Train2Game News 2018 Game Investment Doubles

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.

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 billion, PAI 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)

Train2Game News Make Real Investments

Solutions-driven immersive technology company, Make Real, has secured equity investment to fund the development of Virtual Reality & immersive products.

The Brighton-based company has raised an undisclosed amount, via the investment round led by M&A Advisory.

This investment arrives at a key time in the immersive technology space, especially as Brighton has been highlighted as one of the growing key clusters, according to Innovate UK’s Immersive Economy in the UK Report, launched in May this year.

Make Real intends to use the investment to fuel significant growth, including the hiring of new talent and building out a number of immersive e-learning products.

The focus of the investment will cover three core areas ;
● Building an R&D team to focus on prototyping and creative product development.
● Marketing & PR investment to increase Make Real’s discoverability and presence within the industry.
● Investing in experimentation with non-commercialised technology for learning and development applications.

Robin Scott, Managing Director said:

“The Immersive technology market is growing and maturing rapidly. This investment round allows Make Real the opportunity to exploit the background IP we have generated over our decade of immersive development. We are thrilled that our new partners have seen the potential in our business and look forward to contributing further to this fast growth sector.”

Jane Burgess, Chairman said

“Make Real has established a strong position in the growing immersive industry. With this capital injection, we’re excited to move to the next stage of company growth, focusing on the areas that provide even more value to our clients. We are delighted to be working with an investment partner who provides us not only capital, but also years of strategic experience in growing businesses.”

Train2Game News nDreams investment

nDreams Ltd., the UK’s largest independent developer/publisher solely focused on virtual reality (VR) entertainment software, today announced that it has received an investment of £2.0 million, the first of a two-stage round. 
Mercia Technologies PLC, the technology-focused investment business who has invested £4.1 million into nDreams previously, funded £1.0 million of the latest round. The rest of the investment comes from a group of angel investors.

The nDreams investment follows the recent launch of the award-winning The Assembly (view trailer) on Sony’s PlayStation®VR, coming after its number one debut on Oculus Rift and successful release on HTC Vive. nDreams also recently released Danger Goat (view trailer), its first title for the Daydream, Google’s new high-quality mobile VR platform that launched on 10 November 2016.

Patrick O’Luanaigh, nDreams’ CEO and Founder, said:

“We’re delighted that Mercia are continuing to support our growth by taking part in this investment, which is the first of a two-stage round. We’re also very pleased to welcome a number of private investors, all of whom have hugely successful business backgrounds and a wealth of knowledge and experience. I’m so proud of the team that we have assembled here at nDreams. This investment allows us to continue building on the momentum we have achieved, and to develop VR games and experiences of the very highest quality.”

Mike Hayes, Mercia’s Investment Director, Digital & Digital Entertainment:

“The continued progress of nDreams is an example of Mercia’s success in investing and mentoring UK technology businesses. We congratulate the nDreams team and believe that the Company has an exceptionally exciting future ahead, operating at the forefront of the VR content development.”

nDreams was one of the first game studios in the world to focus on VR software, and has been working on virtual reality since 2013. The company has also launched Gunner and Perfect Beach on the Samsung Gear VR and has several VR games and experiences in development.

Train2Game News: Oculus Rift gets huge funding

Oculus RiftOculus VR, maker of the anticipated Oculus Rift VR gaming headset, has secured $16 million in Series A funding.

The round was co-led by Spark Capital and Matrix Partners. Santo Politi, founder and general partner at Spark, and Antonio Rodriguez, serial entrepreneur and general partner at Matrix, have joined the company’s board of directors. Founders Fund as well as Formation 8 also participated in the round.

Oculus plans to use the funds to accelerate the development of its virtual reality hardware, software and services, and ultimately create a virtual reality platform for consumers.

“Oculus began with a single mission: to put players inside the game,” said Palmer Luckey, founder of Oculus VR and inventor of the Oculus Rift.

“This investment allows us to deliver immersive and affordable virtual reality to players everywhere.”

Oculus garnered lots of attention when it debut at last year’s E3. Oculus has since manufactured and shipped the Rift development kits purchased in its Kickstarter campaign, allowing game developers to create Oculus-ready applications and interactive content.

Spark Capital has previous backed other forward-thinking tech ventures, which have subsequently gained massive popularity, including Twitter and Tumblr. Matrix Partners’ achievements include early investments in some of the world’s most successful technology companies, such as Apple, SanDisk and others.

“What better way to mark our first anniversary than to announce our next phase of growth,” said Brendan Iribe, CEO of Oculus VR.

“There are still many challenging problems to solve, but with the support of these great investment partners, and our passionate community, we will continue to hire the brightest minds and stay laser focused on delivering the very best virtual reality platform possible.”

Oculus VR originally raised over $2.4 million through its Kickstarter campaign – almost ten times its fundraising goal.

Development kits are currently doing the rounds, but no commercial release date has been set for the product.