“Gaming startups should consider a media partnership strategy early,” Gavin Teo said during his panel at Casual Connect USA 2014. “The right IP – like FF6, Despicable Me, and even Kim Kardashian can provide a major advantage in distribution.”
Gavin Teo is an Investment Manager at Comcast Ventures, where he invests in early stage companies with a focus on the connected home. He says, “We love working with entrepreneurs and thrive on helping them take their ideas to a global stage,” and points out, “CV is a returns-oriented fund with the strategic resources of Comcast NBC Universal.”
A Commitment To Games
Teo is an avid gamer who plays on console, mobile and PC. Currently, he is playing Forza 5 on Xbox One and says, “it showcases all the capabilities of this console generation – AAA graphics; transmedia content like the Top Gear integration; and advanced big data features such as a Drivatar that learns your driving style and earns you points by competing in the world when you’re offline.” He also points to the advances of AAA titles on mobile, citing his favorite iPad title, Xcom: Enemy Unknown. He shares, “I am a huge Xcom fan and played all of them on PC, but loved Enemy Unknown on my old 360 and was pleasantly surprised that it plays just as well on iPad.” Teo describes investments in FanDuel, Iddiction, and Trion Worlds, led by his colleagues at Comcast Ventures, which “are all gaming companies with well-developed cross-platform and transmedia strategies”.
A F2P Bias
Teo is also a former Product Manager on Farmville, so he admits to a bias for F2P business models that can harness the broadest potential reach. He insists, “F2P works at both the hardcore and casual ends of the spectrum.” However, he notes that it can also lead to a bias toward optimizing for short run user pay revenue – whale hunting, price discrimination, steep difficulty curves, and pay gates are common and effective. He doubts that iOS will relax rules allowing gaming apps to charge subscriptions, which limits user pay options. He asserts that F2P is a positive force in game development and says that the most successful publishers will find a way to optimize for both reach and monetization, and believes that “new advertising models are emerging that will make games look more like media properties.”
A Developing Perception
When asked about an emerging trend in gaming, Teo points to the rise of eSports and livestreaming of gaming content on platforms like Twitch. “Twitch is a social phenomenon with 50 million monthly viewers who consume almost 2 hours of gameplay video per session,” he says. Today, livestreaming of core genres is happening at scale on PC and console. He expects it to spread quickly to mobile as well. He is interested in platforms and content genres with low content acquisition costs, including UGC, which have broad reach and appeal and high consumer engagement. Teo mentions other Comcast Ventures investments led by his colleagues who focus on the MCN and content space, including Fullscreen, Tastemade, and CreativeLive.
Teo expects the rise of the professional eSports athlete to be the next big trend in the games industry. The US government is now issuing athlete visas to eSports athletes to come to the US and compete in major eSports events. He points out “20M fans watched the DOTA 2 International this July, which had a prize pool in excess of $10M. The winning team, Newbee, walked away with more than $5M. Competitive gaming is beginning to eclipse major sporting events in fan reach and prizing.” Consider that in context of the $3M prize Djokovic won by taking home the Men’s singles title at Wimbledon, which drew 17M viewers this June. He asserts, “big ad dollars will chase eSports like it has other sports.”
When not playing console games on his Xbox One, Teo is a distance runner and enjoys using consumer health apps, such as Runkeeper and Nike+, that are at the intersection of fitness and gaming.