Tag: Electronic Arts

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AppLovin wants to buy video game maker Unity for $20 billion

A year after going public, app growth and monetization agency AppLovin submitted an unsolicited proposal today to buy the game engine Unity in a deal worth $20 billion. But there’s a catch: Unity would have to terminate its recent deal to merge with ironSource, an AppLovin competitor.

Unity powers thousands of games across consoles, but when it comes to mobile apps, Unity supports games like Pokémon Go, Animal Crossing: Pocket Camp, Call of Duty: Mobile and more. Unity CEO John Riccitiello said that he was interested in the deal with ironSource because it would give Unity developers more tools to grow and monetize their apps, but the company hasn’t yet responded to AppLovin’s offer, which would offer similar benefits for creators.

“We believe that together, AppLovin and Unity create a market leading business that has tremendous growth potential,” said Adam Foroughi, AppLovin CEO, in a press release. AppLovin estimates that together, the companies could reach an estimated run-rate adjusted EBITDA of over $3 billion by the end of 2024. In AppLovin’s proposal, Unity would own 55% of the merged company’s shares, representing 49% of voting rights. But in the agreement with ironSource, the Israel-based company would become a wholly owned subsidiary of Unity.

Today’s Unity news doesn’t stop there, though. Reuters reports that Unity struck a $1 billion deal to create a joint venture in China. Partners in this venture, which will be called Unity China, include tech giants like TikTok parent ByteDance, Alibaba and more. The deal will help Unity develop local versions of its products for game developers.

Amid a downturn in tech valuations, M&A activity is becoming more and more popular, and gaming is no exception. Microsoft is expected to close a $68.7 billion acquisition of gaming company Activision Blizzard next year, but the deal has not come without scrutiny from shareholders.

Unity is merging with ironSource in an all-stock deal valuing Ironsource at $4.4B in a big consolidation play for gaming

Microsoft to buy Activision Blizzard for $68.7 billion

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As regulation heats up, will gaming studios’ gamble on loot boxes pay off?

You’d be hard pressed to find a game that doesn’t include some form of microtransactions these days, especially in mobile games. It just makes sense for gaming companies — an immensely lucrative source of revenue, the microtransactions market was worth at $60 billion in 2021, and projected to hit $106 billion by 2026.

Typically offered as in-game collectibles, currencies or chance-based loot boxes, microtransactions are now better received than they were a few years ago. Loot boxes, which are a way for players to receive random in-game rewards in exchange for real money, have been disparaged for a while now, and they’re now increasingly subject to government scrutiny.

Loot boxes have become an issue because they encourage spending real money for a miniscule chance at obtaining valuable in-game items, more often than not leaving players with nothing to show, except a desire to continue gambling for better items. Companies have been known to employ predatory sales tactics to sell loot boxes, and in the process, introduce to minors an avenue to gambling. Despite Electronic Arts’ (EA) insistence that loot boxes are not gambling, and are, in fact, “surprise mechanics,” several studies have shown there is a link between loot boxes and gambling addiction.

Red tape redemption

When Belgium banned loot boxes in 2018, it looked like the first domino had fallen, and further regulation from other countries would follow soon. The ensuing response was sluggish, though, despite countries like the U.K. agreeing that loot boxes are an issue that needs to be addressed.

One of the biggest hurdles faced by countries attempting to regulate loot boxes is that they do not fit their present definitions of what constitutes gambling, allowing companies to offer them and continue operating outside traditional gambling regulations.

The Netherlands, following in the footsteps of Belgium’s ban, tried to get the gears moving as well by fining Electronic Arts in 2019 over the inclusion of loot boxes in its popular FIFA franchise. This fine was overturned earlier this year after an appeal.

EA couldn’t celebrate its win for long, though, as the Netherlands has now pushed to update its legal definition of gambling to ensure better regulation of loot boxes. It remains to be seen if this results in an outright ban, or leads to EA requiring a gambling license and all the regulation that goes with it. When it does happen, it’s likely that EA will simply remove the offending loot boxes from the games sold in the Netherlands, similar to its response to the ban in Belgium.

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‘Elden Ring’ gaming giant Bandai Namco says hackers may have stolen customer data

Bandai Namco, the Japanese video game publisher behind titles including Pac-Man, Tekken and Elden Ring, has admitted that hackers accessed its systems and potentially made off with customer data.

In a statement shared with TechCrunch, Bandai Namco said it detected “unauthorized access” to its systems by a third party on July 3, adding that it has since taken measures, such as blocking access to the affected servers, to “prevent the damage from spreading.” The confirmation comes days after the Alphv ransomware gang, also known as BlackCat, added the Japanese company to its dark web leak site.

Bandai Namco declined to elaborate on the nature of the cyberattack or how hackers were able to access its systems, but warned customer data may have been stolen, all but confirming that it was hit by ransomware.

“There is a possibility that customer information related to the Toys and Hobby Business in Asian regions (excluding Japan) was included in the servers and PCs, and we are currently identifying the status about existence of leakage [sic], scope of the damage, and investigating the cause,” Bandai Namco said.

The Alphv ransomware group — believed to be the latest incarnation of the DarkSide ransomware gang responsible for the Colonial Pipeline attack — has threatened that the stolen data will be released “soon”, but no exact deadline has been given. Bandai Namco declined to say whether it had been given a ransom demand.

“We will continue to investigate the cause of this incident and will disclose the investigation results as appropriate,” Bandai Namco added. “We will also work with external organizations to strengthen security throughout the Group and take measures to prevent recurrence. We offer our sincerest apologies to everyone involved for any complications or concerns caused by this incident.”

Bandai Namco is the latest in a long line of gaming companies to be targeted by hackers. CD Project Red, the studio behind The Witcher 3 and Cyberpunk 2077, was last year hit by a ransomware attack, which saw hackers leak data related to its games, contractors, and employees. Electronic Arts was also hit by a cyberattack last June, an incident that is believed to be linked to the once-notorious Lapsus$ hacking group.

CD Projekt hit by ransomware attack, refuses to pay ransom

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Incredibuild powers up with $35M to boost its distributed, faster approach to games and software development

Incredibuild, an Israeli startup that has picked up a lot of traction in the worlds of gaming and software development for a platform that drastically speeds up (and reduces the cost of) the shipment of code and related collateral during building and testing — has raised some capital to speed up its own development. The company has picked up $35 million in a Series B round of funding — money that it will be using for product development, as well as to strengthen its ecosystem with more investment into community, developer relations and cloud programs across more markets.

This all-equity round is being led by Hiro Capital, with past backer Insight Partners also participating. We understand from sources close to the startup that the money is coming with a doubling of its valuation: when Incredibuild last raised funds — $140 million in March 2021 led by Insight, which took a big stake in the company at the time — it was at a valuation of $300 to $400 million. The company has doubled its ARR in the last year, and although it doesn’t disclose the actual figure, this round likely puts its current valuation at close to $800 million.

If it sounds odd that a Series B would be so much smaller than the Series A, that’s in part because that previous round was a mix of debt and equity: the company had raised very little since being founded in 2000 and was profitable.

These more recent rounds have been to give the business — which counts companies like Epic, EA, Nintendo, Sony, Microsoft, Adobe and Citibank among its 1,000 customers — capital to build new products on top of those that were already doing well. (Hiro is a VC that focuses on gaming, creator platforms and metaverse technology; and so it can potentially help on that front.)

One example of how Incredibuild has been evolving its product is the company’s deeper move into the cloud. Incredibuild’s first iterations, and still one of the biggest use-cases, were aimed at helping organizations distribute compute across their own on-premise machines.

In a concept not unlike (but not exactly like) peer-to-peer networking, the idea is that there is idle CPU in organizations’ network at any given time, and so Incredibuild has built a way both to identify those idle gaps, and to effectively divide up heavy code and distribute it to run across those CPUs in real time, and to then be reintegrated at a final end point. Over time, that also incorporated cloud compute.

“It’s a flavor of grid computing,” Tami Mazel Shachar, the CEO, in an interview, “but the secret sauce is Incredibuild’s approach to parallelization and virtualization. Nothing needs to be installed on the remote computer.”

And most recently, in the last year, following what some of its customers are doing, it has made an even deeper move into cloud: it has now inked partnerships with AWS and Microsoft integrating the Incredibuild tech directly into gaming stacks run in those companies’ respective cloud platforms, the idea being that using many pieces of small compute in the cloud simultaneously works out to be cheaper and now faster than simply running a process over a platform’s biggest single compute platform. 

“If I have a heavy process, millions of lines of code, that would take a 64-core machine to process, it’s considered expensive and will run 10 hours,” said Shachar. “But if I take 400 4-core machines and run that for five minutes it is cheaper, shorter and running in less time.”

She added that it has yet to provide tools to companies to run compute over different cloud providers, and has yet to build a similar deep integration with Google’s cloud platform: the demand from customers for either of those use cases is not there (not yet, at least).

And although cloud is growing in use, the real story still seems to be a lot of motivation to get the most out of on-premise equipment.

“Most of our users are on-prem and then burst to cloud when they have a peak or need,” she said.

The bigger picture for why Incredibuild has been growing well is because its product addresses three key factors in the market today, Shachar said.

The first is that, if you believe that “the metaverse” is more than just a marketing concept, it will require significantly more compute power, and as many organizations are coming to realize, the solution to that will not rely on hardware alone, but also software that can intelligently optimize the usage of existing hardware.

That is related to the second factor, which is that it’s going to be hard to continue relying on hardware because of the chip shortage.

The third factor is that the growing drive for more media-heavy code and more digitized services overall is seeing a massive strain in terms of human capital: there are not enough software developers out there. That is driving a market for more software automation, to take out some of the busy work.

Interestingly, the other big theme in distributed computing has been the big push around decentralization in finance, specifically in areas like cryptocurrency. This is not something that Incredibuild has really touched yet, but I asked if its cheaper and more efficient approach to distribution could ever be applied there, given what a bad rap crypto mining has had for the energy and other resources that it consumes.

“The idea of crypto has been looked at,” Shachar said. “It’s not in our near future, but definitely an option. It’s a question of focus.”

The fact that its focus so far has gotten Incredibuild to a pretty good place as a startup and cash-generating business is an indication that it could well be on the right track.

“Games companies are feeling the squeeze in developer capacity. Incredibuild gives developers back precious time by accelerating build compilation,” said Cherry Freeman, co-funding partner at Hiro Capital, in a statement. “Amazing games companies like Tencent, Take Two, EA, Konami, Nintendo, Capcom, and WB Games are already reaping the benefits of Incredibuild and our hope is that more companies will discover and take advantage of their brilliant technology. As always, Games are the cutting edge for technological advancement, and we envisage a future where Incredibuild will be the de facto distributed supercomputer on every machine in every company.”

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Blockchain gaming unfazed by crypto volatility as gamers ‘seek out entertainment’

The web3 gaming industry is one of the few sectors seemingly unaffected by current crypto market conditions, with capital continuing to pool into the space — and some industry players say it’s for good reason.

“The current market environment is funny,” Robby Yung, CEO of Animoca Brands, said to TechCrunch. “People have a tendency to couple crypto markets with blockchain games and content, but actually it’s only as appropriate as linking tech stocks on Nasdaq with the businesses of tech companies. There’s a certain correlation, but it’s tenuous.”

While the crypto industry was in free fall over the past few months, web3 games remained fairly stable. In May, over 1.15 million daily unique active wallets interacted with blockchain games, down just 5% from the previous month, according to a DappRadar x BGA Games report.

The number of active users “has nothing to do with the market,” Yung said. “You can argue it’s countercyclical because as we see in entertainment products, there tends to be more consumption when the economy is not so good because people will seek out entertainment,” he added.

While the future of the industry was in question amid the bear market of 2018, there has been tremendous validation and progress since then, Yung said. “The rest of the year will definitely be challenging, but I’m optimistic for the first quarter of next year.”

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Layoffs hit crypto and real estate tech particularly hard this week

Hey Siri, when does a “macroeconomic downturn” become a “recession”?

It’s another bleak week for startups weathering dismal tech stocks and even worse cryptocurrency prices. But let’s start with some good news: your children can get vaccinated against COVID-19!

Back to the bad news: we’re writing another weekly layoffs column, because once again, there’s been enough bad news this week that it’s necessary to round it all up.

This week, startups in crypto and real estate fared particularly badly — naturally, as mortgage interest rates rise, fewer people want to buy homes. Meanwhile, Bitcoin is nearing dangerously close to the $20,000 mark, a serious plunge from the $60,000+ prices we saw just seven months ago (I have been told on Twitter that #ItsNotAllAboutPrices).

Unfortunately, this week’s layoffs spanned beyond just those two fields, with consumer tech, fintech and food delivery impacted as well.

Let’s start with real estate

Our own Mary Ann Azevedo has been tracking the real estate tech sector, reporting on Tuesday that publicly-traded real estate brokerage platforms Redfin and Compass laid off a combined 900 employees.

“I said we wouldn’t lay off people unless we had to,” said Redfin CEO Glenn Kelman. “We have to.”

Redfin offered laid-off employees ten weeks of base salary, plus an additional week of pay for every year of service, capped at 15 weeks. They will also be paid the cost of three months of company healthcare so that they can temporarily continue coverage.

In addition to cutting 450 jobs, or 10% of employees, Compass will pause hiring and M&A for the rest of the year.

San Francisco-based rental platform Zumper also cut about 15% of its 300 employees, which mostly affected its art, sales and customer service departments, according to The Real Deal. Earlier this month, another Bay Area brokerage Side cut 10% of its staff as well.

Despite this industy-wide shakeup, some companies are still chugging along. Proptech company HomeLight raised $60 million and acquired lending startup Accept.inc this week.

Redfin and Compass lay off a combined 900+ employees as mortgage interest rates continue to climb

Pain on the blockchain

Coinbase is suffering a slow, morale-crushing descent. After a hiring freeze, then the controversial rescinding of accepted offers, the crypto exchange announced this week that it will reduce its workforce by 18%.

Remember when we said that layoffs are a bit more bearable when you’re not a jerk to your employees? I regret to inform you that Coinbase’s higher-ups probably do not read my work.

In a letter to employees, CEO Brian Armstrong said that employees who were laid off would be notified about their status via their personal emails — they would be cut off from their corporate accounts immediately to protect sensitive data.

True, angered former employees might retaliate by leaking such info. But you know how to make them even more aggrieved? Cut them off from their work accounts with no warning and tell them they no longer have a job.

Coinbase had 1,250 employees at the beginning of 2021, when the NFT craze ushered a new wave of participants into crypto. Since then, the team had more than quadrupled.

“There were new use cases enabled by crypto getting traction practically every week,” Armstrong explained. “While we tried our best to get this just right, in this case it is now clear to me that we over-hired.”

Armstrong also added that onboarding new employees had made the team less productive in recent months.

Coinbase is providing 14 weeks of severance pay to affected employees, plus 2 weeks for every year of employment beyond one year. The platform also will offer 4 months of COBRA health insurance in the U.S., and 4 months of mental health support for international employees.

The crypto layoffs don’t end there. Exchanges that depend on transaction fees are losing their income streams because of the downturn. The $3 billion crypto-lending platform BlockFi cut 20% of its staff of about 850 — less than two years ago, the blockchain startup only had 150 employees. Crypto.com also laid off 5% of its workforce, or 260 employees (meanwhile, Crypto.com has committed $700 million over 20 years for the naming rights to the Staples Center…). Finally, Huobi Thailand is shutting down in July due to government licensing issues.

Consumer tech takes a hit, too

While Spotify is not yet conducting layoffs, CEO Daniel Ek told employees that the streaming giant will slow hiring by 25%, citing market uncertainty. So far this year, Spotify has shut down its live audio creator fund and cut its internal podcast group, Studio 4, affecting about 15 jobs.

Is WordPress design tool Elementor consumer tech? It’s saved my ass several times, so let’s go with it. Just last week, Elementor acquired Strattic, which converts WordPress sites into Jamstack, a newer web development architecture. But, citing the “rising inflation and pending recession,” Elementor co-founder and CEO Yoni Luksenberg announced that the company would layoff 15% of its workforce, mostly in the marketing department.

That brings us to ByteDance — don’t worry, TikTok is fine. Three years ago, TikTok’s China-based parent company purchased Mokun Technology, an online game developer. 101 Studio, which was part of that acquisition, was shut down this week, cutting around 150 staffers, offering the other 150 workers in the studio internal transfers. This marks a setback in ByteDance’s race against Tencent to dominate mobile gaming.

And still, there’s more

TechCrunch’s Mary Ann Azevedo reports:

Canadian fintech giant Wealthsimple, which was valued at $4 billion as of last year, is laying off 159 people — or about 13% of its staff. The Toronto-based company has been a leader in the realm of democratizing financial products for consumers, including stock trading, crypto asset sales and peer-to-peer money transfers. And now it appears that Wealthsimple is an example of another company that experienced a boom during the early days of the pandemic and is now seeing a slowdown in business.

Mary Ann also reported a 25% workforce reduction affecting 110 employees at Notarize, a startup that offers remote online notarization. Of course, this startup boomed at the start of the pandemic, but now, online notarization isn’t in as high demand.

Our own Christine Hall shared news of JOKR, an on-demand food delivery company, leaving the U.S. to focus on Latin American markets.

Christine writes:

Food delivery companies are facing tough times as funding dried up and the rush to invest into this sector, partly as a result of the global pandemic, caused it to become quite inflated and due for a course-correct. This became evident when some of JOKR’s competitors began announcing layoffs. For example, in May, Gopuff, Gorillas and Getir announced staff reductions.

TechCrunch took a deeper look at what was happening in the on-demand delivery space earlier this month and what it means for the industry going forward.

The delivery market is coming down from its pandemic highs

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Can Amazon’s Product Managers Make Videogames Successful?

So far, things have not been going well for Amazon's video games
So far, things have not been going well for Amazon’s video games
Image Credit: Josar Photos

It almost goes without saying that we all know about Amazon – the book seller who has turned into the seller of just about everything. What you may not know about Amazon is that they decided a while back to that they were going to enter into the lucrative video gaming market. With the power of Amazon behind you, you’d think that there was no way that they could ever not be successful. However, so far things have not gone the way that the Amazon product managers had wanted it to go. What are they going to have to do to turn their product development definition around?


What Has Not Worked For Amazon’s Video Game Efforts?

So why would Amazon, who makes so much money doing so many different things, care about video games? The answer is that the video game market is too big to pass up. The video game market is currently estimated to be US$130B. Every product manager would want getting a piece of that to be on their product manager resume. Since Amazon is always looking for new ways to grow, this is just too big to pass up. However, ever since Amazon decided to get into the video game business, things have not been going well for them. Most recently, Amazon has laid off many of the people that had been working in their video game division.

The Amazon plan had to been to find a way to create hit video games – can anyone say Fortnight? However, so far that has not happened yet. The goal was for Amazon to create software that could then be used to create video games. Their motivation to do this was because their software would run in its Amazon Web Services (AWS) cloud. With a little luck and the creation of a popular game, Amazon could get more people to purchase their AWS product offerings. With their current setback, the Amazon product managers have decided to reorganize and focus on just two games that are currently under development.

Back in 2012, Amazon formed a new unit called Amazon Game studios. They staffed this unit with approximately 800 employees and spread them over three sites located in Seattle, San Diego, and Irving, California. The initial focus for this unit was to publish mobile games that were created by other developers. This went on for a while; however, in 2015 the product managers changed their mind and started to develop their own titles for personal computers. The next year the Amazon unit announced that they had three different computer games under development. Since this announcement, one of the games has been cancelled and the other two still remain under development.


How Is Amazon Going To Win The Video Game Market?

The game that the Amazon product managers ended up cancelling was to be called “Breakaway”. However, it never achieved the break through that was required for it to be successful. This is why the product was cancelled before coming to market. There are rumors that that there was another PC game under development that was never announced, but which has since been cancelled. The good news for Amazon Game Studios is that they have been able to successfully release a game. Last year they released a car-racing game called “Grand Tour Game” for consoles. However, since its release it has sold poorly.

In an attempt to boost their ability to create games that people would want to play, Amazon has recruited gaming industry stars including a former Sony executive and a couple of game designers. The Sony executive still works for Amazon, but the game designers have both left several years ago. The creation of video games is much like the creation of a Hollywood movie – it can take a long time and there is no guarantee of success. If a game gets negative feedback from players when it is released, there is a very good chance that the company who developed it will then stop selling the game.

A key part of developing any modern computer game is the engine that the game uses. Amazon has been using an engine that it purchased called “Lumberyard”. However, it turns out that this engine was never designed to be used for multiplayer games and so Amazon has been busy trying to add that functionality to it. Other firms, such as Electronic Arts have their own proprietary engines that they use to create their games. So far nobody has created a popular game using Lumberyard. The Amazon product managers may be forced to allow its game studio unit to use other company’s engines to create games. The thinking is that by doing this they can create games that would be more popular. However, the downside is that they might end up paying royalties or subscription fees to the firms that developed the game engine.


What All Of This Means For You

To be a product manager who works for Amazon sure sounds like a great product manager job description to have. It seems as though everything that the company touches, books, groceries, streaming services, etc. turns to gold. However, the product managers who are responsible for Amazon’s video game unit are starting to discover just exactly how hard it is to create wildly popular video games.

The reason that Amazon is interested in getting into the video game market is because this is a very large market. The Amazon product managers had hoped to be able to create video games that would attract developers and players to make use of Amazon’s AWS cloud service. Amazon created a unit to focus on the development of video games. This unit was spread over three different locations. They initially started to work to promote mobile games created by other developers; however, they then switched to creating their own PC games. They currently have two games under development. Amazon used to have three games under development; however, they have cancelled one of them. They have hired outsiders to help with their game development; however, many of them have since left. A key part of any video game is the game engine. Amazon’s engine is not up to handling multiplayer games and so they may end up having to make use of another company’s engine to create popular games.

There is no question that the video game market is a huge market. A gigantic company like Amazon should be able to do quite well in this market. However, what the Amazon product managers are starting to discover is that in order to succeed in the video game market you need to have creativity merged with good design. Getting these two video game characteristics to work together is turning out to be harder than anyone thought it would be. Their plan to expand their set of tools and start to use game engines developed by other companies is a step in the right direction. Now the Amazon product managers just need to see if they can attract the right set of talent that will allow them to create the next run-away hit in the world of video games!


– Dr. Jim Anderson Blue Elephant Consulting –
Your Source For Real World Product Management Skills™


Question For You: Do you think Amazon should try to create their own games or market games created by others?


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What We’ll Be Talking About Next Time

Think about your favorite non-water drink right now. What color is it? When you pour it into a glass, it looks the way that it should – you can recognize it. In fact, when you drink it, it probably tastes the way that it looks. What if all of this could be changed. What if your favorite drink suddenly became clear? No, the taste would not be changed at all, it would just all of sudden look like water. Would you still want it? Some product managers are betting that you would say yes.

The post Can Amazon’s Product Managers Make Videogames Successful? appeared first on The Accidental Product Manager.

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Lapsus$ hacking group claims software consultancy giant Globant as its latest breach victim

Just days after police in the U.K. arrested seven people over suspected connections to the now-infamous hacking and extortion group, Lapsus$ is claiming its latest victim.

Lapsus$, whose recent victims include Okta, Microsoft, Nvidia and Samsung, now claims to have breached Globant, a Luxembourg-based software development consultancy. After declaring itself “back from vacation” on Wednesday, the group published a 70 gigabyte torrent file on its Telegram channel with data allegedly stolen from the company, which the hackers claim includes its corporate customers’ source code.

The hackers also published a list of company credentials used to access its source code sharing platforms, including GitHub, Jira, Crucible and Confluence. Malware research group VX-Underground tweeted a redacted screenshot of the hackers’ Telegram post, which shows the group posting what they claim to be Globant’s passwords, which if confirmed would be easily guessable by an attacker.

Prior to publishing the torrent file, Lapsus$ also shared screenshots of a file directory that contains names of several companies believed to be Globant customers, including Facebook, Citibank and C-Span.

Globant also lists a number of high-profile customers on its website, including the U.K. Metropolitan Police, software house Autodesk and gaming giant Electronic Arts. At least one member of Lapsus$ was involved with a data breach at Electronic Arts last year, though it’s unclear if the two incidents are linked.

SOS Intelligence, a U.K-based threat intelligence provider that analyzed the leaked data, told TechCrunch that “the leak is legitimate and very significant, as far as Globant and Globant impacted customers are concerned.”

Amir Hadzipasic, the intelligence provider’s chief executive, says the data includes a large amount of GitHub source code that appears to belong to Globant, along with a number of repositories that contain “very sensitive information” such as TLS certificate private keys and chains, Azure keys and API keys for third-party services. SOS Intelligence also found a collection of around 7,000 candidate resumes, over 150 databases and a “large number” of private keys for a number of different services.

TechCrunch contacted Globant with a number of questions about the breach but has yet to receive a response. We have also yet to receive a response from any of the Globant customers we approached for comment.

This latest breach comes just days after U.K. police arrested seven people connected to the Lapsus$ group, all aged between 16 and 21. In response to questions about the arrests on its Telegram channel, Lapsus$ claimed no members of the gang were arrested.

UK police arrest 7 people in connection with Lapsus$ hacks

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Kooply taps into $18M from Microsoft and more for a mobile games dev platform still in stealth

Mobile dominates the world of gaming, with smartphone and tablet games generating $93.2 billion in revenues in 2021, more than console ($50.4 billion) and PC ($36.7 billion) combined according to gaming market research firm Newzoo. And that’s before you consider the thousands of popular apps out there that are not strictly games but rely heavily on gaming mechanics to entice users.

Now, banking on the idea that both professional developers and more casual enthusiasts are going to want to build even more mobile games in the future, an Israeli startup called Kooply is announcing funding from key investors to build out a mobile games development platform.

The company is still in stealth mode — it hopes to have a soft launch later this year — but in the meantime it has picked up $18 million in a seed round co-led by Microsoft (via its M12 fund), TPY Capitial, and Israeli mobile casino games giant Playtika — with Aleph Venture Partners, Entrée Capital, Glilot Capital Partners and Samsung Next also participating. The money will be used for hiring, and to continue investing in R&D and building out Kooply’s platform ahead of its launch.

Kooply’s CEO Ido Yablonka — who co-founded the company with Vadim Zak and Guy Pitelko last year — would not get very specific about what the company is building when we talked about the seed funding the other day, instead talking about the challenge that they have identified and want to address.

That challenge is that while there are a lot of mobile games on the market already, a lot of them are not very good, either in how they are built, or how they meet what consumers want, or in how they are amplified in the world — or a combination of all three.

“When you look at the App Store and Google Play, more than 99% of the mobile games will have between 50 and 100 downloads,” he said. “For sure, most of them are not very good but 40% are adequate, 5% are very good, and the rest are okay. What you should infer from those numbers is that in terms of distribution and monetization, for the adequate, okay, and very good games it was never in the game, so to speak, to succeed. They were dead on arrival.”

This, he said, is because even with good ideas, that is only half the challenge to executing on them to make an attractive game, and then to get it in front of those who are most likely to love it — hard work in itself that needs its own expertise and access to the right tech. “We try to shorten that path for developers,” Yablonka said. “Our mission statement is that if you have a concept and know what [you want] to build, we take on the development, the assets and the distribution so that you can focus on that vision.”

This will, he said, bring the company both into the realm of tools for experienced developers but also those who are keen to build something but might lack those technical skills. He said initially the focus will be casual mobile games — an area that has seen a huge amount of activity in terms of M&A, startups raising big money to scale and stay independent, and most critically of all, massive audiences (more than 20 billion downloads projected for this year on revenues of over $19 billion).

There are a number of games development platforms already on the market or in development, with different takes on the level of expertise needed to build, and for which environment. Some of the more recent fundings include Yahaha — Chinese founders with studios in Finland as well, a no-code platform aimed at immersive gaming — announcing $50 million in funding; PortalOne — a hybrid and immersive platform that will start with its own games — which recently raised $60 million; and companies like Overwolf, which focus not on the games themselves but customizations within them; and of course a number of platforms for building mobile games such as Unity, Unreal Engine and more.

Yablonka believes that there is an opportunity in building new kinds of tools that go beyond what people typically get these days with no-code interfaces.

“Usually when I see visual programming it’s no less complicated than regular programming, so I don’t really see the point,” he said. “We are allowing for very significant no-code developing including certain logic in the system, which we think should suffice for most use cases, and for users who wish to extend beyond that, we will allow for script writing.”

If you wonder why founders who are only still talking in general platitudes are getting $18 million in a seed round, then chances are they have shown some interesting early developments to investors, and they likely got the doors opened to those backers because of their backgrounds. In this case, Yablonka has a long history of building and selling his own companies to a number of bigger tech giants, with interestingly a focus not on gaming but security. That is an interesting angle when you consider how central the themes of data protection and cyber have become in recent years.

Yablonka knows Vadim Zak and Guy Pitelko from a couple of those experiences, including working at ad fraud prevention specialist ClarityRay, which eventually got acquired by Yahoo (which is now the parent company of TechCrunch). Zak is now the VP of R&D at Kooply, and Pitelko — a data scientist by training — is the chief data science office. The fact that there are three technical people as co-founders who have experience touching the adjacent parts of the mobile games business (security, monetization) says a little something, I think, about how they are approaching building a games development platform, and what they see as the most valuable things to put into it.

What will be left to discover is whether the games design community feels the same, and whether the proof is in the pudding: whether audiences come to the games as promised.

For now investors are intrigued enough to punt.

“Kooply embodies everything TPY Capital seeks in a startup: a visionary, yet grounded team with mutual entrepreneurial backgrounds, and a close proximity to the challenges mobile developers face,” said Dekel Persi, co-founder and managing prat of  TPY Capital, in a statement. “Add to that a bold perspective on how to democratize game development and favorable trends such as the growth of UGC in game development, as well as the prominence of mobile in this space, and this becomes an extremely compelling story.”

“We believe Kooply has the potential to create an entirely new gaming category that can capture hundreds of millions of users,” added M12 partner Irad Dor. “Kooply is tapping into a rapidly growing market that has been disrupted by technological advances in mobile networks, devices, and consumer behavior. They understand how to meet users where they are, with compelling content they’ll want to stay and engage with. The ability to create for the mobile domain first will be increasingly valuable as the metaverse becomes more established and consumers seek new experiences.”

“As a company, we strongly believe in encouraging and supporting visionary gaming entrepreneurs. What stood out most about Kooply’s approach was its focus on mobile native creation specifically and the ease of use of its tools not just to create experiences, but also to operate these experiences after their creation,” added Eric Rapps, chief strategy officer at Playtika. “Kooply is one of the few companies to understand the game management challenges and lower the barriers to operate user generated content and games as a creator.”

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Kooply taps into $18M from Microsoft and more for a mobile games dev platform still in stealth

Mobile dominates the world of gaming, with smartphone and tablet games generating $93.2 billion in revenues in 2021, more than console ($50.4 billion) and PC ($36.7 billion) combined according to gaming market research firm Newzoo. And that’s before you consider the thousands of popular apps out there that are not strictly games but rely heavily on gaming mechanics to entice users.

Now, banking on the idea that both professional developers and more casual enthusiasts are going to want to build even more mobile games in the future, an Israeli startup called Kooply is announcing funding from key investors to build out a mobile games development platform.

The company is still in stealth mode — it hopes to have a soft launch later this year — but in the meantime it has picked up $18 million in a seed round co-led by Microsoft (via its M12 fund), TPY Capitial, and Israeli mobile casino games giant Playtika — with Aleph Venture Partners, Entrée Capital, Glilot Capital Partners and Samsung Next also participating. The money will be used for hiring, and to continue investing in R&D and building out Kooply’s platform ahead of its launch.

Kooply’s CEO Ido Yablonka — who co-founded the company with Vadim Zak and Guy Pitelko last year — would not get very specific about what the company is building when we talked about the seed funding the other day, instead talking about the challenge that they have identified and want to address.

That challenge is that while there are a lot of mobile games on the market already, a lot of them are not very good, either in how they are built, or how they meet what consumers want, or in how they are amplified in the world — or a combination of all three.

“When you look at the App Store and Google Play, more than 99% of the mobile games will have between 50 and 100 downloads,” he said. “For sure, most of them are not very good but 40% are adequate, 5% are very good, and the rest are okay. What you should infer from those numbers is that in terms of distribution and monetization, for the adequate, okay, and very good games it was never in the game, so to speak, to succeed. They were dead on arrival.”

This, he said, is because even with good ideas, that is only half the challenge to executing on them to make an attractive game, and then to get it in front of those who are most likely to love it — hard work in itself that needs its own expertise and access to the right tech. “We try to shorten that path for developers,” Yablonka said. “Our mission statement is that if you have a concept and know what [you want] to build, we take on the development, the assets and the distribution so that you can focus on that vision.”

This will, he said, bring the company both into the realm of tools for experienced developers but also those who are keen to build something but might lack those technical skills. He said initially the focus will be casual mobile games — an area that has seen a huge amount of activity in terms of M&A, startups raising big money to scale and stay independent, and most critically of all, massive audiences (more than 20 billion downloads projected for this year on revenues of over $19 billion).

There are a number of games development platforms already on the market or in development, with different takes on the level of expertise needed to build, and for which environment. Some of the more recent fundings include Yahaha — Chinese founders with studios in Finland as well, a no-code platform aimed at immersive gaming — announcing $50 million in funding; PortalOne — a hybrid and immersive platform that will start with its own games — which recently raised $60 million; and companies like Overwolf, which focus not on the games themselves but customizations within them; and of course a number of platforms for building mobile games such as Unity, Unreal Engine and more.

Yablonka believes that there is an opportunity in building new kinds of tools that go beyond what people typically get these days with no-code interfaces.

“Usually when I see visual programming it’s no less complicated than regular programming, so I don’t really see the point,” he said. “We are allowing for very significant no-code developing including certain logic in the system, which we think should suffice for most use cases, and for users who wish to extend beyond that, we will allow for script writing.”

If you wonder why founders who are only still talking in general platitudes are getting $18 million in a seed round, then chances are they have shown some interesting early developments to investors, and they likely got the doors opened to those backers because of their backgrounds. In this case, Yablonka has a long history of building and selling his own companies to a number of bigger tech giants, with interestingly a focus not on gaming but security. That is an interesting angle when you consider how central the themes of data protection and cyber have become in recent years.

Yablonka knows Vadim Zak and Guy Pitelko from a couple of those experiences, including working at ad fraud prevention specialist ClarityRay, which eventually got acquired by Yahoo (which is now the parent company of TechCrunch). Zak is now the VP of R&D at Kooply, and Pitelko — a data scientist by training — is the chief data science office. The fact that there are three technical people as co-founders who have experience touching the adjacent parts of the mobile games business (security, monetization) says a little something, I think, about how they are approaching building a games development platform, and what they see as the most valuable things to put into it.

What will be left to discover is whether the games design community feels the same, and whether the proof is in the pudding: whether audiences come to the games as promised.

For now investors are intrigued enough to punt.

“Kooply embodies everything TPY Capital seeks in a startup: a visionary, yet grounded team with mutual entrepreneurial backgrounds, and a close proximity to the challenges mobile developers face,” said Dekel Persi, co-founder and managing prat of  TPY Capital, in a statement. “Add to that a bold perspective on how to democratize game development and favorable trends such as the growth of UGC in game development, as well as the prominence of mobile in this space, and this becomes an extremely compelling story.”

“We believe Kooply has the potential to create an entirely new gaming category that can capture hundreds of millions of users,” added M12 partner Irad Dor. “Kooply is tapping into a rapidly growing market that has been disrupted by technological advances in mobile networks, devices, and consumer behavior. They understand how to meet users where they are, with compelling content they’ll want to stay and engage with. The ability to create for the mobile domain first will be increasingly valuable as the metaverse becomes more established and consumers seek new experiences.”

“As a company, we strongly believe in encouraging and supporting visionary gaming entrepreneurs. What stood out most about Kooply’s approach was its focus on mobile native creation specifically and the ease of use of its tools not just to create experiences, but also to operate these experiences after their creation,” added Eric Rapps, chief strategy officer at Playtika. “Kooply is one of the few companies to understand the game management challenges and lower the barriers to operate user generated content and games as a creator.”