Genvid Technologies focuses on what many would consider an obscure area, interactive streaming SDKs for game developers. However, this is an area that could drive a new future of game industry business models. Investors tend to agree as the company announced an oversubscribed Series B round from important strategic investors.
The new funding round is for $33 million, raising the total investment in Genvid to $53 million. However, it was not the amount of money that made this investment interesting. The investors are Huya, NTT DOCOMO Ventures and Samsung Ventures. For these companies this was clearly a strategic investment.
Huya is a Chinese company that offers live game streaming services similar to Twitch. NTT, based in Japan, is a global telecommunications leader that has been looking heavily at cloud gaming across its infrastructure. Samsung of course is a South Korean consumer electronics giant.
The interest in Genvid is because the company is looking to provide new ways to monetize important segments in the game space, most notably esports and cloud gaming. Genvid Technologies has the potential to offer developers the ability to generate revenue from the more passive consumers that watch, but do not actually play a specific video game.
For publishers the issue with esports is that it is more of a marketing cost to drive sales of their big-ticket games. The publishers have limited revenue participation in the huge audience of gamers that watch their games being played.
Interactive streaming has the potential to allow viewers to become participants. Users can see different views of a game, explore game statistics, and basically have control of their own camera to watch games. Of course, innovative developers can look at new ways to monetize that activity.
For many years, DFC Intelligence has worked with companies like NTT to explore the business model challenges of cloud gaming. Back in the 2012 rush/collapse hype cycle of cloud gaming the conclusion was that the lack of a viable business model, not technology, was the major barrier to success.
The idea behind esports and cloud gaming is that there are far more users that want to just watch games being played than those that actually play the games. This is not only because of limitations in access to technology but also just the intimidation factor of playing many high-end video games.
Activision Blizzard’s release of Call of Duty: Mobile on October 1, 2019 is a prime example of the monetization issues. For the fourth quarter of 2019, this game nearly quadrupled the monthly active users for the Activision division. However, revenue for the division remained flat over the previous year quarter.
For a company like Activision Blizzard, they can sell 30 million copies of a Call of Duty game at $60 each. However, Call of Duty: Mobile proves that over a 100 million users are interested in the franchise. The challenge for Activision is how to monetize that audience.
The excitement over interactive streaming technologies from companies like Genvid Technologies is the potential to monetize the non-playing game viewers. This is a huge audience and is the reason esports has attracted so much attention.
The DFC Executive Brief series is designed for busy industry executives, leaders and investors that want focused analysis of the key issues in gaming today vs lengthy reports . The series includes access to top-level forecasts and regular briefs that come out every two weeks or more.
Briefs are on major topics and upcoming trends such as esports, cloud gaming, new product announcements, VR/AR and much more. Subscribers gain regular analyst access including the capability to pull specific research data as needed. Subscribers are given the opportunity to provide feedback on topics they would like to see covered.
The Executive Brief Series is only available to qualified executives and investors.