Tweets, Awkward Suits, and Hustle: How I Became a VC in Detroit at 22 | by Blake Robbins | Medium
2:00 Gaming as a business
- Game has become a platform instead of a one time purchase.
- Example: Leage of Legends, Fortnite. The barrier to entry is low, you don’t need a high end device to play it. This leads to massive growth.
- The real giant: Tencent. They are proactive in acquiring studios.
- The other one EA, Activision Blizzard, Valve.
5:30 How Free to Play Games make money?
- Major free to play games today are not pay to win. People used to think that when you play free to play games you need to spend money on extension pack and many more to win.
- They make money from in game items and cosmetic items. These items don’t impact the game at all. These items can be shown to your friends as an indicator that you have spent money on a “rare” item.
- CS has a more open economy around the game. People open loot boxes to get a random skin. Can be worth a penny to 5-10K. There is a finite amount for these rare items. There are third party website to sell the items, not just inside the Valve market.
- Fortnite and Leage of Legends -> specific events, limited time offer.
Fortnite rotate their in game items every day. Some of them are rare. People even sell their account with those rare items.
There are infinite supplies for the items because they are free to reproduce.
9:50 How do gaming companies manage their economy?
- Each of the game has an economy surrounding it.
- Fortnite -> buying V-Bucks to buy items. No secondary market. Only selling account. People use skin for expression inside the game. It symbolises the type of player you are.
- In CS -> there is a secondary market where you can sell the skins. People also gamble using these items. There’s even a chart for the price. People use that gambling for content, using cheap skin to get expensive skin using gambling. Once the gambling site went down, the item value decrease too.
- There are other game that use loot box. It works like a slot machine.
- Tier 1 game: CS, LoL, Overwatch.
- It feels like a real sport now.
- Valve and CS -> similar to Golf.
Lots of tournaments, from amateur team and players to a more experienced one. They are working they way up.
New teams emerging all the time.
Have multiple majors every single year.
This kind of system has been around for a long time.
Separated into different regions.
Play independent season and funnel to the world championship.
Changed in 2018 for NA, they decided to do franchising so it is a bit similar to NBA. Before this system was applied, they look similar to EPL (English Premiere League) that has relegation and promotion system.
Started as a league from the first launch instead of a tournament.
20-30 million for a spot. Hopefully become a rare asset.
25:30 The Future of Media Landscape
- Fortnite as a place instead of a game.
- Twitch as a distribution channel.
- Biggest creator realise that they has distribution and audience, they have a chance to build something bigger for themselves. They need to understand where to build it.
- Micro and medium sized influencers start to do that also and they are successful in it.
- Most of the big influencers sell merchandise, there are bigger opportunities beside merchandise.
29:35 Investing in Games
- He invest in pre-seed. It’s hard to do this for gaming because in pre-seed they don’t even have the demo.
- Comes back on how they can build a platform.
- Roblox has an incredible economy -> teenagers are creating game, item inside the universe.
- Creator economy -> not just youtube or twitch. Webflow for game.
- There will always be ideas for amazing game but most of the people with that idea don’t have the tool to build it.
- Continue to improve the output of games. Produce more games so whenever we invest we’re not just betting on 1 or 2 games.
- The platform publisher -> 1 game that hit and funnel into another games.
- Voodoo.io -> 10-20 games on iOS on the top 100 chart because they are good at funnelling their games.
33:04 Unity and Unreal
- Gaming is starting to look better than movies.
- The opportunity is limitless.
- The future of gaming is exciting because of the improvement of these engines.
- People start hanging out in games instead of social media.
35:05 Investors that are good in this field
Invest in seed or pressed on game studios.
Investor in Riot Games.
If you want to invest in studios you have to invest really early and take risk.
37:40 Blake’s other areas of investing
- The future of work.
- Creator Economy / Passion Economy.
- A lot of platforms emerge that enable people to do what they love.
- It’s like a modern day lemonade stand.
- These platforms will win in the next decade.
41:23 The enablement of creator and other business
- Twilio, Stripe, Shopify
- Developer facing API companies.
- A lot of companies emerge in the Fintech field.
- They are enabling new startups to be built.
- How to discover this kind of business? Strip back a business. Find the core competency of the business.
49:10 Investment that Blake most proud of
- 100 thieves. Because he is most involved in the investment.
50:39 What skills or mindset that is the hardest to transfer from Blake
- His curiosity. That’s why he loves being a VC.
52:30 Things in gaming that Blake hasn’t understood yet
- How does the open/close ecosystem for esports evolve.
- When a new company launch a new game, it can kill the old game.
- How the developer and players align in the long run.
- Each game has different strategy.
54:03 The kindest thing that anyone has ever done to Blake
- Eric Jorgenson -> his mentor and the first person he has ever contacted. The first person who took a bet on him.
- Partners at Ludlow Ventures.
Also available on my Public Notes on Notion : Investing in Gaming - Blake Robins