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The Future Of The Gaming Space with Mike Sepso
On this episode, we have magic Mike. Obviously, not Channing Tatum, but we have Mike Sepso. Mike, thank you so much for joining us. Could you tell the audience a little bit about yourself?
For those people who have no idea what a blizzard is besides something that makes them late to work and keeps their kids at home, I guess it also is something that keeps their kids at home.
Activision Blizzard is the largest independent video game developer and publisher in the world and the Blizzard part of the business is the one that focuses, at least historically, on computer games, so games like World of Warcraft and StarCraft, and Overwatch. Activision, the other side of the company is the first video game software company and now is part of the big conglomerate of studios. That side of the business develops and publishes Call of Duty, which is the biggest video game franchise in the history of the industry. In addition, we also own King that makes Candy Crush, one of the biggest phone games. The company has launched some very, very big program, the largest in the industry programs around e-sports, which is competitive gaming at the professional level.
Your claim to fame in all of this was about sixteen years ago. You had one of the dumbest ideas anybody in the gaming industry ever had. You and your best friend, roommate, partner?
Best friend at the time, also business partner, Sundance DiGiovanni, who is the other Co-Founder of Major League Gaming. Both of us had been two things that are important, childhood athletes and sports fans and then also childhood gamers. If you think of those three things, being a sports fan and athlete and a gamer, all of those things carried on into our adulthood except the athlete part, which now consists of going to the gym once a month.
I’m going to take us back sixteen years. It was about 2002. The world is in total chaos. It’s recently after September 11th. The most advanced video games at the time were like Microsoft Flight Simulator and 64, like GoldenEye. What are we talking?
GoldenEye had been out for a couple of years. I would say the major technical innovations or product innovations that happened were a couple of things that originated this. One was the first Xbox had just been released the prior holiday season and it came out with an Ethernet port in it that, at the time, didn’t do anything but it had an internet connectivity port, which hadn’t existed in prior console. Sega Genesis may have had an adapter that you could connect, but there was no reason to connect it to the internet, so the Xbox, for the first time, had an internet connection. No use for it, but the port was there, so people wondered.
The crazy thing about Xbox is that it was just essentially a home PC. Most people don’t know this, but the Xbox name comes from their software package for handling graphics called Direct X and they’re like, “We need to make a product around this. What are we going to call it?” They said, “Xbox.” It’s essentially just a PC that’s hyped up on a really good graphic processors.
I didn’t even know that. That’s really good graphics cards.
They sold it as if it was something completely different.
They sold it as if it was a better PlayStation because the first PlayStation had been out for a little while. They also launched a game title called Halo, which was developed by a company called Bungee that they bought. If you go back a little bit before that Bungie was one of the bigger developers of the first era of Mac Games and they created a game called Marathon.
Also, After Dark or something like that.
The people in that team have done a lot of interesting stuff. Bungie is part of the Activision Blizzard family and they’ve created Destiny, which is a huge game. A great team of developers who have made some of the most iconic games in the history of the industry. Halo was the game that caught our attention personally because it was a team-based multiplayer combat game. It’s very Sci-Fi and fun to play. The multiplayer component of the game allowed you to have a team of two or four people or you can play individually against each other and you ran around blowing up and shooting your friends.
Sounds like a healthy pastime.
What better way to have fun? It was team-based to create an interesting dynamic. I spent most of my time in college playing like Sega Hockey and things like that where you’re competing against somebody in your trash talking and it’s a lot of fun. Halo brought that for me, for my friends to that sports competitive environment out of the sports gaming arena and into the games that we like to play about like shooters, like Goldeneye and things like that. Halo helped launch that.
At the same time, prior to us really getting the idea together for MLG, people in South Korea were playing StarCraft competitively and it was being organized. It was being broadcast on television and that’s a one versus one game. If you haven’t played StarCraft, it’s a very cerebral but also very fast paced game where you create an industry in the military and you have three different races and you can pick what you want to be. It’s a head-to-head high speed, three-dimensional chess. That was the focal point for the origination of e-sports in general is South Korea where it off with the Blizzard game, StarCraft.
Most people don’t have this in-depth background on it, you see this all starting to play out and you think, “It would be really cool if we made a video game playing a major league sport like baseball and basketball.”
That was pretty much it. It wasn’t deeper than that. It was really, “We’re playing this particular game competitively against people.” In between watching Yankees games over the summer, we were playing video games competitively and we are betting on it with our friends and that stuff and having fun. It started to look a little bit like sports, so we researched. We realized people all over North America were also casually competing against each other and running little tournaments in school basements and things like that. Then we did some more research.
We discovered what was happening in South Korea and looked at that and said, “I don’t know that StarCraft is the right kind of mainstream game for the North American audience, but here’s this game Halo on an Xbox and people at the time in the Western world where most video gaming happened on console.” It’s not on computers. It was more mainstream, almost every kid had one in their living room and we thought, “If this is the model for it happening in Korea and we’re doing it here, is there an Americanized sports business that can be built around this where we can create a platform for people to compete against each other in these games?”
Sixteen years later, how big is Major League Gaming?
Major League Gaming was acquired by Activision Blizzard, so now it’s part of the largest video game business in the world. As an internal component of the company, it spans across the Activision Blizzard universes and we’re like an internal partner to the studio and publishing teams who make and market the games. The MLG unit is responsible for designing and launching the Overwatch League. If you haven’t heard about it yet, you will soon. It’s finished the midway point of its first season and it is a professional sports league modeled on franchise systems like the NBA and the NFL, but it’s global. The playing field is Overwatch, a video game that over 45 million people play.
That’s one-sixth of the country if it were purely the US. That’s bigger than many European countries. I found completely mind boggling is you guys sell out stadiums to watch people play video games.
That’s been happening across the industry for several years now in North America and Europe. In Asia, it’s been happening for a decade plus. A lot of times people say, “That’s China.” There’s lots of cities with ten million plus people. I’m actually talking about South Korea and Seoul and not anywhere near as big a country in terms of population, but there was an outdoor StarCraft tournament that had over 100,000 people come live to watch. It was just an exhibition tournament at the Olympics and Pyongyang. There’s a lot going on and it’s becoming very massive. It’s interesting because the first sport that’s grown up and become a big media business outside of traditional television and therefore lots of people who are not interested in it don’t discover it because you can be flipping through the channels on your TV on a Saturday afternoon and come across basketball, football, and baseball. There isn’t that opportunity to organically discover this sport. You really have to go seek it out.
Knitting is the second largest craft in the United States. If you were to ask me to name people who knit, they don’t really talk about it with their friends. They only talk about it with other people who knit.
You could take the knitting metaphor and then say if it’s the second biggest craft in the country, whatever that is, but ten times that many people just watch people knit. That’s what’s this sport is.
Over the course of sixteen years, you’ve managed to build up this entire business. You’re Major League Gaming is a highly respected, very profitable business. You were acquired by the largest independent video game producer in the world and you’ve been ensconced in this whole gaming industry for the better part of your adult life. What do you see as happening next? What should I expect that the kids that my friends are having are going to be playing? Are we going to seeing that on Sunday night when the family gets together, everybody’s watching World of Warcraft on their TV being played by people? Is that the next evolution?
If your friends are parents of late teens to early mid-twenties, people who are generally gamers, they’re probably already watching these sports in some fashion. If they tune into Twitch or watching a lot of YouTube videos about gaming, they’re already watching these sports. The Overwatch League in particular. It’s the culmination of many years of having a vision for how something should work and then seeing it happen. There’s many super interesting things about it, but one of the interesting things about it is a little bit down in the weeds but we’ll have massive effect is it’s modeled on a city-based franchise system.
There’s a New York team. There’s a Boston team. There’s LA teams. There’s a London team, a Seoul team. One of the things that started to happen is those cities are creating fandom in the same way that we in New York City love the Mets or the Yankees, the New York Excel, the Overwatch League team for the Boston uprising for people in Boston who liked the Patriots and the Red Sox. Those are starting to create city-based fan, city pride and you want to get behind your sports team and it gives you an added context besides liking the game or a particular player. Now you can just be a fan for your city. The interesting thing to know too about both those New York and Boston teams for instance, is the New York team is owned by the family that owns in New York Mets and the Boston team is owned by the family that owns the Patriots. It’s not just gamers organizing this stuff anymore. It’s professional sports team owners who are getting guided as well.
Is it too late for me to get my own franchise?
It’s not. If you had a partner who owned an NFL team or maybe a European soccer club in lots and lots of money, you could totally do it.
How much does it cost? I don’t know if you can disclose these numbers.
We don’t disclose the numbers for obvious reasons, but it’s a lot. It’s millions and millions, but that’s not really the focal point. For us, it’s the quality of the ownership. We have a great mix of organizations from the professional sports world, like Bob Kraft and Jeff Wilpon and others, but we also have a great mix of e-sports entrepreneurs who came up in the industry with me and I’m the old guy, so most of them after me, but developed these businesses around owning and managing teams in different games. They’ve been able to participate in this as well. There’s a great mix of kind of traditionalist people from the e-sports space who are the entrepreneurs that helped pioneer the entire industry along with great entrepreneurs from other industries who happens to now be so successful that they own NBA, Major League Baseball and NFL franchises.
Mike, I am flabbergasted and amazed by what you and your co-founder have been able to create. As far as the future of gaming itself, what do you think we should be expecting? Is it more mobile? Is it VR, AR? Have you done The Void?
I haven’t done The Void. I did some really cool other VR stuff, but one of the things that is a macro trends in gaming that maybe lots of people in this post 30 age bracket don’t necessarily understand because it is a little bit generational, is that almost everybody is a gamer under a certain age in some respect. Maybe they play Candy Crush on their phone or maybe they play Overwatch on their computer or Call of Duty on their PlayStation, but people are gaming as a form of entertainment that for people who grew up like me as an ‘80s kid or even ‘90s kids who spent hours watching TV and sucked into that linear video experience as a primary form of entertainment. That’s been usurped largely by social media. Those hours are now being spent interacting with people through social media platforms, but they’re also spent interactively gaming. Our concept of what gaming is has to widen a great deal and you have to understand that like this is what people are doing instead of linear video experiences through doing interactive things.
Elements of gaming are now part of our everyday life. If you’re a frequent business traveler, like me for instance, you are likely to chase airline and hotel points all over the place. Most of those systems have been redesigned in the past decade or have ticket or so by people with lots of gaming expertise to help understand how to create that dynamic so people do chase those loyalty programs and things like that. Gaming is now pervasive as part of our culture. The technology that’s now being developed like VR and AR, like more powerful mobile platforms create more pallets for great developers to think of new ideas and execute them. I’m not in a place right now to predict where everything’s going to go from consoles to AR on mobile or something like that. I say the whole gaming space is going to get much, much bigger and people will have different areas of play where they like to game.
Things like VR and AR are going to be very big and powerful over time. The interesting thing about gaming too as a lot of technology that’s developed in the gaming space becomes very applicable to other more mundane things or more interesting things, and different industry. Things like gaming in the military industry for instance, the defense industry, have always had lots of back and forth. VR is an obvious example of things that both video game industry and the military use quite extensively. Same thing for AR, mobile devices, drones, all of those things started to crossovers between the military and defense industry and in the video game industry. It’s a hotbed for innovation in the technology space, but I don’t know that any one thing is going to become a dominant platform because it’s so big and so pervasive. What I would say is that even people who, a lot of times when I talk to them say they’re not gamers actually are. They’re playing different little games on their phone or things like that and they don’t think of it as “gaming”, meaning we still have this archetype of a kid in his basement by himself with headphones on staring at a TV screen. That’s gone. That’s not gaming anymore.
I can’t get on the subway without seeing people back in the Blackberry days playing, Sudoku or nowadays playing Candy Crush or Temple Run or anything like that. Mike, I have to say I’m in complete awe of what you’ve managed to create and as a professional geek and somebody who grew up playing a lot of video games, I thank you for making it something that can be seen as respectable and not just an embarrassing thing that kids who can’t speak to girls do. Thank you so much for coming on. I absolutely applaud you. Your partner’s name is Sundance?
I think you guys are amazing and thanks for coming on the show.
Thanks for having me. It was a lot of fun, John. Thank you.
If people want to find out more about you, where can they get that? Do you have a website, Twitter, Instagram?
@MSepso is my Twitter handle.
For the audience, stay tuned because we’re going to have the anonymous interview and if you can figure out who it is, you can win an invite to Miror: The Salon by Influencers. Good luck.
About Mike Sepso
Mike is Senior Vice President of Activision Blizzard where he runs Media Networks, a division devoted to creating the best esports experiences for fans across games, platforms and geographies. Prior to joining Activision Blizzard, Mike was the co-founder and president of Major League Gaming (MLG), a global leader in esports, focusing on strategy, key partnerships, corporate development and overseeing all product and technology development, including the launch of MLG.TV.
Anonymous Guest Interview
We have Oliver with us. Oliver, thank you so much for joining us. Let’s give people a little bit of a hint of who you are and what your background is. Where’d you grow up?
I grew up in Southern California.
Where you live now, or did you move around?
I started in elementary school in Northern California, completed elementary school in the Los Angeles area. I went to high school in Orange County, then moved to college to UC Riverside and then I did graduate work in San Diego. Now, I live in beautiful Del Dios on the shores of Lake Hodges.
Was there a certain incident or a teacher or experience that inspired you to go into what you do?
It didn’t hit me all at once, mostly, but I remember as a child taking a trip with my parents to Lake Tahoe. We were driving from Northern California and my parents were going, “Isn’t it beautiful? This is so beautiful.” I looked out and I said, “But it’s just trees.” I realized later that I was being taught what to appreciate. I was being taught that nature was important. Later in life, I was hiking, and I was an impatient hiker. I was with a family group and I charged out ahead and spent my energy. We were at 10,000 feet. The others caught up with me and passed me by and it was only a mile on the trail to where we were going or something. They were content to just keep moving. I was alone in the Sierras and a coyote crossed the path and looked at me. We looked into each other’s eyes. It made a big difference for me because I remember that my whole life.
I had another formative moment that was the first day in my biology class in high school when the teacher said, “Biology is becoming much more biochemically and chemically oriented.” I thought, “That’s great because I love chemistry.” I was interested in exothermic reactions. I thought anybody that got to work with things that exploded and get going. Then the teacher said, “Biology is going to change because there’s this chemical that is the blueprint for life.” I don’t really understand it, but it’s called DNA. I said to myself, “That’s what I want to work on.”
Here you are, but we can’t say too much about that right now. Just to give people a sense of what you look like. Who do you think would play you in a movie?
I’m really terrible on actors’ and actresses’ names. Maybe Tom Cruise.
Is there a certain achievement that you’re very proud of?
A lot of what I do involves some materials that are stored. I was showing a man and his daughter the contents of this room. The man having won a silent auction to have the opportunity to have a private tour.
What was it that you stored?
Living cells. His daughter wanted to be a veterinarian and this man was a Vietnam vet and he wanted to give his daughter a special experience. He won this silent auction and I brought him into the room and explained to him and his daughter that these were living cells from endangered species and briefly explained it. We stopped, and he was quiet for a minute and he said, “This must be one of the most important rooms on earth.” I thought, “This man has framed the essence of it.”
Oliver, I’m assuming because of the nature of the work you do, people probably compare it often to Jurassic Park. Does that ever happen?
That’s very true, John. It used to annoy me, but now I take it as an opportunity to launch into how good a story Jurassic Park is, but how it’s a story and how the science doesn’t jive with reality. That allows me to segue into a discussion about what you would do if you wanted to have access to forms of life that were gone or were on the verge of disappearing, or importantly for me, that you could prevent from disappearing. It’s been possible to save living cells from an animal for only about 60 years.
The history of life on earth is four and a half billion years of age approximately. You might look from a cosmic perspective that this is the first time in the history of life on this planet that living material could be saved after an individual is died or after a species has gone extinct. This could continue. This could be the starting point for documenting, chronicling, banking, conserving, and utilizing biodiversity in a way that’s never before been conceived.
For the audience, you have a ton to go on. You know where Oliver lives, what his passions are, and he’s more than hinted on the kind of work that he does. If you can figure out who he is between now and the release of the next episode, you can win an invitation to Mirror: The Salon by Influencers. Good luck.