Benchmark Capital has announced an investment in Meteor Entertainment, the publishing company that will bring the amazing mech shooter Hawken to market, together with Adhesive Studios, later this year.
This is going to be fun. First, I get to work with a remarkable new talent, Khang Le, and his team at Adhesive Studios in LA. I discovered Adhesive the same way everybody else did -- through their YouTube gameplay demo for Hawken. My brother sent me a link along with a simple message: "Find these guys!" I've been looking at games for 20 years and Hawken is one of the most astonishing things I've ever seen.
Second, I get to work with my good friend Mark Long. I first met Mark early in his career in the video game business, when he had just started Zombie in Seattle. Mark is a pro's pro, and I was honored that he agreed to come on as our CEO at Meteor. He not only brings recent experience creating free-to-play games, but also a deep understanding of the marketing power of transmedia. Mark is an accomplished graphic novelist (Shrapnel, The Silence of Our Friends) and has worked closely with Brian Grazer's Imagine Entertainment developing leading-edge film and television concepts.
Third, I get to join Meteor's board along side Rick Heitzmann from FirstMark Capital in New York. Rick and I were the Series A investors in another well-known free-to-play company, Riot Games, a startup studio that had a monster, worldwide hit with their first title, League of Legends. Riot was acquired by the Chinese internet giant Tencent early last year. Rick and I had a great experience together on the Riot board and have been looking for something interesting to do together ever since. I can't think of a better project than this to reunite the team.
Free-to-play is the future of core gaming. Every month we hear the dire reports from the front lines of the packaged goods business, with sales off 10-30% year over year, a trend that we've seen continue unabated for the last couple of years. The packaged goods business is undergoing the disruption that we've witnessed in many other media businesses (music, newspapers, TV) as the internet, free-to-play models, and micro-transactions erode the traditional brands, retail bundles, and price points. This is a huge opportunity -- perhaps up to $8 billion of core revenue is at stake in this migration to free-to-play/virtual goods in the next few years.
If the other media businesses are any guide, this will happen fast. Some of the incumbents, like EA and Valve appear to understand what's happening and are taking action, but the opportunity is enormous for new entrants built from scratch for free-to-play design and publishing. Riot was able to come out of nowhere and, with a single great title and a deep commitment to customer service, reach over 35 million players around the world (and growing), while generating outsized revenues and profits. They did this without the "reach" of the incumbent publishers, without access to their distribution channels, and without their massive conventional marketing budgets. That was simply not possible in the past.
I think Meteor has a great chance to build a really big business in this space, and that's why we invested. I look forward to getting to work with this great team to make it happen.