The games industry investment power panel

[Music] [Music] everybody I guess we'll get started what's up I'm Rachel Cooke I'm the founder of seeds seeds is the easiest way to ask the block to for help and receive it as a gift with no strings attached so to do smell is good point you want to help developers get money for projects we were the recomputed in TechCrunch Disrupt adil field 2016 went through TechStars in 2015 and the boost VC Bitcoin accelerator in 2014 and we're now doing a token sale and our front-end tools help game developers convert more paying customers so kind of at the intersection of all this today so I

thought what we could do is just go down with the panel and you guys need to introduce yourselves and I had a couple questions and I thought we could open it up to you start hi I'm Julia Ogden Indians for one time I joined the company called g5 when it was developing three iPhone mobile games and then we jumped on the iPhone mobile train pretty early in 2009 I stayed for seven years until we did you stain on solution attack then I moved to cities and the three years there mostly with London Venture Partners or the investor investment team and recently I loved and moved to San

Francisco to start my own company which is like now the mountain starter let me discuss but because if my investor experience I'm here I'm most advising a few companies I go to the shop Supergirl I've been in games for about 25 years worst happened which was in D production so I was a game producer / gameplay defunded Sims and later made the move over to corporate development and to investment so didn't act an angel investor and also open investigating games for about 10 years now so my personal investment Studios include super evil Megacorp and a corporate investment and hi my name is Jeff actually work in

my own for about six years mobile gaming space focus so I work with a lot of studios help various businesses such in the last couple years have been more focused on M&A investment opportunities as those become more challenging looking more creative ways for people to fund their projects as well as startup companies great my name is Miko and I'm actually a little bit relatively new to the gaming space you know I'm a gamer myself but that doesn't make me an expert in industry I have joined however Gumi ventures and GUI ventures is a publicly traded Gumi is a publicly traded company of about 850 employees headquartered in Tokyo they have game studios all around the world including San Francisco Helsinki and in Seoul Korea and they

have multiple venture investment funds that invested gaming most recently they have a venture reality fund that has about a hundred portfolio companies has one of prolific investors in AR BR and I'm a partner in the upcoming crypto investment fund so it's a 20 to 30 million dollar fund that will be investing principally in watching based efforts so personally I'm a adviser to 14 kokin sales as well as a founder in a crypto currency exchange called ever coin so I come a little bit more from the crypto siphon from the game side but we're excited to see synergies these areas hi my name is Jim yang Tom would city capital where shanghai-based investment bank that primarily brokers late-stage investment and M&A deals out of Asia we worked on several

transactions with a Western company our seller that's looking raise funds from China Korea or to sell personally my background is it games for the last 15 years with Xbox six waves three tango mostly on the operations and right now okay I wanted to ask you guys if you would die have a little bit deeper into your specific interest in at the intersection between blockchain and gaming investment related things or if you fall more on one side do you understand I'm happy to take a crack so here's the thing that I think from the basis which is that people often misunderstand satoshi nakamoto and his vision so he's the pseudonymous founder a big coin if you're interested there's a wonderful book called the book of Satoshi it's a collected emails of Satoshi

Nakamoto the thing that people don't understand is they really don't understand blockchain they really think blockchain is just a data structure which changed lakhs of transactions that's really a very dim and limited view and Enterprise people are all desperately trying to ignore cryptocurrency Bitcoin and they're desperately trying to convince everyone that blockchain should exist without their currency you know and as such they're divorcing things like consensus algorithm they're forcing a lot of really meaningful layers on top what why do you think that is because they're centralizers so enterprises are centralizers and the notion that decentralization blows them up from the inside make some constitutionally incapable of metabolizing the idea that decentralization could disrupt their business model so and by the way this is an all companies there's some amazingly more powerful companies that just Facebook that have tilted up a watching division and when they say it's a

blockchain division one of the first projects is a cryptocurrency right so they're really actually fighting fire with fire I don't think they're all known but the point I'd like to say what this is is what does got me excited is that one of the biggest insights are on decentralization is the notion that one of the big insights of Satoshi is is if you can block economic three writers which were people that are stealing value from your community so if you can block them and you can incentivize people that are adding value to your community then the network becomes effectively self-inflating so it actually becomes a bed caps law valued self-inflating network so the reason why I think gaming is meaningful in this is that people talk and drink a lot about game theory but it isn't actually just theory it's practiced right and the people who have the most understanding of and a behavioral

dynamics at scale like for example there's two classes of people that understand the formation of cricket balls one of the classes of people are central bankers of which there are probably a thousand on the planet the other class are people who have designed in-game economy so to be people understand their economies will largely come from gaming and I don't want to take up too much time but I do have a crazy story which is Brock Pierce was one of the godfathers of cryptocurrency movement and the star of the Mighty Ducks yes and a child actor starved the Mighty Ducks century with Emilio Estevez crock peers that is started cryptocurrency with the world of warcraft gaming old mining Chinese old mining outfit and the executive that he hired from Goldman Sachs to run it was a guy by the name of Steve and who's not famous for his role in the

Trump administration but I don't wanna rant too much but the only thing I wanted to click on is all about a click on crypto from the beginning has been tied to gaming and so I think that's kind of an intrinsic vibe that comes out of the crypto world so that's that's my new sense soon you want to go my background is not in crypto it's mainly in gaming and so for a lot of for me a lot of this is having any of the students very awesome so the interesting things I see is because crypto the technology allows you to place especially value a lot of digital goods and a lot of people I'm thinking that's how we're going to leverage this technology in the game so that there's value in these goods that are created with the games and they can either sell like my trade up I think that art is particularly interesting on the gaming side so the other thing is

also like as a funding source you know moving away from you know traditional channels being able to sort of self fund is an interesting idea I think it's a little bit more complicated than that in terms of the reality especially if we looked at like the history of things like Kickstarter and whatever with games didn't nicely play out very well so I mean I think think that what could you elaborate on what you need no I mean I just think that a lot of people over-promised and under-delivered and the there was initially of definitely a lot of interest from the community and people kind of potentially still get advantage of that and then I kind of wore wore away and we don't see that a lot these days so I think it's that way interesting is it conceptually to move away from meat dependent on on traditional funding sources but and especially on a platform side being able to move away decentralize like game distribution but

we're still like my project is so pretty far off from that be a possibility just based on like from a consumer perspective where people discover content things like this yeah I also come from ins and so for me you know I tend to look at it through that lens and the big shift is because product is you know centralization versus decentralization I look at it as a player it is investor but what does that improve you know like what can you do now that you couldn't do before does it make something traditional better you know I can you distribute better can you you know make a better game and you unlock a play experience or age distribution experience or you know market experience that you couldn't before I think that's the interesting aspect of it really needs to be seen from from my perspective whether or not like watch-chain represents that type of opportunity said or not you know the

experimentation that I've seen personally with regard to like designs they're based on blockchain the use of cryptocurrencies in particular very early you have to I'm sorry

so anyway flip it around the question like your mom's a games developer what would I do what it is I'm gonna make what I need crypto first or what I do AR or what I do I probably wouldn't I think it's early I think it is experimentation the Mikey wages that you earn by being early

as an investor I have experience in venture capital not with crypto so I guess as an investor think that there are different ways you can raise money and in some cases cryptic and feather within others as a gamer I could spend thousands of dollars in some of the keys so I do see if I knew how I could actually own some of the items across different games and experiences so was it like right now I have no way to get my money back or sell what I bought because I was spending money mobile games primarily so they're no good markets but I do see value in crypto there as a game developers shine decided I would probably not start with blockchain technology as the basis of my

business but if there is if I prove some other things I can see how it I can add value to my players top throat but I don't think that my first players will be keeping our early users yeah I think you know if you look at something like crypto kitties like people really look at that as kind of like it deep integration right because you're talking about the emergence of this kind of non fungible asset you know and so you're talking about the emergence of this kind of new class of game right to me it's super not exciting you know because crypto kitties by itself and of itself because it to me like you know most people in the room here are gamers and so to me the game

comes first and I think that I think what we're hearing some from the panel too is like the game should be fun at the point right I think there are a couple areas though that I think are super interesting I think obviously the financing area was mentioned and I think it's a valuable concept and I think it's that's definitely going to be increasingly in this kind of intersectional zone between people who are financing things and people who are using things right so whether it is Kickstarter II or whether it's more like you know if you think about shareholding the ability to hold equity in a company it's kind of more cumbersome than the ability to hold okay there's more liquidity and that may actually improve the overlap between player and owner right so I think that's an interesting model but I can tell you a segment where you're going to see immediate explosive games is in kind of money gaming slash gambling right so if you recently I think it was the Supreme Court just made a ruling on sports

betting I think that will be an area will be extremely explosive growth and you know we're gonna see a lot of down stream coming from that area so I think there is a you know that whole segment money gaming and gambling I think will be huge I'm advising a couple of I mean one relevant player which is lottery calm which is doing an ICO I think they're looking at about 300 million USD raise another one is that I did that smaller was a ten point five million dollar hard cap which was Blakey which is basically creating streaming gaming or people like really bad pcs you know and it's a very weird little tiny sub market but they basically decentralized the streaming service into miners so the miners so the piece of the end users are paying in crypto and basically streaming from their servers and they're collecting coins through

that process so that's the decentralization plan but I think just to put a capstone on this conversation to me someone asked me should i do Nico like a start-up founder and I said that's completely the wrong question and an order aligned meaning on this question the correct question should be should I incentivize my users right and the reason why I think that and if if the process of incentivizing your users includes a token sale good for you and go for it right but to me the reason why I encourage them to incentivize their user base is that they will soon be competing against someone who is incentivizing their user base and if you actually have two things how big one again the game has to work as a game alright so in other words if you have two things help equal the only way to make the vehicles if their role font like in gaming but if they're both equally fun and what other rewards you and the other one doesn't which one you're gonna play I think that's that's the kind of like twist to the tale I think which is incentivize can user community or non incentivize

user community I think that's going to change the fundamental stakes of competition anyone else on that yeah I mean I think with a I would say of crypto kitties I think we're it like you know version one of what's possible it's basically just know a lot of collection there's not much game game experience gameplay I think there's also a lot of speculation I mean you have the sort of people in the experience you know maybe for the clock taking part and maybe it's just people speculating but you know I think it's indicative if you look at like mobile games or you know social games the first stuff was super simplistic to me the thing that's interesting is the cross game potential of leveraging these these digital assets like your cross games I think that's definitely coming that's something that's pretty unique and pretty say especially if there is something monetary you know value behind it but I think we're super early in terms of like the gambling experience or you know it's very very limited sauce the audience or

most of you guys here because you're interested in gaming more so than crypto degree enhance gaming game developers yeah yeah anyone from the crypto space turn there yeah cool okay are you guys interested in hearing about how to raise money for your games yeah that we brought you in here yes okay cool got it so for my part I'll say we raised a million dollars in seed capital from traditional investors went through a Bitcoin focus startup accelerator like I said in 2014 our first tool was an SDK product to give to game developers to let their users help people in need which made them like 60 or some more likely to start spending in an app so that's where we started we were kind of looking at gaming initially um with our tokens you should check this out of here just said to do like a self

promotional thing but genuinely it seeds tokens calm with the tokens you can redeem them to ask the network for help with any project and then rather than a Kickstarter type sort of like silo we're then sharing that through the network of apps and games that are using our products so we can get in your need in front of like 15 million users the current to ask them to contribute micro amounts and then we'll just give that to you so this is an example of an alternate fundraising mechanism where you're not chasing investors and doing all the legwork and going through that rejection which I've gone through myself for years and we can just get you capital small amounts right now but it's the network growth of course we can do you want yeah so how about does anyone have any questions that you wanted to ask anyone specifically yes Oh

are we talking about or is there tendency of did you repeat the question I kind of see this Julie can you repeat the question they probably couldn't yet so what is uh what is going to happen with different kinds of fundraising strategies right but this is a creep they're going to make everyone else obsolete or not is it the question yeah from my point of view this is just different tools like you can use different strategies and dependent and what you want to achieve I know many developers for game developers

in companies entrepreneurs who wants to raise venture capital this is quite a selection bias so firstly because my experience was in venture capital so this this is one way to fundraise if you want to commit to certain pattern is that your VC masters want to see and can help with if this is the way you want to work I think right you kept talking great if you want to serve certain community let's say the early adopters of crypto then I see always probably a good strategy I'm not so so so experienced that but I'm sure it works the answer is crowdfunding and many of the companies that we invested in venture capital they use crowdfunding as marketing strategy they would start off sometimes they would actually come to investors after successful crowdfunding and say we've got so many users who are

waiting for us to start shipping so this would with the asan argument for venture capital investors to invest because you really proved there is some market fit who's your early adopters of it extorted for example so I think depending on what you want to achieve you can use all these small taneous really or one by one and I don't think that any of this is going to be obsolete anytime soon

like explaining yourself as always and if you were going to be discussing with you know American investors a series of the back profile for them they may not understand

one area that I'd be curious to see how it plays out is the parallels between companies are raising through icos and companies that were thinking of proudly so I think early on release when the gaming companies saw a lot of success of the crowdfunding site a lot of companies know why we're never not to raise easy money every yeah we want to be able to crowd fund our way and I think we've seen over time is that how funding for games has has not been as successful as somebody thought areas the companies that have been really successful are one that I've been building on nostalgia

already having a brand out there either with the developer or the IP and so they're able to pull in a lot of that interests just out of the gate based off of the game and right now I feel like I'm a ICO side there's a netbook for some of that but then also a lot of people who are putting money in are purely on the speculations and so maybe it is early it's early enough where it's not they're not necessarily investing based off of and quality of the content or how successful maybe make it go be successful but it's not actually off of or material and you know well that over time will it become more concentrated in terms of a crowdfunding where it's only be the most interesting opportunities that are able to yeah and I think one of the things that's really interesting also its recent is fig which is essentially you know funding from the crowd with an actual opportunity for a

turn so that to me becomes really interesting I've never crowd funder the game but if there's a developer the sophisticate and I think that they can make a product I can return some profit then to me is it the average person I can actually participate in that so that's something that's fairly new and still obviously emerging but it's pretty compelling we had to go with citrus of course is that there's a secondary market on exchange like ever pointer so another question from the audience that's fine because I just wanted to ramp up that's so let me let me rephrase a good question or repeat it and you can

nod your head if it's a yell if it's wrong but you know the question really was more about the publishing side which is not as much fund raising but the question becomes how do you get more of a boost in terms of the game publishing aspect which kind of okay so I'm getting a lot so that was the question what I would love to do is actually talk about the potential evolution of the space because I think one of the things that I'm feeling right now from the panel too too much of a flavor of a snapshot of a point in time right which is I think that what I'm hearing from a panelist today you know there's crypto investors and there are gamers today there's AI SEOs and there's crowdfunding and there's BC all right so to me like that's all true but what we're talking about here is an exponential technology right and so the idea that you can take crypto as a snapshot you know most of what happens when people take ripples a snapshot is that it come up with things to complain about like you can't buy a sandwich with Bitcoin or like you know people come up

with these things then you know if you think about the 6.5 billion dollars of ico that have been raised that's a very large Talent crowd right so there's a lot of really good engineers working on a lot really interesting problems in crypto but how does this relate to that a question about publishing forget oh let me bring it I'm a great poem so what I want to say is this right which is I think what I'm talking about is even the future we're talking about the synthesis of numeral platforms so I think that's what's going to emerge will be basically crypto fueled game platforms right so I think if you remember mobile fueled game platforms it was all about users right and the platforms consisted of big piles of users the thing that I think will be really interesting will be you know essentially platforms that are glued together by a token and those platforms may actually straddle a RvR desktop mobile like they may actually straddle a web casual social they may stretch travel all these different categories but they may be glued together by a token right and they may actually be and the thing to me that I think in the

future will be convergent will be this notion of crypto investors versus users versus there may not be a vs right so Facebook actually succeeds that'll be another billion wallets alright so you know it's gonna be a really interesting shift so that's what I would say is like you know and that may not answer your question today I think for the near future you can imagine a converged platform that's glued together by tokens I don't know if anyone else has a take on that yes so I'm sorry just to clarify you're basically looking at it from an investment perspective or just you're looking for a publisher and trying to understand like how the best go about that okay yeah I mean the little bit sever for this topic but I mean yeah if I think in front of mole is a mobile gaming space yeah I mean I think you basically you know these days it's a tougher model to make it work you need

to be like pretty diligent about understanding like what you specifically looking for if it's just someone to push traffic to your game or you need other capabilities operational capability early customer support or like localization things like this or platform partnerships so yeah I mean I think you just want to do significant diligence and talking to companies making sure that you know talking to other developers it worked with but in terms of sourcing opportunities and I think it's pretty straightforward you come to these events a lot of the posters are here looking in the App Store stuff like that and then working through your your workflow in terms of what you're looking for operationally as well as on the business side to find it someone that fits within those criteria and then hopefully some subset of those will be interested in your actual product but it is a pretty tough model these days to make work no matter what type of game or scale you're operating on yeah well I personally also have a

lot of experience in publishing you know like I was responsible for publishing at g5 and then while at London major partners I consulted our companies on publishing strategy so I think what you're saying mica is that in the future the publishers are now seen as companies that hold this user base and they can give you a push is the Williams side of what you're getting but what you're saying is in the future publishers might become obsolete because no one no one is going to be able to hold the same user base that well if if krypton and decentralization works out but I think for today I would just defined another theme that you are developing and depending on the I would scan publishers that have the best fit for your game

like for example fun PLAs is one of those and maybe Chinese you can have a look but yeah so actually you can come we're gonna speak later I have good take a base of publishers with some insights but basically you just try to find a good fit for your game in existing primarily from user base perspective I would say and then you you can approach down with a peach and hopefully get yes the right because from my perspective I think one thing that it in help with is obviously some funds in to finish the game but the second is that is probably bigger from my point of view is right either base but they can cause promote your into especially you say have developed strong relationships with their users so that they don't just sell easy in all and see what sticks but they actually work with their user base as an

example of this is my informant company g5z birth was female audience been married that love adventure games on while so if your impulse in this category might be a good publisher for you then there are other publishers this is official eyes any different so what I pick person that I have for you is are you interested in a publisher primarily for the capital side of it or for the distribution marketing side of things to see distribution seemed quite difficult around I don't think why I spent several years on publishing side in six ways retake my question would be why do you feel like you need a publisher because if you've already funded the game and you've redeveloped it and you're able to market its let you see what some of the metrics are then if the metrics are strong either you have

cash flow that's coming off that you can market the game or war and raise funding to market the game yourself because when you do look side with the publisher you give up a lot of even if you're not going away the IPO give me a lot of revenue I've share of rights and then when you're down the line looking at a potential exit or I even though just long-term viability of the game any publishers don't want some sort of blocking I think one thing that they can give you is they are good for you as a free traffic so so your actual user acquisition cost is going to be much lower but only if it's a good it's not I agree with you in situations one example of kind of this disaggregation disintermediation pattern is I'm an adviser to a crypto company called the refer IAM and refer um basically allies with people like

twitch streamers in order to create referral ant works that are paid out in cryptocurrency now one of the real interesting enablers in crypto is that you can actually write very small checks and quotes to people in other countries right so in other words it solves problems of international payment or people doing referrals right so as a discovery engine it creates a really interesting kind of independent disaggregation around streamers as kind of a referral source for game people selling games right so you know you can potentially get low cost of acquisition through tying yourself up with appropriate streamers but depending on the nature of your game some games don't stream very well and others do there's many you know that's just an example of a crypto fuelled mechanism or channel low cost customer acquisition yeah I'm gonna related note with our tool whenever we launch in a new app a friend

of products are in a new app we like a user base of token holders know there were in that app to send them to the app so that's another alternate sort of crypto related example anybody else got a question a long time three minutes well I have one but it might be very basic question like as an investor including cryptocurrency investor what would be what would you ask like three questions like every developer must give you an answer immediately like 1 2 3 like game

developer our company founder perspective and maybe one doubt that you're looking to do but one thing one area where sometimes the incentives aren't aligned is that if it I but it developer or founders establishing business where they can just add a cash flow it and they're not looking for that crazy Souter I think don't worry about finding a VC because your fans are gonna be misaligned let's say as a founder you have the opportunity to exit like two three billion that's pretty good payoff for the ever Roman Casey it was perfected that's never going to be interesting alright so one question that Airways gonna get even if they don't come out right ask you is what is the ten times 100 returned for me and if you don't have a good answer your business isn't set up for that and I don't think the BC drought cool so my top three will be basically we're since word early-stage folks to me it's team traction and idea right and so

when I talk about idea I'm really looking for you know as much fully baked of an idea as possible and in some ways these all end up being kind of fun a sort of pungent so for example if you have a super experienced team you may actually not need as much traction if you have an inexperienced team you probably need more traction alright and ultimately when I look at an idea I'm also looking at things like total addressable market right which is how big of an idea is it from a market perspective right so team traction idea to me again they're the even-even idea and team can be fungible so for example if you have a idea that looks like a very small idea if you have an incredibly experienced and a unicorn team that's fine because they'll dominate that micro statement and then they'll know enough to be able to like jump into a much bigger thing from that position right so the point I would make is is that you know team traction idea

pick two and that's more like my feeling yeah I think that's directionally similar to what you hear from a lot of investors depending on the stage of course so an early stage team you like is one through three but you know like second second after team is like what do you building and why like I think it games in particular demonstrating that you have some insight related to that player base or you know I kind of that game type that is interesting that unique and will beat you to like outcome that is like to Jim's point or the that investor type so if it's if it is a venture investor he's right you're going to basically need to do the straight and kind of a return profile that maps to what your fund is all about they're not you know like perhaps you can kind of healing to them be careful however is

that you know like I've seen particularly I think this is much more common in Europe than it is here but are seeing companies that have investors from outside the industry or outside kind of a venture world but don't understand games that don't understand how it works don't have any value whatsoever I didn't walk there I tended once all the time and so like I would think like there is reason to kind of look for smart money first and like the smart money is probably going to be very interested yeah I mean to me I think right now especially in the market for Game Studios like team is by far number one I mean if you don't have expertise and be able to show like commercial success if you'd be able to have a team with commercial success even from previous studios that opens a lot of doors if it's like project funding or

studio funding outside of that it's pretty challenging and has been for actually a while from my perspective which stage well earliest earliest indie developer in my experience usually like this early team is there is some lack of skill in the beginning like some of the most important aspects of the business are not covered in this team in terms of experience usually this problem persists as you go like very often like for example if you have super business person running team what products are this liking open it continues like this not for too long just the company which probably or vice-versa like product team is amazing but then business part - so usually investors like to see everything

covered or almost everything covered in the early team more or less and then I think if if it's a team then the Fond like London Venture Partners will definitely ask about you is that it was that because you should strategy it should be compelling because users are scarce in a way like it's expensive to acquire them so it should be something special we have says so influencers is one way like there should be something that makes sense but you know how you are going to acquire users you don't just put any footage installed thank you [Applause] [Music]

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