The DeanBeat: Is It A Golden Age Of Gaming When Everything Is Funded?


GamesBeat Summit 2022 returns with its biggest event for gaming leaders on April 26-28. Reserve your spot here!

This week was a microcosm of the game industry’s continued expansion. And it reminds me of the dream of a golden age of gaming.

LikelyMonsters, a startup game publisher run by former Bungie CEO Harold Ryan, announced it has raised $250 million to continue funding multiple triple-A games at once. Jon Goldman’s Tower 26 has raised a $50 million fund to fund virtual reality games and other immersive content. Meta’s VR division has announced new titles, such as a Ghostbusters VR game.

Raph Koster and Eric Goldberg raised $25 million for Playable Worlds to build a cloud-based multiplayer online role-playing game. Former developers of Bungie and ArenaNet raised $22 million from One More Game to build a strategy game called Spellcraft. And MetaVRse unveiled plans to build a metaverse shopping center with 100 floors and 100 million virtual square feet of space.

And Amy Hennig, co-creator of the Uncharted games, is now working at Skydance with her own game studio on both a Marvel game and a Star Wars title. And 20-year-old Habbo, now owned by Azerion, announced to open a non-fungible token (NFT) hotel later this year. Expanding our scope to just a longer time frame of the past year, we’ve seen some great moments like the launch of Unreal Engine 5, Facebook’s pivot in the metaverse, Nintendo’s Switch becoming the best-selling console of all time,

Boom or bubble?

The scale of change in game deals.The scale of change in game deals.

It seems every corner of gaming is getting funding. That begs the question of whether we’re in a golden age of gaming, predicted long ago by Bing Gordon of Kleiner Perkins, because just about any gaming project can raise money. Or is it a bubble?

That’s the kind of question we’ll be trying to answer with financial and gaming experts at our GamesBeat Summit 2022 event next week from April 26 to April 28. Reggie Fils-Aime, former president of Nintendo of America, will set the stage for us with a conversation about entertainment disrupted with Danny Pena of Gamertag Radio/G4.

As a refresher, we live in a remarkable time. Microsoft’s $68.7 billion plan to buy Activision Blizzard and Take-Two’s $12.7 billion bid to buy Zynga pushed the first quarter toward a huge total value of $98.7 billion for gaming software. deals, according to a report released yesterday from Drake Star Partners.

That’s compared to $85 billion for the full year of last year, which itself was a huge jump from the $32.7 billion in deals of 2020. But even if you don’t count the biggest deals, we also had the purchase. from Bungie for $3.6 billion by Sony. The March issue of Drake Star’s Global Gaming Industry Report said the 387 Q1 deals compared to 1,159 in all of 2021 and 505 deals for all of 2020. The result is a massive talent show, where it’s great for job seekers and difficult for recruiters.


The big blockchain deals of Q1 2022 in games.The big blockchain deals of Q1 2022 in games.

One concern I’ve heard many times in times like these is that the overhyped trend is starting to take over and take funding, resources, and staff away from something else that’s purer and more valuable. But that assumes we’re in a zero-sum game.

I’ve heard anecdotally that some game studio entrepreneurs have heard that game VCs will spin if the studios announce they are making blockchain games. Some of that concern is confirmed in these numbers we saw this week. The first quarter saw 128 blockchain game deals bringing in $1.2 billion. By comparison, during that same period, there were just 43 mobile game deals — battered by Apple’s focus on privacy over targeted advertising — worth $1 billion.

On the other hand, it is clear that tons of money is also going into traditional games. We have a M&A panel – featuring Alina Soltys of Quantum Tech Partners, Frankie Zhu of Liontree/Griffin and Chris Petrovic of Funplus – to put the M&A market and the flow of money in order. We also have US and European venture capitalists weighing in, and David Gardner of LVP will talk to Neil Young of Forte about diving into blockchain games.

Hardcore fans and some game developers are against NFTs, much the same way free-to-play games worried about crappy games and scams a decade ago. We will see a debate on this topic between indie game developer Rami Ismail and David Kim of Wax Studios.

Deal mania in gaming.Deal mania in gaming.

New territories like India and Africa are taking off, as some of our panels will show. When it came to investments or acquisitions, we saw strength in blockchain, triple-A PC and console games, mobile, esports, cloud and AR/VR.
Public markets slowed, but Drake Star expects this to pick up in the second half. Perhaps the biggest obstacle to the golden age of gaming is geopolitics.

The war in Ukraine has for the time being removed Ukraine and Russia from the rest of the world. And China’s moves to crack down on its games industry could make it very difficult for games to reach truly global markets. It is difficult to say whether this bubble will burst or simply continue to expand.

We have the optimists and the pessimists. Steve Chiang (former head of studios at Warner Bros.) of Fortis and Steve Goldstein of Turtle Rock Studios will have a talk about the age of big studios, and I’ll let you guess which one is the pessimist and which one is the optimist.

Ever semi-pessimistic, Eric Goldberg of Playable Worlds and Joost Van Dreunen of Super Joost will have a discussion about what will happen to the metaverse after it has gone through the inevitable valley of disillusionment. Coincidentally, this week I moderated a fireside conversation with Craig Donato, chief business officer at Roblox at Stanford University’s business school, and he made a good case about Roblox’s chances of creating a user-generated content metaverse.

Roblox had a year of explosive growth in 2021.Roblox had a year of explosive growth in 2021.

All activities – both positive and negative – show that the gaming industry is expansive and capable of expanding and contracting at the same time. How companies do in this market depends on their own execution. When big companies like Electronic Arts were slow to move to free-to-play games a decade ago, startups like Supercell, King and Machine Zone took the market by storm. Due to their success, the audience for gaming grew tenfold.

Infrastructure companies like Forte, which have raised $725 million, hope to arm all companies in their entry into the blockchain game market. Big companies like Microsoft, Valve and others will be waiting for regulators. And the more nimble NFT startups could conquer the market, according to Yat Siu, executive chairman of Animoca Brands. Others, like Meta, plan to race into the metaverse in the hopes that VR and immersive content will explode.

We are always one step away from a crisis or an opportunity. Game developers have endured many ups and downs. I hope they get their golden era of gaming. But it always pays to be willing to turn around in case all the hype doesn’t pan out. I hope you’ll be there at the GamesBeat Summit.

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