Richard Branson has a history of turning industries on their ear. And now he has his eyes set on the video game world.
The billionaire entrepreneur’s re-entry into the gaming world with Virgin Gaming Tuesday caught a number of people by surprise. While it was hardly shocking that he’d want a piece of the $10.5 billion dollar industry, most expected Virgin would approach it from the publishing route.
Virgin Gaming, though, will have nothing to do with developing or distributing games. Instead, it will act as a matchmaking service for both Xbox 360 or PlayStation 3 games, giving players the opportunity to cash in on their skills via cash wagers or letting them simply find an opponent whose skill level equals their own. The unit will also let players play for real world prizes, such as trips on Virgin Atlantic flights.
“We are creating a new way for people to enjoy games,” says Branson. “I think with this we can create a platform that thousands and thousands of people will find fun and useful – and fair and welcoming.”
Rather than launching the company from scratch, Virgin has taken an equity investment in WorldGaming.com, which has been involved in player-to-player cash tournaments for over a year. To date, 30,000 registered players have collectively won (and lost) $1 million.
The average wager at the site during its WorldGamer days has been in the $10 range. It has an upper limit of $1,000 per game, but the biggest bet they’ve seen to date among non-celebrity players was two people playing for $800 each. (Snoop Dogg and Jermaine Dupri hold the celebrity record, once plunking down $5,000 each over a game of “NBA 2K”. Snoop Dogg walked away the winner.)
To date, the real money in the video game industry has been on the software side. Virgin itself had a publishing division in the early 90s. Branson, though, says he’s not eager to retread familiar ground.
“The great thing about this is it encompasses all games, rather than just the handful you make in your own publishing house,” he says. “It’s something that we haven’t done – and I like a new challenge. I think it’s a real service to everyone who’s producing games.”
While Virgin Gaming won’t be a major contributor to Virgin’s overall bottom line in the near term, it’s also a division that has minimal risk. The company won’t be pumping millions into making titles that could flop – and players have been betting each other over matches since the Pong days (though wagering via PayPal or credit card is a new twist on the practice).
What’s especially interesting about the move is what it might mean for other companies who are eyeing the gaming space. Virgin’s sidestep into the industry could turn attention to smaller remora companies that service gaming and exist off of it. The reward’s smaller, but so is the risk – and it’s a good way to get hands on experience in the industry and establish a reputation, should they want to get more involved.
“I’m not writing off the fact that we will never produce our own games again, but I find it more exciting doing this, rather than doing something we did successfully 15-20 years ago,” says Branson