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Northzone’s Paul Murphy goes deep on the next era of gaming – TechCrunch

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As the gaming market continues to boom, billions of dollars are being invested in new games and new streaming platforms vying to own a piece of the action. Most of the value is accruing to the large incumbents in a space, however, and the entrance of Google and other big tech companies makes it difficult to identify where there are compelling opportunities for entrepreneurs to build new empires.

TechCrunch media analyst Eric Peckham recently sat down with Paul Murphy, Partner at European venture firm Northzone, to discuss Paul’s view of the market and where he is focusing his dollars. Below is the transcript of the conversation (edited for length and clarity):


Eric Peckham: You co-founded the hit mobile game Dots before moving to London and joining Northzone last year. Are you still bullish on investment opportunities in mobile gaming or do you think the market has changed?

Paul Murphy: I’m bullish on mobile gaming–the market is bigger than it has ever been. There’s a whole generation of people that have been trained to play games on mobile phones. So those are things that are very positive.

The challenge is you don’t really have a rising tide moment anymore. The winners have won. And so it’s very, very difficult for someone to enter with new content and build a business that’s as big as Supercell or King, regardless of how good their content is. So while the prize for winning in mobile gaming content big, the likelihood is smaller.

Where I’m spending most of my time is not on content, it’s on components within mobile gaming. We’re looking at infrastructure: different platforms that enable mobile gaming, like Bunch which we invested in.

Their product allows you to do live video and audio on top of mobile games. So we don’t have to take any content risk. We’re betting that this great product will fit into a large inventory ecosystem.

Peckham: New mobile game studios that are launching all seem to fall under the sphere of influence of these bigger companies. They get a strategic investment from Supercell or another company. To your point, it’s tough for a small startup to compete entirely on its own.

Murphy: It’s possible in mobile gaming still but it’s really, really hard now. At the same time, what you’ve seen is the odds of winning are lower. It is hard to reach the same scale when it costs you $5.00 to acquire a user today, whereas when Candy Crush launched, it was $0.05 per user. So it’s almost impossible to achieve King-like scale today.

Therefore, you’re looking at similar content risk with reduced upside, which makes that equation less attractive for venture capital. But it might be perfectly fine for an established company because they don’t need to do the marketing, they have the audience already.

The big gaming companies all struggle with the challenge of how to create the next hit IP. They have this machine that can bring any great game to market efficiently, with a large audience they can cross promote from and capital they can invest to build a big brand quickly. For them, the biggest challenge is getting the best content.

So it’s natural to me that the pendulum has swung towards strategic investors in mobile gaming content. Epic has a fund that they set up with Improbable, Supercell is making direct investments, Tencent has been making investments for years. Even from a content perspective, you’re probably going to see Apple, Google, and Amazon making more content investments in mobile gaming.

Image via Getty Images / aurielaki

Peckham: Does this same market dynamic apply to PC games and console games? Do you see a certain area within gaming where there’s still opportunity for independent startups to create the game itself and find success at a venture scale?

Murphy: The reason we made our investment in Klang Games, which is building an MMO called Seed that people will primarily play through PC, is that while there is content risk–you’re never going to get rid of the possibility that the IP doesn’t fly–if it works, it will be massive…an Earth-shattering level of success. If their vision comes to life, it will be very, very big.

So that one has all the risks that you’d have in any other game studio but the upside is exponentially larger, so the bet makes sense to us. And it so happens that it’s going to be on PC first, where there’s certainly a lot of competition but it’s not as saturated and the monetization methods are healthier than in mobile gaming. In PC, you don’t have to do free-to-play tactics that interfere with the gameplay.

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Sega packs unreleased games, new arcade ports into Genesis Mini 2

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A trailer detailing all the games on the Sega Genesis Mini 2, some of which are fresh releases or ports.

After revealing just 23 named titles back in July, Friday morning Sega announced the full lineup of 60 games that will be included on the limited supply of US Sega Genesis Mini 2 units starting on October 27. Beyond the usual retro suspects, though, that list includes a couple of games that have never been released in any form, as well as several fresh arcade ports and Genesis titles sporting brand-new features for their plug-and-play re-release.

Enlarge / The previously unreleased Devi & Pii looks like an interesting, competitive take on a Breakout-style game.

Those unreleased retro games include Devi & Pii, a title designed by Sonic 3 developer Takashi Iizuka. The “paddle-style game” looks like something of a cross between Arkanoid and Twinkle Star Sprites, with one or two players shifting back and forth to juggle angels and avoid bouncing devils.

The Genesis Mini 2 will also see the worldwide premier of Star Mobile, a game completed in 1992 by little-known journeyman developer Mindware but never actually released. The puzzle-heavy gameplay involves stacking stars on a carefully balanced mobile in a way that reminds us of the tabletop game Topple.

Besides those two never-before-seen titles, the Genesis Mini 2 features a few Sega arcade games that are being “ported” to Genesis-level hardware for the first time. These include:

  • Fantasy Zone: The cute-and-cuddly side-scrolling shooter gets ported to the Genesis by the same team that ported Darius on the first Genesis Mini, with a brand-new Easy Mode that wasn’t in the arcades.
  • Space Harrier and Space Harrier II: While the sequel was already technically native to the Genesis, these new ports use “modern technology” to provide a much smoother sprite scaling function than was previously possible on 16-bit hardware (it’s unclear if these new ROMs could run on a standard Genesis).
  • Spatter: A little-known 1984 maze game featuring a clown on a bouncing tricycle.
  • Super Locomotive: A 1982 train game focused on switching tracks to avoid collisions.
  • VS Puyo Puyo Sun: A competitive two-player-exclusive “demake” of the third game in the popular color-matching puzzle series, with “new rules not found in the original version.”

The version of <em>Outrun</em> on the Genesis Mini 2 will feature new music.
Enlarge / The version of Outrun on the Genesis Mini 2 will feature new music.

Other titles that were first released on the Genesis decades ago are getting brand-new features for their Genesis Mini 2 re-releases. These include:

  • Hellfire: Sega’s trailer talks up unspecified “new features and options for the Genesis.”
  • OutRun: The four in-game radio stations will now include “new [music] tracks not featured in the original.”
  • Phantasy Star II: The classic RPG now features “adjustable movement speed and a new easy mode.”
  • Rainbow Islands Extra: The “Extra mode” with brand-new enemies comes to North America for the first time.
  • Truxton: Comes with a new option to play background music “at its original arcade speed.”

None of these titles or additions may have the sheer star power of the shelved Star Fox 2 that finally appeared on the Super NES Classic Edition. Still, taken together, they show a certain level of care and attention to detail on Sega’s part that goes well beyond just throwing some ROMs on a cheap emulation box.

The complete list of titles available on the Sega Genesis Mini is included below (titles that were previously announced in July are marked with a *).

Genesis titles

  • After Burner II *
  • Alien Soldier *
  • Atomic Runner
  • Bonanza Bros. *
  • ClayFighter
  • Crusader of Centy
  • Desert Strike: Return to the Gulf
  • Earthworm Jim 2
  • Elemental Master
  • Fatal Fury 2
  • Gain Ground
  • Golden Axe II
  • Granada
  • Hellfire
  • Herzog Zwei
  • Lightening Force: Quest for the Darkstar *
  • Midnight Resistance
  • OutRun *
  • OutRunners *
  • Phantasy Star II
  • Populous
  • Rainbow Islands Extra
  • Ranger-X
  • Ristar
  • Rolling Thunder 2 *
  • Shadow Dancer: The Secret of Shinobi
  • Shining Force II
  • Shining in the Darkness *
  • Sonic 3D Blast *
  • Splatterhouse 2 *
  • Streets of Rage 3
  • Super Hang-On
  • Super Street Fighter II: The New Challengers
  • The Ooze *
  • The Revenge of Shinobi
  • ToeJam & Earl in Panic on Funkotron
  • Truxton
  • Vectorman 2 *
  • Viewpoint
  • Virtua Racing *
  • Warsong

Sega CD titles

  • Ecco the Dolphin (CD Ver.)
  • Ecco: The Tides of Time (CD Ver.)
  • Final Fight CD
  • Mansion of Hidden Souls *
  • Night Striker *
  • Night Trap
  • Robo Aleste
  • Sewer Shark
  • Shining Force CD *
  • Silpheed *
  • Sonic The Hedgehog CD *
  • The Ninjawarriors *

Bonus Games

New ports and/or previously unreleased titles

  • Devi & Pii
  • Fantasy Zone *
  • Space Harrier II (and Space Harrier)
  • Spatter
  • Star Mobile *
  • Super Locomotive
  • VS Puyo Puyo Sun

Ars Technica may earn compensation for sales from links on this post through affiliate programs.

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Hundreds of cosmetic MultiVersus mods stop working in apparent crackdown

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Enlarge / Mods like this one, which replaces Lebron James with Jesus, no longer work in Multiversus.

The hit new free-to-play Warner Bros. arena fighter MultiVersus has enjoyed a robust modding scene since the game was still in its early access beta. This week, though, that community is on life support as players and developers report the game will no longer run with any modification installed.

Users on mod distribution site Game Banana started noticing the change around noon on Wednesday, with some discussing potential workarounds that might let their mods still work. By that afternoon, though, modder Ghost suggested on Twitter that “MultiVersus will no longer boot up if you have mods installed. They killed modding of any kind.”

The move was seemingly confirmed by MultiVersus Game Director Tony Huynh, who tweeted overnight that a user-reported game-crashing issue “might be because your client has been modded. If so you’ll need to remove the mods to play.”

In the few weeks since MultiVersus‘ public launch, modders have crafted hundreds of reskins that make existing characters look like other pop culture mainstays, from Lola Bunny and Luigi to Master Chief and Jesus Christ. Other mods could replace background art or music, add new visual effects to characters, or, uh, put duct tape over Velma’s mouth, if that’s what you’re into. These cosmetic mods only applied to a player’s local copy of the game and didn’t impact the integrity of online gameplay.

Buy some DLC instead?

This isn’t the first time Warner Bros. has made moves against MultiVersus modding. The publisher reportedly started issuing copyright strikes against Twitch streamers using modded characters in their videos earlier this month. At the time, Huynh confirmed in a tweet that “streaming with a modded client” was grounds for a DMCA copyright strike against at least one streamer.

While Warner Bros. hasn’t responded to a request for comment from Ars Technica, some players suspect the crackdown on mods could be an attempt to stifle competition for official MultiVersus DLC. The free-to-play game brings in revenue primarily by selling Season Pass content subscriptions that include new “variant” costumes and looks for many characters. Warner Bros. also sells separate DLC packs that include “unlock tickets” for upcoming characters like Rick & Morty and Black Adam.

Warner Bros. might worry that players will be less likely to buy this kind of content if similar (or near-identical) cosmetic content is available as free mods. But games like Crusader Kings II have managed to thrive with both paid DLC content and a wide range of free user-made mods, showing it’s not impossible for both types of content to coexist without ruining a free-to-play business model.

While modders haven’t given up on finding ways around MultiVersus‘ apparent new mod ban, Warner Bros. will likely keep squashing any new modification methods as well. When it comes to this version of the metaverse, apparently only officially recognized characters need apply.

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Embracer acquires rights to Tolkien-related IP, teases new LOTR films

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Enlarge / A classic photo of famed author J.R.R. Tolkien, modified to reflect the new steward of his most famed intellectual property as of this week’s megaton acquisition announcement.

Getty Images / Sam Machkovech

Swedish game publisher Embracer Group has racked up headlines in the past few years thanks to megaton acquisitions of video game studios, and on Thursday morning, the company announced it has grown further still. Its latest acquisition spree includes one surprising company outside its usual business purview: Middle-earth Enterprises.

This company is better known as the exclusive handler of all Lord of the Rings and Hobbit novels, along with all intellectual property derived directly from those J.R.R. Tolkien fantasy masterworks. The financial terms of this deal with previous handler the Saul Zaentz Company were not disclosed, but Embracer is already eager to tease brand-new films featuring the aforementioned novels’ characters.

No production plans have been set for new films just yet; rather, Embracer says in a press release that it wants to “explore additional movies based on iconic characters such as Gandalf, Aragorn, Gollum, Galadriel, Eowyn, and other characters from the literary works of J.R.R. Tolkien.” The deal has a logical connection to Embracer’s existing business in the form of LOTR-themed board games already being produced by its subsidiary, Asmodee, while it’s hard to imagine Embracer not immediately assigning one of its many wholly owned video game studios to the franchise in one way or another. Embracer has yet to suggest plans to produce a Tolkien-themed video game, however. Instead, its Thursday announcement hinted to “new opportunities for fans to explore this fictive world through merchandising and other experiences.”

Importantly, this deal does not materially affect Amazon’s upcoming, highly budgeted Rings of Power TV series. That series’ pitch was led directly by the Tolkien estate and presented to various platforms before Amazon emerged with a winning bid, and the deal cleverly sneaked past Middle-earth Enterprises’ rights, because it involved texts and materials not covered by the long-standing SZC arrangement. Embracer suggests it “has financial interests” in the Amazon series, but it’s unclear whether Embracer will see any cut of that production’s profits, or if they merely benefit from more publicity and attention to all things Tolkien.

That’s a lot of Embracin’

Embracer named six other companies as acquisition targets, with four resembling traditional game development houses: Tripwire Interactive, the American studio responsible for the Killing Floor and Maneater series; Tuxedo Labs, a Swedish studio best known for the PC-exclusive destruction-simulation game Teardown; Tatsujin, a Japanese developer staffed by arcade-era developers with plans to work on series from the esteemed Toaplan games library (particularly the classic “shmup” Truxton and the beloved meme machine that is Zero Wing); and Bitwave Games, another Swedish studio with plans to both collaborate with Tatsujin and also create ports of NES-era classics like Sunsoft’s lost 8-bit gem Gimmick. The latter announcement appears to spoil at least one news item from a Sunsoft-related event scheduled for later on Thursday.

Outside of formal game studios, Embracer’s three other named acquisitions seem designed to diversify the company’s gaming business portfolio. The best-known of these, Limited Run Games, has risen to prominence among gaming fans in the past five years thanks to its focus on physical game releases. Typically, Limited Run opens up preorders for cartridges and discs of games that have previously launched as digital-download exclusives; once the preorder period completes, the publisher typically shuts down orders for the game in question, especially since the games in question are often cult classics or niche favorites (though it occasionally publishes games from larger game studios, particularly certain versions of games in the Doom series). Embracer did not suggest in its acquisition announcement that it plans to shift Limited Run’s business model.

Embracer is additionally acquiring Singtrix, a karaoke system manufacturer launched by patent holders previously involved in the Guitar Hero series. That acquisition’s announcement does little to clarify what consumers might expect from an Embracer-run Singtrix, other than a suggestion that the company is working on “the next pop culture musical experience,” which may or may not involve a future video game-like project. There’s a chance that Embracer’s third non-studio acquisition, the European peripheral manufacturer Gioteck, could help Embracer build some kind of physical musical peripheral to go with whatever Singtrix is whipping up, but that’s only speculation at this point.

In addition to all of these announcements, Embracer buried news of another game studio acquisition that it is not prepared to announce “due to commercial reasons.” Instead, Embracer suggested that this unnamed studio counts as “the third- or fourth-largest” game studio it entered plans to acquire today—which suggests that it’s not necessarily a massive studio. (If this were the third- or fourth-largest acquisition in the company’s entire history, on the other hand, that would be worth no less than $525 million, which is what it paid for the entirety of Saber Interactive in early 2020.)

Thursday’s news follows the shocking May announcement that Embracer had acquired the entire Western operations of Square-Enix, and those studios’ lucrative IP (including the Tomb Raider, Legacy of Kain, and Deus Ex series), for a mere $300 million. That announcement included confirmation that the studios were moving ahead with games in both the Tomb Raider and Deus Ex series, though neither Embracer nor its newly owned studios have revealed anything more about such games since the May news broke. That followed its acquisitions of well-known game studios such as Gearbox Entertainment (Borderlands), 4A Games (Metro Exodus), and Deep Silver Volition (Saint’s Row, Red Faction).

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