In this Metacast episode, David Amor and Matt Dion, join your host Maria Gillies to discuss Epic & LEGO’s Collaboration and their plan to build towards the Metaverse as compared to Facebook’s creator fees. The team also discusses Ubisoft’s Ghost Recon NFT experiment and Miniclip’s Pivot from Web Browser Games. The group also checks in on Take-Two’s Public Offering, and what the results could mean for the company in the future.

2022 BAFTA Games Awards Winners

Ghost Recon: Breakpoint Sunset

  • Reference: Ubisoft announced the end of active development for Tom Clancy’s Ghost Recon: Breakpoint
  • Background
    • Negative reception from launch in Oct 2019
    • Also received criticism upon launch of NFTs via Quartz (Digits)
    • Could have had an indication of this upcoming sunset → Lower stakes to test and learn about new technologies, in this case NFTs
  • Implications for NFT proliferation
    • Ubisoft’s case was a partnership with Tezos. However, given the small number of NFTs sold, the experiment may have had more PR than functional value.
    • In the wider industry, we also see Zynga partnering Forte and Krafton working with Solana. There’s a race between competing blockchains to become the de facto blockchain for games.
    • Big publishers likely to wait for Web 3 games to become more established. Smaller studios competing to set the standards, become the reference.

Epic x LEGO Collab

  • Reference: Epic Games partners Lego to build family-friendly Metaverse, and raises $2B from Sony and Kirkbi to do so
  • Assessment of implications:
    • Combination of powerful expertise and shared interests
      • LEGO with its trusted, family-friendly brand appealing to generations of parents → Compete with Minecraft / Roblox
      • Epic Games bringing deep experience in digital games, strong potential to expand on top of Fortnite in terms of User Generated Content
    • Fundraising amount is enormous
      • Back of the envelope: Able to hire ~1000 people for 10 years
  • Likely motivations for Sony
    • Good investment, given Epic’s positive track record in building a network with game services and attracting a significant user base through Fortnite
    • Building on an earlier round of investment, where Sony Music could benefit from leveraging Fortnite to promote artists and movie IPs
    • Also in line with a possible broader interest in multi-platform games such as with the recent Bungie acquisition
  • Versus competing Metaverses
    • Meta announced plans to take a nearly 50% cut on virtual asset sales
    • Contrary to wider Web 3 ethos, of returning more value to creators
    • Epic has a reputation for being more developer-friendly by taking lower cuts, and is fighting with Apple to create open distribution platforms

Miniclip Pivots From Web Browser Games

  • Reference: Miniclip commits to mobile games publishing, pivoting from browser games (see earlier discussion on recent Miniclip milestones)
  • Likely motivations behind the move:
    • Less revenue from browser games versus mobile
    • Extension of broader approach which focuses on attracting players rather than monetization
      • Cross-promotion of games helps users move from game to game within the wider Miniclip ecosystem
      • Contributes to ‘Network Lifetime Value (LTV)’, broader than that for individual games → Advantageous user acquisition strategy given post-IDFA challenges
      • Even with negative Return on Ad Spend (ROAS) or long payback windows, brand advertising is valuable to draw more players to the ecosystem, thereby building up critical mass
    • Unlikely to be part of majority owner Tencent’s broader strategy → Tencent continues to spread its bets with diversified investments across genres and geographies
  • Downstream implications:
    • Less competition in web browser games → Kongregate as remaining leader
    • Move may not be blockchain-friendly:
      • Existing platform limitations restrict distribution for blockchain games, incentivizing them to be built on browser
      • That said, Miniclip is likely taking a wait-and-see approach with Web 3 game development

Take-Two’s Public Offering