There are billions of gamers on the planet, and even as gaming consoles and devices grow more powerful, there’s a good deal of investor attention being paid to so-called “hyper-casual” games that likely could have shipped on decades-old hardware.
Simplicity has never been something to take for granted in game design, but as design tools have gotten easier to use, a larger group of game creators has entered the fray. Many popular games have introduced “creator modes” to whet user appetites, but this has emerged alongside the introduction of dedicated tool that enable amateur developers to become miniature studios.
This past week, I chatted with David Lau-Kee, general partner at London Venture Partners, about opportunities in the game development industry for less-experienced game creators to build titles that find an audience. His firm closed an $80 million fund last September to invest in early-stage gaming startups.
“[Hyper-casual] is a very elegant trend in the demographics of getting games into the hands of people who weren’t traditional gamers who want very low on-boarding so they can get straight into the game,” Lau-Kee says. “The challenge with that for us is that, you know, as a developer in hyper-casual games, you can have a great business, but it might not be a VC-investable opportunity.”
The proliferation of more complex ad units inside apps bubbling up alongside free-to-play monetization models has allowed bite-sized gaming titles to find larger audiences that don’t have to commit much time or effort to dive into the title. Low commitment is great for viral growth, but it’s not the metric VCs are generally looking for in a successful platform.
What’s drawing more investors to hyper-casual gaming is the idea that lightweight titles are in the best position to showcase how far amateur developer tools have advanced in the past decade. By betting on hyper-casual-aligned platforms, they hope to be best poised to reap rewards from falling barriers to everyday consumers getting into game creation.
“The democratization of game development that Unity started in 2009 is continuing and accelerating,” Lau-Kee adds. “And the fact of the matter is that everybody who plays games these days also wants to be able to build games, or make games, or mod games as well.”
This week, LVP announced that it had led a $4 million seed round in Coda, which is looking to help small-time developers publish lightweight games and bring them to a wider audience. The play is to court single developers or small teams to push out hyper-casual puzzle games through its interconnected network. It’s not a revolutionary model for selling games, but given the scale of the titles it plans to release, it represents one of the few ins for capitalizing on both amateur game development and hyper-casual games.
There is still major money to be made in puzzle games. Though Candy Crush has fallen out of the national conversation, King still pulled in $1.1 billion from the title in 2019, Sensor Tower estimates. Game developers in the hyper-casual category are still courting major investments. Mobile game studio Wildlife Studios just announced a $60 million raise last month led by Benchmark.
“Really, for me, what made us pull the trigger on it was their insight into how to use technology to drive the scale process, using a platform to be able to create efficiencies in the developing and publishing process for lots of these games,” Lau-Kee said. “One of the challenges some of the other publishers in the space have is that they’re obliged to cherry pick, which is not a bad thing in and of itself, but it’s so much more interesting if you can tap into a platform where hundreds of millions of people can use it and maybe you know tens of thousands can have viable businesses, they don’t all need to be million-dollar-per-day games.”