Risky Business
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Risky Business

Trends in Gaming Investing

Venture capitalists invested $4.7 billion in gaming startups during the first year of the pandemic

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  • The Covid-19 pandemic acted as a tailwind for the industry, with limited safe options for leisure activities resulting in increased gaming consumption among serious and casual gamers alike
  • Cloud gaming allows users to stream instead of using dedicated hardware like consoles and PCs, with improved performance stemming from the rollout of 5G networks
  • Games are increasingly functioning as social networks, driving greater user retention and opening up new models for monetization
  • The gaming value chain has expanded with the growing popularity of eSports, bringing additional fan bases and channels for brand exposure
  • Developers are incorporating features like real-time personalization and virtual and augmented reality into gaming content to create more immersive experiences

Gaming & VC Funding Highlights

CVC Highlights

  • Tencent made 31 gaming investments, primarily in mobile game developers, from its Win-Win Fund and other vehicles.
  • Riot Games participated in four gaming investments in 2020, mostly focused on game studios and mobile gaming applications.
  • HP Tech Ventures invested in three gaming deals in 2020, including the Series A and Series B of Parsec, a low-latency game streaming platform.

Notable Gaming Deals and Exits

  • Online gaming platform Roblox went public in March 2021 via direct listing, at a valuation of $42 billion. The company had raised a $520 million Series H round of funding just two months prior.
  • Communication platform Discord raised a $100M Series H round in December 2020, with plans to use the funding to continue developing more features for both paid and free users. Discord began as a solution to enable communication among friends while playing games online, and has since expanded to facilitate communication via text, voice, and video across a variety of social communities.
  • Interactive entertainment platform Scopely raised a $340M Series E round in October 2020 to fuel its M&A strategy and to expand its product offerings.

Gaming Innovation in the News

  • Netflix is taking on gaming — In a move to continue its dominance in the word of streaming entertainment, Netflix has announced it will offer games on its platform within the next year.
  • “The United States of Play” — Recent data released by the Entertainment Software Association demonstrates the continued growth of the U.S. gaming population, up from 214 million in 2020 to 227 million today.

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Thoughts on corporate VC from the team at Touchdown Ventures, the leading provider of managed venture capital for corporations.

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