A glance at the investment landscape of the game venture capital fund GGP

By Zen, PANews

According to market research firm Newzoo, the gaming market is now larger than movies, music and books combined and is the fastest-growing consumer trend in the world, expected to grow 248% over the next decade. With the development of blockchain technology, more and more people are beginning to believe that Web3 games based on blockchain will be one of the important directions for the future development of the game industry. Griffin Gaming Partners (hereinafter referred to as "GGP") is a proponent of this view.

Griffin Gaming Partners, located in Santa Monica, California, is currently a venture capital institution investing in game content, software infrastructure and social platforms, and game-related Web3 companies, with an investment asset management scale of over US$1 billion. In March 2022, its second fund was oversubscribed, raising more than $750 million. As a venture capital fund focused on the game industry, GGP had already participated in 16 Web3-related investments, including the blockchain game platform Forte, accounting for more than half of its deployed capital; since the launch of the second fund, they have invested in The public chain project Aptos, the Web3 game company The Wildcard Alliance, the blockchain game developer and publisher N 3 twork Studios, etc.

Three game and entertainment investment veterans join forces

Griffin Gaming Partners was founded in 2019 by Peter Levin, Phil Sanderson and Nick Tuosto. The team led by the three has extensive investment experience in the gaming, media and entertainment industries. They launched their first fund of US$235 million the following year.

Phil Sanderson has been in the venture capital industry since 1997 and prior to that he worked in the finance arm of international investment bank Goldman Sachs Group and global investment management firm RobertsonStephens. From 1997 to 2006, he was a general partner at an investment firm called Walden VC before co-founding Ridge Ventures (formerly IDG Ventures) in 2006. His investments include some of the world's leading gaming infrastructure and content companies such as Discord, Phoenix Labs, Vivox, Triller, Funzio, and more.

Phil Sanderson (far left), Peter Levin (centre) and Nick Tuosto

Peter Y. Levin brings decades of operational experience to Griffin Gaming Partners. He served as President of Interactive Ventures, Gaming and Digital Strategy for film and television company Lionsgate, and co-founded and served as CEO of Nerdist Industries, a pop culture content creation platform that launched in 2012. Acquired by Hollywood film and television company Legendary Entertainment. Levin has been building businesses and investing in the games industry for many years, and he was an early advisor and investor in the Finnish company Rovio, best known for the game Angry Birds.

Nick Tuosto is also currently a Managing Director of LionTree, a US investment banking firm focused on technology, media and telecommunications (TMT), where he facilitated LionTree's strategic partnership with Griffin Gaming Partners. Tuosto has extensive experience in Internet and digital media. He has provided consulting services to several world-leading game companies in mergers and acquisitions, including Tencent's acquisition of Finnish mobile game company Supercell, and Disney's sale of its game studio FoxNext to mobile game development and publisher Scopely et al.

The potential of Web3 games needs to be unleashed

As a top gaming fund, GGP reviews more than 1,300 qualified projects each year. By analyzing a large amount of data and proprietary research, combined with past practical experience in supporting the growth of portfolio companies, they discover potential investment opportunities from seed rounds to growth rounds, and provide Perspectives on growth, retention and monetization, and leveraging its unique resources in the gaming and investment worlds to assist portfolio companies in their business development.

Before launching the second fund, GGP stated that it would try to avoid blindly following popular trends, but its intelligence-based and data-driven investment strategy still made them choose to support and invest in Web3 and blockchain games. According to Nick Tuosto, "Our thesis is simple, with our focused focus and analytical skills, we can make sense of vast amounts of data and see around corners. This informs our assessment of risk-reward, but also allows us to Business development and consistent advice work for our portfolio companies to respond to these highly dynamic market conditions." He added: "We help our portfolio companies open the right doors at the right time to unlock transformational opportunities .”

With the development and iteration of Web3 games, and after witnessing the influx of a large number of top talents who have been committed to building web3 games for a long time, GGP concluded that the paradigm shift of Web3 will become a huge game market expander, and web3 infrastructure, content and business The introduction of modes can have a huge impact on the game. It believes that new models of digital property ownership in games have the potential to support durable player engagement and a balanced digital economy, but will require a very talented and experienced team to unlock the potential of blockchain games.

Phil Sanderson said that the current combination of Web3, blockchain and games is similar to the era of the free game model he has experienced, and it has completely subverted the industry in a positive way. And the core that it can make developers and gamers excited and looking forward to is:

• Provides broader utility and greater ownership flexibility for digital assets in and out of games
• Further support for casual gamers, pros, collectors, builders, communicators, stakeholders within the gaming industry
• Automatically reward players for the value they contribute to the developer ecosystem (e.g. blockchain-based UGC)
• Promote trust and transparency in primary and secondary markets
• Provide open global liquidity and native built-in payment system
• Create a passionate community and intimacy between developers and players, aligning incentives and creating feedback loops

Portfolio covers chain games, development tools and infrastructure

According to incomplete statistics from PANews, GGP has currently invested in 31 blockchain and Web3-related projects. Its investment portfolio is mainly chain game developers, game development tools and blockchain public chain projects, and it has also invested in DeFi and NFT tracks. Made a small investment. The following will briefly introduce individual projects with relatively large financing scales.

Aptos is an L1 public chain project founded by former Meta employees. Meta's Libra project (later renamed Diem) was stranded and then sold at the end of January 2022. Some core members who left formed a team and launched the Aptos public chain based on Diem's open source code. development. It adopts the development language Move, focusing on the security, scalability and upgradeability of the blockchain. GGP participated in Aptos' $150 million funding round in July 2022, led by FTX Ventures and Jump Crypto, with Franklin Templeton, Circle Ventures and Superscrypt among other investors.

N 3 twork Studios is a blockchain game developer and publisher established in January 2022 by the game team of N 3 TWORK Inc. The team consists of more than 60 industry veterans from companies such as EA, Kabam, Zynga, Glu, GREE, Scopely, Machine Zone, Warner Brothers and Disney who have built and operated many successful live service games. N 3 TWORK Studios is developing a diverse portfolio of multi-platform games, including the upcoming Legendary Heroes Unchained and Triumph. GGP led N 3 twork Studios' $46 million Series A round in May 2022, with participation from Kleiner Perkins, Galaxy Interactive, KIP, Floodgate, and more.

Everyrealm is a metaverse project of the alternative asset crowdfunding platform Republic, which shapes the metaverse through investment, management and development of assets, including NFT, virtual real estate, metaverse platforms, games and infrastructure. GGP participated in Everyrealm's US$60 million Series A financing in February 2022. This round of financing was led by a16z, and Coinbase, NGC Ventures, Dragonfly Capital, Hashed, Lightspeed, Griffin Gaming Partners and other institutions participated in the investment.

Forte is a blockchain gaming infrastructure company whose platform allows game publishers to integrate blockchain technology into their games, offering seamless, embeddable token wallet products, NFT minting and selling, payment rails, and proprietary Additional services built for the blockchain token economy and digital and virtual asset management. In May 2021, Forte received US$185 million in Series A financing at a valuation of US$1 billion. GGP led the round, with participation from Union Grove Venture Partners, a16z, Battery Ventures, Canaan, and others. At the end of the same year, GGP, together with Forte and Solana Ventures, announced that it would invest $150 million in blockchain games.

Gunzilla Games is a game studio. Gunzilla's team comes from various familiar studios and publishers, including Ubisoft, Electronic Arts (EA), Blizzard Entertainment, THQ, etc. Gunzilla launched GUNZ, a blockchain-based digital economy platform built on the Avalanche subnet, and will make a cyberpunk-style battle royale third-person shooting game Off The Grid (OTG) based on it, which is expected to be released this year. Available half a year. Other game studios will also be able to build and publish their own projects on GUNZ utilizing the GUNZ Software Development Kit (SDK) and white label components such as the built-in companion app, marketplace and NFT minting engine. GGP participated in Gunzilla's US$46 million financing in August 2022, led by Republic Capital, and other investors included Animoca Brands, Jump Crypto, etc.

Wildcard Alliance is a Web3 game company. Its parent company, the independent game studio Playful Studios, was established in 2012. The studio has produced the well-known 3D platform game "Lucky's Tale" series and the sandbox adventure game "Creativerse". Wildcard Alliance is a triple-A PVP game based on the Polygon chain that combines real-time strategy, multiplayer online competition, and card games. It plans to create a decentralized and autonomous Web3 competitive social platform. The platform intends to build a Web3 ecosystem through games, provide communities and platforms for content creators, organizers, and owners, and generate economic benefits. GGP participated in the $46 million Series A round of financing completed by Wildcard Alliance in June 2022, led by Paradigm and participated by Polygon and others.