Investor’s “News of the Week” (March 8th – March 15th)
Companies doubling/tripling their revenue and market cap…
Others “successfully” going bankrupt.
How did money work during the 2nd week of March (8th-15th)?
1) Are We Ready for $70 Games? Two-Take Interactive’s Boss Think We Are
Strauss Zelnick, boss of Rockstar/2K parent Take-Two Interactive, was asked why NBA 2K21 was $10 more expensive than other titles, during the Media & Telecom Conference.
His answer? The game is good, replayable… And there hasn’t been a single price jump during these 15 years. He explains:
“We announced a $70 price point for NBA 2K21, our view was that we’re offering an array of extraordinary experiences, lots of replayability, and the last time there was a frontline price increase in the US was 2005, 2006, so we think consumers were ready for it.”
While this is partially true, games nowadays are full of DLC expansions, game passes, and all kinds of money-squeezing microtransactions. Take-Two also justified charging that much due to development costs and the overall improved user experience.
Fun fact: 2K went through a controversy for including unskippable ads during the loading screen. The company was forced to take them out and state that their placement was a plain mistake and was not meant to run as part of the pre-game introduction.”
2) “Zombies, Run” Dev Acquired by OliveX ($9.5m Total, $6.65m Paid Upfront)
Australian fitness firm OliveX has acquired “Zombies, Run” developer company Six to Start.
OliveX has agreed to pay $6.65 million upfront and $2.85 million as for future expected performance. The deal includes ALL of the UK-based company’s shares.
OliveX CEO, Keith Rumjahn, assures the acquisition will bring immediate value to his company. Adrian Hon, CEO, and Founder of Six to Start is as well. He’ll become the new Chief Innovation Officer at OliveX as soon as the acquisition completes.
Zombies, Run has +300,000 monthly active users (50,000 of them pay for a subscription) so the numbers point out that the avg. revenue per subscriber is higher than £25 per year. Specialized in gaming fitness apps, they also released “The Walk and Zombies, Run 5k.”
3) GAME Parent Company Rant Against UK COVID-19 Relief Packages
GAME’s parent company, Frasers Group, speaks about “how useless the UK COVID-19 relief package is” and “how disappointed he is by the proposed business rates.”
The model is unnecessarily complicated and outdated – Said Mike Ashely.
Mike Ashley’s Frasers Group has said the cap on biz rates relief announced in the Budget could stop it taking over ex-Debenhams stores and force a review of its own estate.
It said the £2m cap on business rates relief rendered the package “near worthless” for large retailers. pic.twitter.com/aHdIelxVCO
— Capital Moments (@CapitalMoments) March 5, 2021
Jonathan De Mello, a Retail property expert agrees with the Fraser Group’s, claiming rates relief cap would only place a burden for those with just a handful of stores. Instead, large shopping centers and downtown areas will be negatively impacted.
The Frasers Group, owned by Mike Ashley, has GAME, Sports Direct, and other businesses over its shoulders. This is the result of a risky bet made in June 2019, after purchasing GAME for £52 million. The gaming retailer has over +300 stores in the UK alone.
4) BLADE Shadow: Cloud Gaming Firm Seeks Investment Due to Bankruptcy
Blade, the parent company of cloud gaming service Shadow, is seeking new investment after facing bankruptcy in the US, but “outstanding” results in France (home market).
The company provides gaming-specific PC setup hosted on remote servers and promises to deliver streaming power to play games from any device… But the thousands of new subscribers every month, in the past five years, has forced the model for them.
A combination of debt with server provider 2CRSi and a shortage of graphic and electronic components is enough for the company to claim they “became a victim of its success.”
Fortunately enough, subscribers or pre-order accounts won’t be impacted by these events.
5) Discord Triples Its Revenue in 2021
Discord, the instant messaging and digital distribution platform has just tripled its revenue without intrusive ads nor sold personal data. Instead, they achieved it by offering subscription access to Nitro ($9.99 /month – $99.99 /year), a slightly upgraded version.
Discord its monthly user base during the pandemic (+140 million) and went from generating $45 million in revenue to $130 million. Its valuation also doubled to $7 billion in December 2020, after raising $100 million from Greenoaks Capital, a venture firm.
Discord continues to absolutely crush…
– Discord did $130M in revenue last year ($45M in 2019)
– Discord doubled its monthly active users in 2020 to 140M MAU.
– Monthly visits to Discord 10x’d over the past year (754m monthly visits in December 2020)https://t.co/TJRn2Bc0hJ pic.twitter.com/GUTlYBIrj8
— Blake Robbins (@blakeir) March 8, 2021
Jason Citron, CEO, and co-founder knows that the startup founded in 2015 is among the favorite gamer’s platforms to enhance the online playing experience. So, that would be the only reason for such an increase in revenue.
After all, unique emojis enhanced video resolution, and server boosts aren’t too attractive.
They’re testing more paid features (original multiplayer games and digital stickers) but don’t plan to go public, according to Crunchbase’s data.
6) Neopets Black Market: Here’s What To Know
Neopets is that free-to-play web-browser “cutie” 2000s version of Pokémon who aged enough to become a black market for players to illegally sell/purchase rare “pet” creatures.
Users were free to create pets from scratch with colorful paint styles, wings, and clothes.
But the “unconverted” Neopets were/are the real deals. These are those with different art styles, created before Adobe ended its Flash Player support.
Players, especially those from its niche community, are willing to pay real money and crypto-currencies (sometimes even hundreds of dollars) for the rarest pets.
Although the game’s poor account security and constant stealings have stopped this trend to keep growing any further
7) GameStop New Committee Seeks to Transform It into a Tech-Business
GameStop has learned the lesson. The money is out there, it’s just a matter of being smart with its business model and loyal to its customers/backers.
So it’s just a matter of time to see what its board of directors build to accelerate the company’s transformation.
Called “Strategic Planning and Capital Allocation Committee” is formed by Alan Attal, Ryan Cohen, and Kurt Wolf. They’ll be guided by Matt Francis, after the departure of former CFO Jim Bell.
They’ll move in a new direction, to evaluate operational objectives, capital structure, allocation priorities, digital capabilities, organizational footprint, and personnel.
8) Girls Who Code Receive $100,000 from Zynga
Girls Who Code has teamed up with Zynga to grow all of its support programs, enabling them to run more free young woman clubs, supporting its alumni.
The donation comes from Zynga’s Social Impact Fund and it was announced as part of their International Women’s Day efforts.
GWC is an international Non-Profit Organization focused on teaching kids about computer science and other tech sectors, as in the games industry. So far, they have helped over 300,000 in India, Canada, the US, and the UK (50% of them Black or Latinx).
9) Loot Boxes $20 Billion Market and Germany Warns Age Ratings Back
According to another Juniper Research report, +230 million gamers (around 5% of the planet’s player base) are expected to fall into the loot boxes system by 2025.
For the same reason, loot boxes might generate 20.3 billion by 2025, the majority coming from mobile gaming microtransactions, mainly from the Far East and China.
Curiously enough, the market is expected to grow 5% per year but will stop doing so over and over, as “consumers become and legislative constraints limiting the market.”
The Bundestag is among those entities taking action against it, now passing reform to bring stricter age-ratings for video games to protect them from bidding and similar “predatory monetization mechanics.”
10) Roblox Closed 1st Day of Listing With $38 Billion Market Cap
Roblox closed the first day as a publicly-traded company with a market cap of more than $38 billion.
They first started at $64.50 a share, getting close to $74, before it closed at $69.50 on its first day of trading. This is way more than the $45 referenced by the New York Stock Exchange.
CNBC highlighted that this final price would give Roblox a $38 billion market cap and $45.3 billion of the total value.
While they’ve been getting ready to go public since last year, they just opted in for direct listing due to under-pricing concerns.
Esports Marketer. Marco is the Founder of DFY Gaming. He types for a living but writes awfully on pen and paper.