
It's time: Naavik is thrilled to launch the Open Gaming Research Initiative. If you've followed us for a while, you know we work hard to publish great, free content for the games industry every week. What this launch does is take our free content efforts to the next level.
Here's what you need to know:
The mission: Our goal is to create the No. 1 destination for games industry analysis in collaboration with outstanding creators and keystone gaming brands. Whereas most great research is either paywalled, siloed, or scattered, everything we do is going to be free, enormously collaborative, and all in one spot.
What's going to change? In short, things are going to get bigger and better. The Open Gaming Research Initiative encompasses all the great free content we already publish — namely Naavik Digest and the Naavik Gaming Podcast — but it's going to include much more:
- A monthly in-depth game deconstruction
- A bimonthly mobile genre report
- Monthly deep dives exploring important companies and emerging trends
- Dedicated market updates, including coverage of dealmaking, public markets, web3, and UGC.
- New tactics-driven podcast episodes that explore exactly how teams achieved success
- And more to come!
You might not need it all, but whether you are creating games, starting a company, or making investments, there's certainly more research to come that you will find relevant and interesting.
How is this possible? Two reasons: our creator team and our partners.

We're blessed to have an amazing community of creators who are not just experts in their fields — as executives, game designers, investors, and more — but passionate about learning in public. The team has grown at a mind-boggling rate over the past couple of years, and we're gearing up for higher-quality output than ever before.

We're also excited to announce our launch partners for the Open Gaming Research Initiative. Not only are these companies the reason why we're able to support so many creators, but they're also full of insights we're eager to share. You'll hear much more from them in the weeks and months to come, and you can learn more about them here.
To all of our creators and partners — thank you! And to all of our readers and listeners, we're humbled and grateful that you choose to spend your precious time learning with us.
To close, we have one short request: Share the news! Whether you forward this email, encourage your colleagues to sign up, or repost/retweet on LinkedIn or Twitter, we'd appreciate your introductions to new readers. After all, we truly all learn better together.
AAA vs. Gaming Startups / Building a Sustainable Web3 Game With Sorare

Is greenlighting really that different? Who leads innovation, and who fast follows? Should you accept your gaming startup offer? Lee Reed is Studio Product Lead at Infinity Ward, and Jess Adepoju is a Lead Producer at Bad Robot Games and consultant at The Indie Intellectual. In this episode, Reed and Adepoju join host Alexandra Takei to frame gaming studios and incumbents in the Innovator’s Dilemma of “low-end versus new market disruptions;" compare and contrast the differences between production, greenlighting, and hiring between ex-AAA studios and AAA; and share what to consider if you’re a game industry professional looking to make the leap either way.
As always, you can find the Naavik Gaming Podcast on YouTube, Spotify, Apple Podcasts, Google Podcasts,our website, or anywhere else you listen to podcasts. Also, remember to shoot us any questions here.
Most web3 game economies, even the most successful ones from the earliest days of the movement, have struggled in recent quarters, in part due to fundamentally unsustainable economics / tokenomics. But in this episode, we’re discussing one of the more notable exceptions: the France-based fantasy sports platform Sorare. Launched on Ethereum in 2019, the game generated nearly $350 million in secondary market volume in 2022 and almost $90 million in the first five months of 2023.
In this episode, your host, Niko Vuori, talks to Sorare Head of Growth Brian O’Hagan about how the company maintains a “sustainable” economy, how it secured the crucial initial licenses for soccer, why it chose not to launch its own token, expanding into additional sports to tap into the U.S. market, and what’s next for the company, among other topics. Niko is joined by Naavik contributor Devin Becker, who covered Sorare in the June 22nd, 2023, issue of Naavik’s Digest newsletter, which you can read here.
#1 Square Enix Turns the Page
By Matt Dion, Naavik Contributor

It’s been a busy month for Square Enix.
The company’s flagship franchise just launched its latest mainline release, Final Fantasy XVI, to largely positive reviews (with some exceptions) after nearly seven years in development.
The Japanese publisher also used the FFXVI launch to showcase its newest chief executive, Takashi Kiryu. At 47 years old, the freshly minted CEO brings a younger face to the corner office, replacing former CEO Yosuke Matsuda after a decade-long stint. Kiryu immediately sought to win fans over with his bona fides as “a Final Fantasy fan for life,” committing to deliver “entertainment that promises new and unforgettable experiences.”
Kiryu takes over at a pivotal time for Square Enix. The company is coming off a poor showing in its FY2023 earnings, in which it reported year-over-year dips in total revenue (-6%), digital revenue (-12%), and profit (-3%), driven in part by underwhelming sales of HD releases (Forspoken, Octopath Traveler II, and a host of smaller RPGs) and a lack of major expansions to its MMORPG titles (Final Fantasy XIV, Dragon Quest X).
The current fiscal year (April ‘23 to March ‘24) also represents the final third of a three-year “medium-term plan.” Though the company’s stock is up nearly 10% this year and roughly 15% since the commencement of the medium-term plan, Square Enix has a lot of ground to make up if it wants to hit its ambitious earnings targets, which you’ll see in the chart below. The company’s own FY’24 projection of ¥360 billion in net sales already falls short, coming in below the company’s FY’22 figure of ¥365 billion.

The prior two fiscal years of the medium-term plan have also been host to major shake-ups across the organization, headlined by the divestiture of its North American assets to Embracer Group and a reshuffling of its international publishing organization. On the latter point, Square Enix has highlighted a need to “[f]ocus resources on titles carefully selected for global appeal” while bolstering its pipeline for “regular launches of major titles.”
Though Square Enix is home to more than just Final Fantasy, the RPG franchise is clearly one of the company’s biggest moneymakers, having handily outsold other IPs like Dragon Quest and Kingdom Hearts over the years. Within the company’s “Digital Entertainment” business segment (its largest in terms of net sales), Final Fantasy remains a prominent fixture among all three subdivisions:
- HD Games: Of Square Enix’s best-selling games of all time, eight of the top 10 (in terms of unit sales) are “HD” Final Fantasy releases. Rounding out the top 10 is Final Fantasy XIV, which falls under the “MMO” subdivision, and 2013’s Tomb Raider.
- MMO: Final Fantasy XIV is reportedly one of Square Enix’s most successful titles, providing a “major contribution to [the] company’s profits,” according to game director Naoki Yoshida.
- Games for Smart Devices/PC Browser: Three of the company’s top 10 revenue earners on mobile during FY’23 were Final Fantasy titles (according to data.ai).
Unfortunately, Final Fantasy has also been the most prominent victim of protracted development cycles. As such, it makes sense Kiryu would want to improve the company’s operations in this area. His predecessor, Yosuke Matsuda, only managed two mainline Final Fantasy releases over his 10-year tenure. The first is the enormously successful MMORPG Final Fantasy XIV: A Realm Reborn in April 2013, which was technically a relaunch of 2010’s troubled Final Fantasy XIV: Online.
The second was the long-delayed single-player Final Fantasy XV in 2016, which served as the basis for at least seven spin-off titles (across both console and mobile) all set in the same universe. We can also add the 2020 debut of Final Fantasy VII Remake to that list, though that game also took at least five years to develop and changed hands from outsourced to in-house development during that time.
Though Square Enix has expanded upon the Final Fantasy IP in myriad ways since the release of Final Fantasy XV, touching nearly every platform and business model across the industry (Stadia, anyone?), the company appears to be taking a different approach with its latest launch. Final Fantasy XVI is a PlayStation 5 exclusive (for at least six months, with a potential PC port on the way), despite its predecessor launching simultaneously on both PS4 and Xbox One.
This change in tact appears to have influenced early sales, at least in part. The game has sold over 3 million copies in its first six days (a figure that includes both digital sales and physical units shipped to retailers), compared to Final Fantasy XV’s 5 million day one shipments. This is made all the more interesting by recent revelations that Microsoft had previously considered acquiring the Japanese publisher to bolster its Game Pass offerings and establish a foothold in Asian markets.
Platform concerns aside, Square Enix clearly has its work cut out for it. In the near term, the company will be able to tout Final Fantasy XVI’s strong performance (as it was not included in the FY’23 results) and can also point to a few promising titles in the pipeline. These include the next entry in the Final Fantasy VII reboot series, Final Fantasy VII Rebirth (due early ‘24), the much-anticipated Kingdom Hearts IV (date TBA), and the “don’t call it a Splatoon clone” party shooter Foamstars (date TBA), among several other announced projects.
Beyond that, Square Enix remains steadfast in its focus on blockchain gaming as a catalyst for future growth. In addition to launching early web3 experiments like Symbiogenesis and Shi‐San‐Sei Million Arthur, the company has created a “Blockchain Entertainment Business Division” and acquired stakes in at least 11 web3 organizations. It’s also considering establishing a corporate venture capital unit for further investments. The company views being a “pioneer” in the blockchain gaming space as “key to achieving overwhelming success” and looks set to stay the course, despite backlash from gamers and an ongoing crypto market downturn.

Though some fans have expressed hope that Kiryu might change course on the company’s fascination with blockchain gaming, I find it hard to believe the new CEO is not also a proponent. Kiryu’s previous role (as of June 2022) was Chief Strategy Officer, a position in which he must have at least been privy to the company’s web3 initiatives if not been a driving force behind them. Whether this strategy will bear fruit for the company is another matter entirely, but the publisher is nothing if not committed.
With just a few quarters remaining to achieve the ambitious goals laid out in the previous medium-term plan, I am skeptical that Square Enix will get it done. Of course, they could always surprise us with an unannounced release, but from where I sit, I view this as a rebuilding year for the company as it looks to a future of fewer, bigger releases and continued experimentation with blockchain gaming.
Square Enix is not a small company and it will naturally take time for any organization of that size to reorient and streamline an entire global publishing operation. Given the typical AAA timeline for developing and launching new games in today’s market, it will likely be at least another year or two before we can attribute the success or failure of any game releases to these organizational initiatives.
Beyond that, Square Enix has provided little insight into its future-facing plans outside of blockchain gaming. The company’s FY’23 presentation mentions a push to hire more engineers and internal development talent, as well as a desire to bring external development resources in-house (perhaps through M&A or minority stakes). While these are worthy goals, they aren’t exactly groundbreaking; what game publisher is not looking to bolster its talent pool? I suspect that the company will find the competition for talent and potential acquisitions to be fierce, as these are battles that rage constantly across the industry.
Finally, there is always the possibility of Square Enix being acquired. While Microsoft’s prior interest in the company is telling, the geopolitical challenges of an American firm buying a Japanese mainstay would complicate matters. However, there is at least one company for which that would be no issue at all: Sony. Given the news that Sony’s partnership with Square Enix has “never been stronger” and the persistent rumors of a pending acquisition, this is perhaps the likeliest outcome if an M&A event does ever materialize.
Clearly, the future of the company is in flux. I will be eager to see if Kiryu continues the tradition of releasing a New Year’s Letter to the public, as that should give us insight into his views on the company’s future. Until then, Square Enix will follow the well-worn path of hanging its hopes on the continued popularity of Final Fantasy.
#2 Top Movers & Deals: June 23rd - June 30th
Written by Mario Stefanidis, CFA, Naavik Contributor

- For the week ending June 30th, 2023: The average return for gaming companies tracked by Naavik with a market capitalization exceeding $500 million was 0.3%. The S&P 500 returned 2.4% and the Nasdaq-100 returned 1.9%. Full access to the Naavik Gaming Company universe is available here.
- Through the second half of 2023, the average gaming stock returned 17.9%. This is slightly higher than the S&P 500’s return of 16.1% but lower than the Nasdaq-100 which has returned 39.0%. AppLovin returned 144.4% and is by far the highest gainer in the sector to date. Embracer Group led declines with a -43.0% return thus far.
- Unity (NYSE: U) rose 15.9% after announcing a new AI marketplace within the Unity Asset Store. This announcement came concurrently with the launch of Unity Muse and Unity Sentis. Muse was described as a platform to accelerate the creation of real-time 3D applications, while Sentis allows AI models to run on any device where Unity runs.
- AppLovin (NDAQ: APP) rose 10% after achieving the top spot in data.ai’s Top 30 U.S. Headquartered Publishers list, which ranks publishers by lifetime downloads on mobile. This ranks the publishing platform ahead of gaming giants Take-Two Interactive and EA, which ranked second and third respectively.
- IGG Inc. (SEHK: 799) fell by -12.2% following the issuance of a profit warning. The Chinese video game developer and publisher now expects to incur a loss of HK$400 million for H1 2023, much wider than the HK$176 million loss it incurred during H1 2022. The company blames this loss on the “intensive promotion” of its two new hit strategy games, Doomsday: Last Survivors and Viking Rise.
Notable Venture Financings

- Mythical Games raised $37 million in the first part of its Series C round, bringing its valuation to over $1 billion. The round was led by Scytale Digital, which previously invested $20 million in April for its Horizon Fund II, and also saw the participation of new investors such as ARK Invest, Animoca Brands, and MoonPay. Mythical is behind NFT titles NFL Rivals and Blankos Block Party, and expects to launch a third game titled Nitro National World Tour in the coming months. The company is also building a platform aimed at providing publishers and developers with tools to integrate Web3 features like play-to-earn within their games.
- Gaming ad platform Anzu raised $48 million in Series B funding. The round saw some early investors exit their holdings at a “valuation increase of 10 times.” Anzu specializes in creating non-intrusive, programmatic in-game ads that integrate smoothly into gaming experiences. The round saw participation from numerous companies and VC funds including PayPal Ventures, Evolution, Simon Equity Partners, and Bandai Namco Entertainment. The company plans on using the funds to expand its leadership team and further grow its footprint in the United States.
- Mobile gaming growth platform SuperScale raised $5.4 million in its Series A round, its first major financing round since being founded in 2015. The company has 70 employees spread between its headquarters in Bratislava, Slovakia and offices in London and Gdansk, Poland. SuperScale’s platform uses machine learning and data analysis to optimize game performance and increase revenue for developers. The funding will partially be used to build out SuperScale’s “Venture Publishing” approach, in which it takes ownership of an app’s marketing and backend features in exchange for revenue sharing.
- Web3 gaming studio Pixion Games raised $5.5 million in new funding as an extension of its seed round. The round was backed by blockchain funds including Avalanche, Shima Capital, and ReadyPlayerDAO. The funds will be used to develop the studio’s flagship game Fableborne, which is heading into its final closed playtest starting on July 5th. Fableborne is a mobile-first play-to-own blockchain game, blending action RPG and base building elements.
- Scriptic, a London-based studio combining gaming with visual storytelling, raised an additional $5.7 million in seed funding. This builds on the $2.5 million the company formerly known as Electric Noir raised in May. The company plans on using the funding to roll out its user-generated content strategy, which will give external creators AI-enabled tools to create their own stories. Scriptic’s eponymous app is a platform on iOS and Android for interactive stories, currently featuring ones in the crime genre. Scriptic is also available on Netflix Games via a partnership that began last December.
Notable Strategic Investments

- Mobile gaming company Scopely acquired U.K. mobile developer Tag Games. Tag Games was founded in 2006 and has developed over 60 titles for iOS and Android. Currently the studio specializes in free-to-play mobile games. Its clients have included Activision, Bandai Namco, EA, and Rovio. In July 2021, Scopely invested $50 million in Tag, as one of three concurrent investments in European games studios that also included Omnidrone and Pixel Toys. Omnidrone was acquired by Scopely in February 2022 while Pixel Toys remains independent.
- Nexon published an electronic disclosure that showed a major shareholder, the Saudi Public Investment Fund, increased its stake in the company. The PIF, which owns stakes in large video game companies around the world, increased its Nexon stake by approximately 6.3 million shares, from 9.2% to 10.2%. As of the disclosed date of June 23rd, this would represent a $124 million purchase, for a stake now totaling $1.7 billion. The Saudi PIF’s first investment in Nexon was disclosed in February 2022 when it purchased a 5% stake in the company for $883 million. These purchases are part of the PIF’s ongoing commitment to invest a total of $38 billion in gaming and esports by 2030 via its subsidiary Savvy Games Group.
Notable Studio Updates & Partnerships

- Layoffs continued to hit the games industry, led by a massive downsizing at Niantic:
- In an internal email to employees, CEO John Hanke stated that Niantic will be reorienting its focus in reaction to “current challenges in the market.” The Pokemon GO developer will be closing its Los Angeles studio and laying off 230 employees, or about a quarter of its workforce. Niantic will now only focus on first-party games, meaning NBA All-World will be sunset and production on Marvel: World of Heroes will cease. Additional reductions will be made across the company in addition to these changes. Going forward, strategic priorities will include keeping Pokemon GO “growing as a forever game;” improving metrics for Pikmin Bloom, Peridot, and Monster Hunter Now; and continuing to invest in AR experiences.
- Canadian video game developer Ludia announced layoffs, which have reportedly affected up to 55 employees. The creator of Jurassic World Alive has struggled to find success in recent first-party games as it had achieved with its flagship title. Ludia has been a subsidiary of Jam City since September 2021, when it was acquired for $165 million. Its parent company underwent layoffs affecting a similar proportion of the workforce last summer.
- Daedalic Entertainment, the studio behind critically panned title The Lord of the Rings: Gollum, is exiting game development and laying off 25 of its more than 90 employees. A second Daedalic Lord of the Rings game has also been canceled. The German company will now solely focus on publishing and marketing efforts.
- Hi-Rez Studios, the developer behind SMITE and Tribes: Ascend, is laying off about 30 of its over 450 employees. The move mainly affected employees in publishing and support roles. Furthermore, the company is rebranding as Hi-Rez Ventures, and restructuring its five subsidiaries into three. RedBeard Games will be folded into Titan Forge Games, while First Watch Games will become a part of Evil Mojo Games.
- Scavengers Studio, an indie games studio from Montreal, underwent massive layoffs that saw it shed nearly two-thirds of its 45-person workforce, leaving it with just 16 employees. The studio’s second game, SEASON: A Letter to the Future, received “Very Positive” reviews on Steam, but only “sold 60,000 copies during its first five months,” according to CEO Amélie Lamarche.
- Indie games marketing and PR support firm Player Two PR created a label to handle publishing called Mooncat Games. The label has already published two games on Steam, both focused on LGBTQ+ characters or themes. A third title is due later this year as well. Mooncat will be led by Player Two PR founder Charlene Lebrun, who founded the company in 2019 after working at Sega as International PR Manager.
Featured Jobs
- Coda Payments: Managing Director, Publisher Partnerships (Los Angeles, U.S. / Hybrid)
- FunPlus: Senior Community Manager (Barcelona, Spain / Remote)
- LILA Games: Lead Gameplay Engineer (Remote)
- MY.GAMES: Game Designer (Remote)
- Nexus: Head of Sales (Remote)
- Supersocial: Game Designer (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 this period of layoffs. Every job post garners ~50K impressions over the 45-day time period.