We last voted Our network of investors on the topic of gaming infrastructure startups came back in May as it was becoming clear what the epidemic opportunities were for gaming startups.
Amit Kumar of Excel told us at the time that the “social and interactive layers spanning these games” were poised to become big winners, highlighting his firm’s investments in startups such as Discord and Mayem. In December, Discord announced it was rising to a valuation of $ 7 billion and this month Pokémon Go maker Niantic announced it was buying Mehm.
Digging the investor spirit around the opportunities that developed in social gaming following my story this week, I dug into gaming tools and emerging platforms and pinged a few VCs to voice my views on that market.
Comprehensive market moves over the past several months have defied expectations with startups in the gaming world as well as picking up enough steam. This week, Roblox announced that it had assessed a valuation of $ 4 billion to $ 29.5 billion in February last year. Game makers across the board, including Robox, have been lately acquiring gaming infrastructure startups.
I talked to investors about what they wanted to see in the space.
Ethan Kurajvil of Bessemer said, “We would love to see more innovation around the gaming infrastructure, including democratizing the development of the game and allowing clever Indians to combat the riot and epic.” And Saqib Dadi told ClearTips.
He highlighted several areas for new opportunities, including specialized engines, next-gen content creation platforms, and tools to port desktop experiences to mobile. The VCs we interacted with were also introspective of the latent opportunities presented by the major platforms adopting cloud gaming technology. The overall trend was to promote a reach, a desire to provide a more casual experience for platforms that could cater to a typically “hardcore” audience.
It was also clear from the conversation that Robox is shaping investors’ attitudes towards potential growth opportunities and pitfalls throughout the gaming industry, with VC who were not keen on disrupting their success and betting on imminent or one . A similar recipe for success may follow.
Responses have been edited for length and clarity. We talked together:
- Hope Cochran, Madron Venture Group
- Daniel Lee, Madron Venture Group
- Ethan Kurzveil, Bessemer Venture Partners
- Saqib Dadi, Bessemer Venture Partners
- Alice Lloyd George, Rogue VC
- Gigi Levi-Weiss, NFX
Hope Cochran and Daniel Lee, Madron Venture Group
Cloud game-streaming networks are exciting, but don’t seem like a sure bet yet, how do you feel about them?
DL: I think the real story behind cloud gaming is the nature of “playing anywhere” and its cross-platform. Gaming is completely different from Netflix, it’s not like you want an endless library of content. When I’m playing a game, I want to play Overwatch all the time and I don’t have to reach 1,000 other games. I think the approach cloud companies have taken is more around thinking about what we have and what we can build for gamers with it? What do gamers want more than that and what can we give them? This is definitely in that direction, which includes things like giving away two free games per month, but really I think the thing that will be exciting in the long term for cloud gaming is to play your game anywhere and Play anywhere with your friends.
If users embrace desktop-class cloud gaming on mobile and have an extensive cross-platform integration, is it a cause of trouble for today’s mobile gaming industry?
DL: The audience is probably a little different between a candy crush and a warzone, though I like to play both. So maybe it joins some people’s lunch, but I don’t think it’s anything where the number one problem for Candy Crush is to eliminate people for playing desktop Call of Duty.
Is there a clear infrastructure gap where you want to see new startups rise and fill the void?
DL: Honestly just game making tools, such as next-gen Robox Studios, next-gen Unity and unrealistic type of stuff – I’ve seen some interesting companies out there. I think we’ve focused on a few small companies that focus on making sure a network is safe for kids, but I do think that a lot of infrastructure stuff is really inspired by what kind of new content is. So as social games became really popular, achieving this and making sure the chats were safe became really important.
Court: I would love to see something built to help games that were built for the Triple-A environment to port to a better mobile environment. Whenever I work with a gaming company on that, they start to recreate the game, so it would be really interesting to see something that really helps them adopt the mobile form.