4. Where am I coming from?
•
•
•
•
•
•
McIntire, UVA for business strategy
In house analyst
NYC’s first entrepreneur hub
Foodspotting, Betfair, MTV Networks
Last 4 years Games
YetiZen
– 10000 developers at YetiZen events last year
– 1500 startup applications per year, choose 16-20
– Large extensive investor network—peak at YetiZen’s board
6. Step-by-Step Process of our Research
Process:
1. Game investment deal data from 2012 and 2013 provided by
Raymond James
2. Each deal cross checked with Crunchbase and other public sources
to determine:
•
Stage of the fund (Seed, First Venture),
•
The company type (Game Studio or Platform),
•
Date of inception.
3. Seed and Kickstarter deals were excluded
Additional Notes:
•
As we are in Dec 2013, we only used data between January to
November in our comparison between 2012 and 2013
•
First venture rounds are the company’s first VC fund that comes
after seed / angel funds.
8. More Game Studios were invested
in than Platforms
# of First Venture Investments by type
12
Game Studios
10
10
8
Platform
7
3
6
Increase
4
3
2
1
0
2012
2013
2
Decrease
9. First venture funding is becoming later and later for Game
Studios, indicating significantly more mature companies
Inception
First Venture
Financing
10. With a lot more success…
Performance and Success of First Venture Funded Game Studios in 2013
Game Studio
Highest Rank in 2013 for iOS
Plain Vanilla Corp.
Top #1 in Trivia Games
Bash Gaming
Top #1 in Casino Games
Kiwi, Inc.
Top #1 in Role Playing Games
Pluto Games, Inc.
Top #1 in Music Games
Bee Cave Games
Top #4 in Casino Games
Hammer & Chisel
Top #4 in Action Games
Arkadium
Top #4 in Action Games
11. Decrease on the Size of
Investment Deals
Median for Game Studio Investment Deals
$ Milions
5
4
3
2
1
0
4
1.95
2012
2013
13. Our Takeaways
• Venture comes in after significant traction. Plan for this. Do not
turn to venture for survival as you prove out product market fit
• Venture is valuable to scaling. Nine out of the top 10 grossing
games in the U.S. iOS market today are from venture-backed
• All Venture companies invested in derived principle value
proposition not from hit IPs and associated cash flows but on
something else, be it a platform, distribution, or audience
aggregation. VCs see these companies as having sustainable
competitive advantage
No:Seed or kickstarter - Individuals - Mostly bet due to passion for game or team - Momentum driven to some extent - What works: build passionate followers in your vision. Ex DoubleFine (12 year). Can take entire career-Follow-on venture rounds - based on company achieving growth milestones with Series A financing - indicates match between performance of prior investments with follow-on investor expectations - bad indicator of investor appetite for gamesYes- True apples to apples comparison- Hypothesis driven Investor patterns in - Traction - Social Proof
more investments in game studios then in platformsTotal # of First Venture investment inGame Dev from 7 10 Platform from 3 1
game studios are now getting first venture funded even later from inception signaling a much more mature company with a lot more success
Highest ranking for each first venture funded game studios from AppAnnie
typically we look at averages or mean but there are lots of higher outliers so we looked at median to get a sense of central tendency and the median for $ size of investment for game developers has gone downMedian:2012 – Game Dev: 4.002013 – Game Dev: 1.952012 – Platform: 2.102013 – Platform: 15 (anomalies)
King.com – Candy Crush SagaSupercell – Clash of ClansBig Fish Games – Big Fish CasinoKabam – The Hobbit: Kingdom of Middle-earthGlu Mobile – Deer Hunter 2014Machine Zone – Game of War – Fire AgeKing.com – Candy Crush SagaSupercell – Clash of ClansBig Fish Games – Big Fish CasinoKabam – The Hobbit: Kingdom of Middle-earthGlu Mobile – Deer Hunter 2014Machine Zone – Game of War – Fire Age
