Investor thirst for opportunities in the video game industry has paid off for BITKRAFT Ventures, which said it had surpassed its goal for its new fund by a third. BitKRAFT Venture Fund $1 of $165 million, set at $125 million, will focus on eSports. interactive games and media.
“The industry continues to grow and accelerates during the total Covid crisis (-19),” said Jens Hilgers, founding partner, who spoke to me from Berlin about the fund’s investment strategies. “We’re jumping a little bit where the video games have been and will be and can be. “
Hilgers is the founder and former CEO of ESL, one of the oldest e-sports operations, and co-founded the G2 Esports team. Four-year-old BITKRAFT has partners in San Francisco, Los Angeles and London.
Several analysts expect the video game industry to generate about $160 billion in profits internationally this year, adding about $1 billion for e-sports, which is roughly double the global combined film and music industries.
The industry can go beyond these prodigious projections as the pandemic and recession close competing entertainment functions and cause many others to turn upwards with prices consistent with dollar-consistent experiences they can make at home.
BITKRAFT supports its investments with a theory that calls realities, the expanding shift from entertainment, education and other sectors to virtual technologies evolved for the first time in the game, Hilgers said, sensitivity, established in a white paper and other documents on its website. , was kind to his investment approach.
“As the game becomes so big and the tool layer expands, what happens if much of what this society does begins to spread into simulated realities?”Hilgers says. ” A growing component of society will take position in simulated realities, a growing component of paintings will actually be made simulated. Now is the time when that changes. Obviously, we can see that this will accumulate considerably. »
Hilgers said the new fund will be in 4 areas:
Much of the game itself is based on recombination of proven and true genres and formats for new platforms or new markets, Hilgers said. A classic example is League of Legends, which crossed the team shooting genre with the then emerging free-to-play business style and one of the most popular titles in the world.
Other investment opportunities arise regularly, but make cash with them by placing a “space” in the market, he said.
“Where’s a vacancy?” Hilgers said.
This area can be around a genre, platform, style of monetization or even geography, given the predominance of cellular players in Latin America and parts of Asia in console-oriented territories such as North America and Europe.
In the year following the good fortune of Epic Games’ mega-good fortune, Fortnite swept through the industry, for example, it made no sense to launch a cross-platform, loose Battle Royale shooter, Hilgers said (BITKRAFT is an investor in Epic. )
“We’ve trained a lot of other people in mobile games and shooting,” Hilgers said of the industry. “This is a new opportunity. This is the glorious mix we are for. “
Hilgers is actually more positive about the potential effect on the next generation of PlayStation and Xbox consoles, whether expected by the end of this year, than the 5G mobile, which is rolling around the world behind tens of billions of dollars in capital investment.
“The new generation of consoles will be more successful than the last generation,” Hilgers said. “I feel like there’s a lot of excitement that’s generated because other people have spent a lot more time with video games now, so I believe in markets you’re going to be a big boost. “
By contrast, in markets such as Japan, North America, and Europe, where console games are deeply rooted, Hilgers said faster networks are not expected to have a significant effect soon.
“I don’t see the need for four (G) or 5G, at least in a market location with a smart LTE network,” Hilgers said. “I don’t see cloud gaming as something that replaces the market spot in the next three, four, five years. In emerging markets, that can be a big difference. There are many places where playing multiplayer or downloading bigger games on devices will be difficult. They will become massive places in the gaming market with massive connectivity. “
BITKRAFT’s investments from the previous budget come with the video network aimed at Venn players; Playable Worlds massively multiplayer sandbox title; and Galaxy Interactive, the Los Angeles-based fund managed through Sam Englebardt (listen to my verbal exchange Let’s DEW Lunch this year with him here). The company also supports Roundhill Ventures, which has two ETFs aimed at games, e-sports and online sports betting, $NERD and $BETZ.
Institutional investors in the new fund come with shoe manufacturer Adidas, corporate marketing/advertising holding company WPP, gaming device manufacturer Logitech and Advance, newhouse circle of family asset holding corporations such as magazine editor Condé Nast, Hilgers said. Offices have also invested, adding Bruce Karsh’s Carolwood, David M’s Declaration Partners. Rubenstein and JS Capital through Jonathan Soros.
I’m a columnist, speaker, podcaster and Los Angeles representative on the collision of technology, media and entertainment. I’m also a host and producer of Bloom in Tech