Over the last 5 years, many investors have been excited by the trend of “player improvement” in video gaming. In theory, because everything in video gaming is digital, it can be tracked, studied, and re-purposed to help gamers, of any skill level, improve. Given the competitive nature of many video games, an overwhelming majority of gamers do want to get better. This can be accomplished through coaching, training, repetition, time spent, and data analytics.
In the player skill improvement category, two of these companies just got acquired in the same week. Corsair bought Gamer Sensei and GAMURS Group acquired Pro Game Guides. Here at Konvoy, we have seen a plethora of deals in this category over the last few years but have not invested in one (yet). This is a direct reflection of our view that (as of today) player skill improvement is best situated as a product feature of a larger offering to gamers.
The market demand and monetization opportunity in this vertical can not currently support a massively scalable company. This might change, but definitely not anytime soon. The acquisitions this week validate our thesis on this sub-vertical in gaming. They are roll-ups into a wider offering by both Corsair and GAMURS Group.
Fortnite was arguably one of the most popular games on the Apple App Store until August 13th when Apple decided to remove Fortnite after Epic Games decided to add its own payment system to subvert the 30% fee Apple charges for in-game purchases. Now, mobile Fortnite players may be able to play on their iPhones again through Nividia GeForce NOW which allows for games to be played in the Safari browser. As of now, Apple does not restrict which third-party services can run within Safari or any web browser for the matter.
As for now, it looks like Nvidia is not commenting on which clients are coming into the cloud gaming service. That said, even if Fortnite is allowed via Safari, the gaming experience won’t be that great given input lag. While this is an interesting workaround for Epic, Apple still owns Safari and has control over which apps are available on the iPhone - including browsers.
As we’ve previously mentioned, we project Fortnite to be almost 1% of the total app store revenue which gives Epic a strong case. On the other hand, Fortnite had 116m users (~33% of Fortnite’s registered users) on iOS, and the majority of Fortnite’s mobile revenue comes from iOS compared to Android. The court date between Epic and Apple is set for May of next year (Gameindustry.biz), but until then, Nvidia may be the winner at the end of the day if this pushes more users to subscribe to GeForce NOW.