LVP's Paul Heydon on investment, eSports, mobile MOBAs, and Europe's advantage

just before I get started just want to see if I would have estimize gate who has event English food is raised money raised and one whose plans i'm raising money this year is so it's a relevant topic ok so i hope you prefer LBP but if not just a little bit about me I used to be an investment banker or blog in companies and getting together with my clients and help set up LBP but i wanna game company some of personal travelers Jason I'm also a shareholder play hubs which is a co-working space in somerset house which is just over a mile away yeah that we set up but a year ago almudena seen finally focus on see a stage sector for start-up game companies

were focused in Europe we have done deals in the US and done to do more but I focused early and Europe that's where we are these the companies that we have invested in and you know we can change invest into anymore they're fortunate to me in supercell also in unity but which are doing extremely well supercell just sort of give you super quick history on that that a lot of people may not realize is company was started jun 2010 they raised the first seed funding for 2010 which we participated in there is a series a just a few months later with back cell partners and we have original sin company I was going to do some high-quality browser games and pivot into mobile they launched you know

all began wanted to be very successful there was various liquidity events and they didn't almost two billion revenue 2014 we were fortunate up his cell dress prostate softbank when they bought all the financial Buster's last year so in the top because quickly with some key trends mounted mobile game sector that were seen so yes it's getting bigger now you can go back 30 years and the whole game sector is just gradually got bigger every year has a sort of different growth spurt or not so big grossberg but it's just continue their and mobile games is the fastest growing area mobile mobile it's a really awesome topic on Memphis spend that much time on bang glory who are excited about it and there's off people were not so excited about it will

think mobile mobile can happen some people don't believe in happen but I think supercell basic beta launch of clash Royale and because surprise a lot of people because it's monetizing my crazy so I think mobile on mobile will work but just has to be done wait a little well so let's see what happens but I think there's a lot of exciting things to come and be nice to see what happens with class royal actually both global mobile game live streaming I use a lot of things happy in this area as much money necessarily and generated there's lots of people watching people playing games or watching the streams she's got a mock crush in California camp pork is awesome California but I really focus in Asia now youtube is trying to do

everything global and then this little company and trying to call shoot teeny which welcome wait up be familiar with it raised peanuts in terms of capital compared to the rest of those companies and they've got tens of million users in China I think you're going to see a lot more innovation things happening here because if anything you see with which have with twitch on PC the mass market may not yes how they be playing it but they they want to watch it and it's just huge so it's gonna be really nice to see what happens there mobile be sports bangalore adding sort of leaning away with this what they've done various leagues and tournaments that going on around the world they've

actually partnered with when it sort of the game TV channels companies in Korea and that was a lot of really smart things hearthstone is got some eggs and I'll show there's some others they're starting right I think you're going to see more on that people want to play in teams with a bottle watches and he's 14 geologist growing those are some of the key ones I mean there's more but I'm going to spend time on that so why is your great well guess what Europe has more people overall in it than all the US Europe has more smartphones than the u.s. so you in terms of number of people you can reach for mobile games as a bigger community that's how to do you think roadies bug bigger than us currently whether there's some more

things than good so this is a chart that we did Mason research that we did late last year so we went back last four years we looked at all the acquisitions are IPOs and just look at sort of pure value creation and here was the best deforming market so this is surprising video you look at sort of any sort of BC back tech sector us is sort of the way in terms of that agreement and the game this is different this is something that we've been believing for long times a huge amount of talent in Europe it was never enough capital but is there's a lot of different things to sort of think about their so value creation and returns are better in Europe because people do more with less here you know

the salaries are probably less than half in general across here than they are on the silicon valley yes it's not as much capital here but people just sort of tend to make it work and guess what new evaluation has been what four times more than in the u.s. so for you know European game companies this is something that you should show that oestrogen so this is something a lot of people don't know I'm we never shown this data before and I'm not going to show the detail behind it but basically if you were to look at Europe as a whole and look at the value of games revenue that seems to be made here but ready to be generous cease and the value of games that have been played here that are not made in Europe and thats how you should work out exports versus important are you in that

export is sort of like economic success basically Europe is exporting way more mobile games revenue that it is importing a bug in front of you and so it's the only one that's a net exporter so US imports way more games yeah and a Asia doesn't this just doesn't export very much it has a massive domestic market but a you know if you look at the top charts and some key markets in China Japan and Korea guess what most of our domestic games with the best market so in point and then when you look at on revenue basis Europe is trailing behind Asian us overall but if you look at on a

per capita basis just in terms of sort of exports per capita you know you're busy in a way I just think we're doing a good job here so you should share that news and people and when you look at assists for some pure text endpoint there's a lot of developers in Europe and you've got some key knots the parts of Europe and we've got more mobile developers here I just think you know mobile seven do you look back to the beginnings of the Kia and when it's how much rd Gary I mean it's just everyone think oh well there so if we look at side of Europe and this is just mobile this is a sort of all game companies in general who the biggest game companies that are public with market and this is the list you know I

just on that list you're looking that up how bad was 3am billion and probably Martin cap Tencent is see the weight on the room so asia eppes Cole has biggest overall market cap concentration because it's just a lot more public companies there and it's got ten cent and it also has the most revenue again driven by ten cents there's just been a lot more happened over the years driven by online but growing more so with global in Japan so here is the largest Japanese company by market cap so the orange ones are now mobile black ones on boba and this is

this is the biggest ones is there's probably another 40 or 50 public companies that are not in this list of public in japan is a very unique market for cold a lot of reasons this is the Chinese slide again there are probably another 20 or 30 companies on here that are not on this list that republic my new tried is all over the place is what's happening in the stock market mccauley over there but the game company performance wise are doing extremely well just terms of soaring profits just see what happens with the with their market caps and then we've got Korea you know it's next on and so soft and then the low ball one is gaming will come to

us which is money just just through mobile so just going back so what I didn't say is that all those companies on the list is mobile it's probably the area of the most interest right now in terms of where they spend their time in terms of new games with the one development me it's a lot of published could be somewhat a bike is going to bust in and you're going to start seeing a wave this major spending a lot more time hair you know I'd already seen it already because we got huge pockets money to spend and they're very serious so this is an interesting chart it's actually the top six feels two of them are involved you know what is stopping supercell deal the other ones the activision king jail I

mean the valuations from the massive you know they are generating massive revenues you know what does that mean for the sector I think it's a great thing for lots of reasons sort of validates well while it's a great place to be to migrate returns more importantly is that capo is likely to get reinvested in the game sector at least parts that anyways so who invest in game industry in Europe well there's a 17 there's initial capital X playfish matters Chrissy I'd say those of the leaders it was a whole bunch of others did you know doing the odd deal here and there and then just sort of broadly across Europe these some of the more active firms DN exhale random or sewn index yes is a lot

more VC firms may have done what utilities are the ones had just been a bit more active that's it just one thing I just wanted to say this is that if you are planning and raising money this year things have changed in case you haven't been fun in stock markets the oil prices for real estate markets the news is coming at Silicon Valley realities can you know it's going unicorns unica laps so just manage your expectations because things may take longer valuations may not be what you're expecting and racing largement that somebody is just going to get more difficult and some investors may just be investing less it's not the end of the

world but it's just you know just a bit of reality cooking so there has been a bit too much height thank you