Preface: There are a number of general topics of worry when it comes to gaming, in particular the long term health effects and potential social alienation aspects. Here follows my perspective, ofc. enriched with science and data because that’s how we roll on this blog. It happened to become a mixed piece about investors and parents view on games – but I guess that’s just because my brain is still a bit messed up post burnout.
Happy to hear feedback. #teamscience
With the increased focus on building a sustainable future for our people and planet to thrive, we rely heavily on a common view of what it means for a company to take their environmental, social and corporate governance responsibility. To help us speak the same sustainability language, ESG was brought forward as a type of scoring to portray any given firm’s collective sustainability conscientiousness on a number predetermined factors. The score is compiled from data on specific metrics related to ”intangible assets” within a company and helps giving us an overview of where a company stands when it comes to taking their responsibility for the planet. Here is a big five company’s take on the topic (PwC on ESG).
This data isn’t just important for the company itself to keep track of and likely demonstrate to their board or owners. It’s more so important for companies managing assets for others to make sure they are not investing in something that is making a bad footprint on planet earth. One way of approaching this is to simply exclude industries that are ”at risk” of scoring badly on any of the given paramenters – and in this analysis we are going to talk about wether the gaming industry is such an industry or not. But before we go into on that topic, I think it’s important to understand why companies should care about sustainability in the first place.
Why should companies care about sustainability?
If we are idealists we might answer this question by stating ”because it’s the right thing to do” but if we want to be a bit more cynical we could also say ”it pays to do so”. According to multiple research papers funded by various actors in the field we find companies who focused on these aspects during the 90ies have been benefitting from that focus during the last couple of decades.
To quote Roel Drost (PhD);
The battle to get companies interested in sustainability is basically over. No self-respecting company big and small, debates whether environmental and social issues can affect the company’s bottom line. At the very least, executives recognise their key stakeholders like their customers and employees, do care about these issues. So, sustainability is on the strategic agenda to stay.
The reality is we experience business executives still having doubts about it. The biggest challenge seems to be, how to substantiate the investments needed and how to calculate a simple RIO. But there are no shortcuts or quick wins here. What is needed is a longer term vision, strategy and persistance. Therefore we need to stop debating whether adopting sustainability practices make sense. The evidence is already there, and it is overwhelming.
He and Edwin de Zeeuw have written an entire analysis on this topic alone, so if you want to dig deeper you can find their work here.
If you read German, you can find another piece in HBM here by Tensie Whelan and Elyse Douglas. While I had to translate it, so might have missed part of the flavour to cultural differences – they basically dissect why it’s still seen as a cost not a value increasing task to work with these questions and how the different things we measure affect how we look at the situation. It reminds me a lot about how we used to look as cybersecurity for the longest of time.
What’s the beef between ESG and Gaming?
Every generation of parents want to find the reason to why their teens are behaving in a less desirable manner. From rock music to film and back to hip hop, each clan has had their own monster to blame rather than accepting that kids will be kids. The post millennial generation have naturally chosen gaming as their main culprit for turning their children into hormonal monsters. This also gives media a way to sell newspapers by giving parents an easy way out rather than actually looking into the adaptability of their own parenting. Zoom out even more, this catches the eye of WHO (yes, the same organization who endorses unsolicited alternative spooky magic medicine, but that’s a different story all-together). And this is where it gets interesting.
A couple of years back the WHO tried to prove that children who played video games could suffer from something they wanted to lable a ”Gaming Disorder” and they wanted to go as far as to diagnose children with an addiction according to the ICD-11. As an integral point in ESG is societal and our society consists for the most part of people – logically this sparked worries that gaming companies would receive low scorings on ESG with regard to the WHO stand against gaming. It also made parents question wether or not their children should play computer games all-together. In particular as Media took every opportunity to display gaming as the reason why people are aggressive in the first place (like we didn’t have aggressive earth citizens before we started playing DOOM or sth). Here is an example of hate-washing computer games in the trial of a convicted murderer. Also, I attached a picture of a person picking flowers to make potions in this ”very violent computer game” to make my point about it in fact not being aggressive.
Anyways, back to WHO. The reaction from the gaming community on the report was as expected, but there was notably an even more vocal community of mental health experts who spoke up against this on the basis of severely low quality of the research. You can read more about it here and here.
Primarily they were concerned as there are a lot of risks with labelling someone an addict of any sorts without the grounds to do so. People were also referencing the work of Kardefelt-Winther, D and Przybylski, A. K. in those dialogues too. Even Nancy Petry who is leading a study on gaming disorder says herself the scientific evidence is insufficient. There are numerous other studies where the ”problem gamers” are not as easy to write off as just that – problematic. It’s a complex question even to the very people who experience having challenges shutting it down when gaming. As with any scientifically based study, if you can’t back it, you can’t back it.
Does this mean I should just let my kids play games all the time?
No, that’s not the message. Ofc. very young children should not play violent games or have access to credit cards which allow them to buy things – I think that’s common sense really. The whole point of the PEGI system is to make it easier for parents to assess wether or not a game is fit for their child – read those labels carefully if you are not a gamer yourself or ask your fellow neighbourhood rogue for help.
And even if you do keep your home clear – naturally, children will find ways to do that anyways because they are children. There is always a friends house where 9 year olds play GTA and are exposed to situations which are not meant for their eyes. Whatever the adult world labels forbidden becomes extra interesting to a child. Here’s where your role as a parent really becomes crucial in guiding children and preparing them for the world outside (digital or physical). You can’t outsource your parenting to daycare and the internet – that’s not how responsibility works. Why did you have kids in the first place if you’re not planning on investing time in them?
Suggested RACI on who should do what to make the climate better:
Investors should not shy away from opportunities because they are afraid of social implications. Firstly because it’s stupid as the ROI on games is usually swell – but also because when you acquire something you really have the chance to make a difference. You as an owner/customer/what have you are in a unique position to raise the bar and set targets and demands for companies to adhere to.
That being said, if you wouldn’t want to invest in Rockstar-like studios with regard to their portrayal of women – I totally understand and back your decision. But bear in mind, they also made Red Dead Redemption II. This book is not up to date, but I remember when reading it that it gave me a good grasp of the subject of gender inclusive game design (thank you Ivan Milles). We would however need to broaden that term to include all types of cultural variants and societal minorities just as we do in Hollywood – it’s not just women who are stereotyped in games.
Studios/publishers should take their responsibility in being cautious about the content they create and the group of people they create it for. They can leverage things like parental controls or NLP to monitor misuse of funds or toxicity in chatrooms. If they notice there is an increased spending on an account – it could be good to notify the owner. They can also work with unconscious bias to make sure the dev teams don’t create profiles in the games which are offensive to groups in society on that last topic.
Parents – yes, in fact what is the role of a parent in a digital era? This part really grinds my gears with my own generation and the one that came before. To what extent can we blame systems/technology for our children’s behavior and where does the parental responsibility kick in? It is easy to make a case for gaming as a bad for your health, turning kids aggressive or triggering behavior which could lead to gambling addiction if you are actively looking to poke a hole – but is it right? Or are we lazy? Let’s unpack this.
Aggressive: Have you ever seen a kid react angrily on the football field? Have you seen physical confrontation – bad mouthing – locker room talk? I bet you have. Is it equally bad in the eyes of a parent to be ”addicted to football” or to be aggressive on the field? How do you handle that situation in the ride home, vs someone being angry at a game.
From what I’ve seen parents are trusting the football clubs to work on their end to ensure that the kids learn about fair play by using some of their rolemodels as well as talking a lot to their children about winning and loosing a game. We have the same setup in Esports if you know where to look. Toxicity is being adressed by the pro-player community across esports too, here is an example of that. Just ask someone for help if you feel uncomfortable and unsure about how to approach the topic.
Here and here are two reports I wish every parent with kids online would read. They’re originally in Swedish, but I’m sure there’s an option to translate.
Gambling: The gaming industry has battled the separation from gambling for ages. The only thing you need to remember here is that there is no chance involved in gaming – it’s skillbased. That’s what sets the two appart. Let’s leave it at that.
Health aspect: Yes, ofc your child should spend time moving around as well, but society is changing around us. We went from egg-clocks on computer time in the late 90ies to majority of modern society spending 8 hours a day on computers, and no one bats an eye. It even helped us stay alive as businesses mid-pandemic. Be smart about this – find a balance together with your kid.
Something I feel is always overlooked is there are a number of things which improve with kids playing games such as collaboration with people from different cultures, staying cool under pressure, thinking quick on their feet, speaking good english etc. To plug my own content, I did a TED on this a while back. Being able to choose Avatar in an open-world is very important for the development of self-confidence in a kid, realising that your exterior doesn’t matter but your heart and actions do is something I got to learn in computer games. It also helped me feel included and socialise, so that I could take those experiences with me out IRL which didn’t come as naturally to me at the time. And I share this view with many of my friends who were somewhat of an underdog group who found their belonging through games.
I hope this piece can help you (investor) reason with your partner team and help them understand why the opportunity is not only on trend, but the ROI far out-weights the ESG-risk.
If you’re new to this and specifically want to work with game investments, there are companies like Aldeon and Amplifier who might be a good fit for you – I suggest you check them out.
I hope it can also be supportive for you (parent) in finding a balance between physical and digital activities for your kids.
Rest in pepperonis 🍕