. And they start and then as TJ was saying some people are happy being small but they will never be obviously the guys who are making tonnes of money they’re doing it for fun and there are enough of them and they actually watch a lot of other streams. So they’re a very critical part of the community and they will report and so we consider them like our users, they always report other people, these guys are doing fraud, this guy is a great player, this guy is very great talent, have you heard of this guy.

So they’re like your hard core guys and hard core users and then obviously people diverge, as soon as i’ve seen even i want to say 30K subscribers, 40K subscribers people immediately buy a laptop and then they start from there. So i agree with TJ as things improve that funnel will broaden and that’s how you will see more people trying and once they try is only when they’ll know whether they’re good or not.

Rahul:

And TJ and Anirudh i think we’re also seeing a lot of indian Startups which provide these free tools as a key GTM and then look to build distribution or monetization. What do you think about this strategy and do you think that this strategy could be leveraged to build that distribution?

Thomas:

Can you repeat the first part, you were breaking up at my end.

Rahul:

TJ, you said that there are a lot of these free tools nowadays coming up to democratize e-streaming and we’re seeing that in india as well. Several indian Startups are providing tools to the long tail of gamers as a key GTM and then look to build that distribution on the platform. Do you think that’s a viable strategy, do you think tools can be leveraged to build distribution?

Thomas:

Yeah. i mean absolutely. Like we did this so i know it can be done. But i think it’s much more competitive now so let’s say that the amount of free organic users you get from having like a super duper streaming tool now is like half what it was two years ago. So there’s just that much more pressure out there and more opportunities out there for people who do it i think that its really about looking at your funnel and seeing who you want to capture because all the people that you bring in they will eventually graduate if they’re the most valuable users if you don’t capture that or if you don’t give them a community to feed into.

And so i think instead of necessarily just thinking of it as long tail like i have this tool and will get a lot of people doing a lot of different things that’s a backdrop, that’s your market research that you’ll get some of that but you have to find certain ones that really work and like double down on that in some kind of way like creative programs that support them or cultivating those communities, doing something with it. it’s about finding other natives and there’s tonnes, right, so i think that’s the place where if there’s a lot of competition in the space and the opportunities for having pretty easily accessible ability to build these tools the better is it going down and down.

So people are going to have to focus on the operations to really stay differentiated and then build the business.

Anirudh:

Yeah, i mean i personally don’t think that’s a good GTM for india because when you go in a market you have to know -- i think TJ put it really well what timeframe you’re in and what sort of market conditions exist. Right, so what worked five years ago may not work today and what works today will not work five years later. So that’s something that’s a market awareness you need to have, the TikTok method that okay like it’s a romanticization of how things work which is okay i’m going to create a point and shoot and it’ll work well. it worked well because the editor had the most value there because when i used Musical.ly the first time and there’s a big reason we didn’t actually build it and maybe we should have given what happened later.

i mean obviously we didn’t have any policy crystal ball but i was just blown away by the quality of the product like i was like i can create an MTV style video which i watched as a kid for free, this is insane. And but that doesn’t happen so much with streaming because a lot of mobile streaming as TJ and i were mentioning earlier is a hardware limitation not a software problem. And so what is really happening here, you’re basically getting a screen capture and putting some agora audio rooms, this is a clumpy solution so unless you actually have a 10x better solution whether it’s going to make it lag free or your phone won’t heat up most of these are not the 10x solution that you need for mobile streaming to become viable.

So that will like i was saying earlier will come from hardware and you can see this even in the PC world. You know, compare Streamlabs to what happened with Twitch, right, that’s a simple comparison. And as TJ is saying one of the things which i liked about Omlet when we were looking they also had a front end where you could actually watch and there was a community element that they were going for versus saying okay, look, this is a way with like Streamlabs where we just let you stream.

So i think the tools market is relatively smaller and what you will continue running into is either a graduation problem where they’ll say okay, now our business is valuable so the top of the funnel just leaks. Or they’re going to be like running into tech problems which is that if you are a streaming tool which is servicing YouTube, YouTube is never servicing you, they won’t even return your call. So you don’t know why something failed like today you can go on our instagram page, there’s many times where i reply to people and then they nail me publicly. Then you’ll see this is like a common my self esteem gets completely ruined every hour and they use very colourful language but actually they’re great users because then they reply to me on instagram privately and we do sessions with them to figure out what happened.

Because these are not usual cases because we’re testing out the usual cases, these are edge cases which is what Twitch has gotten good at on PCT for example. Like these software like again sorry to go into philosophy but like a lot of what looks like a smooth platform is a bunch of edge cases that they’ve taken care of already. They know that this stuff is going to break in like ten different ways at different scale levels. So you need to have that front end because what will happen is if you don’t do that today you’re going to have a tool, by the time you build some community some guys have already built the front end and then you’re kind of stuck because you don’t have the front end, all your streamers are going there because you have no way to keep them.

So that community element is critical, whoever the community is with they will definitely, definitely benefit and i think you can see that in Twitch, right, and i just remind my team of the one of my favorite blog posts by Marc Andreessen of the product market fit is that just a good enough product can also win if there’s a big market and you’re solving that basic problem. Twitch didn’t even have rewind for a long time, when you think of e-sports that’s the number one feature they’ve asked us for but they’ve really invested in that community and the community knows that. They don’t just leave them like this because YouTube has rewind. That part of it i think that’s why i’m saying the tooling for me is not such a hot way of actually building, it’s a good business by itself it can be like a SaaS business then you’re in a different business, you guys are better evaluators of that than i am.