thecoreloop's Weekly Recap (Week 8 of 2023)
Here's the fundraising news and top five stories for the week!
Welcome to thecoreloop's Weekly Recap, where we will cover the five must-know headlines and all fundraising news for the week. Make sure you subscribe so you don't miss next week's recap.
This week we see quite a few funding for web3 games ($31M+). I included not one but two of Konvoy Ventures’ pieces this week since I thought they were quite insightful. First up is the VC funding data for the gaming space broken by stage and between 2019 to 2022, with a bonus of YTD in 2023. Second piece from Konvoy Ventures talks about AR and they provide the lay of the land as well as what the largest tech companies of the world are currently doing in the space. Following that I included Michael Yossef’s Dota 2 Guide, which is celebrating its 10th year anniversary. Did you know that 91% of all Dota matches use Yossef’s guide? Wild. Then we’ll check out Gamecraft’s latest pod on VR. Finishing off for the week we have Mobile Dev Memo’s Eric Seufert dropping some major knowledge on Spotify and the podcast advertising space. Hope you enjoy! Thank you for reading and subscribing. See you next week <3.
Worldwide Webb // $10M // Web3 // Sandbox
Curio // $2.9M // Web3 // On-chain
Strider // $5.5M // Web3 // Text-based RPG
Azra Games // $10M // Web3 // Collect & Combat RPG
Million on Mars // $3.5M // Web3 // Simulation
Konvoy Ventures GP @joshchapmn shares some stats on 1Q23 funding landscape
With funding off to a hot start in 2023 standing at $500M YTD, we should take a look at how that compares to prior years. Funding in the gaming space hit $5.2B in 2022 per Konvoy Ventures and CB Insights. In the chart you clearly see the respectable 10% YoY growth from 2019 to 2020. But in 2021, the over allocation and the hype cycle was very real. We saw a record shattering, atmosphere piercing, exuberance inducing mania that resulted in $8.8B in funding, which was 3.2x of 2020’s. In 2022, we saw a 40% correction from the high; however the funding amount of $5.2B is close to 2x that of 2020’s — still quite good in my opinion.
Further, the study broke down the investment amounts into Late, Growth, and Early Stage. Unsurprisingly the Late Stage market is basically nonexistent since the IPO market is completely dead. We also saw a decay of growth stage funding quarter-over-quarter in 2022, where it started at 55% of all funding to 25%. Thus leaving Early Stage to soak up all that excess VC capital that needs to be deployed.
Where AR We Going? (We got a double feature this week! Konvoy is banging!)
The article from Konvoy VC's newsletter titled "Where AR We Going?" discusses the current state and future of augmented reality (AR) technology. The author predicts that AR will be the next big platform, surpassing mobile and desktop computing.
Some key statistics, such as the estimated $198 billion AR market by 2025 and the growth in AR-related job postings on LinkedIn. Additionally, the largest tech companies in the world are working ferociously in this space. Google has created ARCore platform for Android devices. Apple released the ARKit to create AR experiences for iOS devices. Lastly, Meta is developing its own AR glasses.
The challenges facing the AR industry are hardware limitations, the need for improved user experience, and the lack of standardization.
Dota 2 Hero Guides celebrate 10 years, used in 91% of matches
I personally love this example of a community member being so driven by the game that he created such an amazing tool for all his peer gamers. Michael Yossef “Torte de Lini” Cohen-Palacios is the founder of Dota 2 Hero Guides. His guides are used in over 90% of DotA matches — insane. Even the folks over at Valve would recommend his guides in DotA 2’s tutorial!
When the term UGC is mentioned, many people would immediately think of Roblox or these other player-creator game platforms but to me what Yossef built is also a hallmark of UGC. In my opinion, UGC could span from actual game or in-game creations to game-adjacent products or services. I’m bullish of this UGC trend but not because of what most would think. “Mod” culture is hitting mainstream and the player-creator paradigm is really expanding from being the niche of a niche.
Gamecraft delivers another banger, this time about VR
The hosts discusses the current state and future of virtual reality (VR) technology by interviewing Mike Vorhaus, CEO of Vorhaus Advisors, a consulting firm that specializes in the media and technology industries.
Vorhaus notes that while the technology has been around for several decades, it has only recently become more accessible and affordable to consumers. Vorhaus also mentions the initial hype around VR in the mid-2010s and how it did not live up to expectations due to a lack of compelling content and high-quality hardware. During the COVID-19 pandemic, people looked for new ways to stay entertained and connected which led to the surge of VR headset sales.
He ended the podcast by saying how VR has the potential to transform how we learn, work, play, and even receive medical treatment.
Spotify and the quality of podcast advertising
Podcast ads has always reminded me radio ads. One could roughly make out what the segmentation of the listeners are through the topic of the podcast or the show host but largely it’s a black box. In Eric Seufert’s latest deep dive on Spotify and podcast advertising, he lays out all the podcast-related acquisitions that the music tech platform made between 2019 and 2022. These acquisitions entail both podcasting tech as well as actual content itself, totaling over $1B+. On the content front, the genre or type of content leaned more on the broad side where it’s difficult to segment or really contextualize the relevance to a specific demographic. Further the attribution challenges just furthers the lack of appeal of podcast advertising for direct response marketers.
Check out thecoreloop's new substack.
Never miss a thread, blog, or pod again!
thecoreloop presents: Wassie's Alpha Guide