Do No Evil? How About Super Evil?!?
Why @SigniaVC invested in Super Evil Megacorp
We are beyond excited by today’s unveiling of Super Evil Megacorp (SEMC) and their first title Vainglory. Check out Bo’s post here if you haven’t already. There‘s also been a plethora of coverage today from the WSJ, Re/code, VentureBeat, and more.
Why am I writing my first post on medium? It’s for three simple reasons: ask any venture capitalist about what they look for in an investment and you will invariably get some combination of market, team and product (or technology). Not surprisingly, these are the same factors I and the Signia team consider in making our investments in gaming or any other space. Super Evil Megacorp is a case study on how to put these three together.
An Exploding Market for Mobile Gaming
The gaming market is not a monolith, but a complex and evolving set of submarkets, each with different success factors and prospects for growth. While games for mobile smartphones are not new, major genres of games such as FPS (first person shooters), ARPGs (action role playing games), SRPGs (strategy role playing games), and MOBAs (multi-player online battle arena games) are all largely emergent. At this stage of the cycle, the easy pickings have already been made in casual gaming. While there will continue to be successes in casual gaming, they are harder to predict. As investors, we have seen our greatest success in taking proven game mechanics from the PC or console world, re-interpreting them and bringing them to a new platform. Multi-player, synchronous play has not yet made much impact on mobile. However, as more hardcore gamers spend more time on their mobile devices the emergence of these types of games is inevitable. Those who are able to deliver compelling player experiences for these players have the opportunity to trailblaze and establish lasting franchises. Our initial investment in SEMC two years ago was a bet on the emergence of this market.
Tablet penetration for Americans aged 18 to 34 has reached 64% (up from 20% in 2011) and it’s predicted that tablet sales (80m tablets shipped Q4 2013) will eclipse PC sales as early as next year. PC gaming isn’t going away as there will always be players who insist on the heightened control and interaction that comes from multiple macros and keyboard hotkeys. That said, hardcore gaming is changing. Several years ago, it meant a bunch of guys spending hours and hours playing in a basement, glued to their PCs. Fast forward to 2014 and SEMC plans to cater to those gamers that want more intricate gameplay, deeper narratives, and better production quality than what is currently in the app store. The idea is to build mobile games that are unapologetically core and that you can easily play with friends.
An A+ Team
In the gaming world there are lot of great people and good number of quality teams engaged in many interesting projects. However, what we have found to be of critical importance is to have the right team working on the right project. Deep understanding of the player, the genre, the platform, and the technology are all critically important, and this only comes from experience. Experience has taught us that for most teams working together for the first time, the first game is likely a throw-away — a learning exercise. As investors we can be nervous about over-investing in the first title. For first time teams it is good practice to have dry powder reserved for the second shot on goal. With SEMC, we were less concerned about this as they had all of the bases covered with “A” players. The team brings passion and love to their craft as well as a commitment to create industry-defining games. Simply put, they are gamers driven to create the game they want to play and share with their friends.
Bo, Stephan, Tommy and Q knew exactly the type of game they wanted to build when they talked to us for seed investment back in 2012. The team not only had experience in the world of MOBAs, they also possessed exceptional talent in engineering, game design, production, art, and monetization. These guys had worked on a series of triple-A titles in the past (e.g. Red Dead Redemption, Force Unleashed) and we knew that this was a top notch team to bet on. With the addition of Kristian Segerstrale as Chief Operating Officer and Executive Director, SEMC has now gained valuable experience in building successful gaming companies. Kristian adds to the deep industry knowledge, and is an authentic, die-hard gamer who fits perfectly within the culture that SEMC has crafted. More recently, the team has grown to 16 talented game industry pros. On the investment side, we’re also fortunate to be joined by Clinton Foy from CrossCut Ventures (a former COO of Square Enix), Adam Valkin from General Catalyst, and Gordon Rubenstein from Raine.
A Killer Product/Technology
In making gaming investments, the norm has been the safe route of using proven, standardized gaming engines such as Unity, Flash or Unreal. In the case of SEMC we had to do our diligence, as they were not only building a game, but the underlying game engine. Delivering high fidelity, synchronous multi-player experiences would push the boundaries of standard tools out there. If SEMC wanted to deliver a quality console experience on mobile it had little choice: either wait 10 years for off-the-shelf tools to catch up or…roll out their own. That SEMC has been able to deliver beautiful, high performant gameplay, on budget and on time, has made the technology bet and its investors look smart. With their proprietary engine and tools, theirs will be a tough act to follow.
In short: this is a killer team, tech, and product that is exploring an exciting new market. We’re proud to be SEMC’s first investor and to welcome other great investors around the table. As you can tell, we’re pretty excited about it. I look forward to seeing you all on the Vainglory battlefield and doing you some evil!
- Rick Thompson
Vainglory player name: Lazarus
