State of Play: 2022

Looking back, 2021 was an extraordinary year in digital entertainment filled with record breaking growth, unprecedented acquisitions, and ambitious new initiatives. More importantly however, if 2020 was the year we collectively bonded through play in response to the pandemic, 2021 was the year that many outside the game industry began to come to terms with the magnitude and importance of that.

A recent Goldman Sachs study estimated that the market opportunity at the intersection of games and Web 3 could be in excess of $12 trillion. Last year, the games industry set an annual M&A record for the number of deals in a single year with $85 billion in disclosed deals, three times more than 2020. The latest high water mark was set earlier this month when Microsoft announced their intent to acquire Activision Blizzard for $68.7 billion in cash, making it both the largest acquisition in game industry history and the largest ever by Microsoft in any sector of their business. This came roughly one week after what had been the largest deal in games history when Take-Two purchased Zynga for $12.7 billion.

In the first five months of 2021, the game industry had already set an annual record for the number of deals in a year. This year, we look set to break that record yet again in less than half the time. The outlook for 2022 and beyond continues to be exceptional and we expect the pace of growth, landmark deals, and industry innovation will continue. As investors that have spent decades building game companies, my partners and I are very excited for the next chapter.

At Transcend we also enjoyed strong growth throughout the year, not only across the portfolio, but within our own team as well. The firm doubled in size, adding key members to further enable our exploration of high growth opportunities in gaming, Web 3, and digital entertainment. In partnership with our founders, it has been inspiring to begin to celebrate some of the exceptional achievements the teams have been hard at work on. Here are just a few:

KEY PORTFOLIO UPDATES

🕊️	thatgamecompany SKY HITS 100M INSTALLS Sky from thatgamecompany reached 100M installs making the company's breakthrough top grossing hit one of the most downloaded mobile games of all time. This incredible success builds on the studio’s legacy of beautifully crafted and critically acclaimed titles such as Journey, Flower, and Flow.
🏔️	Singularity 6 PALIA REVEAL After several extremely competitive funding rounds, Singularity 6 released the trailer for their first title, Palia, alongside an invite-only pre-alpha. The response from press and players alike was deafeningly enthusiastic.
🎬	Trioscope SEED + GEORGE R.R. MARTIN FILM In addition to announcing seed funding this year, Trioscope teamed up with Game of Thrones franchise creator George R.R. Martin on a film directed by and starring Emmy Award nominee Vincent D'Onofrio. The trailer showcases the proprietary technology and production techniques the team uses to deliver the feel of a graphic novel with the emotional depth and nuance of live action. Trioscope has a full pipeline of projects helmed by AAA talent in the works, with more exciting announcements to come.
🎱	Big Run Studios BEST PLACES TO WORK 2021 Mobile developer Big Run Studios received the Best Places to Work Award 2021 from Gamesindustry.biz. With more than 5 million Blackout Bingo players worldwide and a growing community built around their main character Chelsea, Big Run continues to make a name for themselves in the casual competitive space. This is only the beginning of the Chelseaverse.
🎤	Maestro JUSTIN BIEBER VIRTUAL CONCERT Maestro, the interactive live video streaming platform that enables brands and streamers to connect with their audiences, powered a massive Justin Bieber interactive virtual concert which featured the singer’s avatar debut.
💬	Bunch $20M SERIES A Bunch, the popular mobile gaming community, raised a $20M Series A in response to strong user growth on their popular video chat app for multiplayer mobile titles.
⚽	Nifty Games $38M RAISE Mobile sports game developer Nifty Games announced $38M in fresh capital to fuel their vision for real-time competitive gameplay that fits the lives of modern sports fans. Sports and technology legend Peter Moore has joined Nifty Games’ board of directors. As former head of EA Sports and former CEO of Liverpool Football Club, Peter brings a wealth of expertise to the team.
🔊	Spatial SERIES B + TWO CEDIA AWARDS Immersive audio platform Spatial won two awards at CEDIA and closed an oversubscribed Series B. With technology focused on creating soundscapes for retail, event, and entertainment spaces, Spatial is capturing the imagination of major players in business, healthcare, technology, and entertainment.
♟️	King of Games SEED LED BY TRANSCEND King of Games announced Transcend’s lead seed investment in an exclusive interview with VentureBeat discussing their plans for a broad, approachable global chess community.

With a new year stretching ahead and many additional announcements imminent from our partners around the portfolio, the whole team here at Transcend is looking forward to 2022!

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ABOUT SHANTI BERGEL

Shanti is the founding partner of Transcend and a 35 year game industry veteran. His global operating experience spans every major platform and business model transition of the last several decades and is animated by a career-long fascination with how changes in technology and distribution affect products, services, and communities. Shanti is a recognized member of the Techcrunch List, speaks fluent Japanese, and is a frequent speaker on early stage investment, M&A, and strategic partnerships in digital entertainment.

ABOUT TRANSCEND

Transcend is a top quartile early-stage venture firm that backs AI-native entrepreneurs building the next generation of interactive entertainment. In a $263B global industry where AI is rewriting the economics, we partner with the founders leading that shift from pre-seed through Series A. Founded in 2020 by veterans with 70+ years of operator experience and $10B+ in lifetime revenue. Learn more at transcend.fund and follow us on LinkedIn.