Goodbye 2021, Hello 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 amount 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 amount 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 ~

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.

Jeff Strain, founder of Undead Labs and co-founder of ArenaNet, recently announced his new company Possibility Space. While their first title remains unannounced, the outpouring of interest from the many of the largest players in the industry has been gratifying. Transcend is honored to work alongside the team as their only investor.

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.

Shortly after announcing a seed round Laguna Games quickly established their first title Crypto Unicorns, a community-owned digital pet collection and farming game based on blockchain technology, as one of the top ranked projects on the Polygon chain. Multiple phases of unicorn egg and digital land sales are underway with more gameplay to come, creating a variety of opportunities for play to earn fans.

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.

Arcadia came out of stealth to announce their mixed-reality sports platform along with a major partnership with Warner Bros in the Space Jam universe featuring LeBron James. Fans of the toon-sports series were able to sign up for Dream Team tryouts in the world’s largest free roam multiplayer XR arena.

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, 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, 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.

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’s Sports game division and years of experience as CEO of Liverpool Football Club, Peter brings a wealth of expertise to the team.

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.

Kings 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!

About Transcend Fund

The Transcend Fund is an early stage venture capital firm that partners with some of the most ambitious and talented founders in the game industry to collaboratively build the future of digital entertainment.

Founded in San Francisco by gaming veterans, Transcend Fund operates remotely with team members around the world. Our portfolio features a range of high growth digital entertainment companies including thatgamecompany, Possibility Space, Singularity 6, Laguna Games, IndiGG, Big Run, Nifty Games, Treehouse Games, Stress Level Zero, Maestro, Arcadia, Trioscope, Bunch, Kings of Games, Spatial, Goss, and several additional exciting but unannounced new ventures.

More information about Transcend can be found on our website. Follow us on Twitter for the latest news from around the Transcend ecosystem.

About Shanti Bergel

Shanti is the founding partner of Transcend and a 30 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.