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Think Big. Move Fast.

Supercell raised $130M at a $770M valuation and got a lot of press for it recently. It is well on its way to being a billion dollar game company. Also on that track are companies like Kixeye (a Lightspeed portfolio company), Kabam, and many others in the social, mobile and tablet space, joining Zynga, Riot Games, Wargaming and others who already have a valuation north of a billion dollars.

The last 5 years have seen more Western gaming startups create this much value than in the previous couple of decades. Why is that?

It’s because the last five years have seen three new gaming platforms grow from nothing. I’m not talking about a new console launch, where the incumbents from the last generation of game makers have been the winners in the new generation. I’m talking about Facebook, mobile and tablet. Each of these started as tiny markets. The incumbent game makers didn’t pay attention to the new playtforms until they were significant, the classic innovators dilemma. The early talk about games on these new platforms was very dismissive, “barely games at all”. This opened the door for startups, and in each case, startups seized the opportunity.

Today though, it is much harder for a startup to break through on any of these platforms. Development costs, and the “discovery problem”, make it very hard for a new games startup to get reliable, meaningful traction on any of these platforms. (Casino games are a notable exception in the last couple of years.)

None of these gaming platforms started out as gaming platforms. They all had other uses that initially propelled their adoption. But games are and have always been a key consumer use case, and whenever someone can play games on a device, she will.

Many of todays game startups that already exist may continue to grow to become billion dollar companies. But I do not believe that a new games startup will get to that level until we see a new mass market consumer platform get launched.

Today there are two candidates for such a mass market consumer platform. The first is Google Glass. The second is an Apple watch. Of the two, I’m much more optimistic about Glass as a gaming platform. I worry that the screen real estate isn’t big enough on a watch for games. It could end up being about utility, not entertainment. But Glass clearly has the capacity for entertainment.

What will games on Glass look like? Who knows? Certainly different from anything we’ve seen before. Incumbents will eventually port their existing hits across, but it will be startups once again who pioneer innovation in game control, game dynamics, game play, all optimized for the platform. Since Glass likely won’t be readily available until 2014, and won’t be popular for a few years after that, the incumbents won’t dedicate their best teams to building games for the platform. They will always put their A team on their biggest money spinner, whatever they grew up on.

That will be the opportunity for the next billion dollar games startup. You need to wait until Glass is readily available. You’ll build games that the industry experts laugh at when you first launch. But you’ll have mid single digit percentage of all Glass users playing, maybe more. That may only be a few hundred thousand players at first. But you’ll grow with the platform and you’ll learn faster than anyone else because you’ll have real users. And when you’re ready, I’ll be waiting, because I believe in that future.

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