LogInAmong fads, he mentions the metaverse, crypto games, and VR.
Meta
Owen Mahoney, former Nexon CEO, knows a thing or two about both hype and innovation, and in his blog post, he discusses popular trends and tries to answer the question of how to spot a fad.
He crowns his post with Derek Zoolander from Ben Stiller's movie, "glamorous, obsessed with new trends, and completely empty-headed. I use him here as an avatar for the type of thinking that shuts off people's brains, making a trendy topic look brilliant at first glance, but collapsing the second you ask for substance."
He recalls the trendy niches popular currently and when he was with Nexon and tries to explain how to distinguish between something useful and simple hype.
"A vital skill for anyone investing time or money in a hype-laden industry like videogames is to separate empty fads from valuable innovation, and to do that you need a tool to make smart decisions. The best way I have found is to focus at all stages on the user experience. If the UE sucks, you don’t have a product anyone wants, and therefore no business."
He says that hype cycles follow a pattern:
- The Glamour Shot: a perfect image
- Fake News: a grand narrative
- “'OK Boomer' phase: "Consultants publish glossy reports with hockey-stick charts. CEOs, under pressure, appoint a tsar, usually a senior exec with nothing better to do."
- M&A validation: a big acquisition
"A great example was Bobby Kotick pitching esports franchises to traditional sports owners. He needed revenue; they needed growth. Team owners saw their kids gaming and assumed, 'In the future, kids will fill esports arenas the way we filled football stadiums.' Both sides had every incentive to believe the hype, although only the seller made money."
To help you see if the new thing is here to stay, Mahoney offers a "3-question Fad Audit":
- Unlock Something New? Does it enable an experience that was impossible before? The Internet enabled person-to-person gameplay at scale, shifting entertainment from one-way to interactive. Mobile put that experience in people’s pockets, and games like Pokémon Go showed how location could become part of the medium.
- User Experience Much Better? Just being new isn’t enough. To matter, it has to make the experience dramatically better, 2x better at a bare minimum.
- Tangible? Can you try it out yourself? Can you experiment with it today in a tangible, repeatable way? Your own senses are usually more reliable than the crowd’s opinion.
Meta
Then he drags some famous trends through it. In his list, fads are esports, VR, game streaming, crypto games, and the metaverse.
He says that esports were interesting for those who already played the game and didn't offer any big numbers.
VR is a more interesting case, as it is still trying to cling to reality and, in some eyes, it even succeeds.
"On the surface VR seemed to bring the cyberpunk vision of William Gibson and Neil Stephenson to life," Mahoney says. "So it was very tangible (you could try it out yourself), it felt completely new, and it promised a revolutionary experience. ... But that “much better” user experience was highly deceptive. While on the surface VR seems more immersive, in many ways it was the opposite of immersive."
VR got in the way, and most of the time, a screen, keyboard, and mouse are actually easier for playing in a 3D environment, "and therefore more immersive."
"And VR struggled to deliver the high-speed pixel accuracy that made sports and shooter games so difficult to master. These are the types of UE subtleties that are largely lost on non-gamers, so many investors and analysts were utterly fooled by VR. VR looked like the future, until you tried living in it."
Streaming games sounded like a great idea (still does to many), but in Mahoney's opinion, it offered little innovation and a small catalog of games. Maybe that's why Stadia was eventually shut down.
With crypto games, it's pretty obvious: transactions were a pain, and, most importantly, "paying for leveled-up items or characters stripped away the challenge, and challenge is what makes a game a game. Put simply, they took the game out of the game."
Finally, there is the metaverse, Mark Zuckerberg's fever dream that even moved him to change the whole company's name to Meta. In Mahoney's words, it failed his Fad Audit completely.
It wasn't tangible, there was no clear definition, and everyone understood the concept slightly differently. It was not innovative in practice: after a while, it turned out that it offered the same MMOs had been for decades: a fantasy world where you can be whoever.
The UE was also lacking. Basically, not many users could find the appeal of beind in the metaverse.
"Chatting and building things in a simulated 3D world are not compelling by themselves. People must have a reason to go to a place, real or virtual. The hype never grappled with these basic user experience questions."
"In the end, the Metaverse didn’t fail because it was too early; it failed because it never solved a problem worth solving. It reflected our fantasies instead of fulfilling them."
Mahoney concludes that ridiculing such hype trains is actually valuable: "These weren’t harmless fads. The malinvestments destroyed billions of dollars of capital that belonged to pension funds, retirement accounts, and ordinary savers. ... A decade spent chasing fads could have been spent building things people actually want."
It's not at all surprising why companies jump into these trains: you never know if this new thing will be the next breakthrough, and everyone wants a piece of the very profitable cake.
"The solution isn’t cynicism. Rigor allows companies to lean in when it matters and filter out noise when it doesn’t. The test is simple: if a company can’t explain, in plain terms, how their product makes the user experience 2x better, it isn’t a business. It’s a fad. And you should run."
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