Contributed by @nixops
I want to preface by saying that I love video games and I love technology. All of the aforementioned subjects have seen some very similar situations. I want to bring up my thoughts on this without the rose-tinted glasses. It is important to look at the technology itself and not the hype. I do hope you enjoy.
Video games are something a lot of us enjoy immensely. It is a huge business of 108.6 Billion dollars in 2017. No small chunk of change and is embedded into our daily lives. Also understand that one point it was almost lost. It was a crazy decline over a span of two years. It is commonly referred to as the North American video game crash of 1983.
To those in the know, they are aware of the video games market being worth around 3.2 billion dollars in 1983. This was short lived as by 1985 it would only be worth 100 million dollars, a 97 percent drop. This was a huge deal and many companies would not survive.
The crash due to a flooded console market, gimmicks, and ever growing number of shoddy games being launched on consoles. There were issues with licensing as well. Growing threats from the home computer market took its fair share to take a piece of the pie. This leads us to an issue of over saturation and no meaningful engagement with the audiences. As the audiences began to no longer buy the junk being produced. Ultimately this led to the crash.
But with each door that closes, a new one opens. As time went on, Nintendo was able to resurrect the market and usher in the second coming of the home console market. This resurrection of the home video game console is still going strong today. With the resurrection came learning and with that came some changes to their industry.
Everyone uses the internet. In today’s world it is not uncommon in some cases to never disconnect. It was not always so easy to access the internet and during the 1990’s the internet explosion occurred. All of a sudden everyone was pushing for everything to be done online. With it came headaches, extreme wealth, and even more innovations we take for granted today.
A lot of us remember getting the Aol disks in the mail for free dial up. You may remember other companies sending them as well. One thing we definitely all remember were the hours spent exploring and learning something completely new. It was an assortment of things to everyone that interacted with it, and when you have such an engaging experience it becomes a breeding ground for businesses and services.
With that growing internet providers came growing online businesses. It exploded, we saw a huge economic boom of the industry from 1995 till 2000. With that boom we also got to see first hand at what happens when easy capital investments and a hype generated the ever expanding .com boom. Tons of websites sprung up, along with online services, and tools for your every day life for the transition to a digital world. It was fast and loose, but it all came crashing in.
Company’s were getting easy money and instead of using the money on engineering and building products, most of the capital was spent on advertising and marketing. Ideas were turning into companies in no time, however, nobody was looking at the real world problems they were creating. Company’s so focused on the idea that brand awareness would carry them through the operating losses they started with. In the end, most of the companies would shut their doors. The company’s with usable services and features would survive.
“Initial Coin Offerings” (ICO), now you can not really go or do anything today without hearing about an ICO. ICOs are essentially fundraisers for cryptocurrency. This is an interesting idea and for the most part I have no issues with legitimate ICOs. You may ask, how do you determine if it is legitimate or not? My answer is I am not an investor but if you would like me to write about it email me and I will post a checklist to verify an ICO. In a nutshell, this model should replace the venture capitalist model we know of in the current software world. I like the idea of removing government regulation on who has the right to invest money in a project. This is powerful and aligns with not needing permission to use your finances.
Where ICOs begin to fall apart today, is that we are seeing them fail fast. Since you are down this far, I assume you read above. If you did then you would see some scary similarities in the these three events. It is important to note that right now there are some wild ICO ideas. I do not need to guide you on how to find them, just google. That being said, we have to consider what is about to happen in the cryptosphere.
Above is a picture taken from a real conference with a real interaction at a booth.
I think that ICOs are great, I think that it aligns with the ideal of a permission-less financial society. I do think with it comes risks and challenges. We have experienced huge industry crippling crashes. We have and will always bounce back in the case of technology. As technology progresses we will adapt and progress the tools and services for it. This is the evolution of technology. We must also understand that, not all things are solved with a blockchain. It is important to use the right tool to accomplish the task. We have seen some really big ICOs and we are seeing them even now requiring more money to build their project. I would advise to stop spending money on conferences, marketing, and brand awareness and build a product.