$5.7 billion games investment in 2018 doubles previous record

Digi-Capital’s Games Report Q1 2019 tracked games companies raising $5.7 billion in 2018, which was over twice the previous record investment from 2017. Tim Sweeney’s Epic Games’ $1.25 billion was not only the largest round raised last year, it was the largest non-IPO games investment of all time. The only larger single amount raised by a games company was when Netmarble Games held its IPO in 2017. Even that record might not survive given Fortnite’s extraordinary performance.

Source: Digi-Capital Games Report Q1 2019 (note: free charts do not include numbers and data from subscriber version. All data sourced directly from companies and reliable secondary sources)

As a sign of both financial muscle and the need to expand beyond core markets, Tencent was either a major shareholder in or investor in four of the top five deals last year. As we’ve discussed before, this is becoming a familiar pattern. Tencent was behind investments in Douyu ($630 million raised), Shanda Games ($474 million) and Huya ($462 million raised). France’s Voodoo raised $200 million from Goldman Sachs to round out the top five.

11 other companies also raised $100 million plus rounds last year, with more in the single millions to tens of millions range. By far the largest categories for investors were mobile and games tech/other (particularly streaming), each of which took around one third of investment dollars last year. MMO/MOBA games, eSports, console/PC games and AR/VR games companies also raised significant amounts.

The games acquisitions market was also on fire in 2018, with over $22 billion games M&A making it the second highest year on record. Games M&A dollars are always dominated by mega-deals, which last year included Naspers selling 2% of Tencent for over $10 billion dollars for a 60,000% return, and Tencent and others acquiring Vivendi’s $2 billion plus stake in Ubisoft.

Zhejiang Century Huatong acquired Shenyue Network (the online games affiliate of Shanda Games) for $4.4 billionPAI Partners picked up Asmodee Digital for $1.4 billion, and Aristocrat closed its Big Fish Games deal for nearly $1 billion. There were another eight acquisitions in the $100 million plus range, and more in the single millions to tens of millions range.

Unsurprisingly, mobile dominated acquisition activity last year as it did the year before. MMO/MOBA and console/PC made up most of the rest of the acquisitions market. The games market as a whole is incredibly consolidated, with the top 10 public (i.e. stock market listed) games companies taking over three quarters of public games company revenue and around four fifths of public game company valuations worldwide (note: this is not all market revenue/valuation, as privately held companies are also significant). The big keep getting bigger.

Over the last decade, games IPOs have gone through three year repeating cycles where one huge year is followed by two quiet ones. The last high came in the record year for games IPOs in 2017, with games IPOs in 2018 raising around 90% less than that high point (as Digi-Capital anticipated at the start of last year). While it’s too early to tell, if the 3 year cycle repeats in the same way 2019 could also see muted games IPO activity.

In such a highly consolidated, hit driven market, the level of games deal activity last year was extraordinary. Again it is too early to tell whether this year will continue in a similar vein, or if the cyclical nature of deal-making might see the market pull back. One thing’s for sure, it’s not going to be dull.

(Full details and all transactions in Digi-Capital’s new 258 page Games Report Q1 2019)

(Tim Merel is Managing Director of Silicon Valley AR/VR adviser Digi-Capital)

New Overwatch Character: Ashe

A new character has been announced for Overwatch, currently available to play in the PTR (for PC players)

Have played a little bit imagine McCree but with range and can throw dynamite. Very fun so far for those who can actually play DPS.

https://playoverwatch.com/en-us/heroes/ashe

 

 

Four Hours : Red Dead Redemption II

I don’t really like reviewing games, especially since I have not finished it yet so cant give a real “review” of it…. so lets do what I think of the game so far.

When Red Dead Redemption (the original) was first announced way back when, it caught my interest, but when was only going to be released for PS3 era consoles, I was a bit gutted……  but it became the reason I bought a PS3. (Got a great deal on the PS3 with games inc RDR)

I was hooked on the game – GTA 3 etc were good but this was amazing, the freedom, the graphics, the sound, the game play, it was just a top notch game.

It was/is so good, I even bought it on Xbox360 for my Xbox One (backwards compatibility FTW) and was still playing it until a few weeks ago when I pre-ordered RDR2…..

Anyway, onto RDR2

Graphics – being a “nex-gen” console, of course I was expecting better graphics than the first game, but wow, the detail and draw distance is fantastic. You can just lose yourself in the environment and forget about the rest of the game. Everything is well detailed and animations spot on.

Sound – again, amazing, just stop and listen to the world around you. Some of the speech of NPC’s can be a bit repetitive after a while but cant have everything.

Gameplay – Great as usual with Rockstars games.Does take a little while to get used to the controller changes from RDR but everything is accessible fairly quickly. I’ve only done a couple of the missions so far, but each have flowed well and been straight forward to complete. The intro missions are a bit linear but its more of a training system – does take a while to get through though.

Now, warning – it does take approx 90mins to install the game on a standard Xbox – so dont get home after buying it and think “yay, cant wait” – you will wait. But its well worth it.

Multiplayer will be available soon but I wont be trying that as I dont subscribe to Xbox Live Gold.

If you enjoyed RDR, or GTA5, just grab this, you wont be disappointed – except you cant put an exhaust on your horse 😉 But its testicles do shrink when its cold…………

 

Review : Armageddon 2018

So, after I said I wasn’t going to Auckland Armageddon this year, I ended up going on Sunday courtesy of the wife winning some free tickets. Thanks NeonTV!

The TLDR version of this review is, I’m glad I didn’t pay.

Armageddon has lost its mojo.

I’m just going to go through a basic list of what I thought, and you may or may not agree, which is fine.

  • PBTech and Playtech were not present – these guys have been there for the last few years and always seemed to be busy, and had great deals on.
  • Toyworld not present – they always had great deals, but not a large range of items, but was always great for picking up stocking fillers etc.
  • Cosplayers seemed to be very minimal this time – last year (and before), cosplayers were out in abundance, but this year there seemed to very few present – those that were there, had some fantastic outfits.
  • The regular stalls had the same stock and same deals as previous years – come on, do something different.
  • The number of repeated stalls was amazing – must have been about half a dozen t-shirt stalls selling the same t-shirts. One candy store had multiple stalls scattered around. Or if it wasn’t the same stores, it was repeats of the exact same stock.
  • Chinese counterfeit goods stalls were present – was 2-3 I saw selling knock offs of popular boar games etc.
  • Noone “famous” present on Sunday that I’m aware of – used to find a popular author, or artist or something sitting somewhere doing free autographs, or meet and greets, but nope, nadda, zilch, nein.
  • Didn’t see any “play” areas for card games such as Magic etc – maybe I missed them.
  • Very little gaming orientated merchandise – XPDJunior struggled to find any Overwatch themed clothing.

It just wasn’t the same and I feel its lost its mojo.

I hope it was just a bad year and things pick up again next year, but wont hold my breath.

 

New Doctor Who Season

The new Doctor Who season has just started, for those you that have been living under a rock or are not Doctor Who fans the new doctor is played by Jodie Whittaker.

The first woman to play the Doctor in a series, so far I have watched the first two episodes and have enjoyed them so far. They have been the usual get used the new Doctor and meet the new companions, there a three this time.

This season will have 10 50 minute episodes compared to the usual 13 44 minutes episodes from the previous seasons.

In New Zealand this can be viewed on TVNZ on Demand on the day of release:

https://www.tvnz.co.nz/shows

See the trailer below for the new season:

And for those who cant accept a female Doctor: