Easter egg

This article first appeared on The Gaming Recap, a weekly rundown written by The Gaming Shark. Please refer to the disclaimer for further information.

The Gaming Recap is the world of gaming, through the eyes of an investment banker. Each week we take a look under the hood of a key theme we’re seeing in the gaming industry, and sprinkle in some news from around the street.

Some news from a few of our friends in the world of gaming:

  1. Aquilini GameCo / EGLX (TSXV:EGLX) – Game on ladies and gentlemen, this started trading Monday. We’ve fielded questions this week about the transaction, pricing, and how the ratios work. It’s a three-part transaction where you have some people that own Enthusiast, J55, and GameCo. The team at Gaming Street’s parent company, Enthusiast, put together a solid price comparison chart, which you can view right here. It shows the new effective merger price and equates it to what that pricing would be for EGLX or GameCo, depending on what you own.

A quick bit of other news before we geek out

  • Let’s talk traditional sports for a second. In a move that makes Terrell Owens or Neon Deion look like Mother Theresa, Antonio Brown has lit up the headlines in neon lights for being suspended by the Raiders when he threw a class A hissy fit after being denied his old helmet. As a reminder, the Oakland Raiders traded for Antonio Brown during the offseason, and handed him US$30M in now not-so-guaranteed dough. Here’s a picture of him and Raiders freshman GM Mike Mayock pre-breakup:
Antonio Brown and Mike Mayock

Source: Deadspin

  • Niantic agrees to combat trespassing Pokémon Go players
    • Niantic will stop placing PokéStops close to single family homes, and remove existing ones. Apparently this was brought to the forefront by 12 separate plaintiffs in the US who had grown tired from trespassing Pokémon Go players.
    • My 2¢: It’s good to know that Pokémon Go players still to this day are willing to make the ultimate sacrifice to catch em’ all. If you ever wonder to yourself, ‘what lengths will gamers go to win’, perhaps this sheds a little bit of light on the fanaticism that gaming can inspire. Nintendo owns the Pokémon IP, as a reminder.
  • Here’s a good note by Josh Chapman taking a look at how much his group believes that the Call of Duty media rights are worth.
  • Why Anheuser-Busch is pouring beer and money into esports
    • Looking to become the “official beer of esports”.
    • My 2¢: Another big non-endemic brand looking to step into esports with authentic marketing. We see the maker of Bud Light stepping into the space to solidify its position as the ‘official beer of esports’.
  • Activision Blizzard esports league tries a Nielsen metric to take on traditional sports
    • The Overwatch League is pitching marketers with average audiences per minute, a common measure of TV.
    • My 2¢: The Overwatch League in February began releasing Nielsen viewership reports on the average number of people who watch any minute of a league event. As more large brands enter the space, Nielsen metrics will add a layer of familiarity for brands entering the space to monetize content.
  • World of Warcraft is on a campaign to return Activision Blizzard stock to its former glory
    • Since its Aug. 26 release, World of Warcraft: Classic has attracted hordes of players and viewers on streaming site Twitch, making it the most-watched title across any week in the past two years on the game streaming site — and more than doubling the audience of the nearest competitor, League of Legends.
    • My 2¢: It’s just like Hollywood, people love remasters. I remember playing World of Warcraft over a decade ago. This underscores the power of IP in the video gaming world.
  • For all you fellow Nintendo lovers out there, SNES games are coming to Nintendo Switch Online.
    • This is just for fun. I cannot wait to be back cruising Super Metroid again on my Switch!!
  • theScore announced the closing of a $40M strategic investment by Fengate Asset Management
    • Between theScore, EGLX/GameCo, and Millennial Esports, well over $100M has been raised for public companies in the gaming and esports square this year.

An Easter egg

Hey folks,

Yeah, 9:08 L.A. time
Back in the lab
– Saint Pablo, Kanye West

We’ve had a few weeks back to back taking a quantitative look at some of the data underpinning the gaming and esports industry. If you want to dive back in, you can find it here or here. Aside from the numbers behind gaming and esports, we also like to talk about some of the nerdy terms that make the industry so cool. This week we’re going to have a little fun by taking a quick look at the history behind ‘Easter eggs’ and what they mean for the gaming industry.

Easter eggs in real life are chocolate-covered eggs that you find on Easter. You open the wrapper and you enjoy the chocolatey reward. Growing up, my sister and I would battle in an old-fashioned Easter egg hunt. It was a knock-em-out drag-em-out battle to find the last egg. The best Easter eggs were the ones that you found in the most unexpected place. That one egg that you find buried in the back of the house piano. In technology, the concept is exactly the same. The creators bury a little reward deep inside of a game that you find.

The first Easter egg in games was in 1976 and came from a place of revenge. Warner Communications bought Atari, the OG video game maker, in 1976. The game designer Warren Robinett, then 25 years young, chafed under Warner Communications, his new employer. Not only was there a huge culture clash between New York (Warner) and California (Atari), but the New York bosses had no intention of giving credit to the authors of the game. Picture a movie without credits at the end!

The solution: A hidden Easter egg. Warren Robinett built what is generally credited as the first Easter egg into his game Adventure, which was a flashing, colored credits screen that read, “Created by Warren Robinett.” You can see the progression in the gif below:

Adventure - gaming's first Easter egg

To avoid detection by Atari’s testers, he hid it in a secret “room” of the video game, accessed by a convoluted sequence of steps involving a maze, a bridge, and a one-pixel “key” that he called The Dot. Of course, it didn’t take long for gamers to discover it.

This Easter egg would eventually pay off in lights. In Steven Spielberg’s 2018 blockbuster Ready Player One, the game Adventure would play a central role in the climax of the movie, with the main character finding the first digital Easter egg. Since that first Easter egg in 1976, tech makers all over the world, from Tesla to Google, have taken the Easter egg concept to heart.

At the end of the day, game creators have buried secret characters, weapons, maps, places, languages, and names in games. It’s the content creators’ way of expressing themselves. Most importantly, it underscores the difference between game content and every other piece of consumable content: the fact that it’s interactive. Movies and music are both passive, linear content modes – in other words, everyone consumes it the same way. Games are not. They are interactive, with infinitely different modes of consumption. For that reason, creators can, and will, continue to hide little gems for gamers to find. Maybe that’s the best part of games after all and why, in my humble opinion, they are the most powerful form of content that exists today.

What’s out there

Enthusiast Gaming (TSXV:EGLX) – This went out and started trading on Monday

Gaming Street collaborators helped bring our publisher company public last year, and now the merger with Aquilini GameCo has finally closed to become a premium vertically integrated esports and gaming company.

Millennial Esports (TSXV:GAME) – Gear.Club Unlimited 2 Porsche Edition to launch in November

Acquired racing sim manufacturer to deepen existing integration in the racing esports value stack with a proven world-class manufacturer of racing sims.

Versus Systems (CSE:VS) – Signed a deal with HP

Versus makes the technology to let people play games for rewards.

In December they brought on Keyvan Peymani as their Executive Chairman (the former head of startup marketing for Amazon Web Services and a former VP ant Warner Bros and Disney) as they began to scale their platform to new games. They allow players to win real-life rewards while playing in-game, and can be integrated into any Unity based game.

Axion Ventures (TSXV:AXV) – Presented at the Gateway Conference

The only Canadian publicly traded game studio with a JV with the largest gaming studio in the world (Tencent). Their marquee game Rising Fire is distributed under JV with Tencent. They also have a AAA quality mobile game made in Thailand under JV with the True Corporation.

BRAGG Gaming (TSXV:AXV) – Goes live with LeoVegas

GiveMeSport now reaches more than 95M monthly unique users (up from 29M in January 2019). Bragg’s core asset is ORYX Gaming, a B2B gaming technology platform and casino content aggregator.

Sean MacGillis
Sean is VP of Investment Banking at Haywood Securities Inc. and a Gaming Street Contributor.

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