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Yesterday’s announcement of PUBG Corp. acquiring MadGlory got me very excited.
First, and always, I love seeing the New York game scene evolve and grow. Yes, I know that Saratoga isn’t downtown. But this acquisition still means that talented individuals are doing great things. This result will inspire that next budding entrepreneur or shy designer. What characterizes the east coast games industry is that it can’t really exist but does purely because of grit.
Next, I’m excited to see PUBG build on its success. The game has generated over a billion dollars in lifetime sales and has attracted a lot of eager competitors. Epic’s Fortnight is doing really well, both in terms of player base and online viewership, so PUBG needs a second act. Focusing on community is the right strategic move.
But what makes me excited most of all is the emphasis on building tools that can be used by a broader community. PUBG is itself, of course, the product of open nature of PC game development. Continuing this practice of opening up to the broader fanbase and allowing them to share in the success is what contemporary game publishing is all about.
The future is open.
MONEY, MONEY, NUMBERS
Tencent invests $632MM in live-streaming platform Douyu
If the appetite for watching other people play games wasn’t clear previously, then perhaps now it is as Tencent has taken a major position in Douyu, valuing the firm at $1.5 billion. This is in addition to the $100MM Tencent invested previously during the series B round in March, 2016. Gaming video content has been growing rapidly in recent years. Asia has the largest audience with 244MM unique viewers compared to 188MM in North America and 130MM in Europe. Part of its appeal is its monetization strategy: the site lets fans to purchase virtual gifts like balloons that pop up onscreen for all viewers to see, and gives streamers bonuses for referring players to games. Link
70% of people watch Netflix on their TV like animals
Here’s a worthwhile data point: despite the fantastic popularization of smartphones, Netflix user data show that the bulk of its audience watch on their television. Interestingly, even if people initially sign up on their computer or phone, they tend to migrate to connected TVs over time. I’m tempted to say that all this TV watching is caused by Netflix & chill but that would downplay how slowly people transition to new technologies. It can be no surprise then that Netflix is increasing its inventory of content suited for TV viewing as it plans to release no fewer than 700 original TV shows this year. Link
Facebook signs deals with Warner Music Group, Major League Baseball
In ramping up competition with Google, Facebook is pushing into key strategic areas for YouTube. Since December the company has aggressively pursued licensing rights from Universal Music, Sony, and now Warner, which puts it head-to-head with YouTube where music is the largest content category. At the same time Facebook is also pushing into traditional sports (MLB, MLS, Mexico’s Liga MX, and US college football and basketball) and esports (ESL Pro, Paladins Premier League, H1Z1 Pro League, and Gfinity Elite Series). The entire effort centers on increasing user engagement, especially among younger audiences. The firm’s lawyers would like you to know, however, that Facebook is not a media company. Link
US President meets with game execs on video game violence
Following the massacre last month at a high school that claimed the lives of 17 people, a room full of mostly older white men convened to discuss how especially violent interactive entertainment was possibly related to school shootings. A waste of time, obviously, since video games are played literally EVERYWHERE in the world but nowhere except in the US is there a clearly observable gun problem. Countries like Germany, the UK, Japan, and China each represent key markets for the games industry and have between 32 to 96 times fewer violent gun deaths. (In fairness, Obama called a similar meeting after Sandy Hook and asked Congress to fund more research, which it promptly didn’t.) Nevertheless, the current administration is moving towards making funding available to, you guessed it, arm school teachers, which is by far the dumbest idea imaginable. These elected officials should be ashamed of themselves and tried for their complicity in the unnecessary deaths of thousands of their own citizens. Better: please everyone else go VOTE. Link
Magic Leap raises $461MM
With part two of its series D on the books, the Florida-based firm has now raised $2.3 billion in funding and is currently valued at $6 billion. This time the cash injection comes from Saudi Arabia’s Public Investment Fund (a $230 billion state fund!) which signed a $400MM check. In trying to stay ahead of Apple, Facebook, Microsoft, and Google, which are all not-so-secretly working on their own future technologies, Magic Leap has clearly mastered the ‘art of the pitch.’ That the amount of money necessary to compete with these firms runs in the billions should come as no surprise. But the latest round does suggest that the firm is running out of runway: (1) why raise money so far away from home?, and (2) where does Magic Leap turn next if it needs more capital? Link
Intel bids on Broadcom, which tries to buy Qualcomm, which is sued by Apple
After about a decade of spectacular growth both the sales of PC and smartphone have started to slow. That means that chipmakers are looking to consolidate. Especially Broadcom has been aggressively pursuing Qualcomm, which rejected its hostile $105 billion last month and is itself awaiting approval of a $44 billion deal to buy NXP Semiconductors. All of this activity has attracted the attention of both the US Treasury Committee and tech firms Microsoft and Google. Biggest concern is that Apple will benefit from a Broadcom/Qualcomm merger because Broadcom’s management would likely reduce or even cut Apple’s licensing costs. Apple is currently suing Qualcomm for “illegally inflating” fees. Link
Fake news travels faster
Based on an analysis of 126,000 rumors spread by 3MM people, a group of MIT researchers found that falsehoods spread faster across social media than the truth. Interestingly, robots accelerated the spread of both fake and real news equally, suggesting that it is, once again, those pesky humans who are the culprit. Link
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