Hello friends,
Welcome to issue No: 8!
These days, I’m spending my time talking to people in the industry and investors to learn more about the opportunities and pain points, feel free to reach out if you want to have a chat.
Not a subscriber yet? 👇🏻
📈 This Week in Numbers
$0.5T - Apple’s App Store ecosystem facilitated over half a trillion dollars in commerce in 2019
Top three largest streams of sales came from physical goods and services (retail, travel and ride-hailing totalling up to $268B). In 2019, App Store ecosystem generated $61B from digital goods and services. Apple doesn’t disclose its breakdown but according to AppAnnie total estimated billings for gaming is around $27B.
In-app ad sales generated $20B for gaming apps (roughly 44% of total in-app advertising)
Last year alone, total in-app advertising and in-app purchases withing gaming generated ~$50B. It’s also very interesting to see in-app advertising catching up IAP revenue.
$17B - Fortnite Maker Epic Games Nears Funding at $17 Billion Value
New investors T. Rowe Price Group Inc. and Baillie Gifford will contribute to the round, while existing investors including KKR & Co. will also participate, the people said, asking not to be identified as the details aren’t public.
Epic’s valuation is up from $15B in 2018. Sweeney sold 40% of the company to Tencent Holdings Ltd. in 2012. Other minority owners include Walt Disney Co., aXiomatic Gaming LLC and Endeavor Group Holdings Inc.
$4B - AT&T seeks sale for Warner gaming unit, could fetch about $4 billion
$1.4B - Kahoot raises $28M for its user-generated educational gaming platform, now valued at $1.4B
$300M- Star Citizen passes $300m in crowdfunding
$175M - Supercell's Brawl Stars shoots through $17.5 million revenue in China (in its first week)
€114M - Stockholm-based Stillfront lands €114 million to expand its global group of gaming studios
🔮Good Reads
Why Andreessen Horowitz is investing in games
Andrew Chen lays out a few ideas they’re interested in: eSports, modding, user-generated content and new demographics:
We like the idea of user-generated content or moddable platforms as part of our investment thesis because it lets users participate in creating their own worlds. That’s very interesting.
I haven’t thought that there will be one metaverse, for example. If we’re lucky, it will look more like the internet, where there’s a shared set of protocols and standards, but everyone can build their own piece, and users have a lot of ability to choose, versus the Oasis construct in Ready Player One. That’s a bit funny in that it’s this monolithic thing owned by one company.
For a long time, people used to ask things like, “Why do I need a Facebook profile? Why do I need a website?” Eventually, people realized that they did need one. A lot of people right now maybe don’t feel like they need a Fortnite profile. But give it 10 or 20 years and all of a sudden maybe everyone has one. Maybe it becomes as important as having a social network profile. If the historical trends persist, that’s what’s going to happen.
Embracing the metaverse: Roblox’s ambitious vision for building online worlds
With $150M additional funding in the bank, Roblox wants to continue their global expansion and invest in their core technology.
For us to do global well, it's not simply a matter of translating the games. We need to understand how someone swears in that language, what inappropriate memes in that language are, all these sorts of things. We'll also continue to invest in the core technology. We stream all our content in our own cloud. Building that cloud out across the world, that's a big focus.
COVID-19’s Impact on the Gaming Industry: 19 Takeaways
Microtransactions have grown, with IAP revenue for mobile games increasing by 24% since the pandemic was declared
Mobile gaming ad impressions increased by 57%, and ad revenues surged by 59%
Mobile gamers are installing 84% more apps
Individual average eCPM decreased by 3% compared to 2019
Average CPI for mobile games dropped by 33%, so new users are more affordable than ever to acquire
The Grandmaster Who Got Twitch Hooked on Chess
Chess is having a watershed moment on Twitch, a platform known for clutch Counter-Strike plays and Call of Duty pop-offs. As a category, its popularity has grown six times over since March.
How Marc Andreesen Spends His Time
No spoilers, read this article.
🗞News
👩🏽💻 Apple Rejects Facebook’s Gaming App, for at Least the Fifth Time
The free app has three main components: watching live streams of other people playing games; socially networking with other gamers; and playing simple games like Words With Friends and Thug Life. On both Apple and Android devices, those simple games can be delivered within Facebook Gaming’s app using software called HTML5.
👻 Snap hits 100 million players, teams with Zynga, and launches more chat games
🆒 Amazon and Zynga partner on Word Pop, a Words with Friends spinoff created for Alexa
💰 ByteDance brushes off early failures with new partnerships to battle Tencent in core games market
Analysts expect ByteDance’s battle with Tencent, China’s top gaming company and the world’s largest by revenue, to ratchet up in the coming months. TF Securities analyst Wen Hao said their business models and growth strategies are similar in that they both use games to monetise the massive traffic on their platforms.
“The path ByteDance is on now is the same one Tencent took when it first got into the publishing and development of games,” Wen said. “These companies are now fighting for resources from the content providers which hold the rights to big-name franchises.”
➰ Double Loop's plans for relaxing mobile games are far from "casual"
Double Loop Games is focused on mobile titles that lie within the interests of its co-founders: games that can be played for relaxation, that are specifically targeted at adults who are working or have families and need to decompress after a long day.
⚽️ EA Announced a bunch of new games
🔫 Play Counter-Strike 1.6 in your browser
🐉 Pokémon Snap is coming to the Nintendo Switch
🐧 Pokémon Go Fest 2020 plans laid out, as Niantic talks future of its game and company
In other news, your kids can brush their teeth along with Pokémon (No IAPs)
Have a nice weekend,
Emre
Written by Emre Colakoglu, an experienced product manager and data scientist working in gaming. I’m based in London and working on something new. You can find me on Twitter, my personal website and LinkedIn.
P.S Like Loot Box?
Click ❤️ below
Share it with your friends
Reply to this email, say hi!