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 64 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 65 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 66 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 67 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
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