Agustin Soler's List: Corporate Finance

• state of the game industry and the prospects for game startups
• • Y el costo del Hardware?
• The monthly NPD sales numbers haven’t captured the explosion of games on the iPhone, Facebook, casual games on the web, and PC online games
• How optimistic should we be? How scared should we be?
• Unemployment in the Valley is now at 11 percent.
• if you look at the first nine months of 2008 and the last three months of 2008, you find a definite slowdown
• It was in fact the lowest level of VC investment in 12 years
• People are still starting companies.
• We’re in an age of indie revival, a fact that’s evident from the more than 5,000 games on Facebook.
• young social game companies such as Zynga and Social Gaming Network, they’re recruiting top executives now from firms such as Electronic Arts and THQ.
• Look at 2D-Boy, the company created by two men who had no office. They squatted in cafes in San Francisco until they finished their game, The World of Goo, which went on to become a huge indie hit on the PC and on the Nintendo Wii.
• VCs were afraid of their ability to pick hits. The odds of investing in a good game were about as bad as investing in a hit movie. Game developers received funding from game publishers
• times have changed. Many major venture capital firms are now firmly entrenched in game investments
• U.S. industry growth has slowed from 33 percent in the first half of 2008, but it managed to grow 19 percent and hit $22 billion in 2008,
• More kids are playing games. More people are buying consoles due to the popularity of the Wii, which has reached 50 million consoles sold faster than any other game platform.
• I recently took my family to Disneyland. I calculated that we paid $25 per minute of ride time. You can play a $50 game for many hours. And games are a good distraction during a time of stress.

  • y el costo del Hw?
• At the same time that new startups are rising, there have been thousands of jobs cut by Western game publishers
• The bad ideas die
• But the closing of studios isn’t completely alarming. Rather, it shows where the winners are and where the losers are
• The strategy that makes sense is geographic arbitrage. Simply put, that means you take advantage of what your region is good at. For a time, the French stock market overvalued game companies
• Outspark
• the company has six MMOs. Its portal draws 5.4 million visitors a month. About 10 percent to 13 percent of the users actually spend money
• among the spenders,
• the average revenue per user is $45 to $49
• ight now, there is a proliferation of new game business models
• Our GamesBeat survey showed that people were most excited about micro-transactions that enable virtual goods, which 66 percent of our respondents marked as most the interesting new model.
• iPhone represented a threat to Nintendo’s portable game business. About 61 percent of the people who participated in our GamesBeat survey felt that the iPhone was the game platform with the most potential.
• On March 23, there were more than 6,700 games on the iPhone. Now must a month later, there are more than 8,349 games.
• More than 30 million iPhones and iPod touch models have sold.
• John Carmack took a couple of weeks to do a Wolfenstein 3D iPhone game that even his boss didn’t know about.
• In Silicon Valley, we have written stories about how developers believe that the iPhone is the only platform worth investing in.
• Trip Hawkins, the founder of Electronic Arts and the CEO of Digital Chocolate, told me that he thinks the traditional game companies are freaking out about the iPhone’s game success. He said that his company makes as much money on an iPhone game as it does by publishing the same game on 100 handsets.
• The iPhone games share much in common with the games on MySpace and Facebook. They are produced via iteration. You create them. You test them. You see how they work. If they don’t, you tweak the game
• ScoreLoop, which is based in Munich. They have created tools for a social gaming platform for the iPhone. They are not betting on making a successful game among the 8,000-plus iPhone games. They want to sell their tools to iPhone game developers. That is like selling shovels to gold miners.
• Many people believe games are an art form. They can’t be mass manufactured like cars. But somehow, certain companies come up with hit after hit. Those are the companies that Liew and every venture capitalist wants to find early. They are willing to pour money into those companies. That’s why Playfish managed to raise $17 million, even though it might cost only a few hundred thousand dollars to create a Facebook game.
• Critics, including Cevat Yerli at Crytek, just don’t want to believe it. Reggie Fils-Aime takes solace in the fact that OnLive is never going to have Mario. But Perlman has backers such as Electronic Arts and Epic Games. He expects to launch a games on demand service in the fall that is very much like Xbox Live. You will be able to play high-end games on low-end computers. That’s unbelievable. Many people have reacted to this by saying it is impossible. But it is no more impossible than 2D-Boy creating The World of Goo and getting a bestseller out of it. OnLive doesn’t have to kill the console makers to succeed. It will become a wildly successful company if it can simply establish video games on demand as a viable channel. And even if OnLive itself doesn’t make it, it is almost inevitable that game cloud computing will thrive.

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