The GamesBeat Summit is the largest event for leaders in gaming.
The biggest fund in gaming is $750 million raised for a game-focused venture capital fund.
The fund focuses on gaming and markets that are adjacent to gaming such as esports, gaming infrastructure, tools, social gaming platforms, streaming, and the cloud. More than $1 billion in assets are under management for the two funds of the company.
The size of the fund tells a lot about the state of games and game financing. According to Newzoo, gaming has become the largest entertainment in the world. The number was ahead of Newzoo's earlier forecast of $175.8 billion, and it was fueled by growth in mobile gaming as well as strength from the core console business for the Nintendo Switch, Sony PlayStation 5, and Xbox Series X/S.
Tuosto said in an interview with GamesBeat that the $750 million funding round means it is a great time to be a founder. The history of games has had a perception that it is hard to make money in a business that is very hit-driven. Most of the people who invest in this category do it for a small percentage of their time. They are not all into games. This space is covered closely by us. It requires expertise, relationships, and dedicated focus.
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The value of deals in video gaming was $85 billion in 2021, a new record, according to Drake Star Partners. It was three times higher than 2020. During the Pandemic, people turned to games to distract themselves from the real world. Those habits continued even after a return to normal, as game companies prospered.
According to an interview with GamesBeat, Phil Sanderson is the longest-running active VC who has been investing in games. He understands what buyers and investors are looking for and he sees a lot of proprietary information. I've been in the media and gaming business my entire career. The worlds of gaming, media, sport, social media, creator economies, and brands are colliding.
Drake Star Partners expects more than $150 billion in deals to happen in the year of 2022, thanks to the big deals of January, including Microsoft agreeing to buy a company for $68.7 billion and Take-Two buying a company for $12.7 billion. The prices for game company acquisitions keep going up.
A lot of new sources of capital are pouring in, as for the money coming into games.
He said that they don't have a lot of interest in that.
According to Newzoo, the gaming market is larger than movies, music, and books combined, and it is the fastest-growing consumer trend in the world.
Newzoo said that the global gaming market is expected to reach $256 billion of consumer spending in 25 years. According to DFC Intelligence, one-third of the world's population plays games almost an hour a day.
Tuosto said that there are so many subcategories, each with their own dynamics, with each of the teams approaching things from a different angle. The addressable market for gaming is two-thirds the size of the enterprise software market. The fact that this market hasn't had specialist investors is a glaring oversight.
Tuosto acknowledged that they have competition from others.
There is going to be a lot more innovation because people are playing games more and more. There is more revenue coming in. There should be more capital available to serve that audience.
The views of gaming have changed due to the Pandemic. Its trajectory is different from film, television, books, and music. Parents realize that their kids are immersed in gaming and are picking up the habit of their own.
They are realizing that this is very much a thing.
In the first half of 2021, consumers will spend an average of 5 billion hours on mobile games, according to App Annie.
The lines have been blurred across gaming, media, sport, and social networking.
The new fund will focus on both early and late-stage game companies. Content, software infrastructure, and social platforms are some of the things that Griffin invests in.
The company's first fund was announced in November of 2020 with $235 million of funds. According to data from Pitchbook, the fund with the highest internal rate of return was the one that started in 2019.
The track record and competitive advantage come from pattern recognition drawn from historical knowledge, proprietary research, and hands-on experience.
Tuosto said that they can get their hands on a product and try to figure out if it is fun. That part of the job doesn't translate into numbers. I think it's a unique combination to be able to look at thousands of data points that benchmark a company's performance and make sense of the data. We look at a lot of deals. We always look at the consumer perspective.
The team at the Griffin analyzes data and reviews over 1,300 investment opportunities annually to inform perspectives on growth, retention, and monetization. The firm helps portfolio companies with recruiting and business development.
We are all in for the culture, we play games, we have passion about games, and we care a lot about the industry. That creates jobs and opportunities for people. We are also very focused on early-stage investments.
The general partner of The Santa Monica, California-based Griffin Gaming Partners was Peter Levin, a former president of interactive ventures, games, and digital strategy at Lionsgate, as well as a venture capitalist with two decades of experience in game investing.
Our core thesis is to learn as much as we can about a category we are passionate about, be active and understand where buyer's heads are, what they think is attractive, and make sure. Tuosto said that that is a pretty unique element of the strategy.
Jonathan Nolan and Lisa Joy, the creators of Westworld, were behind a video series for Amazon based on the video games, as well as taking Candy Crush Saga to CBS for a show. He helped with the Pay Day integration. He thinks there will be more successes like the Sonic the Hedgehog movie and the The Witcher video series.
He has been investing in games for 23 years, with deals including Funzio, Next Games, and Plain Vanilla Games.
The company has a large network that it uses to help game companies with hiring, business development, and corporate development.
Tuosto has been one of the most active investment and acquisition advisers in the gaming sector, with seven 2020 transactions such as Take-Two Interactive's $12.7 billion acquisition of Zynga. He was involved in deals related to N3twork's partial sale to Forte, as well as public offerings with Nexters, Playstudios, and Skillz.
The first fund had a number of big returns. N3twork sold a division to Forte, one of its investments. Tactile, Wave, Subspace, Scopely, Discord, Overwolf, Winzo, Spyke, and Funzy were invested in. It made seed investments into Theorycraft, Incredible Dream, Players, Lounge, and ggWP.
The second fund has already invested in a number of game companies. All of this activity will be one of the themes at the GamesBeat Summit.
The company raised $725 million.
The team is built from a passion for gaming with decades of collective investing, advising, and operating experience in the games industry, according to interviews.
The fund has gaming in its core. The company has a lot of arcade machines. The lifesize replica of Mario is in front of a picture with Mario creator Shigeru Miyamoto. Tuosto is a big fan of Pokemon Go, while Levin is obsessed with Animal Crossing.
Pierre Planche became a partner in the team after they played Call of Duty: Warzone. I've played Warzone with both Planche and Levin, and they both play on an level of talent. Anthony Palma and James Wing have carried me to victory or near victory many times when I have played Warzone with them. We met for the first time in person at the DICE Summit.
Josh Williams, the CEO of Forte, said in a statement that their extensive network has led totransformational. They work as hard for their company as any other investor.
The actress and author is an advisor to the fund.
Day said that Griffin is always looking for interesting game properties and developers.
The industry is seeing big changes as more teams with great credentials emerge on both the infrastructure and content side of games. He sees more companies moving towards web 3 platforms, which means both non-fungible token (NFTs) and the roadmap for the metaverse.
He said that the company is investing in that space with the same discipline it has always had. The fund is not taking aspray and pray approach. Trying to find the right teams and projects is the focus.
We have to take a good hard look at it when we see talent coming together with a great product and opportunity in the market.
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