Federal Trade Commission (FTC) reportedly likely to challenge Microsoft’s $69B Activision takeover (link)

• The FTC is likely to file an antitrust lawsuit to block Microsoft’s $69B takeover of Activision Blizzard
• A lawsuit challenging the deal is not guaranteed, and the FTC’s four commissioners have yet to vote on the complaint or meet with lawyers for the companies
• The investigation remains ongoing, but much of the heavy lifting is completed, including depositions of Microsoft chief executive Satya Nadella and Activision head Bobby Kotick, according to the people with knowledge of the investigation

Apple and Google investigated by UK regulator over suspected Cloud Gaming and mobile duopoly (link)

• The UK’s Competition and Markets Authority (CMA) is investigating the Apple and Google’s duopoly on mobile ecosystems and their impact on Cloud Gaming
• In the UK, 97% of mobile web browsing took place on Apple and Google browsers last year
• Web developers, Cloud Gaming service providers, and others who spoke with the CMA have claimed that restrictions by both Apple and Google could create headwinds to the industry and hamper innovation

Tax credit to support game development launches in Ireland (link)

• The relief is a refundable corporation tax credit that lets eligible companies claim back 32% of the costs incurred on a digital game’s design, production, and testing
• Companies can claim up to a maximum limit of €25M per project, with a minimum spend of €100k
• The tax was launched and backed by Ireland’s Minister for Finance, Paschal Donohoe, and Minister for Tourism, Culture, Arts, Gaeltacht, Sports, and Media, Catherine Martin

M&A and Capital Raises

Playtika announces $25M investment into Turkish developer Ace Games (link)

• The investment will be a minority investment, allowing Ace Games to allocate the capital where they believe best
• The Company will use the proceeds to continue to grow its portfolio of titles, which include the Match-3 title Fiona’s Farm

City State Entertainment raises $15M to fund games with massive medieval battles (link)

• City State Entertainment is developing the MMORPG Camelot Unchained and the medieval Battle Royale Final Stand: Ragnarök. Both titles utilize the Unchained Engine which could be used to create battles with up to 1,800 concurrent players each
• The Company will use the proceeds to fund games with massive medieval battles using the Unchained Engine
• GF Capital Management, TA Associates, and other undisclosed investors participated in the round, according to PitchBook

Midnight comes out of stealth with $7.5M in funding for a new game company (link)

• Midnight emerged from stealth to announce $7.5M in seed funding earmarked to build a studio and platform to create Web3 games with “never-ending stories”
• The Company’s focus will be on PC and Console games at first, and Mobile might come at a later date. The Company plans to be both a developer and a publisher
• The round was led by Shima Capital, Forte, Overwolf, Snackclub, and others

X-Flow invests $6M in Casual developer Plummy Games after Star Merge launch (link)

• Plummy Games has numerous Match-3 and Bubble Shooter titles in its portfolio. Its Star Merge title (also known as Mira Merge) has garnered more than 10,000 downloads on the Google Play Store
• The Company will use the proceeds to support its ambition to grow into a genre leader

Fenix Games raises $150M for blockchain game publishing (link)

• Fenix Games is a next-generation games publisher facilitating the transition of the next billion gamers into a blockchain-integrated future
• The Company will use the proceeds to create a publisher and platform that plays a key role in bringing blockchain games to market. Fenix Games plans to acquire, invest, and publish both existing games and blockchain games of the future
• Phoenix Group and Cypher Capital participated in the round

Rebel Wolves secures NetEase investment (link)

• The game studio was co-founded in February by former CD Projekt executive Konrad Tomaszkiewicz. The game studio is currently developing a narrative focused dark fantasy RPG
• Rebel Wolves said will maintain full creative control and ownership of its IP, and will continue to operate independently
• NetEase’s new investment amount wasn’t disclosed

Other

Call Of Duty: Warzone 2.0 Notches 25M Players In Less Than A Week (link)

• As revealed by the official Call of Duty Twitter account, over 25M players played Warzone 2.0 in its first five days after release
• Overwatch 2 notched 25M players in 10 days, followed by 35M players in one month. Meanwhile, Modern Warfare 2 continues to be one of the most successful CODs ever, with $1B generated in revenue in 10 days
• Call of Duty Warzone Mobile surpassed 25M pre-registrations (link)

God of War Ragnarök becomes PlayStation’s fastest-selling launch (link)

• PlayStation announced on Twitter that its recent release God of War Ragnarök is its fastest-selling first-party game
• The latest God of War title has set a record for sales for the franchise with 5.1M copies sold within the first week of its launch

Pokémon Scarlet and Violet hit 10M in sales in first three days (link)

• Nintendo revealed that the latest Pokémon games, Scarlet and Violet, collectively sold over 10M units in their first three days on the market, including both physical and digital versions
• Pokémon Scarlet and Violet achieved the highest sale level for any game on any Nintendo platform, according to the publisher

Sony to expand Chinese game incubator (link)

• Sony’s China Hero Project will invest more than 1M yuan ($140,080) in each game it enrolls, and will not only fund small teams but also big teams with dozens of engineers or more
• Sony’s plans were made public during an event live-streamed on Tuesday from the southwestern Chinese city of Chengdu to restart the China Hero Project, which ground to a halt due to COVID-19
• The China Hero Project unveiled its first two batches of games in 2017 and 2019 and has supported 17 titles, of which seven have reached the market. Sony said that it will be the publisher of Lost Soul Aside and Convallaria, two games enrolled in the previous two phases

Netflix is working on an AAA shooter at its new LA studio (link)

• Netflix has placed a new job vacancy for a game director on their website, looking for experience in shooting and live service games for a new AAA PC game being created at its Netflix Game Studio’s LA office
• Netflix is straying outside of its Mobile Gaming interests for the first time. The studio is led by former Overwatch lead Chacko Sonny, and has a focus on Cloud Gaming

Ubisoft returns to Steam with Assassin’s Creed: Valhalla (link)

• The Company has created a Steam page for Assassin’s Creed: Valhalla, the 2020 entry in Ubisoft’s flagship series. It will release on December 6
• Other titles confirmed to be heading to Steam include Anno 1800 and Roller Champions, although neither have release dates so far
• Before its return to Steam, Ubisoft focused on its own UPlay store as well as landing partnerships with the Epic Games Store. Like many stores, Valve takes a 30% cut of all purchases made, whereas Epic only takes 12%

Twitch pulls in 1.8B viewership hours during October (link)

• Twitch reached a viewership of 1.8B hours. Meanwhile, Facebook Gaming hit 342M hours and YouTube Gaming brought in 272M hours watched in October

Trading Comparables

Blockchain Gaming

The post GGP Gaming Weekly — January 13 first appeared on Griffin Gaming Partners.

Embracer releases FQ2 2023 earnings report (link)

• FQ2 2023 Results
  • FQ2 2023
    • Reported FQ2 2023 Net Sales of $899M, representing a 190% increase YoY (35% organic growth) and above consensus of $847M
      • Reported FQ2 2023 Tabletop Games Net Sales of $305M
      • Reported FQ2 2023 PC / Console Games Net Sales of $385M, representing a 107% increase YoY (57% organic growth)
      • Reported FQ2 2023 Mobile Games Net Sales of $135M, representing a 67% increase YoY (8% organic growth)
      • Reported FQ2 2023 Entertainment & Services Net Sales of $74M, representing a 69% increase YoY (-15% organic growth)
    • Reported FQ2 2023 Adj. EBITDA of $287M (32% margin), representing a 135% increase YoY
    • Reported FQ2 2023 Adj. EBIT of $199M (22% margin), representing a 115% increase YoY
    • Reported FQ2 2023 Total Headcount of 15,731, representing a 74% increase YoY
    • Reported FQ2 2023 Total Game Development Projects of 237, representing a 20% increase YoY
  • Guidance
    • Reported FY 2023 Adj. EBIT forecast of $752M – $940M (down from $865M – $1,062M)
    • Reported FY 2024 Adj. EBIT forecast of $968M – $1,278M (unchanged)
  • Mobile KPIs
    • Reported FQ2 2023 Installs of 363M, representing a 106% increase YoY
    • Reported FQ2 2023 MAUs of 300M, representing a 111% increase YoY
    • Reported FQ2 2023 DAUs of 36M, representing a 71% increase YoY
  • Business Highlights
    • Announced the acquisitions of Anime Ltd, VR Group, and the Risk of Rain franchise 
    • Launched a special review to identify potential strategic alternatives to maximize long-term shareholder value, with possibilities including spin-offs and / or IPOs of specific assets

NetEase releases FQ3 2022 earnings report (link)

• FQ3 2022 Results
  • FQ3 2022
    • Reported Net Revenue of $3.4B, representing a 10% increase YoY
      • Reported Games and Related Value-Added Services Net Revenue of $2.6B, representing a 9% increase YoY
      • Net Revenues from the operation of online games (the primary component of games revenue), accounted for 92.9% of segment revenue, compared to 92.8% and 92.7% for the preceding quarter and FQ3 2021, respectively
      • Net Revenues from Mobile games accounted for 68.6% of net revenues from the operation of online games, compared with 66.1% and 69.2% for the preceding quarter and FQ3 2021, respectively
      • Net Revenues from PC & Console games accounted for ~31% of net revenues from the operation of online games
    • Reported Gross Profit of $1.9B, representing a 16% increase YoY
    • Reported Gross Margin on Games and Related Value-Added Services of 65%, representing an increase from 64.9% in FQ2 2022 and 61.4% in FQ3 2021
  • Portfolio Highlights
    • Extended the longevity of leading franchises and titles including both the Fantasy Westward Journey and Westward Journey Online series, and other hit titles including Identity V and Infinite Lagrange
    • Diablo Immortal, co-developed by NetEase and Blizzard Entertainment, debuted in Chinese mainland, topping the iOS download chart soon after its launch
    • Continued preparations for the roll-out of Harry Potter: Magic Awakened in international markets, which is now expected to be launched globally in 2023

Tencent releases FQ3 2022 earnings report (link)

• FQ3 2022 Results
  • FQ3 2022
    • Reported Value-added Services Revenue of $10.2B, representing a (3%) decrease YoY
      • Reported Domestic Games Revenue of $4.4B, representing a (7%) decrease YoY
      • Reported International Games Revenue of $1.6B, representing a 3% increase YoY
  • Portfolio Highlights
    • Attributed YoY decrease in Domestic Games Revenue to Chinese regulatory headwinds resulting in lower paying user counts
      • Revenue from Honor of Kings and Peacekeeper Elite decreased due to current minor protection measures
        • Game time among minors was sharply reduced by (92%) YoY in compliance with China’s minor protection program, with resilience shown within the Company’s adult userbase
        • The Company reiterated their focus on extending the longevity of the CrossFire franchise, with multiple planned esports events and cross-media collaborations
    • Attributed YoY increase in International Games Revenue to robust performance of VALORANT, successful launch of Tower of Fantasy, and an expanded game portfolio at Miniclip
      • VALORANT Champions was the most watched esports event in the Tactical Shooter genre, significantly boosting player count
      • Clash of Clans is now the #1 Mobile Strategy title by YTD grossing receipts
  • Outlook
    • The Company is in full compliance with China’s minor protection program and will be focusing on the retention and growth of its domestic adult userbase
    • The Company expects Domestic Games growth to be catalyzed largely by extending the longevity of key franchises such as CrossFire
    • The Company expects VALORANT and Clash of Clans to spearhead growth with respect to internally developed franchises on the international front, with games publishing driven by titles such as Tower of Fantasy

The Gaming market will contract (4.3%) to $184.4B in 2022, according to Newzoo (link)  

• The downward revision was catalyzed by a slower-than-expected year for Console games, with delayed games and Console shortages increasing industry headwinds
• Mobile revenues are expected to see a (6.4%) decrease YoY to $92.2B, Console revenues are expected to see a (4.2%) decrease YoY to $51.8B, and PC revenues are expected to increase 0.5% YoY to $40.5B
• In contrast to decreases / slight increases felt by most Gaming market segments, Newzoo projects a 26.4% YoY increase in VR Gaming revenues (excluding hardware) to $1.8B
• Despite the overall decrease in year-end estimates, Newzoo states that the games market will grow from $179.1B in 2020 to $211.2B by 2025, representing a 3.4% CAGR 

Asia’s gamers will exceed 1B by 2026, according to Niko Partners (link)

• A report from Niko Partners forecasts that ten markets in Asia will comprise more than 1B gamers by 2026
• The report highlights the Indian Gaming market as the region’s fastest-growing geography, at a projected 21% five-year growth rate, with the country accounting for 50.2% of gamers in Asia-10 (Indonesia, Malaysia, Philippines, Singapore, Thailand, Vietnam, Chinese Taipei, Japan, Korea, and India)
• Niko Partners projects that the number of gamers will increase at a much faster rate than revenue, with Asia-10 PC and Mobile gamers totaling 788.7M in 2022 and reaching 1.1B in 2026
• The report projects the Asia-10 PC and Mobile games market to generate $35.9B in 2022, and $41.4B in 2026

M&A and Capital Raises

Yahaha raises $40M to democratize 3D content creation (link)

• Yahaha has raised $40M in funding to further develop a platform that facilitates the creation of 3D animations and games for users with non-technical backgrounds
• Proceeds will be utilized to hire Gaming industry talent, expand the Company’s footprint in the US and APAC regions, and improve the platform, which launched in early alpha in April 2022
• Temasek and Alibaba led the round, with additional participation from 37 Interactive Entertainment

Immersive Gamebox raises $20M for game room product and receives new patent (link)

• Immersive Gamebox has raised $20M in funding to develop its game room product, and has secured a new technology patent
• The Company’s Gamebox product are projection Gaming rooms for 2 to 6 players, with Immersive Gamebox planning to open 250 locations in EMEA over the next 3 years, with 100 locations set to open by the end of 2023
• Harlan Capital provided the funding via debt financing

Methodical Games raises $15M to create Multiplayer Action-adventure game (link)

• Methodical Games’ 9-person team has raised $15M to develop a Multiplayer Action-adventure title with an emphasis on close-quarters combat based on an original IP
• The Company’s founding team leverages experience from Epic Games, Respawn Entertainment, and Infinity Ward, with development experience including Fortnite, Apex Legends, and Call of Duty
• Lightspeed Venture Partners led the round, with additional participation from Bitkraft Ventures, 1Up Ventures, and Transcend Fund

Heroic Story raises $6M to build tabletop RPG platform for Web3 (link)

• Heroic Story has raised $6M to build a Web3-enabled Tabletop RPG platform reimagining pen-and-paper tabletop gameplay in a digital format with matchmaking services and story-led digital collectibles
• The Company is currently developing Legends of Fortunata, an IP created by Heroic Story’s in-house narrative team of novelists and screenwriters
• Upfront Ventures led the round, with additional participation from Multicoin Capital and Polygon Technology

Noodle Cat raises $4.1M for remote working studio (link)

• Noodle Cat has raised $4.1M in funding for a remote working studio focused on fostering a positive, flexible work culture with 4-day workweeks
• The Company, led by CEO David Hunt, is currently in preparation for work on the Company’s first game, an unannounced original IP 
• Makers Fund led the round, with additional participation from 1Up Ventures and Epyllion

Eschatology Entertainment raises $4M to disrupt Hardcore games (link)

• Eschatology Entertainment has raised $4M to develop Hardcore and Narrative titles, with their first title planned as a AAA level-based Narrative-driven FPS for PC and Console
• The Company, with over 44 full-time employees across 8 countries, leverages experience from industry leaders such as Wargaming and Valve
• The Games Fund and GEM Capital participated in the round 

Walker Labs raises $2M, announces Walker World Multiplayer Metaverse game (link)

• Walker Labs has raised $2M in funding to support the development of Walker World, an Open-world Multiplayer Third-person Shooter
• Walker World, built in Unreal Engine and slated for a late 2023 launch, is being built with Metaverse functionality in mind, allowing players to create 3D animated characters that are interoperable between separate titles
• Citizen X led the round, with additional participation from Futureverse and Altered State Machine, among others

Take-Two’s Rollic acquires German Mobile game studio Popcore (link)

• Take-Two’s Rollic Hypercasual Gaming division has acquired Popcore, an Indie Mobile developer, for undisclosed consideration
• Popcore, based in Germany, specializes in the Puzzle genre with titles such as Parking Jam 3D and Pull the Pin!, both of which hit the #1 most downloaded game on the Apple App Store
• Rollic, based in Istanbul, recently surpassed 2B LTD worldwide downloads with 19 of its titles reaching the top two spots in the US Apple App Store

Other

Mobalytics and Overwolf join forces to expand competitive features (link)

Overwolf is a portfolio company of Griffin Gaming Partners

• Mobalytics, a coaching and analytics platform, has signed a deal that will bring the Company’s player improvement tools to Overwolf’s in-game platform
• The Company’s software will be integrated directly into Overwolf’s existing infrastructure including in-game overlays, gaining exposure to Overwolf’s catalog of 1k supported titles
• Mobalytics currently supports 5 titles pre-partnership with Overwolf, and is seeking to expand support for titles where analytical guides and overlays can add the most value to players

Xbox to release overhauled Discord experience in November dashboard update (link)

Discord is a portfolio company of Griffin Gaming Partners

• Microsoft has announced a rollout of the Xbox November update, adding the ability to connect to Discord voice channels directly from the console, a new Captures app, and several other improvements
• The Discord overhaul, which was tested by Microsoft insiders last month, integrates a new menu into the Xbox game overlay allowing players to join Discord calls without having to use their Mobile devices

Aptos partners with South Korea’s Npixel on Web3 Gaming (link)

Aptos is a portfolio company of Griffin Gaming Partners

• Aptos, developer of a Layer 1 Blockchain, has announced a partnership with South Korean Gaming studio Npixel to bring Web3 technology to its Gaming initiatives platform
• The Company, who has raised over $400M to-date, will enable Npixel’s multi-million player base to safely own and share assets on Aptos’ upgradable and user-friendly network
• Npixel, founded in 2017, is known for developing Gran Saga, an MMORPG which became a top-grossing game on the Apple store with over 4M downloads since initial launch in Korea and Japan

Sharon Tal Yguado announces Astrid Entertainment (link)

• Sharon Tal Yguado has announced the launch of Astrid Entertainment – a new Gaming venture set to build a fantastical lore-driven interactive world
• Yguado leverages experience from Amazon Studios and Fox Network Group, and has previously worked with franchises such as The Walking Dead, The Boys, and Invincible among others
• The Company has recently secured a pre-seed investment, with existing investors including NetEase Games, Stardom, and Tower 26

VR games revenue will double by 2024, according to Newzoo (link)

• A report from Newzoo predicts that VR games revenue could rise to $3.2B by 2024, with as many as 46M active headsets in use
• Newzoo’s year-end 2022 forecast predicts that the VR market will hit $1.8B in 2022 with 27.7M headsets in use
• The report indicates that Interactive Entertainment is still the top use case for VR, with 73% of survey respondents highlighting one of their top hobbies as Gaming
• Popular genres within VR, according to Newzoo, are Adventure, Shooters, and Simulation titles, with popular titles including Walking Dead: Saints and Sinners, No Man’s Sky, Boneworks, and Microsoft Flight Simulator

Gaming hardware sales and consumer spending trended down in October, according to The NPD Group (link)

• A recent report from The NPD Group states that Gaming hardware sales and consumer spending have trended down slightly in October, totaling $4.3B during October 2022
• Growth in digital sales and subscriptions for console and PC video game content, driven in large part by the release of Call of Duty: Modern Warfare 2, was offset by declines in Mobile content and hardware sales
• October’s best-selling titles in the US include Call of Duty: Modern Warfare 2, Gotham Knights, FIFA 23, and Madden NFL 23

Epic Games launches Unreal Engine 5.1 (link) 

• Epic Games has released a major update for the Unreal Engine, denoted 5.1
• The new update is aimed at making Unreal Engine 5 faster for 3D content creation, with the Company adding a range of stress-tested new features and improvements to make the engine more robust and efficient for creators across all industries
• According to Epic Games, over half of all announced next-gen titles are being created in Unreal Engine

Tencent to expand Honor of Kings into a content universe (link) 

• Tencent has announced that Honor of Kings will be expanded to a content universe centered around the mainline title
• Honor of Kings became China’s most profitable Mobile title in January 2022, surpassing PUBG Mobile, which was also developed by Tencent
• The Company’s expansions to the Honor of Kings lore are currently set to come in the form of three games and a movie, with no publicly announced release date

Blizzard suspends service in China as NetEase agreement ends (link) 

• Blizzard has announced that it will be suspending game services in China starting in early 2023
• The Company has attributed the suspension to the expiry and non-renewal of a licensing agreement with NetEase set to terminate on January 23, 2023
• The partnership expiry will see a cessation of support for World of Warcraft, Warcraft III, Hearthstone, Overwatch 2, Starcraft, Heroes of the Storm and Diablo III, but will not affect the co-development and publishing of Diablo Immortal, which is covered by a separate long-term agreement 

Digital fashion brand House of Blueberry launches on Sims 4 (link) 

• House of Blueberry, a digital fashion brand, has announced the launch of a clothing line in The Sims 4
• The launch was enabled by EA’s partnership with the Overwolf platform, and will see over 200 digital assets integrated into The Sims 4, which went F2P last month
• Players and creators can submit ideas for additional in-game-content to Overwolf’s CurseForge, which offers a single location for players to discover mods and other UGC

The Game Awards returns as a hybrid online show and physical event on December 8 (link) 

• The Game Awards is set to debut on December 8 as an online and physical show that is meant to be as close to the 2019 pre-pandemic event as possible, per host Geoff Keighley
• The Game Awards has opened its tickets for sale to the public, in contrast to the previous year whose crowd only consisted of private invitees and award candidates
• This year’s event will be held at the Microsoft Theatre in Los Angeles, and is set to be broadcasted across multiple digital outlets including Instagram Live

Backbone launches an Android version of its Mobile Gaming controller (link) 

• Backbone has released an Android version of its Mobile Gaming controller alongside an Android OS-compatible version of their companion app
• The Backbone is a plug-and-play controller allowing users to experience console-like functionality on Mobile devices
• The Android version is priced identically to its iPhone equivalent at $99, with earliest product shipments slated for Christmas

Polycade teams up with Atari to launch Web3 games and art collaboration (link) 

• Polycade has announced the launch of a new arcade machine in addition to an accompanying Web3 art collaboration in partnership with Atari, dubbed Polycade Limiteds
• Polycade Limiteds will feature 12 artist collaborations, each of which redesigning a classic Atari game such as Asteroids, Pong, Centipede, Missile Command and Breakout released as limited editions of digital cartridges
• Digital cartridge owners will be able to play on the Polycade website, downloadable software, and on any physical Polycade arcade machine

Samsung Gaming Hub rolls out game streaming to 2021 TVs (link) 

• Samsung has announced that it will be rolling out support for its Gaming Hub platform on 2021 models of Samsung Smart TVs
• Owners of the older Smart TV line will now be able to access multiple Cloud Gaming services via the Gaming Hub, including Xbox Cloud Gaming, Amazon Luna, Utomik, and Nvidia’s GeForce Now

Trading Comparables

Blockchain Gaming

The post GGP Gaming Weekly — January 06 first appeared on Griffin Gaming Partners.

Take-Two releases FQ2 2023 earnings report (link) 

• FQ2 2023 Results
  • FQ2 2023
    • Reported FQ2 2023 net bookings of $1,505M, representing a 53% increase YoY
    • Reported FQ2 2023 recurrent consumer spending of $1,204M, representing a 76% increase YoY
    • Reported FQ2 2023 digitally-delivered net bookings of $1,421M, representing a 62% increase YoY
    • Reported FQ2 2023 EBITDA of $65M, representing a 33% increase YoY
• Forward Guidance 
  • FQ3 2023 Guidance
    • Net bookings of $1,410M – $1,460M vs. consensus of $1,684M
    • EBITDA of $164M – $185M
  • FY 2023 Guidance
    • Net bookings of $5,400M – $5,500M vs. consensus of $5,885M
    • Net bookings by label: Zynga (45%), 2K (36%), Rockstar Games (18%), Private Division (1%)
    • EBITDA of $465M – $514M
• Portfolio Highlights
  • The Grand Theft Auto Series has sold-in over 385M units, with Grand Theft Auto V reaching $1B in retail sales faster than any entertainment release in history
    • The title is now the best-selling game of the past 10 years in the US based on both unit and dollar sales
  • Red Dead Redemption 2 has sold-in over 46M units worldwide to-date and the franchise has sold-in over 70M units worldwide to-date
  • NBA 2K has sold-in 130M units worldwide to-date
  • WWE SuperCard remains 2K’s highest-grossing Mobile game and has more than 27M downloads (unchanged from the previous quarter)
  • PGA Tour 2K23 successfully launched in October 2022, with Tiger Woods appearing exclusively in the franchise and serving as Executive Director / consultant through a long-term partnership
  • PGA Tour 2K21 sold-in over 3M units to-date
  • The Company’s Private Division announced that they signed a new publishing agreement with Wētā Workshop, best known for their work on Middle-earth for The Lord of the Rings film trilogy
  • Wētā is currently in the process of developing a new title set in the Middle-earth universe, and have been granted a broad creative license to interpret the underlying lore of the books
    • The title is in early development and is expected to launch during FY 2024
  • Rollic has achieved 2B+ LTD downloads, with 19 titles having reached the #1 or #2 most downloaded game position in the US App Store
  • Take-Two still plans to bring 87 titles to market through FY 2025

Activision Blizzard releases FQ3 2022 earnings report (link)

• FQ3 2022 Results
  • Reported FQ3 2022 Net Bookings of $1,829M, representing a (3%) decrease YoY
  • Reported FQ3 2022 Operating Income of $485M, representing a (41%) decrease YoY
  • Reported FQ3 2022 GAAP operating margin of 27% vs. 40% in FQ3 2021
  • Reported overall Activision Blizzard MAUs of 368M vs. 390M in FQ3 2021
  • Reported FQ3 2022 segment Net Revenues of $480M for Activision (28% of Net Revenue), $543M for Blizzard (32% of Net Revenue), and $692M for King (40% of Net Revenue)
  • Reported FQ3 2022 digital Net Revenue of $1,606M, representing a (13%) decrease YoY
  • Reported FQ3 2022 in-game Net Bookings of $1,356M, representing a 13% increase YoY
• FQ3 2022 Results vs. Consensus Estimates
  • Net Bookings of $1,829M vs. consensus of $1,720M
  • GAAP EPS of $0.55 vs. consensus of $0.48
  • Non-GAAP EPS of $0.68 vs. consensus of $0.50
• ATVI Business Segment Highlights
  • Activision:
    • Activision reported 97M MAUs in FQ3 2022, representing a (18%) decrease YoY
    • Activision’s FQ3 2022 financial performance was lower YoY, primarily reflecting reduced engagement for Call of Duty following the weaker reception for last year’s premium release.  Segment Revenue and Operating Income are expected to return to strong YoY growth in FQ4 2022 following the successful launch of Modern Warfare II
    • Since its October 28 launch, Call of Duty: Modern Warfare II has set new records for Activision’s largest franchise, becoming the fastest premium Call of Duty release to cross $1B in sell-through. 
  • Blizzard:
    • Blizzard reported 31M MAUs in FQ3 2022, representing a 19% increase YoY
    • Blizzard’s FQ3 2022 Revenue grew double-digits YoY 
    • Segment operating margin was lower YoY, due to marketing investment to support the strong release slate and the shift in business mix for FQ3 2022
    • Overwatch 2 launched in October, with a F2P model designed to allow more people to experience the action title. Over 35M people played in the first month, and the average daily player numbers for the first month was more than double of its acclaimed predecessor
  • King:
    • King reported 240M MAUs in FQ3 2022, representing a (2%) decrease YoY
    • King’s in-game Net Bookings increased 8% YoY, driven by the Candy Crush franchise. King’s payer numbers again increased by a double-digit percentage YoY
    • This November marks the 10-year anniversary of Candy Crush Saga, the original and largest title in the Candy Crush franchise. Candy Crush enters its second decade in strong health, with over 200M MAUs and with player investment at record levels

Playtika releases FQ3 2022 earnings report (link) 

• FQ3 2022 Financial Results
  • Reported FQ3 2022 Revenue of $648M, representing a 2% increase YoY and exceeding consensus by 1%
  • Reported FQ3 2022 Adj. EBITDA of $231M, representing a (7%) decrease YoY and exceeding consensus by 1%
  • Reported FQ3 2022 Credit Adj. EBITDA of $204M, representing a (6%) decrease YoY
  • Reported FQ3 2022 Net Income of $68M, representing a (15%) decrease YoY and falling short of consensus by (5%)
    • The Company attributed increased operating expenses to the acquisition of Reworks
  • Purchased $600M of shares via Tender Offer at a price of $11.58 per share, which has reduced outstanding shares by approximately 52M
• FQ3 2022 Portfolio Highlights
  • Reported Casual portfolio Revenue of $356M, representing a 14% increase YoY and comprising 55% of total Revenue
    • The Company’s Casual portfolio was led by solid performances from Bingo Blitz (15% increase YoY), Solitaire Grand Harvest (14% increase YoY), and June’s Journey (33% increase YoY)
  • Reported Social Casino portfolio Revenue of $292M, representing a (10%) decrease YoY and comprising 45% of total Revenue
    • The Company’s Social Casino portfolio exhibited mixed performance with regards to Slotomania (13% decrease YoY), House of Fun (21% decrease YoY), and World Series of Poker (8% increase YoY)
  • The Company’s Revenue contribution has shifted from 49% Casual and 51% Social Casino in FQ3 2021 to 55% Casual and 45% Social Casino in FQ3 2022
  • Reported Direct-to-Consumer Revenue of $151M, representing a 9% increase YoY and comprising 23% of total Revenue in FQ3 2022, compared to 22% in FQ3 2021
• FQ3 2022 KPIs
  • Reported 30.2M average MAUs across the Company’s portfolio, representing a (15%) decrease YoY from 35.4M in FQ3 2021
  • Reported 9.0M average DAUs across the Company’s portfolio, representing a (13%) decrease YoY from 10.4M in FQ3 2021
  • Reported 310k average Daily Paying Users across the Company’s portfolio, representing a 6% increase YoY from 293k in FQ3 2021
  • Reported 3.4% Daily Payer Conversion, up from 2.8% in FQ3 2021
  • Reported $0.78 ARPDAU, representing a 16% increase YoY from $0.67 in FQ3 2021
• FY 2022 Guidance
  • The Company maintained the previous quarter’s FY 2022 Revenue outlook to $2.60B – $2.66B
  • The Company maintained the previous quarter’s FY 2022 Adj. EBITDA outlook to $900M – $940M

PLAYSTUDIOS releases FQ3 2022 earnings report (link) 

• FQ3 2022 Results
  • Reported FQ3 2022 Revenue of $72M, representing a 2% increase YoY, and exceeding consensus of $68M
  • Reported FQ3 2022 AEBITDA of $10M, representing a 2% increase YoY, and exceeding consensus of $7M
• FY 2022 Guidance
  • Reported FY 2022 Revenue guidance of $275M – $285M (up from $270M – $285M from the previous quarter), compared to consensus of $277M
  • Reported FY 2022 AEBITDA guidance of $32M – $35M (up from $30M – $35M from the previous quarter), compared to consensus of $33M
• Business and Portfolio Highlights
  • Completed acquisition of Brainium, which is immediately accretive to AEBITDA margin
  • Advanced playAWARDS by adding AMC and Cinemark to the Company’s network. Overall partners growth was 43% QoQ with reward purchases reaching 553k units
  • Made considerable technological and design progress on Tetris and myVEGAS Bingo – both games are showing improving metrics and are primed to be positive contributors in 2023
  • playAWARDS is set to be fully integrated into Tetris and myVEGAS Bingo in 2023. Integration will also happen into Brainium’s suite of games in 2023
  • Continued to scale studios in Vietnam and Serbia, which now account for nearly 40% of total development capacity
• FQ3 2022 KPIs
  • Reported FQ3 2022 Average DAU of 1.5M, representing a 25% increase YoY
  • Reported FQ3 2022 Average MAU of 6.7M, representing an 87% increase YoY
  • Reported FQ3 2022 Average DPUs of 29k, representing a (12%) decrease YoY
  • Reported FQ3 2022 Average Daily Payer Conversion of 2.0%, down from 2.8% YoY
  • Reported FQ3 2022 ARPDAU of $0.52, representing a (20%) decrease YoY
  • Reported FQ3 2022 Retail Value of Purchases of $31.4M, representing a (16%) decrease YoY

Roblox releases FQ3 2022 earnings report (link) 

• FQ3 2022 Financial Highlights 
  • Reported FQ3 2022 Bookings of $702M, representing a 10% increase YoY 
  • Reported FQ3 2022 Revenue of $518M, representing a 2% increase YoY 
  • Reported FQ3 2022 Adj. EBITDA of $51M, representing a (63%) decrease YoY and a 7% margin on Bookings
  • Reported FQ3 2022 Net Cash Provided by Operating Activities of $67M, representing an (63%) decrease YoY
• Actuals vs. Consensus
  • FQ3 2022 Bookings of $702M vs. consensus of $693M
  • FQ3 2022 Adj. EBITDA of $51M vs. consensus of $64M
• FQ3 2022 KPIs
  • FQ3 2022 DAUs of 58.8M, representing a 24% increase YoY
  • FQ3 2022 hours engaged of 13.4B, representing a 20% increase YoY 
  • FQ3 2022 average Bookings per DAU (ABPDAU) of $11.94, representing an (11%) decrease YoY
  • FQ3 2022 average monthly returning payers of 10.4M, representing a 19% increase YoY
  • FQ3 2022 average monthly new payers of 2.5M, representing a 4% increase YoY
  • FQ3 2022 average Bookings per monthly unique payer (ABPMUP) of $18.11, representing a (5%) decrease YoY 
• October 2022 Key Metric Estimates (October 2022 Only)
  • Bookings between $231M – $235M, representing a 15% increase YoY 
  • Revenue between $184M – $187M, representing a 4% increase YoY 
  • DAUs of 57.8M for first 27 days of October, representing a 14% increase YoY 
  • Hours engaged of 3.6B for first 27 days of October, representing an 11% increase YoY

SciPlay releases FQ3 2022 earnings report (link) 

• FQ3 2022 Results
  • Reported FQ3 2022 Revenue of $171M, representing a 17% increase YoY and exceeding consensus by 3%
  • Reported FQ3 2022 Adj. EBITDA of $43M, representing a (4%) decrease YoY and falling short of consensus by (2%)
    • This represents an Adj. EBITDA margin of 25%, down from 31% in the same period of the previous year
  • Reported FQ3 2022 Operating Income of $33M, representing a (13%) decrease YoY and falling short of consensus by (5%)
  • Reported FQ3 2022 Net Income of $34M, representing a (9%) decrease YoY and exceeding consensus by 1%
    • This represents a Net Income margin of 20%, down from 25% in the same period of the previous year
  • Reported FQ3 2022 Cash and Cash Equivalents of $299M
    • Reported FQ3 2022 Available Liquidity of $449M
• FQ3 2022 KPIs 
  • Reported Mobile Penetration of 90%, up from 89% in the same period of the previous year
  • Reported Average MAUs of 5.9M, representing a (3%) decrease YoY
  • Reported Average DAUs of 2.2M, representing a (4%) decrease YoY
  • Reported ARPDAU of $0.80, representing a 16% increase YoY
  • Reported Average MPUs of 600k, representing a 20% increase YoY
    • Reported AMRPPU (Average Monthly Revenue per Paying User) of $95.45, representing a 2% increase YoY
  • Reported Payer Conversion Rate of 9.7%, up from 8.5% in the same period of the previous year

AppLovin releases FQ3 2022 earnings report (link) 

• FQ3 2022 Financial Highlights 
  • Reported revenue of $713M, representing a (2%) decrease YoY, against consensus of $728M
    • Reported Software Platform revenue of $307M, representing a 59% increase YoY
    • Reported Apps revenue of $407M, representing a (24%) decrease YoY
  • Reported Adjusted EBITDA of $258M (36% margin), representing a 35% increase YoY, against consensus of $268M
    • Software Platform Adjusted EBITDA of $190M (62% margin), representing a 46% increase YoY
    • Apps Adjusted EBITDA of $67M (17% margin), representing a 12% increase YoY
  • Reported LTM Net Dollar-Based Revenue Retention of 166%, in comparison to 184% in FQ3 2021
    • Net Dollar-Based Revenue calculated as current period revenue divided by prior period revenue for Enterprise Clients
• FQ3 2022 Key Metrics
  • Reported Software Platform Enterprise clients ($125k+ of run-rate revenue, TTM) of 538, representing an 84% increase YoY
  • Reported Revenue Per Software Platform Enterprise Client (Revenue per SPEC) of $1.9M, representing a 19% increase YoY
  • Reported $342M of Total Software Transaction Value, representing a 24% increase YoY
  • Reported $35M from AppLovin Apps business (10% of total TSTV), representing a (57%) decrease YoY
  • Reported Monthly Active Payers of 2.2M, representing a (24%) decrease YoY
  • Reported Average Revenue per Monthly Active Payer of $41, representing a (7%) decrease YoY
• Management Outlook
  • FQ4 2022:
    • Revenue in the range of $685M – $700M, against consensus of $788M
    • Adj. EBITDA midpoint of $250M – $265M, against consensus of $316M
    • Adj. EBITDA Margin of 36% – 38%, against consensus of 40%
  • FY 2022:
    • Revenue in the range of $2,800M – $2,810M, against consensus of $2,926M
    • Adj. EBITDA of $1,050M – $1,070M, against consensus of $1,131M
    • Adj. EBITDA Margin of 37% – 38%, against consensus of 39%

Unity releases FQ3 2022 earnings report (link) 

• FQ3 2022 Results
  • Reported revenue of $323M, representing a 13% increase YoY, lower than consensus of $326M and in-line with guidance of $315M-$335M
    • Operate Solutions: $172M, representing a (7%) decrease YoY
    • Create Solutions: $129M, representing a 54% increase YoY
    • Strategic Partnerships and Other: $23M, representing a 28% increase YoY
  • Reported a Non-GAAP Operating Loss of ($37M) compared to a Non-GAAP Operating Loss of ($6M) in FQ3 2021
  • Reported revenue breakdown by region as follows: US (25%), Greater China (14%), EMEA (35%), APAC (24%), Other Americas (3%)
• Metrics and Business Updates
  • 1,075 customers each generated more than $100,000 of revenue in the trailing 12 months (TTM) as of FQ3 2022, compared to 973 as of FQ3 2021
  • Dollar-based net expansion rate as of FQ3 2022 was 111% as compared to 142% as of FQ3 2021
    • Dollar-based net expansion rate is a calculation comparing Unity’s Operate and Create Solutions revenue from the same customers across comparable periods on a TTM basis
  • Unity Completes Merger with ironSource: 
    • Unity announced that it has completed the merger with ironSource, becoming the industry’s only end-to-end platform for mobile app creators. The transformational merger allows Unity to support developers through the entire development lifecycle as they build, run, and grow immersive, real-time games and 3D experiences into successful businesses. ironSource’s depth and breadth of tools and services are unmatched in the industry. The combined company is expected to be highly profitable and generate positive free cash flow
• Outlook
  • FQ4 2022:
    • FQ4 2022 revenue guidance of $425M-$445M versus consensus of $378, representing a YoY increase between 35%-41%FQ4 2022 Non-GAAP Operating Income guidance of $5M-$15M versus consensus of $4M
    FY 2022:
    • FY 2022 revenue guidance of $1,365M-$1,385M, compared to prior guidance of $1,300M-$1,350M during FQ2 2022, versus consensus of $1,314M, representing a YoY increase between 23%-25%FY 2022 Non-GAAP Operating Loss guidance of ($88M)-($98M), compared to prior guidance of ($95M)-($115M) during FQ2 2022

Griffin Gaming Partners has put nearly 30% of its investments into women-run game startups (link) 

• Nearly 30% of Griffin Gaming Partners’ deployed capital has been invested into game startups with women founders or cofounders
• Griffin celebrated its focus on women with a Women in Gaming dinner sponsored by Silicon Valley Bank, with 50 women attendees from top Gaming companies including Activision, Amazon, Electronic Arts, Lionsgate, Mattel, Roblox, Scopely, Super League, and Warner Bros.

M&A and Capital Raises

NCSoft invests $15M in Mysten Labs for Web3 Gaming infrastructure (link)

Mysten Labs is a portfolio company of Griffin Gaming Partners

• South Korean Gaming company NCSoft has invested $15M in Mysten Labs as part of a previously announced $300M funding round in September at a valuation of more than $2B
• The Company will use the proceeds to develop the Sui Layer 1 blockchain to serve as infrastructure for Web3 games and other projects
• NCSoft will become a strategic partner with Mysten Labs and will explore “future collaborations to create digital entertainment experiences that are more engaging and player-centric leveraging Sui”

Everybuddy raises $15M for Casual Mobile games like Lucky Buddies (link)

• Israeli game developer Everbuddy Games, the maker of the Casual slots title, Lucky Buddies, has raised $15M in funding to make Casual Mobile games
• The Company will use the proceeds to continue growing its team of 70 employees 
• Makers Fund led the round with additional participation from Key1 Capital and Gigi Levy Weiss

Anything World raises $7.5M to assist content creators using AI-based animation (link)

• Anything World has raised $7.5M to create an AI-based animation system that creators can use to be more expressive
• The Company is launching its high-fidelity 3D animation system that enables rigging and animations for any 3D model, which will be launched in stages, with the first version being available now
• Anything World also announced that its service is coming to Epic Games’ Unreal Engine in December, with a mission to lower the barriers to creativity in 3D, allowing users to access tools for making high quality animated videos using industry standard formats
• Investors in the round included Acrew Capital, Alumni Ventures, and Warner Music Group

Krafton acquires Neon Giant (link)

• During its earnings release, Krafton announced that it had acquired game studio Neon Giant in September, the developer of the cyberpunk Action-RPG The Ascent
• Neon Giant is also currently working on its second title, an open-world FPS game 
• The Ascent was first released in July 2021 on Xbox consoles and PC, and later on PlayStation systems this March

Other

League of Legends Worlds 2022 peaks at 5.15M viewers (link)

• According to Esports Charts, peak viewership reached nearly 5.15M for the finals, setting a new record for League of Legends esports, surpassing Worlds 2021’s 4M peak viewers
• This is the second highest peak viewership recorded for an esports event, only behind the Free Fire World Series 2021 at 5.4M
• League of Legends Worlds 2022 averaged 978k viewers throughout the tournament’s nearly 144 total hours of airtime

Gears of War joins list of games getting a Netflix adaptation (link)

• Netflix announced its latest game-to-show/movie adaptation, Gears of War 
• The streaming service partnered with The Coalition to make a live-action movie and an adult animation series, with potential for more
• While Netflix has given no details on the release of either property, Netflix mentions “Delta Squad, a ragtag fireteam led by disgraced sergeant Marcus Fenix, [charged] with leading humanity’s last stand”
• Netflix is also working on several other Gaming franchise adaptions, including a live-action BioShock movie, a Horizon Forbidden West show, and an Assassin’s Creed series

God of War Ragnarök sets franchise record for first week UK sales (link) 

• According to UK sales charts firm GfK, God of War Ragnarök has outpaced the first week of sales of every other game in the God of War series, including its chart-topper predecessor, God of War (2018)
• The firm also reported that Ragnarök PlayStation 5 bundle accounted for 55% of this week’s hardware sales for the PlayStation 5 console
• God of War 2018 was one of Sony’s best-selling games on the PlayStation 4, hitting 23M units sold as of November 1, 2022, and per Sony’s recent earnings report, Sony is expecting Ragnarök to sell equally well

Call of Duty: Warzone 2.0 features Al Mazrah map and DMZ extraction mode (link) 

• Call of Duty: Warzone 2.0 will debut a new free-to-play Battle Royale mode on November 16 with a new map and a new extraction experience called DMZ
• The game will feature Al Mazrah, a new map set in the Middle East that is built in the modern warfare setting of the original Call of Duty: Modern Warfare II
• The DMZ game mode takes players to an open-world, narrative focused extraction experience where operators have free reign to complete faction-based missions, take on additional side objectives, engage with enemy operators or AI combatants, and search for valuable items

Nintendo and DeNA forming joint venture company Nintendo Systems (link)

• Nintendo and DeNA are working together on the formation of a new joint venture company that will aim to “strengthen the digitization” of Nintendo’s business
• The new company will be called Nintendo Systems and will operate as a subsidiary of Nintendo, with Nintendo providing 80% of the capital required
• Nintendo Systems will begin operations in April 2023, based in Tokyo, and led by director and President Tetsuya Sasaki
• This joint venture builds on Nintendo’s seven-year partnership with DeNA, co-developing Mobile games and growing the company’s ecosystem beyond its own platforms, having helped Nintendo produce six Mobile games, including Miitomo, Super Mario Run, Fire Emblem Heroes, Animal Crossing: Pocket Camp, Mario Kart Tour, and Pokémon Masters

Sorare partners with 18 national teams, launches a new game (link)

• Sorare is partnering with 18 national soccer teams ahead of launching Sorare: Global Cup ’22, its brand new free-to-play game with social elements
• Players will be able to put together an eight-player squad of their favorite players from these 18 teams, competing for real rewards as the actual World Cup tournament progresses
• Teams added include the US Men’s National Team, Argentina, Belgium, Cameroon, Costa Rica, Croatia, France, Germany, Ghana, Netherlands, Qatar, Morocco, Serbia, Spain, Poland, Tunisia, Canada, and Wales

League of Legends and Teamfight Tactics Will Be Published by Riot Games in Southeast Asia for the First Time (link) 

• After a 12-year partnership with Garena, Riot Games will begin self-publishing League of Legends and Teamfight Tactics across Southeast Asia (Philippines, Malaysia, Singapore, Taiwan, Hong Kong, Macau, Thailand, and Vietnam) in January 2023
• Riot is planning to expand its efforts in other countries it currently publishes in such as Japan and India, along with establishing new local offices in key countries including the Philippines, Thailand, Indonesia, and Malaysia
• Players will receive a suite of in-game rewards as a gift for the transition, along with welcome events and local activities to further enhance the player experience

TiMi Studio Group and Capcom Co., Ltd. working on a new Monster Hunter Title (link) 

• TiMi Studio Group and Capcom are joining forces on a new Mobile game for the Monster Hunter series
• The game is currently in-development and will reproduce the hunting actions that define the Monster Hunter series, offering players a new game experience unique for Mobile

Virtuos on establishing presence in the Bay Area with new studio Calypte (link) 

• Creative services company Virtuos is opening a new co-development studio, Calypte, in the Bay Area
• The Company’s goal is to establish a presence in San Francisco to better collaborate with its North American partners
• Virtuos has been rapidly expanding over the course of the year, beginning 2022 with the acquisition of Ukrainian art studio Volmi Games, followed by production firm Glass Egg in May, and opening a new office in Malaysia in August

Nifty Games launches NBA Clash for Mobile gamers (link) 

• Nifty Games announced the launch of NBA Clash on iOS and Android platforms
• Featuring all 30 NBA teams and over 100 individual players, NBA Clash is a quick-session, real-time PvP Mobile game
• Gamers will be able to compete head-to-head in 3-on-3 games, featuring first to eleven scoring

Trading Comparables

Blockchain Gaming

The post GGP Gaming Weekly — December 30 first appeared on Griffin Gaming Partners.

Muus Collective teams up with Revolve Group to blend fashion, games, and Web3 (link)

Muus Collective is a portfolio company of Griffin Gaming Partners

• Revolve Group and Muus Collective, a Griffin Gaming Partners-backed entertainment studio, announced a strategic partnership to create a fashion-centered Web3 Mobile Gaming experience that aims to revolutionize how consumers engage with fashion
• Expected to launch in 2023, the experience will feature digital playable renderings of select fashion and beauty items from REVOLVE and FWRD
• Muus Collective and Griffin Gaming Partners want to advance diversity in Gaming, Web3, and fashion through inclusion, collaboration, and empowerment
• Muus’ women-led founding team members are Gaming and fashion/beauty industry veterans who have worked at and with Gaming brands

EA releases FQ2 2023 earnings report (link) 

• FQ2 2023 Results
  • FQ2 2023
    • Reported FQ2 2023 net bookings of $1,754M, representing a (5%) decrease YoY and in line with prior outlook of $1,725M – $1,775M
    • Reported FQ2 2023 Live Services & Other net bookings of $1,119M, representing a (3%) decrease YoY
    • Reported FQ2 2023 Mobile net bookings of $296M, representing a 6% increase YoY
  • Trailing Twelve Months (TTM)
    • Reported TTM net bookings of $7,381M, representing a 4% increase YoY
    • Reported TTM Live Services & Other net bookings of $5,414M, representing a 7% increase YoY
    • Reported TTM Mobile net bookings of $1,252M, representing a 34% increase YoY
• Management Guidance
  • FQ3 2023 Guidance
    • Net bookings of $2,425M – $2,525M vs. consensus of $2,559M
    • GAAP EPS of $0.43-$0.59 (does not factor in share repurchase)
  • FY 2023 Guidance
    • Net bookings of $7,650M – $7,850M vs. consensus of $7,955M and previous outlook of $7,900M – $8,100M
    • GAAP EPS of $3.11-$3.34 (does not factor in share repurchase)
• Portfolio Highlights
  • Business Highlights
    • The EA player network grew to nearly 600M active accounts at quarter end
    • EA SPORTS FIFA 23 was the most successful launch in franchise history with more than 10.3M players joining the game within the first week
    • Based on the first four weeks following launch, EA SPORTS FIFA 23 units (sell-through) are up 10% and Ultimate Team players up 6% on the comparable period for FIFA 22
  • Pipeline
    • Need for Speed and NHL 23 are expected to be released in FQ3 2023
    • PGA Tour, Dead Space, Super Mega Baseball, Wild Hearts, and a Major IP are expected to be released in FQ4 2023
    • Given the current Mobile market conditions, EA has decided to give Lord of the Rings: Heroes of Middle-earth Mobile more time in soft launch
• Notable Headlines
  • EA and Marvel Entertainment Announce a Multi-Title Collaboration to Make Action Adventure Games (link)

Sony releases FQ2 2022 earnings report (link)

• FQ2 2022 Results
  • Reported FQ2 2022 Consolidated sales of $19.9B, representing a 16% increase YoY (constant currency) and beating consensus by 3%
  • Reported FQ2 2022 Game & Network Services sales of $5.2B, representing a 12% increase YoY (constant currency) and falling short of consensus by (6%)
  • Reported FQ2 2022 Game & Network services operating income of $305M, representing a (49%) decrease YoY (constant currency) and falling short of consensus by (28%)
  • Note: JPY/USD average conversion rate of 138.2 per Sony’s filings
• FY2022 Forecast (3/31 YE)
  • Forecasted FY2022 Game & Network Services sales of $26.3B, representing a 0.3% increase compared to FQ1 2022 Game & Network Services sales forecast
  • Forecasted FY2022 Game & Network Services operating income of $1.6B, representing a (12%) decrease compared to FQ1 2022 Game & Network Services operating income forecast
  • Note: JPY/USD average conversion rate of 138.2 per Sony’s filings
• Other Game & Network Services Segment Highlights
  • Reported FQ2 2022 PlayStation Plus subscribers of 45M, down from 47M in the same period of the previous year
  • Reported FQ2 2022 PlayStation Network MAUs of 102M, down from 104M in the same period of the previous year
  • Reported FQ2 2022 PlayStation 5 units produced of over 6.5M, which progressed faster than planned
  • The Company’s FY2022 unit sales forecast for PS5 hardware remains at 18M units, and the Company is now suggesting their aim to exceed this forecast into the year-end holiday season

Skillz releases FQ3 2022 earnings report (link) 

• FQ3 2022 Results
  • Reported FQ3 2022 Revenue of $60M, representing a (41%) decrease YoY and exceeding consensus of $51M
  • Reported FQ3 2022 GMV of $360M, representing a (41%) decrease YoY and exceeding consensus of $283M
  • Reported FQ3 2022 Gross Profit of $53M, representing a (44%) decrease YoY
  • Reported FQ3 2022 Adjusted EBITDA of ($15M), exceeding consensus of ($30M)
• FY 2022 Guidance & Capital Position
  • FY 2022 Revenue of $275M (maintained from FQ2 2022), exceeding consensus of $268M
  • FY 2022 Adjusted EBITDA Margin of approximately (56%)
  • Skillz currently holds $240M of cash and cash equivalents, $225M of current marketable securities, and $93M of non-current marketable securities
• KPIs
  • Reported FQ3 2022 MAUs of 1.7M, representing a (44%) decrease YoY
  • Reported FQ3 2022 ARPU of $12.10, representing a 6% increase YoY
  • Reported FQ3 2022 pMAUs of 320k, representing a (37%) decrease YoY
  • Reported FQ3 2022 ARPPU of $62.80, representing a (6%) decrease YoY
• Business Highlights
  • Selected Play Mechanix’s “QB Shootout” as winner of the NFL Developer Challenge
  • Executed a $11M debt buyback equal to 69.5% of the aggregate principal amount redeemed plus accrued and unpaid interest
  • Restructured the organization to realign resources and reduce operating costs
  • Recorded $48M impairment of intangible assets related to the developed technology and customer relationships for the Aarki acquisition
  • Re-opened San Francisco and opened Los Angeles offices
  • Appointed Vassily Filippov, former leader at Meta, Apple, and Riot Games, as Chief Technology Officer
  • Appointed Seth Schorr and Henry Hoffman to the Board of Directors

Call of Duty: Modern Warfare II breaks franchise record with $800M sold in three days (link) 

• The full title debuted on October 28 after hitting early-access release for the single-player campaign on October 20, breaking all previous three-day sales records since the franchise debuted in 2003
• Players around the world took part in the new launch, setting new player participation franchise records for number of unique players and hours played through its first three days of premium release
• Modern Warfare II is available worldwide on PlayStation 5, PlayStation 4, Xbox Series X|S, Xbox One, and PC for Battle.net, Blizzard Entertainment’s online Gaming service, and Steam

Gaming investments hit $2.2B during Q3, according to Digital Development Management (DDM) (link) 

• The video games agency notes that the figure represents a decline of (55%) YoY at a volume of 156 deals
• Blockchain Gaming investments totaled 63% of Q3 2022’s value at $1.4B
• Meanwhile, total M&A transactions reached $6.5B and saw a decrease of (65%) YoY for the quarter

M&A and Capital Raises

Modl.ai raises $8.4M to develop AI-driven play testing and QA bots (link)

Modl.ai is a portfolio company of Griffin Gaming Partners

• Modl.ai seeks to automate processes like debugging and quality assurance testing for game developers. Through the company’s AI and machine learning driven bots, game developers can test their projects more efficiently and effectively
• Modl.ai uses human player behavior to teach their bots to play like real people
• Currently, Modl.ai works with mid-size studios and will use the proceeds to make their product broadly available in 2023
• The round was led by Griffin Gaming Partners and Microsoft’s M12 venture fund with additional participation from Rendered.vc, PreSeed Ventures, and Transistormedia

Misfits Gaming Group launches $20M creator fund (link)

• Misfits Gaming Group is announcing the launch of a $20M creator fund aimed at helping creators and influencers bring projects to life
• The fund is specifically earmarked to provide the infrastructure so creatives can easily implement their ambitious and innovative projects
• The Group is heavily involved in the creation of TubNet, a highly anticipated cross-platform Minecraft server. TubNet, when it launches, is aiming to provide a fun and engaging community space and exciting original content

Playgig raises $11M for cross-platform game studio (link)

• The Company is creating cross-platform, free-to-play games that are accessible to a broad universe of gamers
• The firm is headed by former Riot Games executive Bruno Schirch, who previously ran esports and global publishing for Riot Games
• The Company will use the proceeds to recruit additional talent to join their fast-growing team of 40 game developers building the Company’s first game and original intellectual property, Mystic Kingdoms
• March Gaming led the round with additional participation from Paramark, Aream, and Gaingels

Freedom Games raises $10M to publish indie games (link)

• The Company is ~18 months old, but has published successful indie projects like Coromon, Dreamscaper, Dark Deity, Cat Café Manager, and Symphony of War
• The Company will use the proceeds to publish additional indie games
• Play Ventures led the round with additional participation from Nashville Capital Network (NCN) and GFR Fund

Netflix adds 6th Gaming studio with acquisition of Spry Fox (link)

• Netflix has acquired its sixth Gaming studio, buying Seattle-based indie game studio Spry Fox
• Spry Fox is an award-winning independent studio focused on cozy, original games
• Netflix expects Spry Fox’s titles, such as Triple Town, Alphabear, and Cozy Grove, to help accelerate Netflix’s creative development in another beloved genre and add to the growing variety of Netflix’s games catalog that will have something for everyone

Frontier acquires Complex Games (link)

• Developer and publisher Frontier has acquired Canadian studio Complex Games for an upfront cash consideration of £8.3M, with a potential additional £3.3M based on company targets
• Complex Games is the developer behind Warhammer 40,000: Chaos Gate – Daemonhunters, launched via third-party label Frontier Foundry in May

NetEase takes minority stake in Liquid Swords (link)

• The Chinese firm has made an undisclosed investment in the Stockholm-based studio
• Liquid Swords was founded in 2020 by Christofer Sundberg, best known as the founder of Avalanche Studios and director of the first Just Cause game
• The studio is currently working on its debut project, an unannounced AAA open-world title
• The investment will fuel the development of the title and support Liquid Swords move into a brand-new office space

Other

Embracer Group Shuts Down Montreal Video Game Studio (link)

• Video game publisher Embracer Group AB is shutting down Onoma, a Montreal, Canada-based video game studio that it acquired just months ago
• Onoma, formerly known as Square Enix Montreal, was best known for creating the Go series of mobile games such as Hitman Go
• The company informed employees Tuesday that some staff would be transferred to a sister studio, Eidos Montreal

Former Niantic developers form new studio Bodeville (link)

• Bodeville was founded in October by Alexia Mandeville and Bo Boghosian, who previously worked together at Niantic on its upcoming location-based pet game Peridot
• Mandeville led the design of Peridot, before which she worked on a variety of virtual reality projects, including Meta’s Horizon Worlds. Meanwhile, Boghosian spent over six years working at Niantic on Pokémon Go and Harry Potter: Wizards Unite, and was the engineering lead on Peridot
• The two have self-funded the studio, which is based in Charlotte, North Carolina
• They are currently working on two original narrative games, with the aim to release both in 2023

China games market to decline for the first time in 20 years, according to Niko Partners (link)

• China Games revenues projected to decline (2.5%) to $45.44B. Mobile to shrink (5.1%) to $30B, representing 66% of total market
• PC to increase 2.1% to $13.6B, representing the first year of growth since 2017. Meanwhile, the forecast for console revenues remains unchanged, expected to account for $1.8B (4% of the total market) and representing an increase of 14.7% when compared to 2021

PlayStation VR2 launches on February 22 (link)

• The headset will retail for $549 and pre-orders open on November 15. Sony is also offering a bundle, which includes the headset, two controllers and a stereo headset
• The new PlayStation VR headset has several additional features compared to its predecessor, including eye-tracking, headset feedback, and 3D audio
• Sony also announced several of the headsets upcoming titles, predicting that the headset will have at least 20 games at launch

Wildlife Studios announces 8-Bit Bandits, new affiliated studio (link) 

• The new Stockholm-based studio, founded by Stephen Jarrett and Robert Woodburn, intends to build mobile social experiences that emulate couch co-op
• Both Jarrett and Woodburn have experience in the industry, most recently working on the endless runner Crash Bandicoot: On the Run. Jarrett worked as a director of game design with Disney/Pixar, Bandai Namco, Warner Bros Games and King. Woodburn also previously worked at King, overseeing its global design craft

Magic creator Richard Garfield releases new PvP card game (link) 

• Game designer Richard Garfield, in partnership with Tyranno Studios, is launching a new card game named Blockchain Brawlers
• Richard Garfield is responsible for many popular board and card games including Magic: the Gathering, RoboRally, Netrunner, and King of Tokyo
• New players can purchase bits of land, called Brawl-O-Seums, to craft different moves and assets to use in PvP mode. Blockchain Brawlers operates on the WAX blockchain

Parsons School of Design and Roblox partner up for digital fashion (link) 

• Starting in Spring 2023, students will work with experienced designers from Parsons and Roblox to create new items for sale
• Part of the challenge will be learning how to set up a retail space in the real and digital world. Physical designs will be on sale at Parsons, while their digital counterparts will be available in the Roblox avatar marketplace

Build A Rocket Boy to open Montpellier studio (link)

• Build A Rocket Boy will be opening a new studio in Montpellier, France, in 2023
• Build A Rocket Boy was created in 2017 as Royal Circus Games by former Rockstar producer Leslie Benzies. The Company currently has offices in Edinburgh, its headquarters, and Budapest

Rovio has 10 new games in the pipeline, and a cross-platform Angry Birds is one of them (link)

• Rovio is soon to release Hunter Heroes, Hunter Assassin 2, and has already soft-launched an idle puzzle game in the Moomins franchise titled Moomin: Puzzle and Design
• Most upcoming titles utilize the Angry Birds IP, such as Bad Piggies 2
• An Angry Birds RPG is also officially in the works, under development by the Copenhagen studio formerly known as Darkfire Games

Jagex and Titan Publishing partnering to create RuneScape comics & books (link) 

• Jagex and Titan Publishing announced an official partnership to begin in 2023, that will see the publishing house work with the developer of RuneScape to produce comics, graphic novels, original fiction, and even coloring books based on the MMORPG
• Originally released back in 2001, RuneScape has remained a venerable franchise throughout the years and the announcement follows the release of RuneScape Mobile last year

NetEase announces new studio led by former Resident Evil & Devil May Cry producer (link) 

• NetEase announced the formation of a new game studio named GPTRACK50
• Hiroyuki Kobayashi will lead the studio in the creation of original IP’s for the PC and Console markets, a move which represents a major step beyond NetEase’s usual market

Trading Comparables

Blockchain Gaming

The post GGP Gaming Weekly — December 23 first appeared on Griffin Gaming Partners.

Griffin Gaming Partners Becomes One of the Largest Venture Funds Focused Exclusively on Gaming with Over $1 Billion Under Management

Griffin Closes Oversubscribed $750M Fund II, Providing Strong Support for Global Early and Late Stage Gaming Companies

LOS ANGELES & SAN FRANCISCO – Griffin Gaming Partners (Griffin) announced today that its oversubscribed $750M Fund II makes it one of the largest venture capital funds singularly focused on the global gaming market, with over $1B in assets under management (AUM). The firm was founded by Peter Levin, Phil Sanderson, and Nick Tuosto, with LionTree as a strategic partner to the Fund. Peter, Phil, and Nick are passionate gamers with decades of collective investing, advising and operating experience in the games industry.

With one of the longest gaming industry track records, Griffin invests in content, software infrastructure, and social platforms, as well as gaming-related Web3 companies. Select Griffin investments include Forte, Discord, AppLovin, Overwolf, WinZO and Spyke Games.

“Griffin Gaming Partners aims to unlock value and growth for our portfolio companies as informed advisors and connectors,” said Peter Levin, Managing Director of Griffin Gaming Partners. “With over $1B of AUM, we have extensive relationships, honed perspectives, and the creative instincts to uncover hidden gems, find synergistic partnerships, and structure complex deals that impact the gaming ecosystem.”

Massive Growth Makes Gaming the Dominant Form of Media

The Gaming market is now larger than movies, music, and books combined, and is the fastest growing consumer trend globally, with 248% expected growth over the next decade, according to Newzoo.

The global gaming market is projected to reach a staggering $256 billion of annual consumer spend in 2025. One-third of the world’s population, 3.1B players, play games almost an hour a day. Consumers spent an average of 5B+ hours and $1.7B+ per week on mobile games in the first half of 2021. [Sources in order: Newzoo, DFC Intelligence, App Annie]

“The lines have blurred across gaming, media, sport, and social connectivity,” said Phil Sanderson, Managing Director of Griffin Gaming Partners. “By seeing more than 1,300 qualified investment opportunities a year, we get a bird’s eye view into the industry and what it will take to succeed in the next phase of interactive entertainment across platforms, genres and demographics.”

From Seed to Growth: Extraordinary Value for Entrepreneurs

Investing in seed through growth rounds, Griffin’s track record is a result of pattern recognition drawn from historical knowledge, proprietary research, and hands-on experience supporting portfolio company growth. The Griffin team analyzes enormous amounts of data and reviews over 1,300 qualified investment opportunities per year to inform perspectives on growth, retention, and monetization. The firm assists portfolio companies with recruiting and business development leveraging its unique resources and focus on gaming.

Investing at the Intersection of Content, Software Infrastructure, and Social Platforms

Griffin makes complementary investments across the gaming ecosystem supporting its intelligence-based, data-driven investment strategy focusing on proven teams with experience scaling businesses.

According to Nick Tuosto, Managing Director of Griffin Gaming Partners and LionTree, “Our thesis is simply that, with our dedicated focus and analytical capabilities, we can make sense of enormous quantities of data and see around corners. That informs our assessment of risk-reward, but also enables us to go to work for our portfolio companies through business development and aligned advice on navigating these highly dynamic market conditions.” He added, “We’re there for our portfolio companies to help open the right doors at the right time to unlock transformational opportunities.”

About Griffin Gaming Partners

Griffin Gaming Partners is one of the world’s largest venture capital firms singularly focused on the global gaming market with over $1B AUM. The firm was founded by Peter Levin, Phil Sanderson, and Nick Tuosto, with LionTree as a strategic partner to the Fund. Investing in seed through growth stages at the intersection of infrastructure, distribution, content, and platforms, Griffin deploys capital to companies like Forte, WinZO, Overwolf, Discord, AppLovin, Tactile,  Spyke Games, Neon, Hadi, DeHorizon,SuperTeam, and Palm.  For disclaimers and more information: https://griffingp.com/

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Media Contact: Nicole DeMeo, Outfront Solutions, nicole@outfront.solutions, 415.533.2599

This release is for information purposes only and is not intended as investment advice, an offer or solicitation with respect to the purchase or sale of any security. Securities of any investment funds managed by Griffin are offered to selected investors only by means of such fund’s governing documents and related subscription materials.

There is no guarantee that any investment objective will be achieved. Past performance is not indicative of future results, which may vary.  Actual results may differ materially from those expressed or implied. An investment with Griffin is speculative and involves significant risks including the potential loss of all or a substantial portion of invested capital and the lack of liquidity of an investment.

This release contains forward-looking statements. The opinions, forecasts, projections or other statements, other than statements of historical fact, are forward-looking statements. Actual events or results or the actual performance may differ materially from those reflected or contemplated in such statements. The assumptions underlying any analyses and forecasts contained in this release are believed to be reasonable in light of the information available at the time. Such assumptions may require modification as additional information becomes available. Nothing contained in this document may be relied upon as a guarantee, promise, assurance or a representation as to the future. 

The companies identified herein do not represent all of the investments made or recommended by Griffin on behalf of its clients.  It should not be assumed that other investments made or investments made in the future by Griffin are or will be profitable.  Past performance does not guarantee future results.

The post Griffin Fund II Announcement first appeared on Griffin Gaming Partners.