© All rights reserved. Griffin Gaming Partners 2021

GGP Gaming Weekly – Week 45

Highlights

American gamers play games more than any other leisure activity, according to Newzoo (link)

  • Gaming is the most popular leisure activity for Americans under the age of 50, with almost a quarter of American respondents aged 10 to 35 responding that gaming is their favorite leisure activity
  • The U.S. gained 13M gamers of all ages during the pandemic, according to research by the Entertainment Software Association, and Newzoo has predicted that these gamers will remain engaged even after the pandemic

Ubisoft beats guidance, reports 9% net bookings growth compared to the same period two years ago during FY22 H1 earnings release (link)

  • Ubisoft reported FY22 Q2 net bookings of €392M, beating their guidance of €340M by 15%, and growing 20% QoQ
  • The Company noted that Assassin’s Creed: Valhalla is the second-largest profit-generating game in their history
  • It also noted that the Siege of Paris expansion delivered “record engagement”, and Far Cry 6 is off to a solid start, in line with the Assassin’s Creed Odyssey and experiencing 25% stronger playtime compared to Far Cry 5
  • Ubisoft confirmed it’s exploring blockchain, mentioning its participation in the Animoca Brands’ recent funding round

Microsoft reports 16% YoY revenue growth during FY22 Q1 earnings release (link)

  • Gaming revenue increased $501M, or 16%, driven by growth in Xbox hardware’s 166% increase
  • Xbox content and services revenue increased 2% driven by growth in Xbox Game Pass subscriptions and first-party titles, offset in part by a decline in third-party titles
  • First-party titles, including Hellblade: Senua’s Sacrifice, Microsoft Flight Simulator, and The Elder Scrolls Online, have kept engagement high for Game Pass
  • Engagement is anticipated to gain momentum with Halo Infinite and Forza Horizon 5 scheduled for release later this year

Sony reports 27% YoY growth in-game and network service revenues during FY22 Q2 earnings release (link)

  • Sony sold 3.3M PlayStation 5 consoles in its FY Q2, amounting to 13.4M PS5s sold to date (to retailers)
  • Hardware sales were $1.4B this quarter, compared to $365M in the same period of the previous year
  • Game software sales were $3B this quarter, compared to $2.9B in the same period of the previous year
  • PlayStation Plus now has 47.2M subscribers, compared to 45.9M a year ago, representing an increase of 2.8% YoY
  • PlayStation Network now has 104M MAUs, compared to 108M a year ago, representing a decline of -3.7% YoY

Social casino apps have generated nearly $1B during pandemic, according to Liftoff and GameRefinery (link)

  • Profits have remained high even as in-person casinos reopen
  • Mobile casino apps engage an older demographic in gaming, with more than half of users over the age of 45, according to the report

Stadia launches streaming enabled features (link)

  • The Platform is introducing its features, State Share, Crowd Play, Crowd Choice, and Stream Connect, to a limited selection of titles
  • State Share enables game saving to be transferred through image or video; Crowd Choice allows players to create polls during a YouTube livestream; Stream Connect enables users to see up to three teammates’ screens during co-op play sessions; and Crowd Play gives YouTube viewers the ability to join and play alongside the person whose livestream they’re watching

Facebook Gaming surpasses YouTube Gaming in views during Q3, according to Streamlabs (link)

  • Facebook Gaming saw an increase of 59% QoQ, while YouTube Gaming saw a decrease of 32.5% QoQ
  • Twitch saw a viewership of 5.79B hours, Facebook Gaming saw 1.29B hours, and YouTube Gaming saw 1.13B hours, according to the Streamlabs and Stream Hatchet’s Q3 2021 Live Streaming Industry Report
  • Facebook Gaming was the only platform to experience a QoQ increase, according to the report

Facebook changes name to Meta (link)

  • In the long-term, the Company wants to build a metaverse, with a goal of accumulating over 1B users in the next 10 years, according to Zuckerberg
  • Zuckerberg stated, “… In the metaverse, you’ll be able to do almost anything you can imagine – get together with friends and family, work, learn, play, shop, create – as well as [enjoy] completely new experiences that don’t really fit how we think about computers or phones today”

M&A and Capital Raises

Admix raises $25M for in-game advertising (link)

  • Admix will use proceeds to build its platform for in-game advertising
  • The Company inserts in-game ads within the landscapes of games, in hopes that it can become the content monetization layer for the formative metaverse
  • Investors include venture funds Elefund, Force Over Mass, DIP Capital, and Notion Capital, with additional participation from Speedinvest, Rocket Capital, Colopl Next, Sure Valley Ventures, and Sidedoor Ventures

Backend game engine, Pragma, raises $22M (link)

  • The Company has expanded its services to include content management and player data with versioning and migration features, full game loop services like lobby, invites, game modes, matchmaking, and game server management
  • Venture capital firm Insight Partners led the round, with additional participation from Overwolf, Greylock Partners, Upfront Ventures, Advancit Capital, Daher Capital, Kevin Lin (formerly of Twitch), and Ted Gill of Unknown Worlds
  • Pragma has recently announced new partnerships with game studios Frost Giant Studios and Lightforge

Sipher raises $6.8M for PC-based blockchain game (link)

  • Sipher will use proceeds to accelerate the development of the World of Sipheria, a multiplayer dungeon PC game based on blockchain technology
  • The Company plans to unify blockchain tech, great artwork, storytelling, multiplayer gaming, and decentralized financial technologies
  • Arrington Capital, Hashed, and Konvoy Ventures led the round, with additional participation from Defiance Capital, Signum Capital, Dragonfly Capital, CMT Digital, BitKraft Ventures, Delphi Digital, Alameda Research, Fenbushi Capital, Sfermion, Hyperchain, GBV, Kyber Network, Coin98 Ventures, YGG, and Merit Circle

Hawku raises $4M for gaming NFT marketplace (link)

  • Hawku will use proceeds to build a marketplace for gaming NFTs, providing data to potential buyers so to inform smarter purchasing decisions
  • Investors include Lightspeed Venture Partners, Multicoin Capital, Dragonfly Capital, Alameda Capital, Animoca Brands, Solana, and Virtual Human Services

ironSource acquires marketing platform Bidalgo (link)

  • The acquisition is designed to expand IronSource’s market presence beyond games and into social, dating, and ecommerce apps
  • The companies hope to create unique offerings for mobile marketers, with a centralized location to create, analyze and manage every aspect of paid marketing

Krafton acquires Unknown Worlds, developers of Subnautica (link)

  • Krafton intends for the studio to diversify the Company’s portfolio of IP
  • Unknown Worlds will become the sixth studio under Krafton’s umbrella following this acquisition
  • Unknown Worlds’ best-known game is Subnautica, which launched on early access in 2014 and sold over 5M units by January 2020

Activision acquires Digital Legends for future Call of Duty mobile games (link)

  • Digital Legends previously developed and published PvP shooting game, The Respawnables, and multiplayer TPS, Afterpulse
  • Digital Legends’ will work with Activision to develop a Call of Duty mobile title

Other

Subspace launches its parallel and real-time internet for gaming and the metaverse (link)

  • Subspace has built out its parallel network using its own networks and hardware as well as partnerships with providers of dark fiber, or some of the excess capacity for the internet
  • It is rolling out its self-serve network-as-a-service in November, letting developers deliver real-time connectivity for their users
  • Subspace hasn’t discussed partners to date, but says they have game company customers with hundreds of millions of players

Chipotle is the first restaurant brand to open in Roblox (link)

  • Chipotle Mexican Grill announced that its 21st year of Boorito will be celebrated in Roblox, marking the first restaurant brand to open a virtual location there
  • In the Chipotle Boorito Maze experience, Chipotle will make $1M in free burritos available (while supplies last) and offer both virtual Halloween costumes and exclusive Roblox items
  • The first 30,000 Roblox users who visit the virtual Chipotle restaurant in costume will receive a free burrito code for use on orders made via Chipotle.com or the Chipotle app

Next Games and Netflix launch Stranger Things: Puzzle Tales (link)

  • Helsinki-based Next Games has announced and globally released Stranger Things: Puzzle Tales, an officially licensed free-to-play mobile game
  • The game was developed in collaboration with Netflix, and is a story-driven puzzle role-playing game
  • Early retention and monetization indicators both look encouraging, according to the Company

State of Survival gains 20M new players from The Walking Dead partnership (link)

  • FunPlus has revealed that its partnership with AMC Networks brought over 20M new players to State of Survival
  • The partnership, first revealed in March, began a six-month-long crossover between State of Survival and The Walking Dead, which included themed in-game activities and additional promotional material

Animoca-backed Gamee launches Arc8, its blockchain mobile gaming platform (link)

  • Gamee has now launched its blockchain-based gaming platform on the Apple App Store and Google Play Store
  • Arc8 contains 10 hyper casual games that can be played to earn rewards, including the platform’s own cryptocurrency GMEE
  • GMEE can be used to pay for entry fees in-game tournaments and to make purchases on the platform

Resident Evil and Monster Hunter boost Capcom Q2 sales to $616M (link)

  • The continued success of Resident Evil Village, combined with the launch of Monster Hunter Stories 2, has boosted Capcom’s results this quarter
  • Capcom reported that Resident Evil Village, which released in May, has shipped over 5M units to date
  • Looking ahead, Capcom forecasts the FY ending in March 2022 to have net sales of ¥100B ($881M), and net profit to ¥30B ($264M)

Epic Games and Tribeca team up on Unreal Engine films (link)

  • Tribeca Enterprises and Epic Games have started a “Writing in Unreal” program to train filmmakers to make independent movies with the Unreal game engine
  • The goal of the partnership is to open new doors for independent filmmakers and enable them to gain firsthand knowledge from Unreal Engine experts and fellow colleagues on how to use the engine and its suite of tools to craft their stories

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