 Hello everyone and thank you for joining us today for yet another capital inside the series today We're actually going to talk about how innovation is happening in the gaming here on Ray and today Particularly with the you know while the lockdown itself has gone from the government side But they are still really all in lockdown as we sit in our homes and do both of the work that is required And gaming particularly an entertainment has been on the real upside on the real rise in these last few months And today we are talking to Soloni saying who's the general partner that looks Lumikai and she's going to tell us about what she sees Is probably going to hone for the future of gaming entertainment and interactive Entertainment industry in the times to come. So thank you very much for joining us Soloni It's the pleasure to have you here with us Indeed there's been a big upsurge in gaming and entertainment in the last few months and by the way We've been on learning to work from home. We've always been also been very busy trying to learn some new games And you know just try some new means of entertainment essentially leaving the television behind and Trying to look into far more other areas of entertaining ourselves so you know my first question to you really is that There's just so much happening in gaming today, you know while it was I know about three years back I we were still only talking about both games being on mobile phone But today, you know, there are trends like lost across platform experiences in game socializing environments. In fact, you know, I was talking to Somebody in the gaming industry last month and he told me that you know This is probably also going to be the new social media for a lot of people to actually come and Communicate with each other and hang around. So what what kind of gaming trends are you seeing at Lumikai? Happening in the industry and particularly from an Indian perspective because you you so focused on in gaming Startups and in entertainment Yeah, so, you know for us and why are you saying that so for us? It's a really interesting time Ritu in the market and if you you know, just take a step back And if you look at what's happened in the market in the last let's say 24 to 36 months And you know, we all know the stats, you know, it's the 300 million gamers is the 450 million smartphone users It's the cheapest data rates in the world the highest data consumption with one nine an average union consuming nine gig of data And through that gaming has become an ultimate beneficiary and covid actually accelerated that the As of April 2020 there was a research report that was done and it's at 67% of India's millennial audience are active gamers and those numbers are phenomenal Those numbers are something that we haven't previously seen before and there were two large supernova events One was obviously the geo 4g introduction and the second is obviously, you know controversial as it may be but pub G's phenomenon which essentially Unlocked monetization and kind of moved away from that myth of that or Indians don't pay in games It kind of unlocked that and it became a phenomenon and you know, when we've Traced at Lumigai when we've traced the gaming sociology and the digital sociology of users We've discovered some very interesting insights about India's gamers versus the rest of the world And you know the first key insight that we've seen is that other Western markets had very linear progressions and introductions to two words gaming, you know, they had the arcade games then they had the Consoles they had the PCs They had the mobile that came about and then they were in very slowly and gradually introduced to different business models and gaming whether it was the boxed games the paid games the premium the free-to-play and then subscription for Indian users there are hundreds of millions of first-time mobile users who have now come online and they have experienced Social media they've experienced messaging they have Experience gaming audio video chat all at the same time and at at Lumigai We call these users, you know digital convergence natives and to some extent their digital sociology is very different you know, so they're inherently social they're inherently multiplayer and Any kind of such new paradigms which will appeal to this audience has the ability to to really scale and There are some kind of thesis areas than trends that we find deeply interesting We feel, you know, one is social social gaming So there's a high degree of openness towards social multiplayer platforms in the country. There's also We are very interested in regional language gaming users, you know, very fun fact, but Tamil gamers and Tamil you Speakers where the fastest growing a gaming users for PUBG in fact, and you know, so that is There is a lot of Interest there's a lot of demand and you know that correlates to what you see on YouTube because 90% of Video consumption on YouTube is actually done in regional languages. So but there is a complete dearth of content there And we we also very interested in original IP original Indian storytelling We believe Indian storytelling is just coming of age And it's only a matter of time that it leverages games and gaming experiences to tell those stories and We're clearly seeing some studios now embark on those journeys as well And of course there are you know, the blotter broader platform plays the tools taken the infrastructure plays around gaming that we find interesting as well Sure, no, I absolutely agree with you and particularly the multiplayer platform has been quite a phenomena It's been a rage during this time. I mean, we've seen the growth of Ludo King as a You know a gaming platform becomes so phenomenally large and it's so simple It's essentially Ludo being played with people on the phone. So That's something You know, we're waiting to see more much more to happen With people see, you know mobile Typically for the use of games has become a very important platform I mean, you know, but do you really still feel that as the game become more interactive as the number of players Increase the experience of Enjoying the game on the phone Would be the real I mean, you know would be the real trend or do you think people would still love to use an iPad or they would love to Use the laptop or a PC to play a game and actually take its entire experience better So, you know clearly and we're seeing this now mobile has, you know, has unlocked a Lot a large audience for let's say, you know gaming in itself, you know gaming earlier was a you know niche Fringe activity, you know with you and you would have to have expensive hardware to be able to game The mobile really transformed that and clearly right now out of a hundred and sixty billion dollar gaming market globally 80 billion is contributed by mobile and you know, that is the fastest going category And we don't see that really changing and now with a mobiles have also become much more powerful Right, so you can get those gaming experiences on your mobile phone And there is a lot more accessibility with it as well And now with a variety of game engines out there cross-platform porting is totally possible as well now Whether you chose choose your mobile as a games platform or not largely depends on what is your target market? What is the genre of the games and what is your developer comfort? What are you comfortable building on and there's no denying the fact that mobile has had the great greatest and largest reach We are big believers of mobile as a key entertainment device It is it has opened up demographics where non traditional audiences who didn't necessarily Self-identify as gamers picked up the mobile phone and started using and playing games and have made that their personal entertainment device and Only mobile can allow for that kind of demographic expansion to happen to Sure totally agree over there and I mean but I mean you know on another on another level when you think of Games like are you even think of platforms like Highland or even if you think of platforms which are international platforms like Minecraft or Roblox Do you really think that they can also be as a can be experienced well on a mobile? Or do you think it would be much better or they need to sort of change their Entire platform to be more mobile friendly. I Don't think it's a either or Because there are enough in more immersive games which are on mobile which deliver a certain kind of experience And then there are these immersive platforms which are on on PCs and consoles which deliver a certain kind of experience and it's never One of the other the genres that they target can be different The categories of gaming that they are building can be different and that is the beauty of gaming in itself But it is incredibly deep and there is a massive breadth of experiences that you can have have and mobile clearly is one of the Platforms which can deliver that now for example, you know if you're building hyper casual games And that's your area of expertise and interest the mobile is the perfect device for it Or whether it's even you know RPGs and we've now seen you know Supercell was obviously the pioneer in building these Immersive games mid-core games on the mobile device and delivering these fantastic Experiences which have been played by hundreds of millions of users across the world So clearly there is a place for each of these mediums and there is a premium Which is now being paid for convenience and accessibility which we can't deny totally There's another genre of gaming which sort of became very big just prior to the pandemic because fantasy gaming and you know with With more you you becoming more interactive with the real on ground for that were happening and by the way Of course fingers crossed that the IPL sort of Delivers on its promise as it goes live now, but I mean what what kind of Challenges have been faced by the fantasy gaming startups in this time And you know what what would you advise to them? I mean given the fact that there's only going to be a slow progress for on ground for To still come you know or to see the error that it was being prior to the pandemic. So What do you what what is your take on fantasy? Yeah, you know, that's a really good question So clearly fantasy gaming was one of the categories that was hit the most in the absence of life sports and Clearly it has a seasonality impact as well So, you know the existing players in the market were either resorting to let's say Nostalgia content or rewards and giveaways to be able to have you know still retain Users on the platform and it is definitely very challenging Also, you know fantasy is an interesting space which already has a very obvious incumbent Which it which we all know is now demonstrating its financial muscle and you know you talk about the IPL Sponsorship which is very interesting because if you you know trace the historical Sponsorship of the IPL you will notice that the de facto industries in trend for those years We're always sponsoring the IPL So, you know whether when it was real estate it was DLF when it was a smartphone boom It was vivo now it's gaming and it's you know dream 11. So clearly it's the golden age for gaming overall So, you know my advice to players in the market who are let's say, you know Not don't have the either financial muscle or the power that The incumbents have to take them on it is the right time to look beyond fantasy towards other genres Which don't necessarily have incumbents yet and build out in those categories So go after the spaces which are underserved untapped and this is a great time to navigate through that because you know This is frankly also from a investment point of view a great vintage year to invest in startups The startups that will get built in this the next two years are are going to be the market leaders of the future Sure, so there's some So there's to Bahujan who is asking right here that you know, how can somebody invest in the gaming industry? So, you know like not as a fun, but probably more I think maybe as an angel investor, but what is your take on it? You know, so that's a that's a great question In our experience investing in games is not like investing in the consumer internet space. Your games investing is incredibly specialized. It is requires a lot of specialist understanding and insights. This is also the reason why there is an emergence of Sector focused globe gaming funds globally which have emerged because there are a couple of problems that are associated with gaming right, you know, most investors use a Problem solution framework when they look at gaming when they look at in startups, you know, what problem does this start up solve now that framework totally breaks down in entertainment because Does the world need yet another match three game? Probably not. Right. And the only the biggest problem that game developers face is boredom, which is not necessarily a problem per se, but it's a Byproduct of the fact that we're in an attention economy. So, you know, evaluating those startups is is really require some specialist insight and Also, the second is that, you know, it is important to understand that you're backing teams who understand the audience who understand the nuances of building games because Being focused in gaming can often lead to very large outcomes and that is really important as well. And you know, everybody says, you know, games is a hit driven business and we say, well, so is venture capital. So you need to have a portfolio approach. And you need to have the right portfolio of games assets across categories across genres across the platforms to be able to, you know, identify the winners and then support and catalyze them. So, you know, my, my advice is that See a lot of deals in the in the space before you make your bets in order to get a understanding of what the landscape looks like and what is your personal preference and capacity to be and risk appetite. Okay, so sort of is asking, how can inapplications be improved for games, which is ministerial right now. That's another great question. You know, it is a function of often content is a success in games as a function of the kind of content. The kind of retention and game mechanics and then the ease and accessibility of the of the payment infrastructure. So, you know, all three are Very important components of being able to monetize on games and doing it well. Now, clearly, we have seen examples of inapp purchases working in India with Games which have deep monetization mechanics and with the not and the payment infrastructure which is still evolving in the in the market. It is a and for us when we are looking at investing in games companies. We know that capital is one of the problems that game developers need to solve for they need other Inputs and insights as well. They need access to talent. They need access to understanding what a game design best practices. They need access to the right partners publishing Clients and all of this goes well and hand in hand together to be able to improve the performance of the games. In themselves and then the companies post that and that is a process and that is something that companies learn over time. And we're hoping that, you know, once we see the unlocking of WhatsApp payments and all those other payment infrastructure issues being resolved. This this will solve over over the years. Sure. So one of our editors is asking that you're the one of the world's first female general partner of a gaming fund. Do you think there are enough females who are finding, you know, who are founders of gaming companies today or do you think we need to do something to have more of them. Well, clearly, if it's 2021 and I'm the first female general partner for gaming fund, I think the answer lies in itself clearly not enough. I think it took us by surprise as well. And, you know, we gaming, but this is a problem of larger tech. I think this is a much larger and longer conversation to be had of representation of women both as as entrepreneurs and as well as the investing side, particularly in India, which is clearly there is a shortage of And this is something that we're obviously mindful of. We, there are a few teams that we know who have mixed gender teams who are female co founders and that's fantastic. In fact, one of the key questions we ask startups when we're investing in them is that what is the diversity of the team, what is the gender ratio. And those are very important questions for us, because especially when you're backing in entertainment products. It's very clear to us that entrepreneurs and financiers need to look like the audiences are consuming Those games and entertainment experiences. So you need to have that representation within your companies and that's always going to be a work in progress for us. But that's very clear part of how we think about investing as well as to back diverse teams. Sure. So we've got another question on Facebook live where they're asking what, what is the fun side that you offer to the startups that you are looking in gaming. So when she's asking that So we look again we are very early stage we have the capacity and the stomach to go early, at least for gaming. So we will do check sizes of anywhere as low as 200,000 up to even as highest $2 million with with capital for follow on That really obviously the higher check sizes require it will depend on the kind of company the genre and the conviction on the bet. But that's essentially the The range with which we invest. We are very comfortable doing pre revenue bets. So we look at pre seed seed bets largely and that's that's the way we Sure. And I mean, have you decently done some investment during the time of the pandemic in some gaining status. We will be announcing our investments next quarter. Sure. So there's that we are still asking that the ban on pubg was a big boost for the development of our South Korea parent companies trying to enter India by serving by severing its size to 10 cent what according to you. Should Indian game developers do to continue growing even when pubg returns and how do you how should they keep their users and grow their users. Yeah, you know, that's it's an interesting. I think, you know, one is that pubg was very important for the ecosystem from a perspective of the nascent eSports ecosystem, the streamers, the influencers that had come through and their return augurs well for that ecosystem. It brought a lot of potential. It started bringing a lot of brands, non endemic brands into the ecosystem. So that was obviously a Good development for the industry. I think on the other side as well. Now is a great time to make original content and There is also, as I mentioned earlier, you know, now is the golden age for gaming. There's clearly a lot of global interest. There are a lot of global capital coming into the market. Coming into the market. A lot of the large corporates are making moves into gaming. So if you're an Indian developer now is a good time to start really thinking about the kind of games that you want to build in the kind of content that you want to build. And if you want to build investable companies, you need to think beyond a single game and a product you need to think about building a business. And how do you do that? What kind of talent that you need and then go out to Raising capital for that. And now we've seen entrepreneurs come to us with some very ambitious ideas and that's that's very heartening to see that clearly there's there's appetite for that. And You know, India, the Indian developers traditionally have been under capitalized, you know, in the last five years has been Let's say, you know, $350 million less than $350 million, which has been invested in the space majority of it in one company and majority of it in the last 24 months. But There is a massive Development developer scene in ecosystem, which is now growing because in the last five years we know that from 25 development studios now they're 300 plus And there's a further underground community of an other additional thousand indie studios who are, you know, tinkering and building games of their own. And that's only a good thing. You just mentioned about diversity. Do you think we have enough for female developers who are in the gaming industry today? We're actually seeing, well, obviously, you know, it's definitely there's a stem problem where, you know, the number of the representation of women and even engineering colleges is very low. So clearly, there is a problem there. But there are more and more women who are in gaming, building games companies who are either part of mixed gender teams or who are also, you know, founding their own games companies that we're seeing. Clearly, it's a minority. But it is definitely an improvement over the last few years where I've tracked the market and they were, you know, you barely, you know, you could count them on one hand. We definitely see a lot more women coding as well. And, you know, we get profiles of people who are developing their own games and they're not ready to be funded at the moment, but it's really heartening to see these women programming their own games and, you know, coming up with these ideas, whether it's a one person or two person shop. And there's definitely an uptick, I would say, it's not, there's nowhere, it's nowhere equal, but there's definitely a slight improvement for sure. For sure. I mean, you know, now today, I mean, since you mentioned, do you think that putting gaming as a subject in school, entertainment, you know, education and gaming coming together, gamification of education, we've been talking about it for the last two years. But, you know, we have to see a lot of content or even let's say a lot of interactive content for children coming in that direction. So clearly, there is an opportunity there, but do you see this content being done in India or do you really see that first it's going to probably be in some other part of the world. You know, so gamification and game mechanics as means to drive retention and engagement have been clearly well established and clearly that they're being leveraged as well, you know, to some extent, even like a byjuice, for example, does use certain, you know, game mechanics to be able to retain their users and we're clearly seeing that. And in gaming is a fantastic way to actually teach certain skills because there are abilities like your visual, spatial, reasoning skills, your problem solving, your collaborative skills. So we're always on the lookout as a fund as well to look for these similar experiences which can be contextualized. We know and we look at games from a portfolio approach, you know, so whether it is looking at categories and genres from gamified learning experiences or language focused gaming experiences or whether it's educational focused gaming experiences, we're always on the lookout for those. And we do believe that there are companies currently in India who are ideating on that space and we're leveraging familiar and well and new mechanics to play with engagement and and retention in their apps. Sure. And I mean, do you think it's something which is going to get as the school is getting into schools and you know there be actually classes or classroom teaching happening through gamification. Do you think it's going to become that mainstream anytime soon? We're definitely seeing it globally. There is a, you know, it's very interesting there is a company called Prodigy which builds mathematics games and clearly globally classroom teachers are using this to teach math skills to kids from the age of eight to 12 and they're being encouraged to play these games as part of their school curriculum. So we're clearly seeing this globally and this is a trend that we only expect to see accelerate. Of course, developers need to think about how to make safe learning experiences for children, whether it's safe virtual environments for children. And that is the next step of evolution and we clearly and we clearly saw that, you know, with Minecraft and Roblox, which have become massive successes and the large part of the user base is is children or teenagers within a certain age group. And that's already happening. Totally. Um, you know, now we're also seeing a big corporate play also happening in gaming today. You know, there is, of course, fun on one side, the likes of Sony and Samsung who are, you know, coming out with new products. And then, of course, there is Google and Microsoft, Amazon, who want the pie of the gaming industry too. And then, of course, we have the entire startup community who's doing so much work in the gaming industry. So do you think that because of the corporate play, do you think the startup is going to be a gainful market for the startups? Or do you think it might just hamper startups somewhere and, you know, they might instead of taking initiative choose to be part of a larger corporate and So that might slow down the whole progress of feeling on an individual level. So not at all. I believe, you know, the more the merrier the industry has been undercapitized and it requires the supports of these giants to come in to encourage and catalyze that innovation, they will bring that risk appetite and they can't do it alone. You know, they will need to partner, they will need to do publishing and they will need to acquire and all of these are very good steps for the ecosystem because all of them within some way of form infuse liquidity. And in build that risk appetite to create those contents, those platforms, the tools and texts that can be leveraged for the domestic ecosystem. So we actually see that as a good thing. And if you're a content developer in the current ecosystem, and if you have skill, ambition and scale, you're in the right place. And we will expect at least a few acquisitions this year or next year to come through which will further infuse liquidity into the system and we quite anticipate that as well. So, you know, it's only a good thing. So what things are you expecting these acquisitions to come forward? I think it's not the most product software. You know, both product and software related to acquisition of capabilities, acquisition of teams, acquisition partnerships, publishing deals, we will definitely see a lot more activity over the next 12 to 24 months in the Indian gaming space. Sure. And I mean, you know, you're very excited about interactive gaming and interactive entertainment yourself. So particularly within interactive entertainment as a space, what kind of trends are you observing and you know, what do you see growing more? So, you know, we touched upon it a little bit. I think in interactive, if we look at the industry from a little bit of a step back, we try and look at within content, we look at various genres. So whether it's your hypercasual, your mid-core and other categories, we look at our original IP, we look at across genres. Then we look at various platform plays, whether it's a verticalized platform player or a horizontal play where, you know, you've got now the MPs in the windows who have now raised capital and well-capitalized. We look at those spaces as well. We look at tools, techs or anything that can enable interactive media. We look at that and then there are infrastructure plays, you know, around cloud streaming, etc. While it's still very early days, we have an eye open for India specific solutions around that as well. And what's more interesting to us is that they're kind of entrepreneurial personas which are now coming and building in the games industry space has been different to that of the past. You know, in the past, you had the gaming 1.0 entrepreneurs, you know, the people who really struggled and built their games companies and leverage very familiar game mechanics where there was a Rami, the team patties and they built solid profitable businesses out of that. Now you have a two separate kind of personas of entrepreneurs who are entering into the who are looking to now build the fastest, you know, the kind of experienced product manager or experienced founder who has exited a company now and coming from ancillary industries or adjoining industries to build gaming. And then the third is finally the kind of Gen Z founder who has grown up playing a clash of clans game or grown up playing Minecraft or Roblox who have a very deep understanding of an inherent understanding of how social mechanics play out in game mechanics. They are now coming in and building products and games. And they are the ones taking the boldest bets. So we find that very interesting. And those are some of the insights that we've seen on the market play out in the ground. So there's a cheat on Facebook who's asking that do you believe we need to introduce new knowledge skills in education at an early age? Sorry, I missed that question. Litu, I may have to ask you to repeat it. Do you believe we need to introduce future technology skills in education at an early age? Absolutely. I mean, the idea is to Absolutely. You know, it's very interesting that back in the 1990s and 2000s, there was a game development institute which was set up in the U.S. and J.Leno came up on you know, Primetime Television and he said congratulations now for the first time. There is a course which is even more irrelevant than other courses. It's on video game design. And and 2021, gaming is a hundred and sixty billion dollar industry and it is only becoming even more mainstream and game designers and game developers are some of the most coveted skill sets that you can get globally. And as technology improves, as demographics who come to gaming and social experience start expanding, this is it is the future and it would be futile to fight it. And hence introduction of coding, programming at an early stage is is definitely very, very important. Sure, I agree. And you know, in terms of the pandemic and hitting businesses hard across categories, but I think gaming still sort of managed to stay afloat and people were still hooked on games. And in statement during this time, how has this time been for your startup or your portfolio startup? I mean, you know, while I can, I can totally imagine that the users might have gone but monetization may have been hard to come by. So what advice have you been giving to your startups? And you know, have you been investing in them to ensure that they still get longer with you? Of course, given the fact of the entire gaming industry is being the upright, but what what have you been doing or how have you been working with them? Yeah, so so I've tracked the gaming industry for a very long time, you know, I've seen it through multiple stock crisis economic crisis, where it's the global financial crisis and the crashes. And our hypothesis going into the pandemic was that even though currently gaming is at an all time high in terms of usage, monetization and adoption. Even after that gaming once gaming usage would normalize, so to speak, it would still settle at higher peaks than pre covid levels. And that has largely been proven out. Covid's digital acceleration, at least for the India market has meant that there were a lot of non traditional users who adopted gaming for the first time. And there was this market expansion that happened. And now when people have gone back to work or people are, you know, now slowly getting back to their regular lives, gaming usage may have reduced, but the companies that we've been talking to indicate that the revenues have largely held up to some extent. So that validates our thesis. So we have actively invested and even though we are seeing that normalization happen, it has still rested at higher than pre covid levels, which has meant that the market has expanded in a certain way and we don't foresee that switching back. Sure. And are you also sort of particularly for gaming startups who might need another round of funding and it's not easily coming from the rest of the market. So are you also going in for the rounds for your existing startups as well or are you looking at newer startups? We're currently in the first phase of our deployment. So we're looking at obviously coming in as primary capital at the moment. We are not at the stage where startups need to follow on investments. So, you know, for us, we're still at the point of deploying our primary capital. Okay. Okay. Thanks so much, Anoni. This has been a great talk. And you know, I think there have been questions in coming in, but I think due to the lack of time, we probably stop here. But I think this is wonderful. This is how the gaming industry and the gaming platform is going to emerge into a much, much bigger industry. And probably, you know, our interest with internet really started more when e-commerce became the thing. And I think the second interest is really with gaming because, you know, we like to now spend with It's really how you've taken the entire television time into gaming, which is very interesting to notice. And I think it's only likely to increase further. So any last words from you to people who should come and enjoy the gaming experience? You know, I mean, gaming is the only kind of interactive immersive experience where it takes you out of your world in a fashion that no other entertainment can replicate. So, you know, I have great appreciation for the industry. I've been in the industry for a long time. And you know, I'm very excited for what the future holds for the India market and for India's creators. Sure. Thank you very much, Kaloni, for joining us today. And it's for our audience, both on Facebook as well as on Zoom. If you have more questions, please keep on putting them on the Facebook link. We'll try to get Kaloni to answer them, though, of course, she's getting mad. So congratulations for that. But we'd still love to see you having and talking to you more in the industry. Hopefully next time, not in front of a screen, but in person. Thank you very much for joining us today. Thank you so much, Rithu. Thank you. Okay. Thank you. Bye-bye, everybody.