Highlights

Microsoft reports Gaming revenue of $5.4B, representing an 8% increase YoY (link)

• Xbox hardware revenue grew by 4% YoY, while Xbox content and services revenue grew by 10% YoY
• Microsoft attributed its Xbox content revenue growth to an increase in first-party sales and Game Pass subscriptions, which have grown from 18M to 25M since January 2021
• The Company also shared that over 18M people have played Forza Horizon 5 to date, and over 20M have played Halo Infinite to date, representing the biggest Halo launch in history

Newzoo releases its Gaming trends to watch for 2022 (link)

• Newzoo’s latest report highlights the following key gaming trends for 2022:
  • Play-to-earn will become a more viable business model
  • Metaverse anticipation will drive both investment and VR Sales
  • Apple and Google will start opening their close ecosystems (to some extent)
  • Game IP value spikes as transmedia becomes more relevant
  • Gamers will be spoiled for choice

The Epic Games Store generated $840M in consumer spending during 2021 (link)

• The Epic Games Store’s 2021 Year in Review report revealed third-party game sales of $300M, representing 36% of total sales
• The reported $840M of consumer spending represents a 20% increase YoY
• The Company reported 194M PC users throughout 2021, representing an 18% increase YoY
• The Company also reported 31.3M DAUs and 13.2M peak concurrent users

Roblox developers and creators earned over $500M in Robux during 2021 (link)

• The Company reported that developer exchange fees of $500M represent a 52% increase YoY
• Roblox’s developer exchange fees reflect compensation given to users in Robux, the platform’s proprietary currency that can be used to buy items on the Roblox platform as well as cashed out for real-world currency
• Over the past three years, Roblox’s developer exchange fees have ranged from 22% to 36% of the Company’s total revenue

M&A and Capital Raises

Frost Giant Studios raises $25M in Series A funding round (link)
Frost Giant is a portfolio company of Griffin Gaming Partners

• Frost Giant is a Southern California-based independent game developer led by StarCraft 2 and Warcraft 3 veterans
• The Company will use the proceeds to expand its team and develop its first real-time strategy game
• The round was led by Kakao Games, with additional participation from Bitkraft Ventures, Global Founders Capital, Riot Games, Gaingels, and Mantis Venture Capital 

Kidas raises money from Overwolf to protect young gamers from cyberbullies (link)
Overwolf is a portfolio company of Griffin Gaming Partners

• Kidas is the creator of the ProtectMe anti-cyberbullying and predator protection software for PC games
• The funding includes a partnership that enables Overwolf to offer seamless integration of the Kidas technology to its over 27M MAUs
• Currently, Kidas supports 120 games and the Company has raised $2.75M to date 

MTG divests ESL Gaming to Savvy Gaming Group for $1B (link)

• ESL Gaming operates some of the biggest esports tournaments in the world, most notably ESL One
• This transaction reflects MTG’s long-term strategy to expand ESL Gaming’s presence throughout the esports value chain, including B2C services
• SGG is simultaneously acquiring FACEIT and will merge the two companies to create a global platform for competitive gaming known as ESL FACEIT Group
• The transaction is expected to close in Q2 2022

Playtika’s Largest Stockholder Exploring Potential Sale of a Portion of its Shares of Playtika (link)

• Playtika and its largest stockholder, Playtika Holding UK II Limited (“PHUK II”), announced that PHUK II is exploring options for a potential sale of a portion of its Playtika common stock
• The sale is contemplated to be approximately 15% to 25% of Playtika’s current total shares outstanding
• The stock may be sold through a private placement, public offering, or other transaction, and the determination and timing of this transaction depends on general market conditions and the outcome of any negotiations

Nexters buys three mobile studios for a combined $100M (link)

• The Mobile studios acquired include Cubic Games, RJ Games, and Royal Ark
• Cubic Games is best known as the publisher of the FPS Pixel Gun 3D; RJ Games is the studio behind Puzzle Breakers; Royal Ark is the creator of mobile survival RPGs Dawn of Zombies and Shelter Wars
• The acquisitions bolster Nexters’ midcore Mobile gaming presence and represent further consolidation in the Gaming industry

Emerge raises $13M to bring physical touch to the metaverse (link)

• Emerge is building products that make it possible for users to feel tactile experiences in virtual spaces
• The Company recently released its Emerge Home system, which emits ultrasonic waves that allow users to interact and feel via touch in the virtual world
• The round includes participation from Trousdale Ventures, a Riot Games cofounder, a Twitch cofounder, and patent firm Schox
• The Company will use the proceeds to finalize product development and support its early adopter community
• The Emerge Home system will be made publicly available in February on Kickstarter, at a retail value of $500 for a limited time

Virtual reality game studio Alta raises $12.4M (link)

• The Sydney- and San Francisco-based company has assembled a team of game developers to make experiences that “push the boundaries of virtual worlds”
• Alta first gained traction in mid-2021 when its first game, A Township Tale, launched on the Oculus Quest 2
• The Company will use the proceeds to further develop proprietary content and IP, expand the team, and position the game for new platforms
• The round was led by Makers Fund and Andreessen Horowitz, with additional participation from Pioneer Fund, Boost VC, muru-D, and other angel investors

Spring Games raises $7M from Playtika (link)

• Spring Games is an Israeli game studio that is developing NFT-powered games on the blockchain
• The Company’s first game is MaxiBoom, an esports game that will offer expensive prizes to players in skill-based tournaments
• The Company will use the proceeds to convert MaxiBoom into an NFT-powered play-to-earn game and develop new games on blockchain infrastructure
• The round was led by Playtika

Apogee Entertainment receives $5M investment (link)

• Apogee Entertainment was founded in 1987 as Apogee Software, and has developed several independent games, including Duke Nukem, Shadow Warrior, and Prey
• The Company will use the proceeds to expand its staff and business portfolio
• The round was led by eWTP Tech Innovation Fund

Rocky Road raises $2.5M for mobile MMO (link)

• Rocky Road, a new Icelandic game studio, was founded by QuizUp founder Thor Fridriksson in 2022
• The Company will use the proceeds to develop a new, casual, open-world mobile game
• The round was led by Crowberry Capital and Sisu Games Ventures

Social First raises $2.5M (link)

• Social First, a Finnish cross-platform game developer, was founded in 2021 by industry veterans across Kukouri, Paradox, and Ubisoft among others
• The Company will use the proceeds to develop a new wave of cross-platform multiplayer games
• The round was led by Play Ventures

Unity acquires Ziva Dynamics (link)

• Ziva Dynamics has developed digital character creation tools that have been featured in games including Marvel’s Spider-Man: Miles Morales, Ninja Theory’s Suna’s Saga: Hellblade II, Godzilla vs Kong, and Jumanji: The Next Level
• The Ziva Dynamics team has deep expertise and understanding of complex anatomical simulation and real-time artistry tools
• The terms of the deal are undisclosed, but Unity plans to make these character creation tools more accessible to the Company’s game engine users

Other

Capcom reports net sales of $774M, representing a 35% increase from the same period of the previous year (link)

• Capcom’s video game segment reported net sales of $618M, representing a 44% YoY increase
• Digital console and PC sales made up $367M (47% of total net sales), boxed games comprised $225M (29%), and Mobile content comprised $30M (4%)
• The Company attributed net sales growth to multiple well-performing releases, notably Resident Evil Village and Monster Hunter Stories 2: Wings of Ruin
• The Company forecasts net sales of $880M and operating income of $370M for FY2022

Together Labs launches MetaJuice for NFT games and apps (link)

• Together Labs launched MetaJuice, a new division dedicated to powering blockchain tech for games and apps
• MetaJuice will bring Redwood Together Labs’ VCoin, VCore, and NFTs to the IMVU metaverse application and soon in Together Labs’ new metaverse, WithMe
• MetaJuice’s vision is to empower users across all metaverse platforms to freely engage, earn and own assets

Steam Deck orders open February 25^th (link)

• In July 2021, Valve unveiled the Steam Deck, an all-in-one handheld device that will allow Steam users to play games from their library
• The Company claims that the Steam Deck will give people another way to play games they love on a high-performance device
• The first batch of pre-orders for the Steam Deck are expected to ship out by the end of next month

Warner Music and The Sandbox will do a music-theme metaverse (link)

• Under the agreement, the companies will create the first music world in The Sandbox Gaming Metaverse, and bring live concerts and music experiences featuring Warner Music artists to the metaverse
• The partnership will empower Warner Music artists to reach the global community of The Sandbox and generate new revenue streams through new forms of virtual entertainment

RocketRide Games partners with Netflix on mobile games (link)

• Montreal-based RocketRide Games has signed an agreement with Netflix to bring more games to the platform
• Over the past two years, the agency has signed 45 deals, generating more than $78M in revenue
• RRG and Netflix’s partnership will focus on delivering great gaming experiences on Netflix’s platform, aligning with RRG’s core values to help create the best games possible
• As an incentive to players, Netflix’s games promise no ads, no in-app purchases, and are included with Netflix subscriptions

Blizzard announces a new survival game not based on its existing franchises (link)

• The new title and IP will be a survival game and is planned for consoles and PC
• The title will be set in a “place full of heroes we have yet to meet, stories yet to be told, and adventures yet to be lived”

Trading Comparables

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