Stu Grubbs

I really enjoyed this conversation with fellow Zynga alum Michael Martinez, founder & CEO of casual mobile studio FunCraft. In this episode of the Naavik podcast, we discuss how Michael built a $35 million revenue run rate company with not one, not 2, but now 3 hit games in the highly competitive casual word game genre on mobile. Some great lessons for any gaming entrepreneur, including: - Bigger is not always better: Funcraft's team size will surprise you! - Speed is of the essence: this is one advantage startups have over larger incumbents - Ad monetization works: Funcraft generates impressive ARPDAUs from ads alone and is able to do LTV-positive UA against them - Remote culture can be an asset: it opens up hiring globally - Failure provides valuable learnings: Michael talks candidly about the failure of his prior gaming startup, Juicebox Games, and what he's doing differently this time around Real talk, with lots of real metrics to benchmark against.

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Dude Perfect raised $100M for global biz expansion. The deal is getting lots of buzz, but our team’s math signals challenges ahead. Let’s break it down… DEAL DETAILS • $100 - 300M growth capital investment • Led by Highmount Capital • Unclear if 100% invested upfront OR draw down of commitment over time • No previous capital raised USE OF FUNDS • Hire mgmt team to expand biz • More live experiences incl int’l tour, consumer products • Grow content formats, frequency, channels, global localization e.g. animation, TV, movies, streaming • Extend brand beyond 5 founders by building talent network • New HQ in Frisco, TX as prod facility and “family-friendly entertainment destination”: – Retail store, podcasts / gaming / fan UGC spaces, trick shot tower, DP museum, mini golf, restaurants – Original plans for 3-story, 30 acre facility est to cost $100M+, 2 yrs to build COMPANY OVERVIEW: Dude Perfect • Digital-native comedy and sports media brand • Faith-based mission: “We’re about giving back, spreading joy and glorifying Jesus Christ”  • Other YouTube franchises: “Stereotypes,” “Overtime”, “Bucket List”  • Media brand also incl books, mobile games, board games and toys, and merch / retail / food and beverage partnerships • 25 current team members PERFORMANCE HIGHLIGHTS • 60M YouTube Followers, 17B views • Est 2024 revenue: $50M per DP • Est 2023 and 2022 revenue: $25M and $20M per WSJ  • Consumer product partnerships incl Nerf toy line, Columbia Sportswear • Partnered with A Parent Media co to launch a streaming service • ESPN “30 for 30” doc premiering at Dallas Int’l film festival • TV series on CMT in 2016, later aired on Nickelodeon • Alternate broadcasts for Amazon’s Thursday Night Football • 4 live nationwide tours as of 2023 ORIGIN STORY • Founded 2009 by 5 friends at Texas A&M • Cofounders = twins Coby Cotton and Cory Cotton, Tyler Toney, Cody Jones, Garrett Hilbert • Started as YT channel featuring trick shot videos INVESTOR OVERVIEW: Highmount Capital • Growth stage and middle mkt PE fund for tech, media, healthcare • Founded in 2023 by jason illian and David Hawkins • 4 team members on website + advisor • 3 team members have faith-based ties per bios • No other investments listed on website other than DP My takeaway... I really like and support the trend of increased investment into YouTubers and digital-native media brands. But as I wrote about in my 2024 State of Creator x Media capital markets reports (will link them below), investment must match market and opportunity size. To ensure good ROI, and to set good precedent for future investment into our space. The DP bet is exciting, but could be overly optimistic based on our prelim math. My colleague Michael Booth's post breaks the math down (link below). More analysis to come in my Friday newsletter. —- I’m the founder of RockWater Industries. We do m&a and strategy advisory for media, agencies, and creator economy. My dm’s are open. #media #agency #creatoreconomy

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Gaming is a Jewish holiday: ⚔ You're oppressed by constraints - limited resources, tech debt, market competition. 😡 You deal with adversaries every step of the way - bugs, toxic feedback, legal issues. 🤯 At some point, you gotta make that leap of faith - you've done everything you can, and you now need to publish and hope for the best. 🥳 If you make it to the promised land and users engage with your game, there's a big rush of liberation and joy. But that’s just the beginning. 🥊 Immediately new challenges arrive - player demands, staying competitive, updating content. Oppression ➡️ Adversaries ➡️ Leap of Faith ➡️ Liberation ➡️ New Challenges The grind never stops, but there are definitely incredible peaks along the way. Happy Passover. #gaming

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Meta Horizon now has SIT ACTIONS and VR PLAYER ROTATION! My Flight Sim is about to level up. New avatars next?! 🥹💜 #meta #metahorizon #metaverse #gaming

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I'm supportive of this but doubtful of the leverage a strike has. The reality is that voice acting typically impacts the last 10% of a game development cycle. And if it is being used in as much as 50% of the game dev cycle, its probably due to non-union actors, either internal staff doing placeholder voices during dev or indie talent getting involved early on. Nothing much will change in game development, but this pressure on larger game publishers to negotiate is still a good thing. ----- GamesIndustryBiz: "SAG-AFTRA calls for a "video game strike", effective from tomorrow. "Frankly, it's stunning that these video game studios haven’t learned anything from the lessons of last year" "The Screen Actors Guild - American Federation of Television and Radio Artists (SAG-AFTRA) has called a strike, effective at 12.01am tomorrow (July 26). National executive director and chief negotiator Duncan Crabtree-Ireland, acting under the authority delegated by SAG-AFTRA, says the strike comes "after more than a year and a half of negotiations [about the Interactive Media Agreement] without a deal." The convenience bargaining group with whom SAG-AFTRA is negotiating includes Activision, Blindlight, Disney, Electronic Arts, Formosa Interactive, Insomnia, Llama Productions, Take 2 Productions, VoiceWorks Productions, and WB Games. SAG-AFTRA says it was campaigning to offer critical AI protections for members by asking "any game looking to employ SAG-AFTRA talent to perform covered work must sign on to the new Tiered-Budget Independent Interactive Media Agreement, the Interactive Media Agreement, or the Interim Interactive Localization Agreement." However, SAG-AFTRA claims that although agreements have been reached on "many issues important" to its members, "the employers refuse to plainly affirm, in clear and enforceable language, that they will protect all performers covered by this contract in their AI language." "The video game industry generates billions of dollars in profit annually. The driving force behind that success is the creative people who design and create those games," said Crabtree-Ireland. "That includes the SAG-AFTRA members who bring memorable and beloved game characters to life, and they deserve and demand the same fundamental protections as performers in film, television, streaming, and music: fair compensation and the right of informed consent for the AI use of their faces, voices, and bodies. "Frankly, it's stunning that these video game studios haven’t learned anything from the lessons of last year - that our members can and will stand up and demand fair and equitable treatment with respect to A.I., and the public supports us in that." (keep reading) GamesIndustryBiz: https://lnkd.in/gG4HpeK5 #gameindustry #gamedev #gamepublishing #strike #voiceacting #sagaftra

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