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Why Retro And Mid-Core Gaming Is Liquid Media's Sweet Spot

Few could argue that 2020 was one of the tougher years of recent record. From the coronavirus pandemic to geopolitical risk, every sector of the global economy was challenged to adapt business models to a changing world.

The video game industry turned out to be one of the more resilient industries of the last year. As citizens were faced with months of quarantines, many turned to gaming as a way to stay entertained and, in a lot of cases, maintain sanity.

While 2020 brought in new gamers, hardcore gamers were able to spend even more time with new games and devices.

What about the gamer who was looking for an experience more in depth than Zynga's (NASDAQ: ZNGA) "Candy Crush," but not quite as intense as Activision Blizzard's (NASDAQ: ATVI) "World of Warcraft" series?

Enter Liquid Media (NASDAQ: YVR).

What Is Mid-Core Gaming?

"We know what the Xbox and PlayStations [of the world] cater to; there are still quite a few more gamers looking for their platform. With new startups and new tech coming, we'll see a lot of new audiences [entering the gaming market]," Danny Cruz, CFO of Liquid Media, told Benzinga in an interview.

Cruz and the Liquid Media team refer to this segment of the gaming market as mid-core gaming, and say it's ripe for Liquid Media's offering of retro and classic games.

"We think it's a new growing market segment, but there are not a lot of ways to invest in that segment. The majors are completely dominated by the majors," Cruz said, referring to the triple-A category of high-budget games like Activision's "Call of Duty" series.

Liquid has been working with a connected arcade platform company, Polycade, to address the need for mid-tier solutions.

"Today, gaming proper is done on Xbox and PlayStations, with high-graphic games like the Fortnites and Grand Theft Autos. Meanwhile mobile is massive [and] dominated by casual gaming," said Tyler Bushnell, CEO of Polycade.

Bushnell recalled the gaming experience of the 1980s and 1990s.

A game "doesn't need to take a long time to have a meaningful, enjoyable time. Players could have fun in five to 15 minutes. We believe this is a whole thread of games the world has forgotten about," Bushnell said.

Bushnell and Cruz said they believe Liquid's slate of classic games can accomplish just that.

The Business Case For Mid-Core Gaming

"A lot of gamers out in the world have been looking to reconnect with gaming. This is why we keep hearing about retro gaming. Game makers know to go to retro; there is this big audience of underserved, would-be gamers — they're not looking for the Call of Duties but looking for more than the Candy Crushes," Bushnell said.

Near the end of summer 2020, Liquid and Polycade teamed up to bring Liquid's long list of retro and classic games to some sleek hardware: Polycade's wall-mounted arcade unit.

The arcade unit is anything but classic. It features a high-resolution display, big and bold joystick and buttons and can be stocked with thousands of games. The unit was created with aesthetics in mind and would fit better in an interior designer's gallery than the dingy arcades of the '90s.

Why Commercial Is A 'Big Opportunity'

While Liquid's games and Polycade's arcade unit were always intended for consumer use in the home, Bushnell said he's excited about the application of the software and hardware in commercial settings.

"We see a big opportunity in commercial spaces. Gaming proper hasn't made it into commercial yet — it's trying to, but hasn't made it. That side of the world was on pause [in 2020]. But pre-pandemic, spending trends leaned heavily toward experiences."

Gaming was a massive sector in 2020, but with no real solution for commercial spaces, he said: "That's where we see ourselves making a big difference."

‘We've Accelerated Our Consumer Plans'

Despite the excitement and focus on the commercial space ahead of something extremely unpredictable like a global pandemic, Cruz and Bushnell said they're optimistic about the companies' prospects in the consumer space.

"The pandemic has validated what we said in the beginning: there is this mid segment of market which is underserved," Bushnell said. "Where we were spending more time on commercial, we've basically accelerated our consumer plans. While we weren't prepared for the pandemic, we weren't in a bad spot. Now we get to develop out our features for home which can be similar as commercial application. When commercial space does return, we're gonna be even more prepared," he said.