Hi, everyone, welcome to another episode of
William Collis:office hours with the professor. As always, I'm your host,
William Collis:William the professor Kahless. And I'm super excited to cover a
William Collis:another esports news story for you all. Now, this week, we're
William Collis:going to do a tiny bit of an older story. It's a story we
William Collis:kind of missed covering on this podcast. Because to be honest
William Collis:with you, I thought the news post sort of Memorial Day was a
William Collis:little bit slow. So rather than kind of dig into a story that I
William Collis:don't think has as much meat on the bones, I'd rather sift back
William Collis:a little bit just a little bit in time to a story we didn't
William Collis:cover and share my thoughts on it. And that story is oldie but
William Collis:a goodie a16z launching a $600 million esports fund. So for
William Collis:those of you who missed it, the fund is called games fund one,
William Collis:and it's going to invest really across the entire category of
William Collis:the esports ecosystem. It's going to be in gaming services.
William Collis:It'll be in consumer products, and crucially, it will also
William Collis:invest in studios. And there are some really impressive names
William Collis:affiliated with this fund. You basically have a who's whose
William Collis:list of founders who are involved whether it's folks from
William Collis:Riot Blizzard discord, Zynga, I think Twitch is in there,
William Collis:believe Roblox is in there. So really, really impressive list
William Collis:of folks, this sounds pretty great, right? Like, why is this
William Collis:a good news story for us to cover on the business of
William Collis:esports? I mean, obviously, it's good news. It's a big venture
William Collis:fund coming into the space, why do we care, I think we should
William Collis:care for two reasons, one smaller, and when I think a
William Collis:little bit more subtle and potentially more important. So
William Collis:the smaller piece is just look, a16z is a big name. And this
William Collis:brings real further credibility to esports and esports. And
William Collis:gaming as a category of investment. I'm not saying that
William Collis:it wasn't a legitimate category of investment before, I'm not
William Collis:saying there weren't big names involved. But you know, this is
William Collis:a16z coming in people take notice. And the name of the fund
William Collis:is games fund one, which sort of seems to imply like, there's
William Collis:going to be other games funds, you know, it's it's rare that
William Collis:you call something one and aren't at least thinking about a
William Collis:234. Right. So this speaks to a sustained commitment from them
William Collis:in the space and a lot of money $600 million of venture capital
William Collis:coming in is a ton of cash to deploy to further businesses.
William Collis:And I think within this point, the businesses a 16, z invest
William Collis:seven will probably have an advantage for being successful,
William Collis:just because the network that I mentioned earlier. So it's not
William Collis:only that there's a big chunk of money coming in it's money with
William Collis:access to important people in esports, who can help empower
William Collis:and make a16z investments grow. So that's the first reason why I
William Collis:think we should care. But the second reason, set is a little
William Collis:more subtle, maybe a little more important. The studio piece, I'm
William Collis:really, really impressed. And to be honest, a little bit
William Collis:surprised to see studios as a category of investment, you
William Collis:know, I'm going to exaggerate significantly here, but I sort
William Collis:of remember a time when studios and investing Game Studios was a
William Collis:bit like pieces of art, right? Like, you know, you could buy
William Collis:it, you could put money in as an individual, right. But, you
William Collis:know, it was not really viewed as a category for serious scale
William Collis:investing. And again, I'm exaggerating here, I'm
William Collis:exaggerating, but the fact is, you know, Game Studios very high
William Collis:risk, right? Like you either have a hit product and you have
William Collis:a lot of money, or you don't have a hit product, and you
William Collis:don't have much money at all. And I think the fact that a16z
William Collis:And not just you know, this venture fund, but other venture
William Collis:funds are really willing to put money into studios highlights to
William Collis:me a shift in the industry, there just studios have become
William Collis:an investable asset class. And that's not just investors waking
William Collis:up to studios and investable asset class, like, hey, turns
William Collis:out you make good studios, you can make money. It's actually
William Collis:because of a shift in the business model of studios
William Collis:themselves. We've gone from basically studios making one
William Collis:game and then needing to sequel at or doing a new IP or what
William Collis:have you to doing games as a service. Right? So game studios
William Collis:look a lot less like sort of hit driven wonders, and more like
William Collis:traditional service industry businesses. And that makes them
William Collis:much more investable, right. They no longer have to struggle
William Collis:to come up with completely different ideas or reengage fan
William Collis:bases year to year they have an existing customer base that they
William Collis:sell to again and again with their service model that's a lot
William Collis:more predictable, a lot more potentially lucrative and a lot
William Collis:more investable. So I think that trend in the industry really
William Collis:underpins why funds like a16z are willing to invest in
William Collis:studios. So I thought this was a fun flashback news story to
William Collis:cover. I had to give it a great great inflation A plus anytime
William Collis:you have 600 million new venture fund cash coming into the
William Collis:industry I think it's a great story. But I also think this is
William Collis:really good for the games industry as a whole and I hope
William Collis:you enjoyed my quick take on this the launch of the games
William Collis:fund one and will join me for Office Hours next week thank you
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