Hi everyone. We have some exciting news to announce. Naavik Pro, our premium research platform, just added its third vertical: financial markets! This vertical is focused on three main areas:
- Weekly Updates — analyzing the most important financial news, including M&A, VC fundraising, IPOs, and major company updates
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To bring this to life, we've brought on two new talented teammates, Enes Ertekin (East Side Games, Wolfson Partners) and Mario Stefanidis (Roundhill Investments, Blackrock) — who bring experience from equity research, investment banking, and corporate development. We’re also excited to share that InvestGame will be the backbone of our deals data. We've started by offering several curated data views, but we’ll soon make the entire deals database searchable in our platform.
Whether you operate in public markets, VC, investment banking, corporate strategy, or competitive intelligence, our mission is help you stay up to date on the entire industry in one spot with unrivaled research and analysis. Upon signing up, members also get full access to our other verticals — F2P mobile and web3 gaming — which include game deconstructions, genre reports, and more.
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Krafton Targets India / Ramifications of Hogwarts Legacy’s Success / Unity Earnings
Why is Krafton hyper-targeting India’s mobile market? What does Hogwarts Legacy’s massive success tell us about the future of the industry? Why is Playtika stopping new game development? We dive into the latest games business news with Aaron Bush, Anil Das-Gupta, Jonathan Anastas, and your host Maria Gillies.
#1: Understanding The Rise of ACG Aesthetics in Gaming
This article is a preview of a Deep Dive written by indie media analyst, Naavik contributor & consultant, Maxime Eyraud. Head over to our site to read the full Deep Dive for free.
Genshin Impact. Tower of Fantasy. Arknights Tower Defense. Omega Strikers. Hi-Fi Rush. See the pattern yet?
Whether you've played these games or watched their success from afar, you may have noticed a common trait between them: their extensive use of ACG aesthetics. ACG, short for "Anime, Comics, Gaming," is a term popular in Greater China and Southeast Asia to encompass the business and culture that has formed around these three forms of media. In practice, the focus is most often on the "Anime and Comics" part, which makes ACG somewhat similar to its better-known, Japan-born neighbor, otaku.
While the term may seem foreign to most, the business behind it isn't. ACG is having a moment: manga and anime, already ubiquitous in the West, continue to grow, and webtoons, the South-Korean digital comics that read top to bottom, have been making significant headway, too. Savvy producers are making the most of this momentum ensuring new and existing intellectual properties (IP) spread far and wide, be it as live-action series, LEGO sets, or vinyl figurines.
But what about gaming? As the name indicates, gaming is very much integral to the ACG triptyque. There are historical reasons for this. In Japan, the nascent video game industry not only received a welcome influx of talent from manga and anime studios early on, it also became part of the media mix, a unique production and distribution model underpinning the majority of the country's entertainment output. Meanwhile, in the West, where such a cultural and commercial interlock didn't exist, anime and comics still made their way into games by way of both adaptation and aesthetics.
ACG's influence on gaming is thus no novelty. Yet the current cultural infusion stands out in several ways that deserve closer attention. Growing cultural legitimacy, the upskilling of Asia's creative industries, and the ascendancy of transmedia as the default approach to storytelling are creating a perfect storm for the relationship to thrive. In an era dominated by global conglomerates and their lowest common denominator franchises, ACG is a striking example of how savvy producers strategically hide, or showcase, the geographic and cultural origins of their work to blend, or stand out, across borders.
To understand the outsize influence ACG has had on modern culture, we need to retrace the origins of this moment, explain the business dynamics at play, and lay out some actionable insights game developers can apply to their own creative work to tap into international appeal and create longer-lasting media properties.
#2: Playtika’s Waning Fortunes & ESL’s Acquisition of Vindex
Playtika continues to wane. The company reported its Q4 2022 earnings results on Tuesday and it wasn’t a great showing. Revenue, net income, DAU, and cash in the bank all noticeably fell. The company also announced new cost-cutting plans, but what stood out the most was management’s decision to “temporarily suspend our new game development pipeline until the ROI for new games is economically viable.” On one hand, we should be sympathetic; scaling UA for mobile games is harder than ever. On the other hand, Playtika remains in a challenging position. Capitulating on new game development will put a larger drag on organic growth, and value-additive inorganic (M&A-driven) growth might not fare much better; after all, Playtika has destroyed value with a few previous acquired studios and games, which also harmed its reputation in the process — not to mention the company also took on tremendous debt. We’ll see what happens with the Rovio bid, but there certainly is a lot of scrutiny for this public company. (Naavik Pro is publishing a much deeper dive into Playtika’s results, strategy, and future on Tuesday!)
ESL FaceIt acquires Vindex. As you may recall, at the beginning of 2022, Savvy Gaming Group — which is fully backed by Saudi Arabia's Public Investment Fund — acquired both ESL (esports event organizer) and FaceIt (competitive gaming platform) and then merged them both together. Now, the combined ESL FaceIt announced it would acquire Vindex — an analytics platform with production / broadcast services. Without any financial or engagement data, it’s hard to say whether this is a good deal, especially at a time when esports as an overall industry is struggling. However, it’s worth noting that ESL FaceIt appears to becoming more of a “conglomerate” of esports services. Pooling services together and decreasing the need for publishers to work with countless venders is a value unlock. It’ll be interesting to see what ESL FaceIt morphs into over time.
Square Enix will change CEOs. After serving the company for 10 years, current CEO Yosuke Matsuda will soon be stepping down. Over his tenure, Square Enix quadrupled its share price, driven by restructurings, studio openings, and (despite some misses) overall solid management of the company’s most important IPs (like Final Fantasy). Toward the end of his tenure, he sold the company’s Western studios to Embracer Group and put a stronger focus on blockchain technologies. His successor is Takashi Kiryu who has held a number of corporate strategy roles at Square Enix since 2020. Shareholders still need to approve the transition, but Square Enix states that this change is "intended to reshape the management team with the goal of adopting ever-evolving technological innovations and maximizing the creativity of the company’s group”. It’s hard to know what exactly that means at this stage, but we’ll specifically be tracking whether Square Enix makes any changes to its blockchain plans and investment strategies. We should learn more in the next couple quarters.
Avalon raised $13M to create an interoperable gaming universe. If this project sounds ambitious, you’d be right! The team, which has experience producing games like Everquest and Vanguard: Saga of Heroes, is looking to build a MMO-oriented UGC platform with connected worlds. Avalon will incorporate blockchain elements that enable the ownership and tradability of digital assets, and the team is also looking to incorporate generative AI elements, too. There’s a lot of buzzwords flying around here, but it’s a big, interesting idea. The team will share more details in the coming months, but one question is how will it solve the cold start problem and kickstart a network effect around users and creators. Will it partner with and incentivize compelling early creators? Will it create an MMO itself?
In Other News
💸 Funding & Acquisitions:
- Earnings: Playtika | NetEase
- Forspoken developer Luminous Productions is folding into Square Enix. Link
- ESL FaceIt acquired Vindex. Link
- The latest entrant in UGC platform is Avalon, having raised $13M. Link
- Champion’s Round raised $7M. Link
- Microsoft’s Activision deal is likely to be approved by EU regulators. Link
- U.S. rep mulls legislative action for game safety and extremism. Link
- Console revenue decreased by 7.8% to $56.2B in 2022, according to Ampere. Link
- February’s top mobile game downloads. Link
🕹 Culture & Games:
- Is Squad Busters Supercell’s next multi-billion dollar smash? Link
- Mainframe announced alpha testing for its debut game, Pax Dei. Link
- Playtika suspends all game launches until marketing landscape improves. Link
- What it’s like owning a Valorant team as a streamer, Disguised Toast. Link
👾 Miscellaneous Musings:
- Where did Knockout City go wrong? Link
- How Temu topped US charts by turning shopping into a game. Link
- Our friend Simon at GameDiscoverCo pulled together charting PSVR 2 release titles. Link
- Game regulation trends in 2023. Link
- Interview with the Club Penguin founder. Link
This Week In Naavik Pro
Looking for more great games industry analysis? Check out Naavik Pro!
This past week the Naavik Pro team published:
- A smart analysis of puzzle game Triple Match 3D from Boombox Games and how stacks up against Moon Active’s Zen Match.
- A look at the growing gap between hybridcasual and hypercasual games.
- More earnings coverage, including Embracer Group and Unity.
- An explainer on the NFT marketplace war between OpenSea and Blur.
- An updated game radar with breakdowns of Payday: Crime War and Bilibili’s Higan: Eruthyll.
This upcoming week, we’re publishing our mobile RPG genre report, covering Playtika earnings, Unity’s new web3 development tools and plugins, a report on the esports market’s ongoing financial struggles, a report on competition in the VR market. And much more to come after that!
If you’re interested in learning more or signing up, request a demo below.
- Coda Payments: VP of Growth (Los Angeles, California)
- Modulate: Content Marketing Associate (Somerville, Massachusetts)
- LILA Games: Game Designer, Systems & Economy (Bengaluru, India)
- Carry1st: Head of Product Marketing (Barcelona, Spain | Remote)
- Merit Circle: Head of Investment & Partnerships (Amsterdam | Remote)
- FunPlus: Lead Game Designer - New Casual Studio (Barcelona, Spain)
- Flick Games: Chief of Staff (Remote)
You can view our entire job board — all of the open roles, as well as the ability to post new roles — below. We've made the job board free for a limited period, so as to help the industry during a harsh period of layoffs. Every job post garners ~50K impressions over the 45-day newsletter featuring period and results in 1 - 10 applications depending on the company and role.