Gaming Bluprint
Summer 2024
Index
1 IAA: In-App Advertising
8
PvP: Player versus Player
2 IAP: In-App Purchases
9
MAU: Monthly Active Users
3 FTUE: First Time User Experience
10
DAU: Daily Active Users
4 MMORTS: Massively Multiplayer Online Real Time Strategy
11
WAU: Weekly Active Users
5 4x: Explore, Expand, Exploit, Exterminate
12
MMORPG: Massively Multiplayer Online Role-Playing Game
6 UA: User Acquisition
13
MOBA: Multiplayer Online Battle Arena
7 PvE: Player versus Environment
14
RPG: Role-Playing Game
Games
2
Contents
1 Section 1: Gaming Sector Macro:
In this first section, we talk about our interest in gaming and evaluate the market opportunity, challenges & funding for games in
India, alongside a look at the notable gaming companies in the country,
2 Section 2: Understanding Game Development
In section 2, we breakdown the game development value chain, stakeholders involved, monetization models employed, and explore
the market map of areas in the value chain that we’re evaluating.
3 Section 3: Understanding Game Consumption
Here, we cover the types of gamers, distribution platforms and present our marketmap of games and our formula for game design.
This section also covers our views on eSports.
4 Section 4: A Closer Look at Game Genres
This section offers a dive deep into the worlds of casual, midcore & hardcore games along with our views on each category. We also
put our Game Design Formula to the test and breakdown some of today’s most popular games using the formula.
5 Section 5: Opportunity Areas:
In this section, we walkthrough the immediate opportunities we see and the spaces we are excited about in the gaming sector.
6 Annexure
3
Section 1 //
Gaming Sector Macro
Why we’re looking at gaming
By 2027, the Indian gaming market is forecasted to increase to US$ 8.6 billion from US$ 2.6 billion currently. While
India has captured only ~1.5% of the global market by revenue, with 500 million gamers and 115 million paying
users, it captures a significant share of the overall global player base. Over the course of time as younger
generations become the key customers, the spending patterns and the market will also shift to becoming a core
gaming market, rather than an RMG market.
Rising gaming and mobile gaming population
1
India has the 2nd largest gaming population with 568M gamers and 90% of gamers playing on mobile. This trend towards mobile gaming is presently
being seen across the globe opening up the opportunity for independent developers and new players to build mobile games in India for the globe.
Increased adoption of In-app purchases (IAP)
2
While RMG games account for 60% of overall casual gaming revenues, in-app purchases are expected to grow at a 35% CAGR. 1/5 Indian gamers use IAP
to augment their playing experiences. Games like BGMI have proven that Indian gamers will pay if the game is good enough
Game development talent is emerging in India
3
Lot of global studios like Zynga, EA Sports, etc are setting up operations in India & we see an interest of experienced leaders from these companies &
others building gaming startups in India. We have also observed lateral movement of movie VFX designers joining gaming studios’ animation team
Source: Economic Times, Eurasian Times (2023 Data), Blume Research
5
The market for games in India
The surge of gaming in India has been propelled by factors like widespread smartphone usage, expanded internet
accessibility, and the availability of affordable smartphones and data plans. With these macro factors at play, India
has established itself as a significant contender in the global gaming arena.
India now hosts an enormous gaming community, with an estimated 568 million gamers and over 9.5 billion
gaming app downloads in 2023 alone, accounting for roughly 15% of the world's total mobile game downloads.
There are 568mn gamers in India of
which 422m are non-RMG gamers
90% gamers in India are mobile gamers
Only 13% of India’s gaming
revenue comes from non-RMG
There are around 144mn paying gamers
in India
Source: Economic Times, Eurasian Times (2023 Data)
6
The contradictions of gaming in India: downloads vs payments
Downloads
Payments
India ranks #1 in the world in terms of gaming app downloads
India does not rank in the Top 15, for gaming app revenues
💡Free Fire, BGMI, CoinMaster, Clash of Clans are amongst the highest grossing apps in India generating $150mn+ in
revenue through In App Purchases (IAP). The success of these titles has shown that Indians will pay if the game is good.
Source: Apptica
7
India does not get as much love when it comes to funding for games
India has the highest number of gamers globally yet Indian gaming startups attract <10% of global gaming funding.
Company
Total funding ($M)
Dream Sports
> 1,400*
MPL
406
WinZo
147
Nazara
133
Zupee
122
Games24x7
107
Real money Games (RMG)
Note: 2024 data as on and until Apr’24
Source: Tracxn
*includes large secondary transactions (money that was transferred to shareholders and did not go in growing the business)
8
Notable companies in the Indian gaming landscape (1/2)
Nazara Technologies
(NSE: NAZARA) is India’s 1st listed
gaming company diversified
across kids gaming, RMG, E-Sports
and media industries. Nazara has
been acquiring gaming IPs
globally via a dedicated $100M
fund, investing in RMG games in
India and non-RMG games
globally. Nodwin Gaming, Nazara’s
e-sports arm, organizes
tournaments for BGMI, Valorant
etc. across Asia and generated
$50M in revenue in FY23.
Market Cap: $740M
Total Funding: $133M
Current stage: Listed
Location: Mumbai
Source: Tracxn
Rooter is an esports platform with
1 million+ game creators and
1,000+ hours of daily watchtime
across its user base. Rooter offers a
platform for creators to livestream
and create content, prioritising
mobile-first titles like BGMI,
Valorant. Rooter also offers viewers
to stream on TV and has a
partnership with Reliance Jio.
Rooter generated $1.53M in
revenue in FY22.
Mayhem Studios, partly owned by
MPL, is a gaming studio building
AAA games out of India. It’s debut
title ‘Underworld Gang Wars
(UGW)’ is a battle royale game set
in India, inspired by Indian gangs.
UGW is currently in a closed beta
stage with a estimated 2024
release date.
Moonfrog, started in 2013 by
ex-Zynga founders, makes casual
and RMG games for Mobile like
Ludo Club, Teen Patti Gold. Before
its acquisition by Sweden based
Stillfront Group, Moonfrog was
India’s fastest growing gaming
company and generated $32M in
revenue in FY23.
Valuation: $82M
Total Funding: $50.3M
Current stage: Series B
Location: Delhi
Valuation: Undisclosed
Total Funding: $20M
Current stage: Series A
Location: Bengaluru
Valuation: $90M
Total Funding: $16M
Current stage: Acquired
Location: Bengaluru
9
Notable companies in the Indian gaming landscape (2/2)
Dream11, founded by Harsh Jain in
2008, is a platform for fantasy
cricket. Dream11 catapulted on
IPL’s success and hit a user base of
2 million in 2017, becoming India’s
first gaming unicorn in 2018.
Dream11 is the official partner of
IPL and has played a key role in
popularizing fantasy sports and
has also forayed into football,
basketball and kabaddi.
MPL is a platform offering e-sports
and real money casino gaming
activities, providing users with
various games such as fantasy
sports, card games, arcade games,
puzzle games, and action games.
Users can participate in
tournaments, compete with
others, and earn cash rewards.
Zupee is a platform for playing real
money casual games, featuring
games like ludo, snakes and
ladders and tombola. Zupee has
partnered with content creators
and brands to increase its
popularity and has rapidly grown
its user base, appealing to those
interested in quiz based games.
PlaySimple Games is a mobile and
social gaming studio. Playsimple
games’s main IPs include “Daily
Themed Crossword”, “Word Trip”
and “Word Jam”, generating $83
million in revenue in 2020, growing
144% y-o-y. It was acquired by the
Modern Times Group of Sweden in
2021 for $360M. PlaySimple games
amassed over 75 million installs
and maintain ~ 2 million DAUs
pre-acquisition.
Market Cap: $8B
Total Funding: $>1.4B
Current stage: Series F
Location: Mumbai
Valuation: $2.2B
Total Funding: $405.7M
Current stage: Series E
Location: Bengaluru
Valuation: $659M
Total Funding: $122M
Current stage: Series B
Location: Gurugram
Valuation: $360M
Total Funding: $4.5M
Current stage: Acquired
Location: Bengaluru
Source: Tracxn
10
Section 2 //
Understanding Game
Development
The game development value chain
1
Market Research &
Development
1
2
Test, Release, Distribute
2
Jobs To Be Done:
➔
Initiation
➔
Feasibility study
➔
Build teams & hire developers
➔
Prototype, develop & design
the game
Blume Research
Engagement & Analysis
3
3
Jobs To Be Done:
➔
QA & testing
➔
Handle game release
➔
Work with distribution
channels & app stores
➔
PR & marketing
Jobs To Be Done:
➔
Drive adoption
➔
Fan engagement
➔
Community building
➔
Hype-cycle management
➔
Merchandising
➔
Monetization
➔
Track & analyse usage
12
The stakeholder map for game development
Market Research &
Development
Test, Release, Distribute
Engagement & Analysis
Game Publishers typically own/employ game development studios and help them with the market research, game concept, funding and distribution of a
game. They also keep a close eye on game consumption and user research which helps in the development of subsequent games.
Game Development Studios take game concepts and build, design, test
and iterate the game until it is ready for market release.
Distribution Channels facilitate the sale of games on physical or digital
platforms.
Game Engines form the backbone for game development
Ad Networks play a major role in the monetization of games
Developer Tools help design develop and deploy games and manage
liveops
eSports, Content, Community drive fan engagement, game adoption,
content creation, and hypecycle management
Market Research Providers
provide market intelligence and
insights to ideate and build
Hardware forms backbone for development (B2B) and for consumption of games (B2C)
Analytics Providers
provide intel and insights to
study game performance
Software Enablers play a supportive role throughout the game development, distribution, consumption and analysis process
13
The monetization models that govern game development
Market Research &
Development
Test, Release, Distribute
Engagement & Analysis
Game Publishers Game IPs, game sales and merchandising
Game Development Studios IPs, revenue sharing with publishers.
Distribution Channels Platform fees, commissions, memberships
Game Engines Subscription fees, revenue share
Ad Networks Commissions
Developer Tools Usage-based fees, subscription
eSports, Content, Community Ad Revenue, Commissions,
Sponsorships, Memberships, Affiliate Revenues
Market Research Providers
Recurring Revenues
Hardware Usage-based fees, one time costs, platform subscriptions
Analytics Providers
Recurring Revenues
Software Enablers Subscription fees, Usage based fees
14
Market map of companies involved in the game development process
Market Research &
Development
Test, Release, Distribute
Engagement & Analysis
Game Publishers
Game Development Studios
Distribution Channels
Game Engines
Ad Networks
Developer Tools
eSports, Content, Community
Market Research
Providers
Hardware
Analytics Providers
SaaS & Enablers
15
Here are the spaces we’re evaluating
We are evaluating
We are not evaluating
We may evaluate
Market Research &
Development
Test, Release, Distribute
Engagement & Analysis
Game Publishers Room to play in the India context
Game Development Studios We prefer developers who self-publish
Distribution Channels Opportunities exist in digital and cloud
distribution
Game Engines Platform play opportunity, 3D game engines, Ai-enabled
Game Creation
Ad Networks Incumbent heavy, fewer rights to win since everyone has
access to similar data
Developer Tools Ai tools, workflow and orchestration
eSports, Content, Community Opportunities exist in social
experiences, live-streaming but unexplored
Market Research Providers
Hardware price gaps and whitespaces exist on the B2C side, in the indian context
Analytics Providers
Software Enablers Opportunities exist across esports management tools, creator tools, collaboration tools, design tools etc
16
Section 3 //
Understanding Game
Consumption
Types of Gamers
The gamer spectrum (1/2)
Description
Casual Gamers
Midcore Gamers
Hardcore Gamers
This group of gamers consists
mainly of gamers who play games:
This group of gamers consists
mainly of gamers who play games:
This group of gamers consists mainly
of gamers who play games:
➔
➔
➔
Casually, often while
multitasking
During idle moments
Want easy-to-play games
Monetization Model
➔
In App Advertising
Retention Mechanics
➔
➔
➔
Daily or Weekly Missions
Login Rewards
Multiple Games/ Game
Mechanics within Game
Universe
➔
Blume Research
Want to play various game
genres but lack large time
commitment
Want to simulate mind and
not just get a dopamine hit
➔
➔
➔
In App Advertising
In App Purchases
➔
➔
➔
➔
In App Purchases
Subscriptions
Gaming Devices
Gaming Accessories
➔
➔
➔
➔
➔
Social Elements
Leaderboards
Quests
Liveops
Game Story Expansion
➔
➔
➔
➔
➔
➔
eSports
Battle Passes
Liveops
Title Renewals
Social Elements/Chatrooms
Community Events
➔
➔
For the thrill of mastering
games & competition
Seeking very challenging
gameplay experience
19
Evolution of a gamer (2/2)
Likely due to an increase in time
availability, skill level, seeking more
comprehensive gameplays
Casual Gamers
Midcore Gamers
Likely due to a decrease in time
availability or lack of skill level
Likely on account of increase in skill level,
affordability (device progression),
time availability
Hardcore Gamers
Typically due to time constraints
The progression, digression or regression of gamers typically happens due to an increase or decrease in 3 main factors
i) time availability ii) affordability iii) skill level
20
Types of Distribution
Platforms
Understanding distribution platforms
Mobile
PC
Console
Playtime
Session lengths are typically ~5 minutes
long. While this is the average session
length this can change depending upon
the game genre (double for casino
games), game title, gamer demography (In
China >46% smartphone gamers spend
over an hour on average per session)
The average PC Gamer spends
anywhere between 17-20 minutes
gaming per day. Popular categories
that drive engagement up are action
games and simulation games.
The average console gamer spends
>1 hour a day on the console,
averaging ~7 hours a week. Top 4
games have a 100 minutes per day
playtime.
Investment
Requires a lower time and budget
investment. The average mobile game can
be developed in 2-6 months or under a
year, at $50k-$300k.
Typically takes 1-5 years to develop a PC or Console game depending upon the
game complexity. Most publishers spend anywhere between $500k-3mn on
PC/Console game development. Will cost much more to develop a AA/AAA title.
Gamer
Demographics
Mobile games cater to wide audience
types. Potential to spend is lower in mobile
gamers.
More skilled, mainstream gamers are
the target audience for PC games.
Gamers can be casual gamers or
hardcore gamers depending upon the
type of console. But spend potential is
typically quite high in console gamers.
Types of
Games
Casual Games were the target but now
moving more towards Core Games too
These gamers typically play a wide
range of titles and opt for platform
subscriptions or buy to play models.
Console gamers play a wide range of
titles, AAA titles are amongst the most
popular.
Source: Udonis, Newzoo, Giant Bomb, Juego Studios,
22
eSports - A rising game distribution & consumption channel
eSports Infra/Accessories
eSports Distribution
eSports teams
eSports
A Primer on eSports
eSports refers to competitive video gaming where teams participate in organized tournaments on popular games like
League of Legends (LoL), Call of Duty and a variety of game genres like real-time strategy, first-person shooters. eSports
attract millions of viewers and clocked 532M viewers across games in 2022. The total prize money globally for eSports in
2022 was ~$240M, pitting it against popular sports.
Market Size: $1.38B (2022)
Target Audience: Casual viewers and enthusiasts
Monetization: Pay to View, sponsorships, merchandising, tournament earnings
23
What goes into eSports?
Team Houses
1
Team houses in esports originated in the early 2000s with South Korean StarCraft players living together to save costs and practice more
effectively. This model quickly spread globally and today, gaming teams show off their luxurious gaming setups. In India, e-sports organisations
such as S8UL, Revenant Esports and GodLike Esports have leased out swanky bungalows to build gaming houses. Mumbai has emerged as the
hub of gaming houses mostly because gaming companies find it easier to cut brand deals in the city.
2
Accessories
Gamers are actively investing in cutting-edge accessories like gaming mice, keyboards, headsets, and controllers to enhance their gameplay.
Gaming mice with precise optical sensors, keyboards with short actuation distances, and programmable controllers are popular choices that
provide a competitive advantage by enabling faster responsiveness and accuracy. In 2024, the gaming accessories market was valued at $12B,
growing at a 10% CAGR
3
Tournaments
The global esports industry has seen a rapid rise in the size and scale of tournaments, with events offering staggering prize pools that have
reached record-breaking levels. The International, Valve's annual Dota 2 championship, has consistently been the world’s largest esports
tournament and in 2021, the prize pool reached a massive $40,018,400. The inaugural Fortnite World Cup Finals in 2019 had a total prize pool of
$30.4 million, with the solo and duo champions each earning $3 million. Looking ahead, the upcoming Esports World Cup in Saudi Arabia, 2024,
is set to feature the largest prize pool in esports history, with $45 million up for grabs
4
Communities
Esports communities on Discord have become key in fostering engagement amongst fans and teams. The most popular esports Discord
communities are run by renowned teams like Team Liquid, Cloud9, and TSM, often featuring thousands of active members with various
channels for discussions, live match commentary, and exclusive content from team members.
24
Our take on eSports
eSports Teams
➔
We believe that eSports teams follow the same
dynamics as a leading bollywood production
house.
➔
The teams end up signing star talent, which
then helps them win tournaments / attract
more sponsors.
➔
Considering the reliance on constantly churning
out talent and maintaining meaningful
relationships with media + brands, we would
want to track the team from sidelines before
forming a solid opinion on what makes a
winning team.
eSports Infra & Distribution
➔
While a lot of streaming platforms and eSports
community enablers have launched in the
recent past, we would want to track how they
integrate with native game and fan
engagement experiences and tournament
logics more closely.
➔
The current business model is still evolving for
eSports team and hence even the infra &
distribution enablers. We will track them before
forming a solid opinion here.
25
Understanding Game
Consumption
Blume’s Game Design Formula
Gameplay &
Mechanics
Genre
Distribution
Monetization
Mechanics
Retention
Mechanics
Impacts Scale
Impacts Narrative
Impacts Acquisition
Impacts Revenue
Impacts Revenue
Core
Loop
Meta
Game
Genre
Unlocks Audience & Content
Setting
Platform
Acquisition
Mechanics
Affects Unit Economics
Every game can be broken down into the following inputs which act as levers to unlock certain outcomes. Innovation in any one or
several of these levers can help games innovate and differentiate amongst predecessors in crowded markets.
Blume Research
27
Our Market Map of Games
Type of Gamer
Basis Gamer Skill Level & Time Spent on Gaming
Determines Monetization & Spend
Distribution Platforms
Hypercasual & Casual
Midcore
Hardcore
Mobile
PC
Console
Indian games
Note: This is a non-exhaustive list
28
Section 4 //
A Closer Look at
Game Genres
Disclaimer: We do not invest in RMG
RMG
Real money games, also known as "earn-money apps" or "play-to-earn games," have become increasingly
popular in India and globally. These games offer players the opportunity to earn real money or rewards
through gameplay, which can be exchanged for cash, gift cards, or other prizes.
We do not invest in this sector. And hence an in-depth analysis of RMG is not offered here.
30
i) Hypercasual &
Casual Games
Hypercasual and Casual Games
Mobile
PC
Console
Casual &
Hypercasual
Hypercasual Games
Casual Games
Hypercasual games are easy-to-play, typically free-to-play, and
feature minimalistic user interfaces. These games are
characterized by simple 2D designs, easy mechanics, and
infinite looped gameplay, making them addictive and playable
for extended periods, in short spurts.
Casual games are characterized by their mass-market appeal,
simpler game mechanics, and rules that can be picked up
quickly. Casual games have short play sessions and engaging
core mechanics and require a slight learning curve compared
to hyper-casual games.
Market Size: $36B global market opportunity by 2032
Target Audience: Typically mobile gamers and non-gamers.
These games are marketed to a wide audience and across age
groups
Platform: Mobile
Monetization: In App Advertising (IAA)
Top Game Titles: Race Master 3D, Helix Jump, Bridge Race,
Blend It, Flappy Bird
Market Size: $26.5B global market opportunity by 2030
Target Audience: Marketed to gamers and non-gamers. Can
be played across devices and amongst competitive casual
gamers.
Platform: Mobile, PC, Console
Monetization: In App Advertising (IAA), In App Purchases (IAP)
Top Game Titles: CoinMaster, CandyCrush, AngryBirds,
Farmville, Mario Party
32
Gameplay & Mechanics
1
The Core Loop
At the heart of every casual game is a core loop. The core loop is the repetitive cycle of actions that players
engage in forming the primary gameplay mechanic. The core loop is designed in 3 fundamental parts that form a
virtuous cycle that keeps users engaged, addicted and retained in the game:
Core Loop = Play the gameplay → Earn Coins/Points → Unlock Upgrades/Power ups → REPEAT
Popular Loops:
Puzzle
2
Timing
Swerve
Merge
Agility
The Meta Game
The Meta Game is the strategic layer of the game design that essentially unlocks the “repeat” or “retention” factor
which keeps users hooked to the gameplay. The meta game sets a goal for the user to achieve and often unlocks
monetization through in-app purchases. Most hyper casual games don’t have a strong meta game, whereas
hybrid casual and casual games do.
33
How casual & hypercasual games compete in a crowded market (1/2)
Using the Game Design Formula, let us see how casual games using a common game mechanic (in this example we are looking
at Match-3 mechanics) have differentiated themselves in a competitive landscape, with an already dominant player.
Gameplay &
Mechanics
Match-3
Monetization
Mechanics
Distribution
Genre: Puzzle
Setting: Jewels
Platform: Windows
PCs
Rev share with
publishers,
Buy-to-Play
New Levels, Title
Refreshes
IAPs, Boosters, Video
Rewards for casual players.
Pay-to-win, pay-to-proceed
for hardcore/competitive
players
Notifications,
Social, New Levels.
Stacking levels in
varying degrees of
difficulty to keep
them hooked.
In-game wallet to
purchase IAPs,
Subscriptions.
Setting refresh - Homescapes.
Switch between Match-3 and
Meta Games. In-game events
that push users to buy
boosters to proceed and beat
levels within a timeframe.
(2001)
Match-3
Genre: Puzzle
Setting: Candy
Platform: Mobile
Match-3 +
Mini Meta Games
Genre: Puzzle,
Rescue, Decor
Setting: Garden,
Real-Life
Platform: Mobile
Acquisition: Ads
centered around
mini-games
(2012)
(2016)
Blume Research
Retention
Mechanics
Genre
34
Differentiation 101 (2/2)
1
3
Bejewelled popularized
the Match-3 mechanic
Match-3
Gardenscapes brought in a strong meta
game within the familiar Match-3 ecosystem.
Meta games drive customer acquisition &
retention, and Match-3 drives monetization
Genre: Puzzle
Setting: Jewels
(2001)
2
CandyCrush integrated
over the typical Match-3
gameplay with monetization
and retention Innovations
Platform: Windows
PCs
Rev share with
publishers,
Buy-to-Play
New Levels, Title
Refreshes
IAPs, Boosters, Video
Rewards for casual players.
Pay-to-win, pay-to-proceed
for hardcore/competitive
players
Notifications,
Social, New Levels.
Stacking levels in
varying degrees of
difficulty to keep
them hooked.
In-game wallet to
purchase IAPs,
Subscriptions.
Setting refresh - Homescapes.
Switch between Match-3 and
Meta Games. In-game events
that push users to buy
boosters to proceed and beat
levels within a timeframe.
Match-3
Genre: Puzzle
Setting: Candy
Platform: Mobile
Match-3 +
Mini Meta Games
Genre: Puzzle,
Rescue, Decor
Setting: Garden,
Real-Life
Platform: Mobile
Acquisition: Ads
centered around
mini-games
(2012)
(2016)
Blume Research, DeconstructorofFun
There is now a rising trend of
deep metagames within Match3
titles -> Eg: New releases like
Modern Community combine
gameplay with strong OTT-type
storylines, dialogues, cinematics
35
Case Study: Coin Master
No. 1 highest grossing casual game in India
Developer: Moon Active
Genre: Casino
Lifetime Revenue: $3.1B (As on Dec, 2023)
Release date: 2015
Gameplay &
Mechanics
Genre
Distribution
Core Loop: Spin a slot
machine
Genre: Casino, Base
Building, Adventure
Platform: Mobile Google Play primarily
Meta Game: Build &
Raid villages
Setting: Viking
Villages
The core loop blends
seamlessly into the
meta game: Spin a slot
machine -> win coins
-> build your village ->
attack other villages ->
level-up
Style: Cartoon
User Acquisition:
i) Coin Master has
harnessed celebrities
for endorsements &
advertisements to
drive acquisitions.
ii) Ads & Social
Monetization
Mechanics
Retention
Mechanics
IAPS:
i) Low value
purchases:
In-game currency,
In-app purchases,
Social elements:
Invite friends, send
spins to friends
ii) High value
purchases:
Bundles, Chest
iii) For Retained
Users:
Pet collection
Meta game
unlocks:
Pets, New levels
& settings
Push Notifications
💡Coin Master made nearly $729 million globally in 2023, with India contributing a small fraction $19 million from In-App Purchases
Blume Research
36
Case Study: Simple Viral Games
Developer: Simple Viral Games
Genre: Hypercasual Game Studio + Distributor
All Time Downloads: 100,000
Play Store Rating: 4.2
Release Date: 2023
Platform
Mechanics
Timepass games has
150+ hypercasual
games that a user can
play when they are
bored.
The game layer is
complemented by a
content management
system which drives
recommendations.
Genre
Genre: Hypercasual
Distribution
Monetization
Mechanics
Platform: Mobile
i) In App Advertising
User Acquisition:
Timepass games
acquires users
through ads and via
social loops
ii) In App Purchases
in app currency that
can be used to play
contests and
challenge friends.
Retention
Mechanics
Rewards:
Rewards for daily
login & playtime
Choice: When a user
gets bored with one
game, they can switch to
another, but they remain
on the same platform.
Social: Challenge &
play with friends
💡 The 150+ games offered by Timepass games keep users hooked & leads to a better retention than traditional hypercasual games
Blume Research
37
Our take on hypercasual & casual games
Hypercasual Games
➔
Typical CAC for hypercasual games in India
tends to be around $0.1 whereas the LTV
tends to be around $0.3, as the most common
source of monetization is ads.
➔
Owing to a low LTV, hypercasual games tend to
be made by indie developers more than by
larger players.
➔
We believe that a platform of hypercasual
games might be more valuable than sum of all
hypercasual games in isolation. The platform
can act like a YouTube or Spotify for games,
which shares revenues with such indie
developers.
Casual Games
➔
LTV of casual games tends to be 10x of
hypercasual games. These games typically
earn from microtransactions.
➔
We believe that games that leverage a closed
loop wallet (such as in app currency) would
have a higher right to win in Indian markets.
Features like UPI Autopay can be implemented
to recharge the wallets more seamlessly if the
balance goes below a certain threshold.
38
ii) Midcore Games
Midcore & skill games
Mobile
PC
Console
Strategy
A Primer on Midcore
Midcore games comprise games that strike a balance between casual games and hardcore games. As mid-core games
typically have no steep learning curve, players can step into a game, immediately start playing and then leave as soon as
other duties call. While casual games often focus on individual play, midcore games can offer multiplayer modes, which can
be a great way for players to connect with friends and other players.
Key categories: RPG, Strategy and Shooters
Market Size: $4.8B global market opportunity, $0.4B in India
Target Audience: Players looking for an accessible in-depth gaming experience that is not highly time consuming. Midcore
games cater to the “mainstream gamer” group - 23%/49% of gamers, second highest spender after regular players
Platform: Mobile, PC, Console
Monetization: Pay to play, In App Purchases (IAP)
Top Game Titles: PUBG, Clash of clans
40
Core-game monetization = whale monetization
Most midcore games monetize through IAPs, employ whale-monetization strategies, and rarely rely on ads. Whale monetization is the
strategy of targeting a small subset of players (high-engagement, high spend players) termed as “whales”, who are willing to spend large
amounts of money on in-game purchases.
While the average player spends on low-value IAPs, whales are often incentivized to purchase higher value in-game items or advantages as
they bring in significant revenue to the game. This concentration of spending allows developers to offer games for free/freemium.
Popular monetization products for midcore games:
1
LiveOps - For Low-Spend, High-Engagement Gamers
LiveOps, or live operations, are strategies used by game developers to manage/update online games after their initial release through
content updates, events, community management, and monetization updates. 91% of the world’s top games support their titles through this
approach. LiveOps lead to higher conversion rates for lower-spending players, increased retention rates as a result of players working their
way through the battle pass(es), and they’re easily adaptable to various game genres.
2
Cosmetic Items - For Hardcore Gamers & Whales
As games double down on social features, players are becoming more invested in their avatars and ensuring they’re an accurate
representation of how they want to express themselves. Whether it’s Balenciaga and Ralph Loren partnering with Fortnite or Louis Vuitton
pushing its brand through Final Fantasy and League of Legends, you can expect to see more mobile games implementing monetized
cosmetics in the near future.
3
Loot Boxes - For Hardcore Gamers & Whales
Loot boxes are items in video games that may be bought for real-world money but provide randomised rewards. The 15 percent of games
that monetize with Loot Boxes generate 73 percent of total worldwide revenue.
Due to fears of loot boxes links to gambling addiction, national governments have begun moves to scrutinise loot boxes and, in some cases,
moved to regulate them. Although a large segment, the growth for loot boxes has been slowing over recent years.
41
How midcore games compete in a crowded market (1/2)
4x games are a popular sub-genre within the larger Real-Time Strategy genre. These games have been around for decades and
have seen multiple evolutions.
Gameplay &
Mechanics
Genre
Distribution
Genre: Strategy Games
Setting: Fantasy - Village
(2012)
Resource
Gathering, Build
Base, Train
Troops, Batte
Platform: Mobile
Acquisition: App-Store
Optimization, Paid UA
(2016)
4x, Meta-game, Real
Time Battles, and
Role Playing
Elements
4x, Idle Mechanics,
Free-form Building,
Team-Battler
(2023)
Blume Research
Genre: Strategy Games
Setting: Fantasy Kingdom
Genre: Strategy, Survivor
Setting: Apocalypse, Glacial
Monetization
Mechanics
Retention
Mechanics
IAPs - In-game wallet,
Subscriptions, Skins,
Bases. Prices increase
as game progresses ->
retained users pay more
Social + MMORTS* Leaderboards, Progress
Trackers, Clans, PvP,
Chat & Comms
Platform: Mobile
Acquisition: 3D
Battle Video Ads,
Engaging FTUE**
IAPs - speed-ups, ,
Subscriptions, In-game
wallet, bundles,
limited-time only offers,
Purchase bonuses
Social + MMORTS* Guilds, PvE, PvP, In
Game Events, Guild
events, Chat & Comms,
New Game Modes &
Features
Platform: Mobile
Acquisition:
Narrative Video Ads
that tie into FTUE and
gameplay
IAPs - speed-ups, ,
Subscriptions, In-game
wallet, bundles,
limited-time only offers,
Purchase bonuses
Social + MMORTS* Guilds, PvE, PvP, In
Game Events, Guild
events, Chat & Comms,
New Game Modes &
Features
42
Differentiation 101 (2/2)
1 Clash of Clans iterated over an already
popular genre - 4x games and
popularized them for mobile. A strong
core-loop, in-game events and social
elements exploded this format and built
a strong community around the game
that keeps this title evergreen.
(2012)
Resource
Gathering, Build
Base, Train
Troops, Batte
(2016)
4x, Meta-game, Real
Time Battles, and
Role Playing
Elements
4x, Idle Mechanics,
Free-form Building,
Team-Battler
(2023)
Blume Research, Naavik
2
Lords Mobile iterated over titles like Clash of
Clans with a deeper meta-game, real-time battle
mechanics, and more immersive social elements.
The game targets mature players of the strategy
genre and is more targeted to players that can
spend on in-game advantages and boosters.
Genre: Strategy Games
Setting: Fantasy - Village
Genre: Strategy Games
Setting: Fantasy Kingdom
Genre: Strategy, Survivor
Setting: Apocalypse, Glacial
3 Whiteout Survival like Clash of Clans adapted a popular-PC
genre and mimicked similar titles on mobile. The game starts
off as a base builder game and expands into 4x and battle
mechanics only post 90 minutes of game play to get users
acquainted with the meta game storyline and also cater to new
players of the genre. Like Lords, Whiteout Survival requires
players to spend in order to level-up beyond a point.
IAPs - In-game wallet,
Subscriptions, Skins,
Bases. Prices increase
as game progresses ->
retained users pay more
Social + MMORTS* Leaderboards, Progress
Trackers, Clans, PvP,
Chat & Comms
Platform: Mobile
Acquisition: 3D
Battle Video Ads,
Engaging FTUE**
IAPs - speed-ups, ,
Subscriptions, In-game
wallet, bundles,
limited-time only offers,
Purchase bonuses
Social + MMORTS* Guilds, PvE, PvP, In
Game Events, Guild
events, Chat & Comms,
New Game Modes &
Features
Platform: Mobile
Acquisition:
Narrative Video Ads
that tie into FTUE and
gameplay
IAPs - speed-ups, ,
Subscriptions, In-game
wallet, bundles,
limited-time only offers,
Purchase bonuses
Platform: Mobile
Acquisition: App-Store
Optimization, Paid UA
Social + MMORTS* Guilds, PvE, PvP, In
Game Events, Guild
events, Chat & Comms,
New Game Modes &
Features
43
Case Study: Battlegrounds Mobile India (BGMI)
No. 2 highest grossing game in India
Developer: Krafton Inc.
Genre: Shooter
Revenue (2023, India): $47M
Release date: 2021
Gameplay &
Mechanics
Battlegrounds Mobile
India (BGMI) is an
online multiplayer
shooter game in which
up to 100 players
compete in battle
royale, a large-scale last
man standing death
match.
Genre
Genre: Battle Royale,
MMORPG, Shooter
Setting: Dystopia
Distribution
Platform: Mobile
Monetization
Mechanics
Retention
Mechanics
IAPs
BGMI monetizes
using Crates
(Lootboxes) and
Battle passes for
cosmetic items with
prices ranging
$10-$15, making these
accessible to a wide
range of users.
Dynamic Gameplay
Skill-level based
player-matching,
battle royale, new
players, maps and
weapons in every
match
Social Squads,
voice-chat
Thriving esports
community
💡BGMI is the highest grossing game in India with 21M Monthly Active Users (MAUs). The game saw $33 million in in-app spending from July 2021 to July 2022
Source: https://escharts.com/tournaments/bgmi - IQOO BGMI tournament saw 160K peak viewers for a single match
44
Our take on midcore games
User Retention
User Monetization
➔
User retention for midcore games will depend
heavily on liveops & keeping the game content
fresh. We believe that games that have a Day 1
retention of higher than 40% at scale are
poised to grow much faster than others.
➔
Considering that most of the midcore games
are multiplayer in nature, we believe that in app
purchases that double for in-game “status
symbol” like better cosmetics, clothing, etc will
start driving more and more monetization.
➔
If generative AI can democratize game
production, we believe that a gaming focused
analytics + liveops tool can take centre stage
for better liveops, which can lead to a better
retention.
➔
According to our studies, a good midcore game
should get >60% revenue from in-app
purchases.
➔
We also believe that like casual games, midcore
games will also benefit from having a close loop
wallet which can be recharged via UPI
autopay.
➔
For multiplayer games, the player matching
algorithm will also play an important role in
user retention.
45
iii) Hardcore Games
AAA & hardcore games
Mobile
PC
Console
Hardcore Games
AAA Games
Harcore games require a high level os skill and commitment
from players such as massively-multiplayer online
role-playing games (MMORPGs), multiplayer online battle
arenas (MOBAs), and first-person shooters. These games
involve intricate storylines, detailed world-building, or
competitive multiplayer elements.
AAA games are high-budget, high-profile video games that
are typically developed by large studios with development
costs ranging $60M - $100M. Typically Pay to Play or hybrid,
60%+ of time spent on AAA games is spent on games
released 6+ years ago, showcasing the power of franchises
and hit releases.
Key categories: Strategy, RPG, Shooter Games
Platform: Mobile, PC, Console
Monetization: Pay to play, In App Purchases (IAP)
Top Game Titles: Valorant, Call of Duty
Market Size: $93.5B (2023) - Newzoo report
Target Audience: Gamers looking for a great playing
experience and are okay to spend money
Platform: PC, Console
Monetization: Pay to play with downloadable content later
Top Game Titles: Call of Duty, FIFA, GTA 5
47
How to monetize in hardcore and AAA
1
Buy-to-play
Buy-to-play is the preferred strategy to monetize for both AAA and Hardcore games owing to the need to offset
high development and marketing costs and accounts for ~60% of PC & Console gaming revenue. In a Blume
Ventures survey with 100+ participants, 80% gamers reported that they rely on recommendations or game reviews
before buying a game, making it crucial to make a great game to bring users on board to play.
2
Downloadable content
Although a small percentage of users use in app purchases for AAA/Hardcore games (50% per our survey), they still
contribute ~30% to the overall revenue generated by AAA and Harcore games. Expansion packs featuring new
stories and maps are very popular with players and help significantly increase LTV for hit titles. Franchise releases
follow a quarterly release schedule where ~1 downloadable content pack is released every quarter to keep players
hooked before the release of the next title.
3 eSports
Games such as Valorant and FIFA which have a deep e-sports footprint also monetize via e-sports through
in-game sales specifically designed around esports events. For instance, Valorant’s champions bundle generated
$20 million in sales for Valorant which was shared between Riot Games and the teams participating in the Valorant
championship. Fifa Ultimate Team which allows players to build fantasy teams accounts for 1/3rd of EA’s total sales.
Strong IP + Multiplayer/eSports element = Opportunity for repeat monetization/higher LTV
48
Case Study: FIFA
Highest grossing sports game franchise
Developer: EA Sports
Genre: Sports
Revenue (2023): $7.4B
Release date: 1993
Gameplay &
Mechanics
EA’s FIFA is the world’s
most popular football
simulation franchise
Core Loop: Steal/tackle
opponents > Dribble,
Pass, Shoot >
Goal/Point > Strategize
Genre
Genre: Sports,
Simulation
Distribution
Platform:
Multiplatform
Distribution (Console,
PC & Mobile)
Distribution: Fifa has
built its brand over
years of cult fan
following, licensing
deals and
endorsements with
clubs, leagues across
the world.
Monetization
Mechanics
i) Pay to Play
ii) Fifa Ultimate
Team -> fantasy game
mode, where players
can purchase digital
card packs to build
their fantasy teams.
This mode is
estimated to account
for around one-third
of EA's total sales.
Retention
Mechanics
Annual Title Release &
Refresh: EA releases a
new FIFA game each
year, with updates in
graphics, mechanics, and
game modes. Each
update reflects roster
updates in football clubs
and enthusiasts are keen
on playing with these
updated rosters and are
more than willing to pay
for the latest version.
eSports & Social
💡 Fifa has built its brand over years of cult fan following, roster updates and licensing deals with clubs and leagues across the world. The 2020 FIFA eWorld Cup drew more than
8.4 million viewers across the competition.FIFA is the best sports game franchise of all time, selling 350 million+ copies since inception
Blume Research
49
Case Study: Call of Duty
Most popular FPS franchise
Developer: Activision
Genre: First-Person-Shooter (FPS)
Revenue: $1.5B+ across platforms
Release date: 2003
Gameplay &
Mechanics
Core Loop: Move ->
Find Targets -> Aim ->
Attack -> Repeat
Genre
Distribution
Genre: First Person
Shooter
Platform: Mobile,
Console & PC
Setting: War, Military
Monetization
Mechanics
Pay to Play
Microtransactions
Downloadable
Content (DLC)
Battle Passes
Retention
Mechanics
Annual updates, title
refreshes, compelling
core gameplay
Competitive nature: The
game is accessible to
newcomers while still
offering depth for
seasoned players.
Social Multiplayer and
competitive modes
eSports: Call of Duty
League (CDL)
💡 Call of Duty has lifetime sales of approx ~$3B, making it one of the highest selling media franchises of all time
Blume Research
50
Section 5 //
Opportunity Areas
Recalling the opportunity areas we’re excited about
Market Research &
Development
Test, Release, Distribute
Consumption & Analysis
Game Publishers → we’re excited about game publishers + developers who self-publish
Distribution Channels → we’re excited about the next
miniclip-for-the-mobile - a platform of games created by indie developers
Developer Tools → we’re excited about Ai Game Creation/Design Tools
Hardware → we’re excited about a potential “India console”
Analytics Providers →
LiveOps + Analytics Tools
52
In games, we are excited about mobile games and kids gaming
Type of Gamer
Basis Gamer Skill Level & Time Spent on Gaming
Determines Monetization & Spend
Distribution Platforms
Hypercasual & Casual
Midcore
Hardcore
Mobile
PC
Mobile Gaming & Kids Gaming
Console
Note: This is a non-exhaustive list
53
Let’s take a closer look at some of these spaces
1 Mobile Gaming: The home-console/portable-console today in India is the Mobile. Low cost of development for
mobile games makes this a lucrative opportunity for indian developers.
2 Kids Gaming: With proper guidance, gaming can be a powerful tool for learning and development for kids. Younger
kids are also raised by digital-first parents which reduces the friction of moving to new platforms.
3 Building For / Building Consoles: Gaming console market is expected to grow by 5.7%. While developers can build
games for the incumbents, they can also rethink and build a new handheld console which becomes ubiquitous in
India.
4 AI Stack for Game Creation, Analytics & LiveOps: AI is reducing game development time and will keep on reducing
it further. Developers can harness ai tools to deeper engagement and open up their worlds to players like never
before.
54
#1 / The mobile game universe
Type of Gamer
Basis Gamer Skill Level & Time Spent on Gaming
Determines Monetization & Spend
Distribution Platforms
Casual
Mobile
Midcore
Hardcore
The personal, portable console today in India is the mobile. Comparable markets grew with the rise of games
that made their way into the home and everyday life (USA with Atari, China with the PC) and therefore we are
betting on mobile games to pave the way for India’s ascent to becoming a gaming powerhouse. Low
development costs associated with mobile games makes this a lucrative opportunity for indian devs to grab.
PC
At the moment, we feel that the talent density required to develop a game and meet its timelines is low in India.
We do see an opportunity in a studio that wants to build globally but that might require
a lot of capital.
Console
55
1a / Categorical playbooks for mobile games
Casual
Midcore
Hardcore/AAA
Development
A platform will be more valuable than
sum of parts. The winners in this space,
such as Royal Match, will combine various
game mechanics to win
Winners here will be a
Shooter/RPG/Strategy core
mechanic with a different winning
mechanism as compared to existing
games in the market. It has to be
mobile-first and optimised for T2/T3
audiences.
Developing a hardcore game is like
making a movie - takes years of effort
and a lot of money, still hard to predict
success. A winning new title will be
global/franchise first.
Acquisition
While acquisition can be driven through
ads, CAC’s have been going up. The
winner will leverage word of mouth and
social in addition to ads to grow.
While acquisition can be driven
through ads, CAC’s have been going
up. The winner will leverage word of
mouth and social in addition to ads
to grow. Need more social proof
than Casual games.
New hardcore/AAA titles compete for
8% of player time as the rest is taken up
by established franchises. In Blume
survey, 80% of participants reported
that they buy games played by friends,
making referral/influencer marketing
critical for AAA games
Retention
Platforms have higher retention than
individual IPs
Social, LiveOps will aid retention
LiveOps, gameplay expansions critical
to succeed
Monetization
Closed loop wallets
Cosmetic items. micro-transactions
Pay to play, micro-transactions
Media
Too small
Small yet growing - game should be
fun to play and fun to watch
Essential to succeed
56
1b / Monetization strategies for differently-engaged mobile gamers
1
In App Advertising (IAA)
Popular method of monetization for
free-to-play games. In-app
advertising allows developers to
offer games for free while still
generating revenue, making them
accessible to a wider audience.
i) Rewarded Ads - Watch video to
earn an extra life
ii) Cross-sell ads - Ads for other
games developed by the same
studio
iii) Playable Ads - Video ads that
have an engaging playable element
to them. Typically used to market
other games and earn an
acquisition fee.
iv) Interstitial Ads - Ads that
appear between levels/turns.
Monetization Product for Low-Retention Cohort/
Casual Gamers
2
In App Purchases (IAP)
In-app purchases (IAPs) are virtual
items or services that can be
purchased within a mobile game,
beyond the initial download/
purchase of the game. While IAPs
are deployed to all players, it is
typically sustained by a strong
retained player base.
i) Consumables - Buy boosters,
lives, in-game currencies
ii) Loot/Rewards - Loot boxes
typically contain a combination of
in-game consumables in bulk
iii) One Time Purchases - Some
one time purchases within a game
universe could be one time
payments for ad removal, purchase
of characters, level unlocks.
3
Subscriptions
Subscriptions are typically deployed
amongst retained user cohorts.
Common monetization model seen
in midcore and hardcore games.
i) Battle Pass - A subscription
model where players are offered
rewards as they play and progress
through levels within a limited time
frame, known as the 'battle pass
season
ii) VIP Subscription - A subscription
model that offers exclusive benefits
like daily rewards, ad-free
experience, and access to special
features or communities, making
users feel special and valued within
the game
Monetization Product for High-Retention
Cohort/Hardcore Gamers
57
1c / How to keep your mobile game fresh & engaging
LiveOps
2 Streaks & Streak Rewards
LiveOps allows developers to tailor the
game experience to each player's
preferences and behavior. It opens up
new revenue streams through In app
purchases, subscriptions and targeted
offers. The ability to continually
introduce new content and features
incentivizes players to spend more time
and money in the game.
Streaks create a sense of progress,
mastery, and advancement, making
the learning process more enjoyable
and motivating. Positive feedback loops
like progressive rewards, daily login
rewards & incentives maintain high
user motivation and encourage
repeated engagement with the game.
1
4
Push Notifications
Push notifications in conjunction
with user segmentation, are a
powerful tool for improving mobile
game engagement. Personalised
push notifications on limited offers,
game progression, and those that
create urgency help bring the
player back to the game.
5
3 Missions, Quests, New Maps
New maps, quests add variety to the
gameplay loop by providing a break
from the main story. They encourage
players to spend more time in the
game per session due to a desire to
complete a specific quest or mission
before logging off which leads to
longer play sessions.
Social
Social elements like leaderboards,
challenges, and in-app social
features create a sense of
community among users. This
fosters interaction, competition, and
collaboration, making the gaming
experience more engaging and
enjoyable.
58
1d / Retention framework for mobile games
Low retention,
Low monetization
Early user segmentation
High retention,
High monetization
D0
D1 - D7
D7 - D30
>D30
Solve for First Time
User Experience
Create a Habit
Solidify the Habit - Win
the User’s Time Block
Stay Relevant &
Exciting
1. This is where a good understanding of
user cohorts begin to emerge, and early
user segmentation can unlock better
performance of various retention
mechanics like push notifications, limited
offers etc.
1. LiveOps to help keep the
gameplay exciting and offer new
stories that branch out from the
mainstory. Maintaining a game as a
live entity is beneficial for many
reasons - events, newly timed
content, extra levels, fresh
characters keep retained gamers
who are likely to spend more money
in the game universe, engaged.
1. Easy Understandability (with
optimized tutorials)
2. Quick Onboarding (Easy Sign
Ups/ No sign ups at all)
3. No/Less In-App Ads
4. Taste of Rewards.
(Introduce daily login rewards,
Level completion rewards)
1. Start optimizing user engagement with
personalized push notifications and win
their daily time commitment to the game
2. Interactive and short IAAs, start
introducing timers (offers, timebound
unlocks etc). These will later translate to
IAPs.
3. Signal the player’s advancement and
mastery over the game
2. IAPs, targeted ads and optimization of
monetization catalysts.
Eg: Time catalysts (Time limited
missions, timebound rewards), Energy
Catalysts (Win Streaks, Lives, Boosters)
3. Introduce Social Elements like
Leaderboards, Add Friends, Challenges
Blume Research, Department of Play, Ironsource
2. Offer enhanced social
experiences - Clans, PvP
3. For >D90 cohorts, external
events like esports, community
meetups, and overall brand building
is important.
59
#2 / Kids gaming
<5 years
5 years - 12 years
13 years - 18 years
Game-based
learning
Gamified Early Learning
Metaverse Gaming
Interactive learning focuses on leveraging game mechanics to
assist in early education, focusing on memory retention and
conceptual understanding. The demand for e-learning
through games is dominated by the U.S. and major players in
market rely on various channels of distribution instead of
relying on mobile platforms.
Gen-Z and Gen Alpha spend a disproportionately large amount
of their free time online and sandbox games Minecraft, Roblox
and Fortnite have captured their imagination. These games
hinge on user generated games and deep social elements,
giving users an online arena to express themselves.
Market Size: $29.7B global market opportunity by 2026
Target Audience: Kids aged 2 to 13 and their parents
Monetization: Pay to Play, In App Purchases
Market Size: $20.9B market in 2024
Target Audience: Zoomers and Gen-Alpha, focus on online
experiences in addition to gaming, ~0.9b users expected by
2030
Platform: Mobile, PC, Console
Monetization: In App Advertising, In App Purchases
60
#3 / The India console
Existing Non-Portable Consoles
Building the India-Console
➔
➔
India today is a rising hardware giant with many
new age brands winning in the space and
domestic manufacturing burgeoning. We think
there exists an opportunity to build a low-cost
truly-Indian home console that offers an
interesting new distribution and gaming medium.
While the initial distribution would have to be via
developing their own console specific games, the
console can be opened up for outside game
developers too once there is enough reach.
Existing Portable Consoles
Developing Console Games
➔
As the adoption to XR devices increases, there will
be an opportunity to be a first mover to these
games. Most of the games on Meta’s Quest stores
require an upfront payment to download.
➔
The audience is used to paying an upfront fee and
this reduces the reliance on in app ads and
purchases as long as the developers solve for
game discovery and distribution.
61
#4 / AI stack for game creation, analytics & liveops
Why We’re Excited for Ai in Games
➔
AI-first developers: The Ai-stack for game design will make the game ideation, programming, testing process a lot
more sustainable, efficient and scalable with copilots, task automation, enhanced procedural content generation, and
lower cost and resource requirement to develop games and optimize them for cross-platform consumption.
➔
Democratization of game creation will kill barrier to entry & barrier to compete: With Ai in the mix, indie developers
will be able to compete on depth and quality of games with some of the bigger studios. Prompt-based game
engineering opens up the opportunity for players to create their own quests, meta-games and even user-generated
games. Breaking the third wall in these game environments will deepen engagement and playtime.
➔
AI-enabled analytics and liveops: Developers will be able to harness player behaviour data like never before to take
insight-driven decisions for optimization of game mechanics and monetization systems. Developers can then offer
dynamic adjustments to game difficulty, pacing, and content based on individual player behavior and feedback. This
level of personalization enhances player engagement and retention without requiring extensive manual tuning.
Scripting
Development support
“The potential prize for AI in gaming is enormous, we may be on the cusp of seeing
the first NeverEnding games created by AI-first developers.”
- A16Z
User generated games
“AI is reducing content development costs already and will continue to make content
creation cheaper”
- PM @ Zynga, Survey Respondent
62
Annexure
Global gaming market
➔
➔
➔
➔
Company
Revenues ($M)
Tencent
7,442
Sony
3,410
Apple
3,652
Microsoft
3,248
NetEase
2,814
Google
2,418
Electronic Arts
1,914
Activision Blizzard
2,093
Nintendo
1,260
Take-Two Interactive
1,129
The global games market will generate $184.0 billion in 2023, representing +0.6% year-on-year growth
The number of players worldwide will reach 3.31 billion in 2023, growing +4.3% year-on-year. Mobile will contribute to most of this growth. As gaming continues to permeate the
mainstream and young people age up, player numbers will rise across the board.
Payer numbers will grow by +7.3% globally to 1.45 billion in 2023. Looking further ahead, we see that worldwide payer numbers will continue to grow with a CAGR (2021-2026) of
+4.2% to reach 1.62 billion players by the end of 2026.
The industry is continuing to stabilize after some pandemic-induced turbulence. The global games market will generate yearly revenues of $205.4 billion in 2026
*Estimate from Red Point Ventures
Note: 2023 data for funding till date (June’23)
Source: Tracxn data for funding news
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Notable Companies in Gaming: Global (1/2)
Roblox is a platform for developing web and mobile games. It enables users to create its own games
through simple drag and drop mechanisms and generates revenue through virtual purchases
in-game by the use of a virtual currency Robux. The platform follows a revenue share model for game
developers. It has 56 million DAUs as of 2023 and hosts >40 million user generated games.
Valuation: Undisclosed
Total Funding: $520M
Current stage: Series H
Location: United States
Valuation: Undisclosed
Niantic, the maker of Pokemon Go, creates Augmented Reality (AR) games. Niantic pioneered AR
games and has released titles such as Monster Hunter World and also has ‘Lightship’, a platform that Total Funding: $858M
allows developers to create AR experiences. At launch, Pokemon Go had 232 million active players and Current stage: Series D
as of 2023, Pokemon Go had 560 million monthly active users.
Location: United States
Valuation: $12.7B
Zynga, maker of farmville, makes casual games for mobile and web. It was acquired by Take-Two
Total Funding: 526
Interactive in 2022 and boasts multiple multi-million dollar IPs such as Merge!, Farmville and Zunga
Poker. With 65 million DAUs, Zynga users have spent 1.8 trillion minutes in Zynga’s games over the last Current stage: Acquired
3 years.
Location: United States
Moon Active, maker of Coin Master, is an Israeli headquartered company that makes social games for
mobile. Coin Master has been downloaded over 100 million times and Moon Active makes some of
the fastest growing, most engaging games in the industry.
Valuation: $5B
Total Funding: $426M
Current stage: Series D
Location: Israel
Discord is a platform for gamers to communicate with other gamers over voice, video, and text. It
allows users can create servers as a way to communicate over voice, video, and text. The platform can
be accessed through the browser or windows application. It monetizes through in-app purchases. As
of 2023, Discord had 560 million MAUs.
Valuation: $15B
Total Funding: $922M
Current stage: Series I
Location: United States
Source: YourStory, Outlook India, Tracxn
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Notable Companies in Gaming: Global (2/2)
Tencent entered gaming in 2003 with QQ Games, a casual gaming platform integrated into its
instant messaging service. Tencent achieved significant milestones in gaming by acquiring Riot
Games (League of Legends), Supercell (Clash of Clans) and a 40% stake in Epic Games (Fortnite).
Tencent's gaming division contributed $22 billion in revenue for Tencent in 2023.
Valuation: $463B
Total Funding: $220K
Current stage: Listed
Location: China
Take-Two Interactive, founded in 1993 is a video game publisher responsible for releasing critically
acclaimed commercial blockbusters like Grand Theft Auto Red Dead Redemption and NBA 2K. The
company has grown in the gaming industry by acquiring studios like Rockstar games (1998), 2K
Games (2005) and Zynga (2022) and making high quality story-driven games.
Valuation: $25.7B
Total Funding: NA
Current stage: Listed
Location: U.S.A
Ubisoft, founded in 1986, is a games publisher credited with making large, immersive open world,
story-driven game franchises like Assassin’s Creed, Far Cry and The Crew. A pioneer in game
development, Ubisoft developed the Anvil game engine used in Assassin’s Creed games, a franchise
with over 155 million copies sold since its debut in 2007.
Valuation: $2.98B
Total Funding: NA
Current stage: Listed
Location: Canada
Twitch, originally founded in 2011 as a spinoff of Justin.tv by Justin Kan, focused on live streaming
video games and quickly gained popularity among gamers for its real-time interactive features,
allowing streamers to broadcast their gameplay and viewers to engage through chat. Key features
include content viewing, channel creation, live chat and monteization for streamers. As of 2023,
Twitch frequently records 2.5M concurrent viewers at peak times.
Valuation: $970M
Total Funding: NA
Current stage: Acquired
Location: U.S.A
Valuation: NA
Steam, developed by Valve Corporation, launched in 2003 to provide automatic game updates for
Total Funding: NA
Valve games and was expanded to support third party titles in 2005. Offering services like game
server matchmaking, game streaming and social networking, Steam dominated the PC game market Current stage: NA
with 75%+ market share. By 2021, Steam had 34,000 games, 132 million MAUs and $4.3B in revenue.
Location: U.S.A.
Source: Tracxn
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About Blume Ventures
Blume Ventures is amongst India’s leading early stage venture funds, investing in tech-led ventures across sectors. We are
presently investing out of our US $290M Fund IV. We are sector agnostic investors and typically invest in companies through
Seed to Series A stages with a preference to come in early.
While we are thesis driven, we are also open to questioning and changing our views as we learn from founders and the
market. If you have any feedback on this thesis, or would like to push back on any view, please reach out!
Gaming Team at Blume
Marmik Mankodi
AVP | Bengaluru
marmik@blume.vc
Blume’s Notable Investments
Nachammai Savithiri
Analyst | Bengaluru
ns@blume.vc
Blume’s Key Gaming Investments
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Thank you!
If you are (or know someone who is) building in
this space, we’d love to chat!
Reach out to marmik@blume.vc / ns@blume.vc
Authored by
Nachammai Savithiri, Marmik Mankodi, Rajat Garg