VCs discuss gamings biggest infrastructure investment opportunities in 2021

We last polled our network of investors on the topic of gaming infrastructure startups back in May just as it was becoming clear what pandemic opportunities were in store for gaming startups.
Accels Amit Kumar told us at the time that social and interactivity layers spanning across these games were poised to be the big winners, highlighting his firms investments in startups like Discord and Mayhem. In December, Discord announced it was raising at a valuation of $7 billion and this month Pokemon Go creator Niantic announced it was buying Mayhem.
Following my story this week digging into investor sentiment around evolved opportunities in social gaming, I dug into gaming tools and rising platforms and pinged a handful of VCs to hear their thoughts on that market.
The broader market moves of the past several months have defied expectations with startups in the gaming world picking up substantial steam as well. This week, Roblox announced it had raised at a $29.5 billion valuation up from $4 billion in February of last year. Game makers across the board, including Roblox, have been acquiring gaming infrastructure startups as of late.
I talked to investors about what they wanted to see more of in the space.
Wed love to see more innovation around gaming infrastructure, which has the potential to democratize game development and allow clever indies to compete with Riot and Epic, Bessemers Ethan Kurzweil and Sakib Dadi told TechCrunch.
They highlighted numerous areas for new opportunity including specialized engines, next-gen content creation platforms, and tools to port desktop experiences to mobile. The VCs we chatted with were also intrigued by latent opportunities presented by major platforms adopting of cloud gaming tech. The overall trend was one promoting accessibility, a desire to provide more casual experiences for platforms that may have typically catered to hardcore audiences.
It was also apparent from conversations that Roblox is significantly shaping investor attitudes toward the potential growth opportunities and pitfalls in the entire gaming industry, with VCs who didnt get in on Roblox eager to dissect its success and bet on an adjacent player or one that could follow a similar recipe for success.
Responses have been edited for length and clarity. We spoke with:

Hope Cochran, Madrona Venture Group

Daniel Li, Madrona Venture Group

Ethan Kurzweil, Bessemer Venture Partners

Sakib Dadi, Bessemer Venture Partners

Alice Lloyd George, Rogue VC

Gigi Levy-Weiss, NFX

Hope Cochran and Daniel Li, Madrona Venture Group

Cloud game-streaming networks are exciting but dont seem like a sure bet quite yet, how do you feel about them?
DL: I think the real story behind cloud gaming is play anywhere and the cross-platform nature of it. Gaming is just different than Netflix, its not like you want to have an endless library of content. When Im playing a game, I want to play Overwatch all the time and I dont need to have access to 1,000 other games. I think the approach that the cloud companies have taken has been more around the thinking of, what do we have and what can we build for gamers with it? More so than what do gamers want and what can we give them? Its definitely trended toward that direction with things like giving away two free games per month, but really I think the thing that will be exciting in the longer term for cloud gaming is to play your game anywhere and play with your friends anywhere.
If users embrace desktop-class cloud gaming on mobile and theres a broader cross-platform unification, does that spell trouble for todays mobile gaming industry?
DL: The audiences between a Candy Crush and a Warzone are probably a little different, though I like to play both. So maybe it gets into eating some peoples lunch but I dont think its anything where the number one problem for a Candy Crush is people hopping over to play desktop Call of Duty.
Are there any clear infrastructure gaps where youd like to see new startups rise up and fill the void?
DL: Honestly just tools for building games, like next-gen Roblox Studio, next-gen Unity and Unreal type stuff Ive seen a couple interesting companies there. I think weve seen a few smaller companies focused on making sure that a network is safe for children, but I feel like a lot of the infrastructure stuff is really driven by what type of new content is coming out. So as the social games became really popular, securing that and making sure that the chats were safe became really important.
HC: I would love to see something built for helping games that were created for the triple-A environment to port over better to mobile environments. Every time I work with a gaming company on that, they seem to have to rebuild the game so itd be really interesting to see something like that really helps them adopt to the mobile form.
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