Ahead of this year’s IEM Sydney, we sat down to chat with Intel’s GM for gaming and VR/AR sales Lee Machen to talk about eSports, VR and where Intel’s broader positioning in the gaming space is taking them.
Intel is often seen as a bit more as an ingredient brand at events like this. What doors does that open in the gaming space and what doors does that close?
Lee: “Our strategy, from basically the beginning of the founding of the company, has been to be a horizontal supplier to basically every customer in the market that can use our technology. As far as I know, we've never built a stand-alone PC product because we don't want to compete with what are, today, our customers. So, in the PC space, that's always been our approach and our intent is to be a supplier and a provider and a helper to anyone in the industry who can make use of our technologies.”
“How does that hold us back? Certainly, it means that rather than having a great idea and just bringing it straight to market for an end-user, we work with our customers [and] with the PC OEMs of the world. We work with them and, ultimately, it's them who brings the end product to the end user, not us. But we think that we've done a good enough job letting people know what the contributions are that we make, and obviously the brands that we have that are vital to that end experience to the point where people do look for that "Intel inside" sticker and that sort of thing. So we think that we being an ingredient provider in the PC space has been and will continue to be the best approach as far as helping as many customers as possible.”
IEM has quickly cemented itself as probably one of the biggest eSports events in Australia? What do you think the next big step is?
Lee: “I think eSports - it's big already as far as awareness and number of people watching. But at the same time, it's sort of at its infancy, right? It's only been the past, less than five years, that it has risen to the size of a stadium event like the one we're going to have here today, right?”
“People have been competing in these sports for a long time, but it started off in very small groups of people and local LAN parties and that sort of thing. I think we have a long way to go just to shore up the availability of eSports competitions and events for people to go watch in all the different parts of the world. We only do IEM four times a year. Right? We try to split the world up and say, "We're going to do one in the west. We're going to do one in China. We're going to do one in what we call APJ. We're going to do one in Europe." But that still is pretty limited as far as accessibility for a lot of people. A lot of people can't get to Sydney for this event even though we might have room for them in the stadium.”
“I think there's a lot of room left for large events - more large events in more places. But there's also room for many sorts of lower tier events as well. What we're going to have today is the best teams in the world in Counter-Strike, but there's only, I don't know, 10, 20, of those top tier teams. There's lots of more local organization that's happening.”
“I also think that another thing that's going to be coming is some more breadth as far as the types of games that are played competitively. I love Counter-Strike, it's been around a long time, and it's gonna to continue to be around a long time, I think. Between Counter-Strike, League, now Overwatch, there's only a handful of games that are really getting attention at the highest levels. We need to see some more breadth of titles being available.”
“Now, if you're asking about what is the next, sort of, quantum leap in gaming and where are we going to be in gaming 30 years from now. I just don't know. I'm not a futurist that way, but I am convinced that it is gonna to continue its march, to the point where it's pervasive in a lot of people's lives and will touch most people's lives in some way, on a weekly or daily basis. So people who don't consider themselves gamers today [and] never have considered themselves gamers, but I think a lot of them are going to play games in some way - on their phone, or on their mobile device or whatever, on a regular basis.”
Fortnite has been a huge thing in the last six or seven months. Do you think Battle Royale has a future in eSports?
Lee: “Well, we've actually taken a run at that and I think it does, but I think we're still a little ways off from really dialing it in, as far as what's the best team experience, what's the viewing experience. At our last two Intel Extreme Masters stops, in Poland and then before that in California, we had a PUBG competition. The PUBG competition that we actually did in Oakland, I think was the first, or one of the first, sort of large-scale, 20 teams of four, all physically in the same place, attempts. It was pretty well received, but a lot of people were like, 'What am I looking at here?' and 'Boy, are they really able to show me where the action is at any given time, when it's like happening all over the place and there's all these skirmishes happening at once'?"
“I know that Battle Royale is something that lots of people are interested in watching, right? I mean if you look at the Fortnite numbers and what Ninja has been able to do and those types of things. That leads me to believe that there will be a continued effort to put that into a more large eSports context. As long as those games are popular and as long people like competing in them, I think there's going to be a niche for them in eSports.”
Currently, companies like Blizzard and Valve are pretty happy to allow people to broadcast their IP at these sorts of eSports events. At a certain point if eSports gets big enough, they might try and extract a bigger share or take things in-house. Is that situation a time bomb for eSports?
Lee: “I mean, look, none of us would be here doing this if those companies hadn't developed those amazing games, right? It all starts with there being a game that people want to play and that people want to watch, right. We draw the contrast a lot between people who know a lot about traditional sports, like basketball, and try to help them understand how that eSports is different.”
“One of the key differences is that nobody owns basketball. But Valve owns Counter-Strike so they're going to have a lot of say in how that game is used in the competitive setting and they certainly have say in the type of things that we do at an event like Intel Extreme Masters. There's no getting around that. I don't necessarily think there should be any getting around that. They built the game. It's a community of players that they have curated. But at the same time, we hope that they appreciate the value that Intel brings, that ESL brings, and anybody else who's involved in the eSports in creating events like what we have here today.”
“I wouldn't say it's a ticking time bomb. I would just say that it's a ongoing dialogue between the content creators and the rest of the eSports community, because it has to be a partnership between both sides. And certainly you've seen different companies have taken different approaches, right? For instance, we used to have League of Legends as part of Intel Extreme Masters - now we don't. Right?”
“Riot has taken those large events mostly in-house. And Overwatch seems to be doing similar things with Overwatch League. We'll see which one turns out to be the best approach for fans, for the owners of the game themselves and for people like us who want to provide hardware and sponsorship of other things. Certainly there is a lot of power in the hands of the people that created the game, but I sort of think that they deserve that for having created it in the first place. And in a lot of cases making the majority or a lot of the investment to launch it into eSports to begin with.”
“Our goal is to be, jointly with ESL, to be as good a partner for any game developer or publisher whose games that we use in Intel Extreme Masters so that they see the value of us being involved.”
VR has sort of experienced a lot of growth in recent years, however it has not quite reached that critical mass that we were expecting maybe three or four years ago. What's holding it back?
Lee: “First, I'll say the same thing I said about eSports which is, we're still very early. I think that we're only, what, a little over two years from the initial launch of the Rifts consumer edition? It feels like longer than that because we had DK1 and DK2 and all that kind of stuff. They didn't deem it ready for consumer use until, I think, April of 2016. In that two years, I think we've seen that the main thing that was necessary for VR to really take off in the consumer way is lots and lots of VR experiences to be developed. Right? And a lot of that couldn't really happen until you started to have broad availability of the hardware and headsets and, frankly, VR-capable PCs. This has been a big focus area for me. When the Oculus CV1 launched in April 2016, most gaming PCs were not high spec enough for what Oculus recommended. So, we worked with our customers over the next year plus to try and get as many of those PCs up to the VR standard.”
“I don't know if you remember, but Oculus published a 'VR-ready' PC program right at the beginning. And I think that when they first launched it there was, like, four PCs that they recommended or something like that. Obviously, that's not [ideal]. We've got hundreds of gaming PCs from all the different vendors in the world and I think we've gone from a near-zero percent of those being capable of VR to more than half. Your standard gaming PC that comes out today that is capable of Oculus VR. We had to upgrade the hardware. Developers had to get that hardware and then really start to embrace building amazing VR experiences and that takes a while too. There's a lot of trial and error in figuring out what makes for a comfortable VR experience. Right?”
“At the same time, I think there's been a lot of progress in the cost of the hardware as there's been more VR-capable PCs on the market. You can get a VR-capable setup for a much lower amount of money than you could a couple of years ago and the price of the headsets have come down too. All of that's great, but as you said, VR hasn't become the primary way that we all interact with computing.”
"It's not Ready Player One yet."
Lee:“In my opinion, all of those things need to continue to develop. There's been some amazing experiences developed for VR but there hasn't been a League of Legends for VR or anything that has tens of millions of people spending a lot of time on a regular basis in VR because of that game or because of that experience.
“I think the content needs to develop. I think the price needs to come down. Microsoft, actually, I think, took a really good run at reducing the complexity of your VR set-up when they launched their range of headsets this last year and the approach they took was to get rid of the need for the external tracking devices and have it be self-tracked. And that was a big upgrade in portability and in how long it takes to set it up, but I think some people didn't think it was a good enough experience to want to sacrifice what you get from a Rift or a Vive.
“All those things together need to continue to improve, and we need to get rid of wires and we're working with HTC on a wireless addition for your HTC Vive so hopefully they will be able to be untethered around your room. But I also think that the wireless headsets are coming, and I think that's going to be an interesting experiment to see if a, I'll just say a lower fidelity, VR experience but with the benefit of no wires and more freedom. Is that a trade-off that people want as opposed to the a higher fidelity wired experiences that you can get today?”
“So all of that is going to continue to improve, and we're going to find our way through this and VR is going to find the places where it makes 100% sense to go. I don't think it's ever going to take over to the point where we're not going to want to have non-VR eSports. People have asked me, "In five years, is Intel Extreme Masters going to be all VR games?" And my answer is, "I would really doubt that." There might be VR games alongside not VR games, but I don't think that the games we have or the types of games we have now are going away. But I think that there can be VR taking its place alongside them in some cases for some really interesting competitive experiences.
Do you think in the eSport space that the needs of those professional players is driving everyday consumer market tastes?
Lee: “I think it absolutely does. I think anytime you take a component that people may have sort of taken for granted, like a keyboard for instance. Certainly there are people that spend a lot of time focusing on the keyboards and the sounds that they make. But for most people, a keyboard is a keyboard, and whatever, I'll just plug in whatever's handy. But if you see pros using a certain type of keyboard and people start to understand that that keyboard has real benefits compared to other keyboards, I certainly think that will trickle down to, even people like me, who do most of their time doing email."
Lee: "I think there's opportunity for keyboards, mics, and headsets in particular, but we've also seen it with gaming PCs in general, gaming notebooks. We've seen a lot of people who generally don't play hardcore games all day long. Even people in my office, you don't just see business notebooks all the time, you see more performance and more capable notebooks as well."
Lee: "I mean this is what Intel is built on, better performance, right? We've always believed that if you offered people performance they're going to want it and they're going to see the benefits off it and that's, in my opinion, true pretty much across the board.
How long do you think it's before the things that Intel is doing with Optane becomes the norm for gamers and enthusiast PC builders?
Lee: “Well, we think what we're doing with Optane memory in particular is going to be mainstream within a year. We are already working with PC makers today to try to make Optane-enabled PCs part of the standard configuration that you see when you go to a OEM's website, the default configuration, we think that will include Optane very shortly because the value you get is really good. The performance is a great adder to what you have without Optane. It's not a hugely expensive thing to add on. It's not like a $1000 upgrade or anything like that, it's much less expensive than that.”
Lee: “But I think, more importantly, it's a first step in what you're going to see over the next few years as we work to evolve the architecture of the memory part of the PC. I think end users are going to see the benefit of Optane memory today and that's going to be pretty broadly deployed in the consumer space but over the next few years we're not just stopping there. We're going to continue to refactor the memory subsystem with the PC and then eventually, hopefully, to just wipe out the challenges of limited IO bandwidth and waiting on chunks of memory to get moved from one cache to another. We think it's going to be pretty pervasive very quickly.”
It's interesting that VR is often perceived as primarily for games but a lot of the growth comes from outside of the gaming space. Do you think that AR could end up being the reverse? There's not a huge amount of talk around AR for gaming within eSports for example.
Lee: “I'm a little biased because I spend a lot of time with game developers. I think people that make games are among the most brilliant categories of developers there are. I would put game developers up against any other software developer category. The gaming community embraces any interesting new piece of hardware and the first thing they try to do is figure out how to make a game for it. That's got fewer dependencies on it than if you're gonna take that piece of hardware and use it in mining or manufacturing or whatever. There's all kinds of restrictions and compatibility things you got to think about there that don't exist as much in gaming. I think that gaming is just an easier path to market for a new piece of hardware. It's no surprise to me that VR was embraced and the first experiences we saw that come out were games."
“To be honest, I think, no matter how much someone like, Apple or Magic Leap or whoever, tries to launch something for AR for a focus that's not gaming? I still think there's going to be plenty of people building gaming experiences for that as well.”
With the closing of Intel's New Devices group and the discontinuation of your smart glasses project, the Vaunt. Does this mean that Intel is no longer looking to play those categories?
Lee: “I can't really talk much about organizational changes or decisions to enter or exit different markets, but we are always looking to see if the technologies that we build are relevant in different growth parts of the market. Even if we decide not to be a provider of glasses themselves we are still on the lookout for places where our technology can support or enhance people who are making glasses.”
“We've always been most successful as an ingredient provider versus a vertical end user product provider. So, that's really all I can say about that.”
At CES there was also a big emphasis on your partnership with AMD's Vega GPUs in the Hades NUC. What's the market reception to that partnership been like a few months later? Can we expect to see more products as part of that partnership?
Lee: “We do have more plans in that direction. The market reception among end users is really just getting started. Because even though we announced it at CES the actual products are just now starting to come out. End users, frankly, haven't had much chance to try them, see them, that sort of thing. So I think we need at least another quarter before we get those systems more broadly available in retail so that users can try them out and decide, "Hey, does this add a new angle that makes me really want to go get a laptop based on that technology as opposed to some other technology?"
“The industry reaction has been interesting as well. I think people that build PCs and other devices, maybe not PCs but they can still use the value that that product brings. They're always interested in new options and new suppliers and new ways to source the different components that they need for their products. So it's been a very positive thing. I think you'll see us continue to look at more innovations with the Radeon group in that regard.”
There's been a lot of buzz about Intel looking to play a more active role in the discreet graphics space since AMD's former lead GPU architect Raja Koduri joined the company late last year. Is the intent to play more in that space? What does that mean for gamers?
Lee: “I can't make any comments about our future plans or products that are unannounced. I will say that as someone who has been around the games industry for a while, I'm thrilled that someone like Raja is now part of Intel. I think that's nothing but good news for us."
"I will say that we've always had a lot of R&D going on on the graphics side. There's graphics chipsets inside just about every one of our CPUs today and we are every year looking to improve the quality of that. For instance with the Radeon product you mentioned a second ago, we're looking at other ways to combine CPU and GPU capabilities in a way that's interesting for our customers and end users.”
What eSports do you follow and do you have a favorite team that you're rooting for?
Lee:“My favorite eSport is Counter-Strike. For some reason, it's probably because I go to a lot of Intel Extreme Masters and we tend to focus on Counter-Strike, I've gotten to know the players and the teams a little bit. And Ninjas in Pajamas for some reason has always been the sort of one, I don't know, that I find myself rooting for. My kids come with me to IEM, the ones in the States, and, they, I don't remember if their favorites is NIP or somebody else, but they like to watch the Counter-Strike as well. But you mentioned Battle Royale. I'm as caught up as anyone watching Streamers play PUBG and Fortnite. I personally have played a lot more PUBG than Fortnite so when I watch Fortnite and they throw up a shield or build a house or whatever, it seems a little weird 'cause I'm not used to that.”
“I personally play more PUBG than just about anything else. And I would love for us to figure out how to make PUBG or Fortnite into a bigger part of our eSports offering.”