A History of Silicon Valley

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These are excerpts from Piero Scaruffi's book
"A History of Silicon Valley"

(Copyright © 2016 Piero Scaruffi)

The Selfies (2011-16)

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The world of gaming was shaken in 2012 when Ouya, founded in San Francisco by Julie Uhrman, announced an Android-powered open-source gaming console. Unlike other platforms, that charged game developers, Ouya promised no licensing fees, no retail fees and no publishing fees. While less powerful than the best-selling consoles of the time (like Microsoft's Xbox 360 and Sony's PlayStation 3), Ouya was promising a whole new world of games, not confined to the big developers. In July 2013 Ouya raised more than $2.5 million in just 8 hours on Kickstarter.

In 2012-13 the big videogame console producers introduced a new generation: Microsoft's Xbox One, Sony's PlayStation 4, Nintendo's Wii U. None of these was based in Silicon Valley. However, two of them (Xbox and PlayStation) were powered by general-purpose processors made in Silicon Valley (by AMD) instead of the custom chips of previous generations. Furthermore, one reason why nobody in Silicon Valley was trying to compete with the giants of consoles was that mobile devices were rapidly becoming a major platform for gaming.

Gaming engines such as Denmark-based Unity (David Helgason and Nicholas Francis) and Palo Alto-based Corona (Walter Luh, 2008) were making life easier for designers.

Silicon Valley was not innovating in mobile game design but it was acquiring. In 2015 Activision Blizzard paid a fortune for one of the most successful mobile games yet, "Candy Crush Saga", launched in 2012 and already downloaded by more than 500 million people (mostly women) on smartphones and Facebook. King had been founded in 2003 in Sweden by Riccardo Zacconi and others, a spin-off of Melvyn Morris' online dating website uDate.com (after it was acquired by Texas-based Match.com).

Gaming was rapidly moving from personal computers and consoles into smartphones and tablets, thus opening the gaming market to new demographics. In fact, according to a 2017 report from the Entertainment Software Association, most female gamers were now over 50, while most male gamers were under 18. Among new gamers, males still outnumbered females 63% to 37%, but the huge gap of the past was closing. In 2017 Newzoo estimated a worldwide market of over $100 billion ($36 billion in the USA alone) and mobile gaming accounted for about 40% of it. It was estimated that gaming companies created Internet traffic of about 50 terabytes per day.

The decline of the console affected mainly Japan's Nintendo, whose 2014 was the first year in its history despite the introduction of the low-end Nintendo 2DS. This was largely due to the emergence of mobile gaming. Sony's PlayStation 4 (2013) and Microsoft's Xbox One (2013) fared slightly better. This was probably due to the growing importance of graphics quality over the plot quality, as gamers expected a more spectacular experience in the age of virtual reality. In 2016 Sony Interactive Entertainment relocated to San Mateo, so the Bay Area could boast a return to the console market; but Japanese commentators saw this move as a sign that the era of the console was ending. The success in 2017 of Fortnite, published by North Carolina-based Epic Games, and available on both iPhone and Android devices, that gathered more than 100 million players in the first year, proved that a console wasn’t necessary for even the most demanding multiplayer game. A compromise was the hybrid console. Nintendo released the Switch console in 2017, a "hybrid" device intended for both home and mobile use, which became the fastest-selling console of all times. Its design was similar to a tablet introduced in 2012 by Los Angeles-based Wikipad (later renamed Gamevice), which in fact sued Nintendo. In 2018 Nintendo announced its first subscription game service.

Streaming and cloud computing were still not adequate to the speed of game playing, but it was well known in Silicon Valley that in 2018 Google started testing a videogame streaming service called Project Stream, popularly described as "Netflix for videogames".

After the success of Niantic's augmented-reality game Pokemon Go in 2016, gamers came to expect virtual and augmented reality features. In 2017 Niantic acquired Evertoon, founded in 2014 in San Francisco by Niniane Wang to develop a platform for people to create short 3D-animated movies featuring avatars of celebrities, and in 2018 Niantic acquired augmented-reality startup Escher Reality, founded in 2016 in Sunnyvale by ex-Google engineer Ross Finman and Diana Hu, the first startup incubated by the MIT Sandbox program, and machine-learning startup Matrix Mill, founded in 2017 by scientists of University College London. In 2018 Niantic also demonstrated its new Real World Platform for game developers.

The idea of free-to-play games ("freemium") was born in 1999 when South Korea's Nexon released Lee Seungchan's QuizQuiz for free, charging gamers for additional features. Freemium (also nicknamed F2P) became a popular business model in South Korea and China. During the 2000s many subscription-based games turned to the F2P model, so that by 2011 revenues from F2P games overtook revenues from premium games on mobile devices. Typical hits of F2P games for mobile devices were "Clash of Clans" (2012), developed by Supercell Oy, founded in Finland by Ilkka Paananen (acquired in 2015 by Japan's SoftBank and then in 2016 by China's Tencent), and the multiplayer online game Dota 2 (2013), published by Seattle-based Valve, a sequel to IceFrog's Defense of the Ancients (DotA). San Francisco had two startups for F2P mobile games: Pocket Gems, started in 2009 by Daniel Terry and Harlan Crystal, and Cloudcade, started in 2014 by Di Huang.

Location-based games (videogames that use the current location to develop the plot) were born with BotFighters, released in Sweden in 2001. One of the pioneers of location-based gaming was Booyah, founded in San Francisco by Brian Morrisroe and Keith Lee, that in 2010 released "My Town"; but it failed in 2014. Niantic also had its own location-based game, "Ingress" (2013).

The Bay Area had indie game developers such as EDEO (i.e. Josh Buckley and TJ Murphy), who developed the hit mobile game MinoMonsters (2011), and Supergiant Games, founded in 2009 by former Electronic Arts employees Amir Rao and Gavin Simon, released the hit "Bastion" (2011). Big Head Mode was started in 2011 by Tipatat Chennavasin and Richard Au in San Francisco to develop personalized gaming: games that star the gamer and her/his friends (acquired by PlayFirst in 2013). MidBoss was an emanation of the gay gamer, or "gaymer", culture, a studio founded in 2012 by Matt Conn in Berkeley that produced the cyberpunk game "2064 Read Only Memories" (2015).

NomadicVR, launched in 2017 by Doug Griffin and Rick Schulze in San Rafael (north of San Francisco), rediscovered the game arcade but in virtual reality: its users, equipped with the appropriate headset, could visit virtual rooms of games and play any of them.

Seattle, home to Microsoft, Valve and about 300 gaming startups, and the birthplace of Penny Arcade Expo, first held in 2004, had become the gaming capital of the USA.

3D open-world gaming had been pioneered by games such as Yu Suzuki's "Shenmue" (1999) for Sega and "Grand Theft Auto III" (2001) by DMA Design in Britain. Markus Persson's "Minecraft" (2011) in Sweden became the most powerful game of that genre, registering its 100 millionth user in 2014. In 2016 Ubisoft released "Watch Dogs 2", an open-world game that poked fun at the hacker culture of the Bay Area. Set around San Francisco and Silicon Valley, it realistically depicted how evil government and corporations threatened people's privacy. If the Bay Area was not the most creative center for videogames, it was becoming one of their favorite dystopias.

click here for the other sections of the chapter "The Selfies (2011-16)"
(Copyright © 2016 Piero Scaruffi)

Table of Contents | Timeline of Silicon Valley | A photographic tour | History pages | Editor | Correspondence