Author: PANews, Zen

According to data from market research firm Newzoo, the gaming market has now surpassed the combined total of movies, music, and books, and is the fastest growing consumer trend in the world, expected to grow by 248% in the next decade. With the development of blockchain technology, more and more people are beginning to believe that blockchain-based Web3 games will be one of the important directions for the future development of the gaming industry. Griffin Gaming Partners (GGP), which owns the largest fund in the gaming industry, is a supporter of this view.

Griffin Gaming Partners, located in Santa Monica, California, is currently a venture capital firm that invests in gaming content, software infrastructure and social platforms, as well as gaming-related Web3 companies, with an investment asset management scale of over $1 billion. In March 2022, its second fund was oversubscribed and raised more than $750 million. As a venture capital fund focusing on the gaming industry, GGP had participated in 16 Web3-related investments such as the blockchain gaming platform Forte at that time, 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 gaming company The Wildcard Alliance, and the blockchain game developer and publisher N3twork Studios.

Three gaming 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 financial sector of international investment bank Goldman Sachs and global investment management firm RobertsonStephens. From 1997 to 2006, he served as a general partner of an investment firm called Walden VC, and then co-founded 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, etc.

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

Peter Y. Levin brings decades of operating experience to Griffin Gaming Partners. He served as President of Interactive Ventures, Games and Digital Strategy at Lionsgate, and co-founded and served as CEO of Nerdist Industries, a platform for creating pop culture content, which was acquired by Legendary Entertainment in 2012. Levin has been building businesses and investments in the gaming industry for many years, and was an early advisor and investor in Rovio, the Finnish company known for the Angry Birds game.

Nick Tuosto is also currently the managing director of LionTree, a US investment bank focusing on technology, media and telecommunications (TMT), where he facilitated the strategic partnership between LionTree and Griffin Gaming Partners. Tuosto has extensive experience in the Internet and digital media, and has provided consulting services to many of the world's leading game companies on 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 developer and publisher Scopely.

The potential of Web3 games needs to be released

As a top gaming fund, GGP reviews more than 1,300 qualified projects each year. They analyze large amounts of data and proprietary research, combined with past practical experience in supporting the growth of portfolio companies, to explore potential investment opportunities from seed rounds to growth rounds, and provide perspectives on growth, retention and monetization, and use their unique resources in the gaming and investment communities to assist portfolio companies in their business development.

Before launching its second fund, GGP said it would try to avoid blindly following popular trends, but its intelligence-based, data-driven investment strategy still allows them to choose to support and invest in Web3 and blockchain games. According to Nick Tuosto, "Our thesis is simple. With our focused focus and analytical capabilities, we can understand a lot of data and see around corners. This provides us with a basis for evaluating risk returns, but also enables us to work for our portfolio companies through business development and consistent advice to cope with these highly dynamic market conditions." He added: "We will help our portfolio companies open the right doors at the right time and unlock transformation opportunities."

As Web3 games develop and iterate, and after witnessing the influx of a large number of top talents who have long been committed to building web3 games, GGP concludes that the paradigm shift of Web3 will become a huge game market expander, and the introduction of web3 infrastructure, content, and business models will have a huge impact on games. It believes that the new model of digital property ownership in games has the potential to support lasting player participation and a balanced digital economy, but it requires a very talented and experienced team to unleash the potential of blockchain games.

Phil Sanderson said that the current combination of Web3, blockchain and games is similar to the era of free game models that he has experienced, which has completely subverted the industry in a positive way. The core of its excitement and expectations for developers and gamers is:

Provide broader utility and greater ownership flexibility for digital assets inside and outside of games Further support for casual gamers, professional players, 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 systems Build passionate communities and proximity between developers and players, align incentives and establish feedback loops Portfolio covers blockchain 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 in blockchain game developers, game development tools, and blockchain public chain projects, and has made a small amount of investment in DeFi and NFT tracks. The following will briefly introduce some projects with relatively large financing scales.

Aptos is an L1 public chain project founded by former Meta employees. Meta's Libra plan (later renamed Diem) was shelved and sold at the end of January 2022. Some core members who left formed a team and developed the Aptos public chain based on Diem's ​​open source code. It uses the development language Move and focuses on the security, scalability and upgradeability of the blockchain. GGP participated in the $150 million financing completed by Aptos in July 2022. This round of financing was led by FTX Ventures and Jump Crypto. Other investors include Franklin Templeton, Circle Ventures and Superscrypt.

N3twork Studios is a blockchain game developer and publisher founded in January 2022 by the game team of N3TWORK 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. N3TWORK Studios is developing a diverse portfolio of multi-platform games, including the upcoming Legendary Heroes Unchained and Triumph. GGP led N3twork Studios' $46 million Series A financing in May 2022, with participation from Kleiner Perkins, Galaxy Interactive, KIP, Floodgate, and others.

Everyrealm is a metaverse project under Republic, an alternative asset crowdfunding platform. It shapes the metaverse by investing, managing and developing assets, including NFTs, virtual real estate, metaverse platforms, games and infrastructure. GGP participated in Everyrealm's $60 million Series A financing round completed in February 2022, which was led by a16z and participated by Coinbase, NGC Ventures, Dragonfly Capital, Hashed, Lightspeed, Griffin Gaming Partners and other institutions.

Forte is a blockchain gaming infrastructure company whose platform allows game publishers to integrate blockchain technology into their games, providing seamless, embeddable token wallet products, NFT minting and sales, payment tracks, and other services built specifically for blockchain token economies and digital and virtual asset management. In May 2021, Forte received $185 million in Series A funding at a valuation of $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 has launched GUNZ, a blockchain-based digital economy platform built on the Avalanche subnet, and will use it to create a cyberpunk-style battle royale third-person shooter game Off The Grid (OTG), which is expected to be released in the second half of this year. Other game studios will also be able to use the GUNZ software development kit (SDK) and white label components, such as built-in companion applications, markets, and NFT minting engines, to build and publish their own projects on GUNZ. GGP participated in Gunzilla's $46 million financing completed 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, independent game studio Playful Studios, was founded in 2012. The studio has produced the well-known 3D platform game (Lucky’s Tale) series and sandbox adventure game (Creativerse). Wildcard Alliance is a 3A PVP game based on the Polygon chain that combines real-time strategy, multiplayer online competition, and cards. It plans to build a decentralized and autonomous Web3 competitive social platform. The platform intends to build a Web3 ecosystem through games to provide communities, platforms, and economic benefits for content creators, organizers, and owners. GGP participated in the $46 million Series A financing completed by Wildcard Alliance in June 2022, led by Paradigm and participated by Polygon and others.