Highlights

Skillz FQ3 2020 Earnings Update (link)

• Skillz & Flying Eagle Acquisition Corp. filed a revised S-4, including FQ3 2020 results
• Highlights
  • FEAC’s stock currently trades at $13.54, which is 35% higher than where SPACs are expected to trade
  • As of September 30, 2020, Skillz operates in 31 states and the District of Columbia, covering ~90% of the U.S. population
  • The Company has continued on their growth trajectory, generating $60M in FQ3 2020
  • The Company noted a sustained boost in the positive engagement trends that arose since the onset of COVID-19
  • In 2020, Skillz expects to power more than 2B tournaments, including 0.5B paid entry tournaments, and facilitate $1.6B in paid entry fees generating $225M in revenue
• Key Performance Indicators
  • MAUs: 2.7M (+57% YoY and +3.8% QoQ)
  • ARPU: $6.93 (+5.8% YoY)
  • Paying MAU/MAU: 12% (vs. 11% in the same period one year prior)
• FQ3 2020 YTD Financial Performance
  • Revenue: $162,392 (+91% YoY)
  • Gross Profit: $153,586 (95% Margin, +89% YoY)

Mobile games saw $58.7B in player spending between Q1 and Q3 2020 according to Sensor Tower (link)

• The impressive number represents a growth of 26% YoY
• The Apple App Store generated $35.2B between January and September, while Google Play earned $23.5B, a rise of 26.3% YoY
• Having generated $16.5B in revenue, the US has proven to be the top-spending country in the world. Meanwhile, Japan and China came in at No.2 and No.3 with $13B and $10.6B respectively

Epic Games launches Houseparty video chat in Fortnite (link)

• Represents a continuation of Epic’s ongoing plan to equip Fortnite with features that will keep players in the game longer, as the company tries to make Fortnite into the metaverse
• Houseparty video chat is currently available to Fortnite players on PC, PlayStation 5, and PlayStation 4, but players will also need an iOS or Android mobile device with the Houseparty app installed

Pokémon GO gets biggest update with higher level cap and seasons (link)

• Niantic announced the biggest-ever update to its flagship Pokémon GO location-based mobile game, called GO Beyond
• Changes include an increase in the level cap from 40 to 50 and new seasons with special content
• The update is about getting lapsed players to come back and first-timers to come aboard while giving those who have stuck with the game something new to achieve

Amazon launches mobile games capture app for Android (link)

• Amazon has launched a new app to allow players to capture and share mobile gameplay
• The new application, GameOn, allows users to not only share clips with friends, but they can also join in on challenges and connect with other mobile players
• Currently, the app is available on Android devices and allows consumers to record clips between 30 seconds and five minutes

Google Stadia to begin public testing for iOS devices in the coming weeks (link)

• As the first step in the company’s iOS progressive web application, Google will use the feedback of the Stadia player base to improve the service
• It has been challenging for companies such as Google, Microsoft and Facebook Gaming to get their instant games apps onto the App Store
• Back in July, Google added 4G and 5G streaming support for its Android Stadia app. Moreover, as of June 2020, the application has been downloaded more than one million times

M&A and Capital Raising

Roblox files for IPO (link)

• Roblox recent filed for IPO, signifying a major milestone for the Company. Roblox is an online game platform and game creation system that allows users to create games for each other. The Roblox Platform consists of:
  • Roblox Client – The application that allows users to explore 3D digital worlds
  • Roblox Studio – The toolset that allows developers and creators to build, publish, and operate 3D experiences and other content accessed with the Roblox Client
  • Roblox Cloud – The services and infrastructure that power the human co-experience platform

• With an average of 157 minutes of daily time spent on the platform in FQ3 2020 (calculated as hours engaged / DAUs / 92 days in FQ3 2020), Roblox was the highest amongst global gaming companies most popular mobile games including MARVEL Strike Force and Pokémon GO, online content platforms including Spotify and Netflix, and social media platforms including Facebook and Snapchat
• Key Financial Highlights
  • FY 2019 Bookings: $694M – 39% increase YoY
  • FY 2020 Bookings based on FQ3 2020 YTD Run Rate: $1,654M – 138% increase YoY
  • FY 2019 Developer Exchange Fees: $112M – 56% increase YoY
  • FY 2020 Developer Exchange Fees based on FQ3 2020 YTD Run Rate: $278M – 148% increase YoY
  • FY 2019 EBITDA: $89M
  • FY 2020 EBITDA based on FQ3 2020 YTD Run Rate: $418M
• Bookings increased at a 47% CAGR from FQ1 2018 to FQ4 2019 (last quarter unaffected by COVID-19). Prior to the pandemic, FQ4 2019 saw a dramatic QoQ increase of 43%, partially due to the end-of-year holiday season. Since the pandemic, Bookings have more than tripled, with a 229% increase YoY in FQ2 2020 and a 200% increase YoY in FQ3 2020
• DAUs increased steadily at a 42% CAGR from FQ1 2018 to FQ4 2019 (last quarter unaffected by COVID-19). Since the pandemic, DAUs have nearly doubled, with a 95% increase YoY in FQ2 2020 and a 97% increase YoY in FQ3 2020
• Hours Engaged on Roblox increased steadily at a 47% CAGR from FQ1 2018 to FQ4 2019 (last quarter unaffected by COVID-19). Since the pandemic, Hours Engaged on Roblox have more than doubled with a 164% increase YoY in FQ2 2020 and a 133% increase YoY in FQ3 2020

Gunzilla raises $25M to make triple-A games with ex-Crytek leader (link)

• Founded earlier this year, Gunzilla will make a “new generation of shooters,” according to co-founder Vlad Korolev
• Gunzilla is creating a game targeted for the Sony PlayStation 5 and the Microsoft Xbox Series X
• The funding will help to drive recruitment, with the team expected to grow to more than 200 people by the end of next year

Embracer Group acquires 12 game studios and a PR firm (link)

• Embracer announced the acquisition of 12 studios across North America and Europe
• The new studios add at least 1,273 new employees to Embracer Group’s growing ranks, pushing the company over 5,000 workers
• More acquisitions are likely to come, with CEO Lars Wingefors saying that the company has been actively talking to more than 100 entrepreneurs who “want to be part of the Embracer family”

Lightfox Games raises $3.3M for ‘hypercore’ mobile games (link)

• Lightfox Games, a Seattle-based mobile game developer and publisher, has raised $3.3M in seed funding to create what they have dubbed “hypercore” games
• The Lightfox founding team worked together at Z2Live, a Seattle mobile gaming studio that King acquired and then closed in February 2019
• The funding came from March Gaming, with participation from Hiro Capital and 1UP Ventures
• Lightfox will use the funding to grow the team and launch their first game, Super Battle League

Genies raises $3M from Bandai Namco for Asia expansion (link)

• The investment and expansion comes just a month after the company launched a product expansion, extending its focus for its 3D avatars from celebrities to everyday consumers
• With the investment, Genies has appointed Yasuo Miyakawa, CEO of Bandai Namco Entertainment, as a member of the Genies KK directors
• Genies rolled out its 3D avatars and SDK so companies like Giphy and Gucci can integrate the SDK into their apps to let consumers create Genie avatars that can wear their merchandise
• Over time, Genies will expand its SDK partnerships, creating a digital identity ecosystem where consumers can transport their avatar from platform to platform, creating a mini-version of the metaverse

Pllay raises $3M so gamers can wager on duels in popular games (link)

• Pllay enables gamers to wager on 1-on-1 duels in their favorite games
• James McGuckin’s Screen Play Ventures led the round, with additional participation from certain angel investors
• Pllay can monitor a 1-on-1 match on Twitch with AI to determine which of the two players won
• When someone wins, they get 100% of the funds wagered, as Pllay doesn’t claim a fee, but makes money through advertising and brand partnerships instead

Lila Games raises $2.8M for mobile shooter (link)

• Lila Games is creating a free-to-play mobile game currently dubbed Project B.L.A.C.K.
• Founders include Joseph Kim, a former chief product officer at Sega and studio lead at FunPlus and Paul Leydon, a former lead game designer at FunPlus and Machine Zone
• Bitkraft Ventures led the round with participation from Galaxy Interactive and certain game industry angel investors

Epic acquires facial animation firm Hyprsense (link)

• Hyprsense is a real-time facial motion capture company that developes and provides software to animate any 3D characters in real-time
• The Company was founded in 2015 and is based in Burlingame, CA

Kongregate takes over three aging mobile games from Disney (link)

• Kongregate announced that it is taking over operations of three Disney mobile games: Maleficent Free Fall, Inside Out: Thought Bubbles, and Where’s My Water?
• According to Kongregate, the three free-to-play games have combined for over 224M downloads
• Kongregate will continue to develop new content, including in-game events, to keep each title relevant

Others

MunkyFun and Zeeppo accepted into N3twork’s $50M Scale Platform (link)

• The latest two games to successfully complete their path through N3twork’s $1M pilot fund and gain access to additional funding are Zeeppo’s Chaos Road and MunkyFun’s League of War: Mercenaries
• Zeeppo is a Brazilian indie developer and its mobile racing shooter has already racked up 5M downloads. During testing, Chaos Road’s UA campaign hit breakeven within 90 days
• Based in San Francisco, MunkyFun’s League of War game was launched back in 2016 with Japanese publisher GREE and has since demonstrated its ability to retain and monetize a hardcore community through its live events and gacha system

Zynga opens studio in Austin to help with its Star Wars mobile game (link)

• The Austin outpost will partner with NaturalMotion in the United Kingdom, which has been working for the past couple of years to develop Zynga’s mobile game set in the Star Wars universe
• Led by game industry veterans Jeff Hickman and Matthew Hemby, the new studio is looking to hire 25 new employees across every role, with a focus on recruiting studio-level leadership

Gaming Public Multiples