Welcome to Lootbox - a weekly newsletter covering the business side of video games.
What's in this Lootbox?
- 🎮 a16z Launches Game Fund 1
- 🚨100 Thieves’s big announcement
- 🍎 The BIG OMG RUMOR
- 📷 Meme
🎮 a16z Launches Game Fund 1
Venture Capital firm a16z launched “Games Fund 1” last Wednesday. This is a $600M fund where they will invest in the entire video game industry from studios, consumer apps, and infrastructure / tools. Andreessen Horowitz (a16z) made the splashy announcement with a hype video you can watch here.
If you follow me on Twitter (@triviatroy) you would’ve known about this fund back in March. I caught their SEC filing and tweeted about it.
Yesterday A16Z filed for a $600M gaming fund sec.gov/Archives/edgar…
— Troy 🎮 (@triviatroy)
Mar 11, 2022
🚨100 Thieves’s big announcement
100 Thieves is finally stretching beyond Esports & selling hoodies to justify their $460M valuation. The brand announced last Wednesday that they’re developing their own…
Is it a coincidence that they announced this the same day that a16z announced their $600M Games Fund? 🤷♂️
Now why would 100 Thieves take on such a big endeavor? Game development is not easy. It takes time, money, talent, and lots of luck. Their competitive advantage hypothesis appears to be that launching a game with a pre-existing community gives them an edge. Plenty of fantastic games have failed solely because they couldn’t break through the noise and build their own community.
The other motivation is that Esports simply doesn’t make a lot of money. Esports teams across the board struggle to solve the monetization problem. Most of the money in the video game industry goes to the publishers / studios, and the content creators / esports athletes. Brand deals and promotions can bring in big money, but there’s a natural ceiling that all esports teams are facing.
By developing their own video game, they can control the IP, Esports leagues, and the entire vertical.
100T is just getting started, they’ve only made 1 hire for their game initiative so don’t expect an alpha or beta anytime soon.
Checkout their announcement video below:
Welcome to Project X!
We are making a video game with our creators, our pros, and our community.
— Project X (@100T_ProjectX)
May 18, 2022
🍎 The BIG OMG RUMOR
9TO5Mac reported yesterday that Apple is in talks to buy Electronic Arts.
My actual reaction when I saw the rumor:
According to 9TO5Mac EA is actively searching for a buyer. Other companies also in talks to acquire the gaming giant include Disney and Amazon (.
EA's current market cap is around $37.6B as of yesterday's close. This would be much cheaper than Microsoft's $68B acquisition of Activision Blizzard but way north of Sony's $3.6B acquisition of Bungie.
The streaming wars are over. The gaming wars are just beginning.
Whoever is successful at closing a deal would get access to top gaming IP including Madden, FIFA (well sort of...), Apex Legends, Star Wars Jedi: Fallen Order (wait doesn't Disney already own the Star Wars IP?), The Sims, not to mention the currently troubled Battlefield franchise.
I'll be on the edge of my seat watching this unfold.
Checkout the 9TO5Mac article here.
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