Sony Corporation invests $250 million in Epic Games…why? And what’s next?

Digital Media Segment

Last week, Sony shook up the gaming world with the news of its $250 million strategic investment in Epic Games. What’s particularly intriguing is that the investment was made by Sony Corporation, making it clear that the deal  includes all the Sony business groups: Sony Pictures, Sony Music, Sony Interactive Entertainment, Sony Electronics, Sony Semiconductors, and others. A deal between Epic and Sony Interactive Entertainment (SIE) and Playstation is obvious, but this deal is with the parent company, Sony Corp. So, what are the implications and what can we expect? 

 

Kenichiro Yoshida, Chairman, President and CEO of Sony Corporation underlined the nature of the deal saying, “through our investment, we will explore opportunities for further collaboration with Epic to delight and bring value to consumers and the industry at large, not only in games, but also across the rapidly evolving digital entertainment landscape.” 

The synergies and opportunities between the two companies have far reaching implications. Individually, each company has strong brand properties that can be leveraged across the other’s markets. In addition, this investment cements an already close relationship between the two companies and reinforces the shared mission to advance the state of the art in technology, entertainment, and socially-connected online services.

The investment allows Sony and Epic to aim to broaden their collaboration across Sony’s leading portfolio of entertainment assets and technology, and Epic’s social entertainment platform and digital ecosystem to create unique experiences for consumers and creators. The closing of the investment is subject to customary closing conditions, including regulatory approvals.

Sony’s Kenichiro Yoshida expanded on this saying, “Epic’s powerful technology in areas such as graphics places them at the forefront of game engine development with Unreal Engine and other innovations. There’s no better example of this than the revolutionary entertainment experience, Fortnite.”

The Sony brands include a staggering number of properties and artists that could be used to build out interactive and entertainment experiences.

Key Sony Groups Sony Subsidiaries Properties & Artists
Sony Interactive Entertainment – Playstation, Games Media Molecule

Naughty Dog

Insomniac Games

Guerrilla Games

Polyphony Digital 

Audiokinetic

Gaikai

SN Systems

Epic – 1.4% investment

GAMES: Little Big Planet, Tearaway, Dreams, The Last of Us, Uncharted, Horizon series, Killzone series, Gran Turismo and many others. 
Sony Music Epic Records

Columbia Records

RCA Records

Arista 

EMI

ARTISTS: Beyoncé, Alicia Keys, John Legend, Will Smith, Pitbull, DJ Khalid, Miley Cyrus, Travis Scott, Leonard Cohen, Yo-Yo Ma, Frank Sinatra, GOT7, Mariah Carey, Celine Dion, Alicia Keys, Khalid, Tyga, Jimi Hendrix, Camila Cabello, and many others. 
Sony Pictures Entertainment Columbia Pictures

Sony Picture Imageworks

Sony Pictures Studios

TriStar Pictures

Sony Pictures Television 

FILM: Jumanji, Spiderman, AngryBirds, Men in Black, Once Upon A Time in Hollywood, Charlie’s Angels, Zombieland

TV: Community, Shark Tank, Outlander, Breaking Bad, The Boys, House of Cards, The Crown, Underground

Source: Company reports/Coresight Research
Fortnite and the Metaverse:

Epic’s Battle Royale game, Fortnite launched in July, 2017 four months after the success of PlayerUnknown’s Battleground, a Battle Royale game from Bluehole subsidiary PUBG Corporation. Fortnite has gone on to become one of the most successful games of all times, with over 350 million registered users. Revenue derived from the game reached $400 million in April alone, with hours logged at 3.2 billion for the month. Put into perspective, in one month Fortnite generates more revenue for Epic than the entire Sony investment. It’s not about the money and more about convergence and cross-promotion opportunities. 

Regarding the Sony investment, Epic’s CEO, Tim Sweeney said, “Sony and Epic have both built businesses at the intersection of creativity and technology, and we share a vision of real-time 3D social experiences leading to a convergence of gaming, film, and music. Together we strive to build an even more open and accessible digital ecosystem for all consumers and content creators alike.” 

Sweeney has long shared his views on the future metaverse, and sees Fortnite as more than just a game. It is a step towards the metaverse experience. A good example of what he’s envisioning is the recent virtual concert presented by Epic and Travis Scott, called Astronomical. On April 24 more than 12.3 million concurrent players watched the concert within Fortnite, the most people ever brought together at an in-game location. 

These numbers do not include the additional 72 million views on Youtube the concert has since received. Of course Travis Scott is signed to Epic Records, a subsidiary of Sony Corp. thus bringing the experience full circle.  


Sony tried to do something similar back in 2008 with Sony Playstation Home, otherwise known as Sony’s “most successful failure.” Home was a virtual 3D social platform where players could create their own avatars, create personal and public spaces, and play both single and multiplayer games. At the height of its success, it was said that Home had upward of 41 million users. Brands like Red Bull and Billabong gave Home lucrative advertising revenue. However, in March 2015 Sony shut down Home without much explanation. People involved with the project have said it was due to technical issues with the platform as well as issues moving it to the Playstation 4.  

Unreal and Playstation 

Games, of course, are the most obvious place where the synergies exist between Epic and Sony Interactive Entertainment (SIE). In particular with the imminent launch of the PS5 scheduled at the end of this year. 

Last month Sony Interactive unveiled their official PS5 showcase with a number of exclusive PS5 games including Ratchet & Clank: Rift Apart, Marvel’s Spider-Man: Miles Morales, Horizon Forbidden West. In the past Sony has maintained a fairly closed development ecosystem with regards to using third-party technology, with many of Sony’s first-party studios maintaining their own tech IP and proprietary game engines. 

M2 Insights analyzed all the games announced for the upcoming PS5 and found internal engines still make up almost half 46% of all game engines when combining: AnvilNext (Ubisoft) at 5%, Frostbite (Electronic Arts) at 4%, and other Internal Engines at 37%. The Unreal Engine represents 30% of all announced Playstation 5 games. 

Epic has done a fantastic job building up their developer programs and support, and it’s definitely paid off. They have also added extensive online tutorials and educational programs, launched their Megagrants program for funding support, and created the Epic Games Store for discovery and sales of third-party games. 

Epic claims there are currently over 7.5 million developers using the Unreal Engine. With both the Xbox Series X and Playstation 5 coming on line by the end of the year, as well as the upcoming release of the Unreal Engine 5, and expanded demand into other markets, we expect Epic’s market share for the Unreal Engine to increase over the coming years. 

While the Unreal Engine 5 will not be available until late 2021, Epic took the opportunity at the Sony Playstation 5 unveiling in May to show off a real-time tech demo of the Unreal Engine 5 running on the PS5 dev kit, which already has over 13 million views. 

Called Lumen In The Land Of Nanite, the demo highlights a number of new technologies:

  • Nanite – a micropolygon geometry system to import and render 3D models and environments
  • Lumen – global illumination system
  • Epic Online Services for cross-platform play across all platforms

 

Sweeney also made public reference to Sony’s SSD storage saying it gives the PS5 a significant competitive advantage. We’ve been working super close with Sony for quite a long time on storage. The storage architecture on the PS5 is far ahead of anything you can buy on the PC for any amount of money right now. It’s going to help drive future PCs.

 

While Epic remains platform agnostic, there are certainly deep ties at work with Sony’s internal development teams. 

Virtual Production for Film and Television 

Epic’s technology has been used in film production for almost 20 years. As far back as 2001 Steven Speilberg was working with Epic on the production of Artificial Intelligence.” Since then Epic has worked on numerous movies including The Lion King, Rogue One: A Star Wars Story, Finding Dory, Ford v Ferrari, Star Wars: The Rise of Skywalker, and the upcoming Batman movie.

There are also an increasing number of television shows working with Epic including ILM on the hit shows The Mandalorian and HBO’s Westworld. More and more studios are looking at virtual production with the objective of building virtual sets as a more viable way to save on production costs. 

 

The use of virtual production has become increasingly important in film and television production since the pandemic hit with many studios working to find business models that work. In a recent interview with XR For Business, Epic’s General Manager, Mark Petit commented, “In the time of Covid we are able to bring the location to the talent instead of the talent to the location.” 

 

Back in January 2019 Netflix sent out its quarterly letter for Q4 out to shareholders saying that their biggest threat and rival was not HBO or Disney, but Epic Games. In the letter Netflix CEO, Reed Hastings writes, “We compete with (and lose to) Fortnite more than HBO. There are thousands of competitors in this highly fragmented market vying to entertain consumers and low barriers to entry for those great experiences.” Since then Netflix and Epic partnered to bring characters from Netflix such as the cast of Stranger Things and Chris Hemsworth character from Extraction into Fortnite. 

Epic’s Acquisitions

Epic has also been on a bit of a buying spree, having acquired 7 companies in 2019 and one this year so far. These acquisitions represent the company’s focus on building up its technologies around real-time animation, modeling, development tools, cross-platform support and social platforms.   

Date  Company Tech Location
3/2020 Cubic Motion Real-time facial animation Manchester, UK
11/2019 Quixel Graphics software and libraries Uppsala, Sweden
6/2019 Houseparty Social media platform  San Francisco, CA
5/2019 Twinmotion Real-time tech for BIM and CAD models Paris, France
5/2019 Psyonix Video game developer of Rocket League, with strong cross-platform development San Diego, CA
1/2019 Agog Labs Real-time scripting and tools Victoria, Canada
1/2019 3Lateral Character digitization, modeling and rigging  Novi Sad, Serbia
10/18 Kamu  Anti-cheating and hacking tools for multiplayer games Helsinki, Finland
1/18 Cloudgine Cloud tech for multi-platform rendering  Edinburgh, UK

Financial Growth 

Several sources told GamesBeat that in 2019 the company reported $4.2 billion in revenue and $730 million in earnings before interest, taxes, depreciation, and amortization (EBITDA, a key measure of profitability). Revenue for 2020 is forecast to be $5 billion, with EBITDA of $1 billion. In 2018, Epic Games did better than it did in 2019. Revenue in 2018 was $5.6 billion, with EBITDA of $2.9 billion, sources said. Epic has been able to use a lot of that money to invest in its Epic Games Store, expanding its staff for Fortnite and Unreal Engine, and some acquisitions.

 

The investment gives Sony a minority stake in the company of 1.4%, putting Epic’s current valuation now at a staggering $17.86 billion. While this is a far cry from the 40% ownership Tencent received for the $330 million they invested in Epic back in 2012. It was Tencent’s investment that bumped Epic’s valuation to $825 million. 

 

But things have changed in the last 8 years. In 2012 Netflix’s revenue was $3.6 billion, half a billion less than what Epic did in 2019. Real-time technologies have advanced, streaming content is pervasive and Epic is not the same company it was 8 years ago. Not only have they greatly expanded their Unreal game engine business, they’ve launched the Epic Games Store that now rivals Valve’s Steam Store, and they created the single most successful game of all times with the launch of Fortnite. 

 

Tencent’s investment couldn’t have been more perfectly timed, and was instrumental in helping Epic better position themselves as essential across multiple industries.  At that time it was not obvious just how much Tencent’s investment would impact Epic’s growth trajectory. 

 

Given Tencent’s extensive online distribution network and access to Asian markets, it would make sense for Epic to tap into that expertise when looking to build out Fortnite. A year after Fortnite successfully launched, and in 2018 Epic successfully raised $1.3 billion, bringing the company’s valuation to $15 billion. With Sony’s investment, it now brings the total investment to $1.8 billion with a pre-money valuation of $17.5 billion. 

Epic’s Funding Rounds: $1.8B (confirmed)
Date Round Investors Amount
July 9, 2020 Corporate Round Sony Corp. $250M
May 8, 2020 Secondary Market Dreamworx
May 5, 2020 Secondary Market Rashaun Williams
Dec 5, 2018 Private Equity Chris Adamo
Oct 26, 2018 Funding Round Sean Ironstag
Oct 26, 2028 Venture Round
  • Kohlberg Kravis Roberts
  • Vulcan Capital
  • Lightspeed Venture Partners 
  • Kleiner Perkins
  • aXiomatic Gaming 
  • Smash Ventures
  • Vulcan Capital
  • Ventures West
  • ICONIQ Capital
$1.3B
June 19, 2012 Corporate Round Tencent Holdings $330M
Source: Crunchbase

 

For the time being Tim Sweeney continues to maintain majority control of the company with over 50% ownership while combined, all current investors represent less than half the ownership: Tencent with 40%, Sony with 1.4% and the other investors owning single digit percentages. However if Bloomberg’s reporting from June is correct, Epic is close to raising an additional $750 million in a separate raise, it may tip the company’s ownership breakdown. 

 

Epic has found itself in the enviable position of having the tools, developers, consumer products and distribution platform that companies like Tencent, Sony and Netflix are all jockeying to access. Whether its building the metaverse, creating tools that help other game developers excel, or supporting film and visual effects companies Epic seems to have the magic touch at the moment and it appears unlikely that anyone will catch them. 

Scopely Buys FoxNext Games And Cold Iron Games from Disney

Acquisition brings top-grossing mobile game MARVEL Strike Force to Scopely’s diverse portfolio

Scopely  and The Walt Disney Company (NYSE: DIS) today announced that Scopely has agreed to acquire FoxNext Games Los Angeles, the game studio behind the blockbuster hit MARVEL Strike Force, and Cold Iron Studios in San Jose from Disney.

“We have been hugely impressed with the incredible game the team at FoxNext Games has built with MARVEL Strike Force and can’t wait to see what more we can do together,” said Tim O’Brien, Chief Revenue Officer at Scopely. “In addition to successfully growing our existing business, we have been bullish on further expanding our portfolio through M&A, and FoxNext Games’ player-first product approach aligns perfectly with our focus on delivering unforgettable game experiences. We are thrilled to combine forces with their world-class team and look forward to a big future together.”The acquisition will add another top-grossing game to Scopely’s live service portfolio, expand its in-development pipeline, and bring a highly experienced team to Scopely’s business.

MARVEL Strike Force reached $150 million in revenue for 2019

FoxNext Games Los Angeles released its debut title MARVEL Strike Force in March 2018 and it has become one of the top mobile games on iOS and Android, bringing in more than $150 million in its first year. The studio is also developing Avatar: Pandora Rising, a massively multiplayer strategy game based on James Cameron’s Avatar. The acquisition does not include the separate portfolio of Fox IP licensed games titles, which will continue to be a part of Disney’s licensed games business. Disney acquired the FoxNext Games vertical game studios and licensed games titles in its 2019 acquisition of 21st Century Fox.

“I’m extremely proud of what our talented team at FoxNext Games has built and accomplished in just a few years, and look forward to joining forces with the impressive team at Scopely, who have a well-deserved reputation as one of the preeminent companies in the free-to-play games arena,” said Aaron Loeb, FoxNext Games President. Added Amir Rahimi, FoxNext Games Senior Vice President & General Manager: “Both FoxNext Games and Scopely are committed to bringing beloved worlds to life through interactive gaming experiences designed to be played for years to come, and we believe this shared focus, coupled with our businesses’ unique strengths and Scopely’s expertise across multiple game genres, will lead to even greater success in the future.” Upon completion of the transaction, Loeb will join Scopely in a newly created executive role and Rahimi will lead the FoxNext Games Los Angeles studio within Scopely as President, Games.

The acquisition agreement follows a number of recent milestones for Scopely including the achievement of more than $1 billion in lifetime revenue last summer, the acquisition of DIGIT Game Studios and global expansion across Europe, Asia and North America.

LionTree Advisors is acting as financial advisor to Disney, with Moelis & Company acting as financial advisor to Scopely.

About Scopely

Scopely is a global interactive entertainment and mobile games company, home to many top-grossing, award-winning franchises including Star Trek™ Fleet Command, Looney Tunes™ World of Mayhem, WWE Champions, The Walking Dead: Road To Survival™, YAHTZEE® With Buddies and Wheel of Fortune®: Free Play, among others. Scopely creates, publishes and live operates immersive games that empower a directed-by-consumer experience. Founded in 2011, Scopely is fueled by a world-class team and a proprietary technology platform that supports one of the most diversified portfolios in the West. Recognized in Fast Company’s ‘World’s Most Innovative Companies’ and #2 on Deloitte’s ‘Technology Fast 500’ as one of the fastest-growing companies in North America, Scopely has achieved more than $1 billion in lifetime revenue by creating long-lasting game experiences. Scopely has global operations in Los Angeles, Barcelona, Boulder, Dublin (DIGIT Games Studios), London and Tokyo, with additional studios in seven countries across four continents. For more information, visit .

 

 

 

M2 Investment Index – Jan 10, 2020

INVESTMENTS & ACQUSITIONS: January 10, 2020

TOTAL INVESTMENTS FOR THE WEEK OF JAN 10, 2020:

For the week of Jan 10, 2020 the total investments and acquisitions reached $365.3 million.

Total investments reached $97.4 million, while all acquisitions for the week were at $267.9 million.

FUNDING HIGHLIGHTS:

INVESTMENTS BY MARKET SEGMENT

  • Gaming investments reached $137.7M.
  • 3D Graphics investments reached $143.3M
  • Artificial Intelligence had investments of $206M
  • Augmented Reality investments reached $7.3M.

ACQUISITION HIGHLIGHTS:

ACQUISITIONS BY MARKET SEGMENT

TOTAL ACQUISITIONS:

  • Artificial Intelligence acquisitions $166M
  • Gaming acquisitions reached $102M

ALL INVESTMENTS AND ACQUISITIONS FOR THE WEEK OF JAN 10, 2020

CATEGORY FOCUS TYPE COMPANY INVESTORS IN THE ROUND AMOUNT ($M)
Games Mobile Acquisition Gloops GDRIVE (Nexon) $0.0
Games Mobile Acquisition Yippee Entertainment Team 17 $1.9
Games Mobile Acquisition Ilyon Games Tencent-Miniclip $100.0
Games Console/PC Investment Platinum Games Tencent-Miniclip
Games Esports Investment Rheo Lightspeed, Sequoia Surge $2.0
Games Mobile Investment Fund Hamburg $2.0
Games Esports Investment Midnite Makers Fund $2.5
Games Mobile MMO Investment Npixel Saehan Startup Investment, Altos Ventures, Bluehole, Roblox $25.9
Games Social Investment HaikuJAM Lightbox $3.4
CATEGORY FOCUS TYPE COMPANY INVESTORS IN THE ROUND AMOUNT ($M)
AR/VR/XR AR Hardware Investment CReal investiere, DAA Capital, SICTIC, grants from European Innovation Council, Foundation pour l’Innovation Technologique $7.3
CATEGORY FOCUS TYPE COMPANY INVESTORS IN THE ROUND AMOUNT ($M)
CATEGORY FOCUS TYPE COMPANY INVESTORS IN THE ROUND AMOUNT ($M)
3D AI, Holographics Investment Jimuyida East China Sea Investment, Lian Jin Shu, Ruiding Capital, others $14.3
CATEGORY FOCUS TYPE COMPANY INVESTORS IN THE ROUND AMOUNT ($M)

Blade Announces $33 Million In Funding For Its Cloud Gaming Platform

Blade announced the company has raised $33 million in a Series B round  to expand its cloud gaming service Shadow. Based in Paris, with offices in Mountain View, California, the company was founded in 2015, and has over 200 employees.

To date Blade has now raised over $104 million. Investors from this round and previous investors include Serena Capital, Western Digital, Charter Communications, Financiere Saint James, 2CRSi and multiple individual investors. In addition to the funding, Shadow is also bringing on a new CEO, Jérôme Arnaud to help build out the company’s international presense in both consumer and professional markets. 

Shadow is the company’s first product, which launched back in January 2018 and currently has 70,000 subscribers globally all paying $35 a month.  As part of the lastest announcement the company has dropped their subscription prices in half with the hopes of getting some momentum before Google’s November 19 launch of  Stadia. 

 

The new subscription service comes in three different levels, rather than the one subscription price. It is currently available in the UK, France, Germany and Luxembourg (Pricing for the US has not yet been announced):

Boost – at £12.99 per month (£14.99 without commitment), this highly accessible offer allows subscribers to play all the latest games in Full HD from any device.

Ultra – at £24.99 per month (£29.99 without commitment), gamers are offered the possibility to play with superior graphic performance(s) in 4K, up to 144 FPS in Full HD with ray tracing compatibility. This offer provides the power of a GeForce RTX 2080 graphics card, but also the power of a better processor, more RAM and more storage.

Infinite – at £39.99 per month (£49.99 without commitment), Infinite grants the most demanding gamers, streamers and creators direct access to the “best available” on the market: a dream computer including ray tracing combined with the top graphics card at the moment (RTX Titan), and 1TB of storage. With this dream line-up, users will be able to play all the latest games in 4K.

Additional storage can be purchased. But what makes this unique is from other cloud gaming solutions is that Shadow provides a full Windows 10 PC which means you can run any software you want, from AAA games, to enterprise work in Solidworks for CAD, or for content creation with Photoshop and video editing solutions.

“Making stupid objects very smart” is one of the philosophies of Shadow, and as part of that mantra they have also announced a redesign of their interface that enables any PC to adapt with a living room display. The TV version is compatible with Smart TV and Android and will be soon extend to smartphones and tablets, currently in beta on Android and iOS. Shadow has also already demoed live streaming to VR, and is currently working to bring that to consumers. 

Shadow has also partnered with OVHcloud, a Data Service Provider who will oversee infrastructure and data center rollout.  Other key partners include Nvidia, Intel, Microsoft, 2CRSi and Ericsson.

 

What We Think

Shadow is the first of several products coming from Blade, and the fact they they have full support of Windows 10 is a good starting point as it enables them to also focus not only on gaming but also high-end visualization and enterprise industries like CAD that will help it draw out further optimizations.

It has to be said though, they are up against some behemoth competition with the likes of Google, Microsoft and Sony. What Shadow lacks in endless funds, they make up for in their ability to be more nimble and take advantage of key opportunities.

With Stadia’s launch on November 19th, and news soon coming from both Microsoft and Sony, we expect the cloud gaming sector to heat up now. While M2 Insights doesn’t predict meteoric growth for the first few years, we do believe this is the start of what will be a slow, steady change in content creation, content delivery are the user experience.

If you want to hear more, join us at the The International Future Computing Summit, taking place at the Computer History Museum, November 5th – 6th where Blade will be speaking.

The conference is focused on client-to-cloud and edge computing with discussions centered around games, visual effects, education, and enterprise. A few of the companies we’ve got speaking include: Intel, AMD, Nvidia, Dell, Lenovo, Unity, Epic, The Foundry, Cintoo, Game Tech at Amazon Web Services, Hatch Entertainment, ShadowTech, MagicLeap, AccelByte, Ultra, Adshir, Xilinx, Ericsson, Looking Glass Factory, Poco Loco Amusements, VentureBeat, M2 Insights, Jon Peddie Research, TIRIAS Research, Stanford University, Intel Capital, Boost VC, Alsop Louie Ventures, The Venture Reality Fund, with additional speakers still being added. 

Apple Acquires UK Motion Capture Company iKinema

Documentation disclosed by MacRumors has found that an Apple executive came onto iKinema’s board of directors starting on Sept 9, 2019. Around the same time the company’s official address was changed to that of Apple’s law firm in London. On October 4th Apple officially confirmed the acquisition, further details of the aqcuistion were not disclosed.

What We Think

iKinema has been used on many films and games and now it will be interesting to see what plans Apple has for incorporating the company’s technology. All of the iKinema site has been removed but in previous press releases it describes itself and its list of clients as follows:

  • IKINEMA (www.IKINEMA.com) sells products that dramatically improve the quality of animation and reduce the cost of producing animation. It uses patented IP to dynamically calculate animation sequences. The resulting animations are more realistic and cheaper to produce and maintain. IKINEMA was established in 2006 in the UK and has actively traded since 2009. The company owns patent protected intellectual property for fast, realistic and organic animation for games, virtual, and movie production. Prominent clients include: Activision, Bethesda, Bluehole Inc., Capcom, CBS Digital, Deep Silver Dambuster Studios, Digital Domain, Digital Idea Corp., Disney, DreamWorks Animation, Electronic Arts, Epic Games, Foundry, Fox VFX, Framestore, Globo TV, GREE, Inc., Hasbro, Image Engine Design, Inc., Impulse Gear, Infinity Ward, Koch Media, Linden Lab, Microsoft Studios, NASA Johnson Space Center, NCSOFT, NVIDIA, Quantic Dream, Rare, Respawn Entertainment, Snail Games, Softstar Entertainment Inc., Square Enix, Sumo Digital, Technicolor, Tencent NEXT Studio, The VOID, 20th Century Fox, 2K Games, Ubisoft, Unity3D, Valve Software, Vicon, Warner Bros. and many more. The company is licensed technology provider by Microsoft, Sony, Nintendo and Autodesk. All products or brand names mentioned are trademarks or registered trademarks of their respective holders.

The ability to produce high-quality, low cost animation has been an issue the industry has been trying to solve for years. 3D and animation is still the most difficult form of media to create. Tools that better enable the democritizition of 3D content for developers is definately a valuable resource and Apple seems to have targeted that as something they look to capitalize on in the future.

Unity Technologies Acquires ChilliConnect

ChilliConnect’s cloud-based toolkit to provide live game management services for building and managing connected games

Unity Technologies, announced the acquisition of ChilliConnect. With the addition of ChilliConnect to Unity Technologies, developers will benefit from easier, better integrated access to live operations and backend game management services to build and manage connected games.

“By joining Unity, we are enhancing that choice for so many more developers worldwide. Our services will remain engine agnostic, but we’re excited to provide Unity developers with an easier path to successful.

“Creating games on Unity is a great first step, but developer teams of all sizes are then faced with the challenge of managing and maintaining those games, which can be very complicated and costly,” said Luc Barthelet, Vice President and General Manager, Cloud Services, Unity Technologies. “ChilliConnect is the connecting piece for Unity developers, providing the essential LiveOps and backend services needed to successfully operate a connected game. Having ChilliConnect onboard closes the loop for developers to create, operate and monetize their game with Unity and we’re very excited to have them as part of the team.”

ChilliConnect provides developers with cloud-based game services to enable backend operations at scale, allowing developers to add online game features and run LiveOps without needing to manage their own server infrastructure. ChilliConnect’s services, and the offerings from Unity’s other recent acquisition deltaDNA, round out Unity’s full LiveOps solution for building and operating connected games. With these acquisitions, developers can now access cost-effective, customizable live game solutions, regardless of individual needs.

“Much like Unity, we believe in democratizing game development and management regardless of studio size, engine technology or commercial aspirations. We want developers to have a choice,” said Paul Farley, Chief Executive Officer, ChilliConnect. “By joining Unity, we are enhancing that choice for so many more developers worldwide. Our services will remain engine agnostic, but we’re excited to provide Unity developers with an easier path to successful connected game operation.”

Unity exists to empower the success of the world’s creators with the most accessible and powerful real-time 3D development and monetization platform. Games and experiences made with Unity have reached more than 3 billion devices worldwide this year and were installed more than 34 billion times in the last 12 months.

Playable Worlds Raises $2.7M, led by Raph Koster

Playable Worlds, an online game company created to change the way immersive worlds work, announced today it has raised $2.7 million in seed funding, led by BITKRAFT Esports Ventures with participation from 1UP Ventures and several game industry angel investors. The company is led by a distinguished team of developers with many decades of collective online game experience from Disney, Marvel, Sony Online Entertainment, and venture-backed startups.

Raph Koster, CEO and Founder of Playable Worlds, is the award-winning lead designer of Ultima Online and creative director of Star Wars Galaxies, a former executive at Sony Online Entertainment and Disney, and founder of Metaplace. Alongside Raph, Playable Worlds has assembled a deep talent bench of veterans that includes former senior technical leader at Amazon and Disney, Dorian Ouer, as Chief Technology Officer; veteran comic book illustrator for Marvel and DC and award-winning art director for MMOs, Mat Broome, as Studio Art Director; industry expert with experience shipping and leading live operations for web, console, and mobile games, Brian Crowder, as Lead Server Engineer; and lead designer of more than 30 commercially published games, Greg Costikyan, as Lead Game Designer. Additionally, co-founder Eric Goldberg is head of business, strategy, and corporate development for Playable Worlds and has served as a strategic advisor or board member for over 60 companies including Playdom, PlaySpan and Pixelberry.

Playable Worlds is building an online world where a broad range of players can find a home, whether their preferred playstyle is exploring, adventuring, socializing, crafting, or player versus player combat. These diverse communities can each play the game in their own way, or cross over with one another, delivering diverse play experience and enriching the world. Bringing together proven features from some of the world’s most popular games in a unique combination that hasn’t been seen before, the team is developing a broadly appealing and novel experience that leverages modern cloud architecture, simulation, and AI. The funding will be used to scale the expert team and accelerate product development.

“I’m incredibly excited to bring a new world to players,” said Raph Koster. “Technology has caught up to the visions we always had of alternate worlds where entire societies can form. It’s time for that dream to be fulfilled.”

“We are honored to work with Raph Koster and the entire Playable Worlds team as they redefine MMOs with new levels of community interaction synonymous with streaming culture,” said Scott Rupp, a partner with BITKRAFT Esports Ventures. “Playable Worlds is building on Raph’s incredible heritage of MMO design innovation to create a completely new experience that will push the boundaries of persistent game worlds and social competitive play.”

What We Think

Raph Koster is one of the most well respected game designers in the industry. With over 25 years of experience, Koster is known as the lead designer on Ultima Online and the Everquest series for Sony Online Entertainment. He is also the author of “Theory of Fun For Game Design”, a must read for any game designer.

Playable Worlds has been in stealth mode since early 2018, and with a headcount of 10 people will be officially based the San Marcos, California. The company isn’t planning to have much to show for a few years, but the idea of a sandbox solution that accelerates the creation of a new kind of MMORPG sounds intriguing, particularly given it’s support of use of cloud, AI and real-time technologies.

Back in 2007 Raph launched Metaplace, an ambitious 3D virtual world platform which was eventually acquired by Playdom, and then later sold to Disney as part of their acquistion of Playdom. Now ten years later, his vision of an next-generation sandbox platform seems extremely fitting.

Games-as-a-service (GaaS) seems to be the current buzzword these days, with more and more companies looking to adopt cloud solutions to develop and distribute their games. Over the past few years Raph has done quite a bit of research on retention and wrote an insightful article on What Drives Retention, in which he correctly states: “GaaS is a business strategy, and F2P is a revenue model“.

Implementing a cloud solution will be necessary for game developers and publishers to compete moving forward. And with cloud-gaming platforms such as Google’s Stadia, Microsoft xProject, ShadowTech’s Blade, and more all coming on line, it will mean developers will have to adjust their business strategies sooner than later. 

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July 15, 2020

Sony Corporation invests $250 million in Epic Games…why? And what’s next?

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Jaunt XR’s Technology Aquired by Verizon

Jaunt XR today announced the acquisition of its software, technology, and certain other assets by Verizon Communications Inc. (NYSE, Nasdaq: VZ) for an undisclosed amount. Jaunt XR is a leader in the immersive industry with a focus on the scalable creation and distribution of volumetric video of humans.
“We are thrilled with Verizon’s acquisition of Jaunt’s technology,” said Mitzi Reaugh, President & CEO of Jaunt XR. “The Jaunt team has built leading-edge software and we are excited for its next chapter with Verizon.”
Jaunt will be assisting Verizon with the transition of select portions of the software and technology for a brief period of time.
About Jaunt XR
Jaunt, Inc. (dba Jaunt XR) enables the scaled creation and distribution of volumetric video through machine learning. Jaunt has twice been selected for Fast Company’s World’s Most Innovative Companies and back-to-back selection for CNBC’s Disruptor 50 List. The company is headquartered in San Mateo, California.
Jaunt’s investors include Evolution Media Partners, CMC, Highland Capital Partners, Redpoint Ventures, SMG, Axel Springer, The Walt Disney Company, The Madison Square Garden Company, and Sky. Learn more at www.jauntxr.com.

Tencent to acquire 29% of game developer and publisher Funcom

Tencent will acquire 29% of the shares in the independent game developer and publisher Funcom

Tencent, a leading Internet company with a strong online games operation, entered into a share purchase agreement to acquire 29% of the shares in Funcom, the independent developer and publisher of games such as Conan Exiles, The Secret World, and Mutant Year Zero: Road to Eden. The acquisition makes Tencent the largest shareholder in Funcom. Funcom is listed as Funcom SE on the Oslo Stock Exchange (OSE: Funcom).

Tencent has agreed to acquire all shares belonging to the Norway-based KGJ Capital AS, which is currently the largest shareholder in Funcom.

For more than a decade, Funcom has successfully launched major multiplayer titles including Anarchy Online, Age of Conan, The Secret World, and most recently Conan Exiles. Both 2017 and 2018 were the most profitable years in Funcom’s history.

Funcom announced recently that the company has acquired the exclusive rights to develop and publish PC and console games based on the DUNE IP for the next six years. The company is already working on an open world sandbox game set in the DUNE universe and is working closely with Legendary Entertainment who will be releasing a new DUNE feature film in December 2020 directed by Denis Villeneuve.

“We are very pleased to see Tencent come in as the largest shareholder of Funcom,” says Funcom CEO Rui Casais. “Tencent has a reputation for being a responsible long-term investor, and for its renowned operational capabilities in online games.The insight, experience, and knowledge that Tencent will bring is of great value to us and we look forward to working closely with them as we continue to develop great games and build a successful future for Funcom.”

Tencent ranks top in terms of online games revenue globally and is a shareholder in many of the world’s leading gaming companies such as Riot Games, Epic, Supercell, Ubisoft, Paradox, Frontier and Miniclip.

For more information about Funcom, please visit www.funcom.com. For more information about Tencent, please visit www.tencent.com.