Klang gets $8.95M for an MMO sim sitting atop Improbable’s dev platform

Berlin-based games studio Klang, which is building a massive multiplayer online simulation called Seed utilizing Improbable’s virtual world builder platform, has just bagged $8.95M in Series A funding to support development of the forthcoming title.

The funding is led by veteran European VC firm Northzone. It follows a seed raise for Seed, finalized in March 2018, and led by Makers Fund, with participation by firstminute capital, Neoteny, Mosaic Ventures, and Novator — bringing the total funding raised for the project to $13.95M.

The studio was founded in 2013, and originally based in Reykjavík, Iceland, before relocating to Berlin. Klang’s original backers include Greylock Partners, Joi Ito, and David Helgason, as well as original investors London Venture Partners.

The latest tranche of funding will be used to expand its dev team and for continued production on Seed which is in pre-alpha at this stage — with no release date announced yet.

Nor is there a confirmed pricing model. We understand the team is looking at a variety of ideas at this stage, such as tying the pricing to the costs of simulating the entities.

They have released the below teaser showing the pre-alpha build of the game — which is described as a persistent simulation where players are tasked with colonizing an alien planet, managing multiple characters in real-time and interacting with characters managed by other human players they encounter in the game space.

The persistent element refers to the game engine maintaining character activity after the player has logged off — supporting an unbroken simulation.

Klang touts its founders’ three decades of combined experience working on MMOs EVE Online and Dust 514, and now being rolled into designing and developing the large, player-driven world they’re building with Seed.

Meanwhile London-based Improbable bagged a whopping $502M for its virtual world builder SpatialOS just over a year ago. The dev platform lets developers design and build massively detailed environments — to offer what it bills as a new form of simulation on a massive scale — doing this by utilizing distributed cloud computing infrastructure and machine learning technology to run a swarm of hundreds of game engines so it can support a more expansive virtual world vs software running off of a single engine or server.

Northzone partner Paul Murphy, who is leading the investment in Klang, told us: “It is unusual to raise for a specific title, and we are for all intents and purposes investing in Klang as a studio. We are very excited about the team and the creative potential of the studio. But our investment thesis is based on looking for something that really stands out and is wildly ambitious over and above everything else that’s out there. That is how we feel about the potential of Seed as a simulation.”

Fortnite’s Summer Skirmish kicks off today, with $8 million prize pool

Fortnite Battle Royale has swept the gaming world. Alongside its 125 million users and record-breaking Twitch streams, the game has also drawn many competitive players away from their usual titles to try their hand at Battle Royale.

Today, that competitive play reaches at inflection point. At 4pm ET, Fortnite Battle Royale’s Summer Skirmish will kick off, with $8 million going to tournament winners over the course of the competition, with a whopping $250K going to the winners of today’s tournament.

This isn’t the first competitive Fortnite tournament we’ve seen. Celebrity Twitch streamer Ninja held a charity tournament in April, and Epic held a ProAm tournament combining competitive players and celebs who play Fortnite in June. Plus, sites like UMG and CMG have been holding smaller tournaments since Fortnite first rose to popularity. And then there are $20K Fortnite Friday tournaments for streamers held by UMG.

But today, the ante has most certainly been upped. This will be one of the highest paying Fortnite tournaments to date, and is yet just a small fraction of Epic Games’ promised $100 million prize pool for competitive play this year.

For some context, Dota 2 (previously the biggest competitive esports title out there) had a $25 million payout for the International Championship tournament in 2017, with the winners taking home $10.8 million. Call of Duty, one of the most popular titles over the last decade, is only paying out $1.5 million for its own Champs tournament this summer.

In other words, Fortnite is catching up quickly to the competitive gaming scene, not only in terms of talent but money. Epic Games’ Fortnite pulled in a record-breaking $318 million in June alone. In fact, Battle Royale is generating so much revenue for Epic that the company is now only taking a 12 percent share of earnings from its Unreal Marketplace.

But with that growth comes increased scrutiny. Though the company is passing along its fortunes to developers on the Unreal Engine and competitive players, some have noticed situations in which Epic might have been a bit stingy.

The stream for Fortnite Summer Skirmish begins at 4pm ET and is embedded below:

Watch live video from Fortnite on www.twitch.tv

Overwatch League strikes a milestone deal with Disney and ESPN

If you’re sick of hearing about esports, you need to get over it. The space continues to grow, inching its way into the traditional media landscape. Today, in fact, Activision Blizzard announced that the Overwatch League playoffs will be aired on ESPN and Disney XD.

The Overwatch League in itself is a huge step for esports, as it’s the first true city-based league for a competitive video game. While most esports leagues consist of privately owned teams with little or nothing to do with geography, Overwatch League is a pro league made up of city-based teams such as the Dallas Fuel or the San Francisco Shock. Many of these teams are owned by big names in the traditional sports world, such as Robert Kraft (CEO and owner of New England Patriots, who owns the Boston Uprising) and Jeff Wilpon (COO of the New York Mets, who owns the New York Excelsior).

The agreement, which also includes a recap/highlights package from 2018 Grand Finals coverage on ABC on July 29, marks the first time that live competitive gaming has aired on ESPN in prime time, and will be the first broadcast of an esports championship on ABC. Activision Blizzard said in the announcement that this is just the start of a multi-year agreement.

That said, EA’s Madden NFL 18 did broadcast an esports tournament on ESPN2 and Disney XD earlier this year.

Overwatch League playoffs begin tonight at 8pm ET, and will culminate in the Grand Finals, taking place in the Barclays Center in Brooklyn, on July 27 and July 28.

Here’s what Justin Connolly, EVP of Affiliate Sales and Marketing at Disney and ESPN, had to say in a prepared statement:

The Overwatch League Grand Finals is by far our most comprehensive television distribution for an esports event over a single weekend: 10 total hours over four networks and three days. This overall collaboration with Disney/ABC, ESPN and Blizzard represents our continued commitment to esports, and we look forward to providing marquee Overwatch League coverage across our television platforms for fans.

The rise of Twitch stars, like Ninja, and the growth of the competitive gaming scene have paved the way not only for a new type of sports media, but for a growing new economy. While challenges remain around monetizing the content, the pieces of the puzzle are slowing coming together to create an audience large enough to incentivize advertisers to spend big money.

In fact, sponsorship revenue and ad spending revenue are expected to hit $655 million and $224 million, respectively, by 2020, according to Newzoo. That doesn’t sound like much when you think about the NFL, which raked in $1.3 billion in revenue in 2017 alone. But, like this deal proves, the esports space is growing and working its way into the mainstream, hoping to get the attention of young men between 18 and 34 who have become increasingly difficult to reach via traditional advertising.

Alongside the live TV broadcast of the Overwatch League playoffs on ESPN and Disney XD, the playoffs will also be live-streamed via Twitch, MLG.com and on the ESPN app and DisneyNOW.

Tilting Point expands its user acquisition fund to $132M in annual spending

Mobile games publisher and marketer Tilting Point is dramatically increasing its commitment to its user acquisition fund.

The company announced a $12 million fund at the end of 2016, which it said would help developers grow their games while remaining independent. Today it  revealed that it’s committing $132 million in annual spending to the fund.

CEO Kevin Segalla said that as mobile app stores become more and more crowded, “user acquisition has gotten incredibly complicated,” so most indie developers “don’t have the tech and the expertise to do it.”

That’s where Tilting Point comes in. President Samir El Agili said the company has built “machine learning technology to maximize and optimize user acquisition.” It likes to work on games that are at the “crossroads,” taking a solid game with a sustainable business model, then dramatically accelerating its growth with advertising.

The initial fund led to partnerships on Disruptor Beam’s Star Trek Timelines and Nukebox Studios’ Food Truck Chef.

Segalla said that given the fund’s success, the question became, “How can we do this at a much larger scale?” which led to the much larger fund commitment, thanks to capital committed by CFC Capital (Tilting Point’s majority shareholder) and Metropolitan Partners Group.

Just to be clear, the $132 million isn’t a price tag that Tilting Point is putting on its own services, and instead represents money that will actually be spent on advertising.

Segalla argued that the deals are structured in a way where Tilting Point’s incentives are properly aligned with the developer’s.

“This is not a loan that we’re giving them, it’s not something where we’re looking for equity, there’s no ongoing revenue share,” he said. Instead, the company is betting that the spending will pay off in its relationship with developer and the resulting fees: “What we’re doing is risking our own capital because we believe in our marketing, our tech and our team.”

Tilting Point says it’s open to partnering with developers in any genre, and is also looking to work with developers internationally. Segalla predicted that fund could allow Tilting Point to work with 20 new games each year, though El Agili noted that the exact number will depend on the games: “The truth is, if get two to three games that do extremely well right away, we can start spending a lot of money.”

Overwatch ‘Pink Mercy’ sale raises $12M for breast cancer research

It can be hard sometimes to grok the scale of the gaming community, but the occasional charity event not only demonstrates the hugeness of the industry but also its diversity and willingness to shell out for a good cause. Today Blizzard announced that an Overwatch charity campaign raised an impressive $12.7 million for breast cancer research in just two weeks.

Overwatch is an extremely popular team-based shooter game that has made an impression not just with its solid gameplay, but its striking and inclusive character design. This sensitivity to the ever-widening demographics of gaming led them to conceive of this charity campaign back in May.

Players could for a limited time purchase a special “skin,” or 3D model, for the character Mercy — she’s the most powerful healer in the lineup, so the choice makes sense, even though the statuesque blonde isn’t exactly their most interesting character work. (A Pink Genji would probably look cool, but it would probably just make more people play him — a regrettable outcome.)

Special skins are highly sought-after, and while many can be obtained through in-game loot boxes, they can also be purchased. In this case, the price was set at $15, rather high for a skin but clearly that didn’t deter players, who shelled out by the thousands for both it and related t-shirts.

I asked for a breakdown, but a little napkin math gives a basic idea of the volume. The press release announcing the $12.7 million number says “thousands” of t-shirts were sold at $30 apiece; usually if it’s 10,000 or more they say so, so we’ll just use 10K as our estimate. That makes $300K from shirts, so the remaining $12.4 million means somewhere north of 820,000 people paid for the Pink Mercy skin.

Think about that! In two weeks more than three quarters of a million people paid $15 each for a virtual item. Pretty great. It’s all going to the Breast Cancer Research Foundation, by the way. They got a big novelty check:

And this is by no means the only big gaming charity event. Games Done Quick regularly raises millions, and Penny Arcade’s Child’s Play got so big that it had to be spun off as its own thing. It just recently announced a round of grants funding pediatric hospital equipment and staff, by the way.

This event went well enough that we can probably expect more in the future for other causes — I’ve asked Blizzard for any details on that front and will update if I hear back.

PlayVS CEO Delane Parnell to talk high school esports at Disrupt SF

The gaming world is evolving at a rapid clip. No longer is the idea of the lonely gamer a reality. Twitch and Discord have brought gamers together and given everyone the opportunity to see just how talented some of these young players are. Meanwhile, publishers and esports organizations have built out an infrastructure.

But there is plenty left to do, and PlayVS founder and CEO Delane Parnell is well aware of this.

We’re amped to announce that Parnell is joining us at TC Disrupt SF in September to talk about how high school esports could pave the way for even more growth in this industry.

PlayVS is a startup that has partnered with the NFHS to bring esports to the high school level, providing infrastructure around scheduling, refs, rules and state tournaments. Not only does this allow high school students to get extracurricular experience doing what they love (playing video games), but it offers a new way for esports orgs and colleges to look at the bright young talent coming up through the ranks.

PlayVS launched in April after securing its partnership with the NFHS. Through this partnership, the company will be able to bring organized esports to more than 18 states and approximately 5 million students across 5,000 high schools.

The company has since raised $15 million in Series A, and the inaugural season begins in October of this year.

We’re absolutely thrilled to get the chance to sit down with Parnell to discuss the launch of the platform and hear about how high school esports could set the tone for the industry as a whole.

Passes to Disrupt SF are available here at the Early Bird rate until July 25.