giving players early access to internal software development tools and to regularly release “style guides” that detail the look and feel of new game worlds.
“Our players are developing content for the game alongside us,” Naviaux said. They are making things like weapons, armor, and camouflage for game avatars, and heraldic displays and other items to decorate their in-game homes and other parts of their make-believe worlds, she explained. Players can buy these items through online micro-transactions to enhance their game experience, and outside developers can get 40 percent of such sales, Naviaux said.
Daybreak also sells after-market downloadable content, such as expansions for existing games, and plans to charge membership fees for such added experiences as online competitions.
Daybreak has the freedom now to make its games available on other platforms, including (or especially) Microsoft’s Xbox. New opportunities also are emerging in mobile—especially for streaming live video games on Amazon’s Twitch and rivals like hitbox.tv and Gaming Live.
“From day one, we’ve thought about what would make a game Twitch-worthy,” Naviaux said.
A lot of that has to do with the surging popularity of e-sports—professional video game competitions and tournaments that pit gamer teams against each other. Some tournaments routinely sell out giant arenas—tickets for a League of Legends tournament sold out in an hour at the Staples Center in Los Angeles in 2013—and some streaming games attract at-home audiences as big as or bigger than the most-popular traditional sporting events.
As The New York Times reported last year, “Prize money has soared to the millions of dollars, and top players earn six- or seven-figure incomes and attract big and passionate followings, luring a generation of younger players to seek fame and fortune as gamers.”
Daybreak has moved to capitalize on the lucrative phenomenon by introducing what it calls “Battle Royale mode,” a virtual free-for-all that enables 120 players to duke it out online until just one survivor remains. Daybreak has tested the feature in its recently released zombie game, H1Z1, and Naviaux said, “It’s really fun to watch it unfold.”
In 1998, when Sony’s San Diego-based group was developing EverQuest, video games were about a $5 billion to $6 billion industry, Naviaux said. Since then, the computer and video game industry has eclipsed Hollywood’s global box office revenue (estimated at $40 billion for 2015), with global revenue projected to hit about $88 billion this year.
Paradoxically, the video game industry has see-sawed dramatically, and the fortunes of many console makers and game developers have waxed and waned. Even the big game publishers like Electronic Arts and Activision seem to go through substantial layoffs on a regular basis. The industry’s latest downturn hit in 2013, when consumer spending on game-playing devices tipped in favor of smartphones and tablets, and away from game-optimized handheld devices.
The leadership at Daybreak, however, sees a new day dawning. After spending the past four months reorganizing its business, Daybreak says it is now emerging with a new company logo, corporate website, expanded strategy, and updated game sites. “The spirit around here feels more like a startup now,” Naviaux said. “It has reinvigorated our workforce.”
