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XSurvios Steps Outside of Virtual Reality to Build Games That Cross Worlds
Sam primarily covers entertainment and media for dot.LA. Previously he was Marjorie Deane Fellow at The Economist, where he wrote for the business and finance sections of the print edition. He has also worked at the XPRIZE Foundation, U.S. Government Accountability Office, KCRW, and MLB Advanced Media (now Disney Streaming Services). He holds an MBA from UCLA Anderson, an MPP from UCLA Luskin and a BA in History from University of Michigan. Email him at samblake@dot.LA and find him on Twitter @hisamblake

Takeaways:
- VR game-maker Survios is expanding beyond virtual reality games as it embraces the idea of a "cross-play" world, where users can play against one another regardless of platform.
- The company sees this as part of a broader emerging trend that it calls "cross-reality."
- Survios' move is part of a bigger shift in the VR industry, which is recalibrating expectations and extending the timeline for immersive technology's growth.
Culver City-based virtual reality and gaming startup Survios is broadening beyond VR.
The company — creator of such games as "Creed: Rise to Glory," "The Walking Dead Onslaught" and "Westworld: Awakening" – recently announced its first non-VR game: "Big Rumble Boxing: Creed Champions." It hopes to leverage its relationship with MGM Studios, a lead investor of its 2016 Series C fundraise and owner of the "Creed" series IP.
Following its recent $16.7 million Series D funding round, Survios is one of a number of companies taking a fresh look at how users will use virtual reality in the future, and its role in the growth of gaming and the "metaverse."
Survios has also made several recent executive hires from non-VR backgrounds. New chief product officer TQ Jefferson was formerly VP of Disney's Games & Interactive Experiences group while Michael Medrano, Survios' new VP of marketing, was previously marketing director at PUBG and brand manager at Blizzard.
"We've been brought on board to help shepherd Survios through this next evolution from scrappy startup to something more formalized," Jefferson told dot.LA. The company has now raised $70.9 million. Its most recent investors included several companies from South Korea, including Irongrey, Woori Technology Investment Co. and Samsung NEXT. Earlier funders included Bay Area-based funds DHVC, Felicis Ventures, World Innovation Lab and Lux Capital.
Survios is betting on the growth of "cross-play," wherein gamers using different gaming systems can play together. The company has a broader vision, though, which it calls "cross-reality" — a seamless connectivity between not just different gaming platforms like Playstation and XBox but also between traditional '"flatscreen" media and immersive tech like AR and VR.
"Six years ago, cross-play was verboten," Seth Gerson, chief executive of Survios, told dot.LA. Fortnite, Epic Games' flagship game and virtual world, he said "broke that dam."
Epic CEO Tim Sweeney's broadside against Apple's app store policies is part of his ongoing crusade to make the gaming world more open and connected. Doing so, Sweeney believes, will more fairly compensate game developers and help the overall industry ecosystem grow bigger and stronger–and bring about a flourishing metaverse. In line with Sweeney's vision, Gerson noted that "people are playing more and paying more."
Media analyst Matthew Ball has described the metaverse as a "quasi-successor internet where everyone and every company can exist, work, socialize, trade and create."
"The 'real world' will become fundamentally integrated into the digital one, and countless new digital services and products will be created," said Ball.
Survios expects people to eventually experience the metaverse primarily through VR. In the meantime, though, in line with its cross-reality vision, it is pursuing a strategy that includes but is not limited to VR, which it hopes will position the company to play an ongoing role as the metaverse develops.
A screenshot from Survios' first non-virtual reality game: "Big Rumble Boxing: Creed Champions."
Virtual Reality: Fad or Future?
The company says it remains bullish on its VR roots. With technological enhancements in VR hardware and an ongoing decline in price – the Oculus Quest 2, due out on October 13, carries a price tag of $299 – about 8 million head-mounted displays are now in the market, Gerson said.
Recounting his former days at Sega, when the Japanese corporation was pushing its Sega Saturn gaming console, Gerson said that "if we had had 8 million units, everybody would've been doing cartwheels down the hall."
Adding in the coronavirus pandemic's boost for VR demand, Jefferson suggested "this is perhaps an inflection point where it breaks open to a larger audience."
Many observers will roll their eyes at that, having heard such proclamations before that failed to deliver.
"Certainly, the promise of VR was expected to arrive earlier than it has," media analyst Peter Csathy told dot.LA.
Ball underscored VR's continual overexuberance by noting that ABI Research, a market research firm, forecasted in 2017 that annual VR revenue in 2021 would be $65B. In 2020, however, the company significantly lowered its outlook, forecasting $25 billion in VR revenue in 2024.
"Imagine how many VR-related start-up decks had that totally baseless, inane 2017 estimate," Ball wrote.
Others are less kind. Media analyst Dan Rayburn flatly calls VR "a fad."
Stepping Back to Build a Broader Universe
Looking back, Survios' Gerson said the VR investment market made two key mistakes.
One is a misunderstanding of how much it costs to make a high-quality VR game. Gerson said VR development is far more complex than, say, mobile games; it can take over 100 developers to make a premium VR experience. "If you don't give the team the funding and the time, they can't build that experience," he said.
Gerson said VR boosters were also mistaken in expecting VR's adoption curve to resemble the exponential growth of smartphones. Instead, he said, VR adoption has been and will likely continue to be more linear, "like color TV."
Tuong Nguyen, media analyst at research firm Gartner, wrote in May that immersive technology (VR and AR) "is still three to eight years from the early majority adoption. In other words, it's in the adolescent stage."
Still, "calling VR 'a fad' is like being negative on the internet," he told dot.LA.
Nguyen wrote that past VR efforts have lacked a viable strategy for reaching consumers. In contrast, businesses have more quickly adopted VR for some applications, like training. But the consumer market remains the larger prize.
In this sense, Survios' effort to meet the consumer where they're at by expanding beyond VR could be a prudent move.
Gerson still believes that VR is the future. He called it the "ultimate iteration" of the metaverse – the parallel digital universe first conceived by science fiction writer Neal Stephenson that is part and parcel of Sweeney's no-barriers vision of the gaming world.
Representatives at market research firm Parks Associates agree with that view.
"2020 has been a good year for virtual reality adoption in the United States," research analyst Kristen Hanich told dot.LA. "With VR headset adoption reaching a critical mass among gamers, and increasing releases of built-for-VR games to the market, the VR market is poised to finally break out."
That vision is firmly in mind at Survios.
The company wouldn't provide specifics on its product roadmap, but Jefferson did say Survios' plans "allow us to edge closer to enabling cross-reality immersion."
"We've built a whole suite of tools...and our goal is to build worlds and allow our customers to participate in those worlds using any platform they want," Gerson said.
For now, Survios will simultaneously focus on adapting to the slower adoption of VR while preparing for a future where it is more widespread.
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Sam Blake primarily covers entertainment and media for dot.LA. Find him on Twitter @hisamblake and email him at samblake@dot.LA
Sam primarily covers entertainment and media for dot.LA. Previously he was Marjorie Deane Fellow at The Economist, where he wrote for the business and finance sections of the print edition. He has also worked at the XPRIZE Foundation, U.S. Government Accountability Office, KCRW, and MLB Advanced Media (now Disney Streaming Services). He holds an MBA from UCLA Anderson, an MPP from UCLA Luskin and a BA in History from University of Michigan. Email him at samblake@dot.LA and find him on Twitter @hisamblake
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Venture Firm BackStage Capital Reduces Staff to 3 Employees
Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
Venture firm Backstage Capital laid off nine employees, reducing its staff to just three.
Managing partner and founder Arlan Hamilton announced the layoffs Sunday on her “Your First Million” podcast. General partners Christie Pitts and Brittany Davis, along with Hamilton, are the only remaining employees, TechCrunch reported. The move comes only three months after the Los Angeles-based firm said it would only fund existing portfolio companies.
“It’s not that I feel like there’s any sort of failure on the fund side, on the firm’s side, on Backstage’s side, it’s that this could have been avoided if…the system we work within were different,” Hamilton said during the podcast.
Hamilton founded Backstage in 2015 to highlight underrepresented founders and launched a crowdfunding campaign last year to draw in everyday investors. The company announced its plan to raise $30 million for a new fund, bringing in $1 million from Comcast. Having invested in 200 companies, Backstage announced in March that it would not be making new investments.
Hamilton said Backstage’s situation is a “purgatory kind of position,” with companies saying the fund was either too developed or not developed enough to invest in. However, in an email sent to stakeholders, she said she is “optimistic about the next 18 months.”
The firm still intends to grow its assets under management to over $100 million as Hamilton looks for backing from to the 26 funds she has invested in for backing. Hamilton said the company does not “have dry powder right now,” which points to the firm’s struggle to grow.
The news comes during a wave of layoffs across Los Angeles, with companies like Voyage SMS, Albert and Bird letting go of employees.
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Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
A New Tide of LA Startups Is Tackling the National Childcare Crisis
Keerthi Vedantam is a bioscience reporter at dot.LA. She cut her teeth covering everything from cloud computing to 5G in San Francisco and Seattle. Before she covered tech, Keerthi reported on tribal lands and congressional policy in Washington, D.C. Connect with her on Twitter, Clubhouse (@keerthivedantam) or Signal at 408-470-0776.
The pandemic exacerbated a problem that has been long bubbling in the U.S.: the childcare crisis.
According to a survey of people in science, technology, engineering and mathematics (STEM) careers conducted by the city’s WiSTEM Los Angeles program and shared exclusively with dot.LA, the pandemic exposed a slew of challenges across STEM fields. The survey—which consisted of 181 respondents from L.A.County and was conducted between March 2021 and 2022— involved respondents across medical fields, technical professions and science industries who shared the pandemic’s effects on their professional or education careers.
The survey found 60% of the respondents, primarily women, were balancing increased caretaking roles with work or school responsibilities. And while caretaking responsibilities grew, 49% of respondents said their workload also increased during the pandemic.
“The pandemic threw a wrench into lots of folks' experiences both professionally and academically,” said Kathryne Cooper, a health tech investor who sits on the advisory board of WiSTEM. “So we need to acknowledge that.”
In the L.A. area, an increasing number of childcare startups are aiming to address this massive challenge that is a growing national crisis. The U.S. has long dealt with a crippling childcare infrastructure plagued by low wages and a labor shortage in preschools and daycares, but the COVID-19 crisis made it worse. During the pandemic, women left the workforce due to the lack of childcare and caretaking resources. By 2021, women made up the lowest percentage of the workforce since 1988, according to the National Women’s Law Center. Despite the pandemic forcing everyone indoors, caretaking duties fell disproportionately on women.
“I almost actually left my job because everything that I looked at was either waitlisted or the costs were so astronomical that it probably made sense for me to stay at home rather than pay someone to actually look after my child,” said Jessica Chang, the CEO of childcare startup WeeCare.
The Marina del Rey-based WeeCare, one of the startups that helps people open their own childcare facilities, announced it raised $12 million in April (to go along with an additional $5 million in bridge funding raised during the pandemic). The company helps people build daycare centers and works with employers to provide access to WeeCare centers and construct child care benefits programs.
Some of these startups strive to boost the number of daycare centers by helping operators with financial costs, licensing fees and scheduling. Wonderschool, a San Francisco-based child care startup, raised $25 million in January and assisted with hundreds of childcare facilities in L.A.-based Playground, which raised $3 million in seed funding last year per PitchBook. Playground acts as an in-house platform for childcare providers to communicate with staff and parents, track attendance, report student behavior and provide automatic invoicing services.
L.A.-based Brella, which launched in 2019, raised $5 million in seed funding in January to create a tech-enabled daycare scheduling platform that could meet the demand of flexible childcare as parents navigate a hybrid work environment, and recently opened a new location in Hollywood. The startup aims to address the labor shortage among childcare workers by paying its workers roughly $25 an hour and offering mental health benefits and career development opportunities for its educators.
“It's this huge disconnect in our society because these are really important people who are doing arguably one of the most important educational jobs,” said Melanie Wolff, co-founder of childcare startup Brella. “They often don't get benefits. They don't have a lot of job security.”
Venture capital funding has poured into the relatively new childcare sector. A slew of parent-tech companies aimed at finding flexible child care and monitoring children saw $1.4 billion worth of venture investments in 2021, according to PitchBook, largely to meet the demands of parents in a pandemic era who have more flexible work commutes and require more tech-enabled solutions.
“I think a lot of it has to do with what employers expect for workers,” said Darby Saxbe, an associate professor of psychology and family relationships expert at USC. “There's still a lot more stigma for men to build their work around caregiving responsibilities–there's a lot of evidence that men are often discouraged from taking paternity leave, even if it's available.”
Childcare benefits are also becoming a more attractive incentive as workers grapple with unorthodox work schedules in a hybrid setting.
“Employers, because of COVID, were having a hard time retaining and recruiting employees,” said Chang. “And they were actually incentivized to actually find a solution to help the employees.”
WeeCare primarily partners with employers of essential workers, like schools, hospitals and grocery stores, and the benefits programs account for the majority of WeeCare’s revenue.
Childcare works are part of a massive labor shortage in caretaker roles that also include nurses, and health aids for the eldery. These workers, which allow women to maintain careers in STEM and other high-paying industries, are vital, according to Saxbe.
“Women can advance in the workplace,” Saxbe said. “But if there's no support at home and there is no one who is helping take care of kids and elderly people, women can't just advance in a vacuum.”
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Keerthi Vedantam is a bioscience reporter at dot.LA. She cut her teeth covering everything from cloud computing to 5G in San Francisco and Seattle. Before she covered tech, Keerthi reported on tribal lands and congressional policy in Washington, D.C. Connect with her on Twitter, Clubhouse (@keerthivedantam) or Signal at 408-470-0776.
MaC Venture Capital Raises $203M for Its Second Fund
Decerry Donato is dot.LA's Editorial Fellow. Prior to that, she was an editorial intern at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.
While venture capital funding has taken a hit this year, that hasn’t stopped MaC Venture Capital from raising $203 million for its second fund.
The Los Angeles-based, Black-led VC firm said Monday that it had surpassed its initial $200 million goal for the fund, which dot.LA reported in January, over the span of seven months. MaC said it expects to invest the capital in up to 50 mostly seed-stage startups while remaining “sector-agnostic.”
“We love seed-stage companies because that’s where most of the value is created,” MaC managing general partner Marlon Nichols told dot.LA. While the firm has invested in local ventures like NFT gaming platform Artie, space startup Epsilon3 and autonomous sensor company Spartan Radar, Nichols said MaC—whose portfolio companies span from Seattle to Nairobi—would continue to eye ventures across the rest of the country and world.
“Talent is ubiquitous; access to capital is not,” Nichols noted. “What they’re building needs to matter; we’ve got to believe that this group of founders is the best team building in the space, period.”
Launched in 2019, MaC is led by four founding partners: VC veteran Nichols, former Washington, D.C. mayor Adrian Fenty, and former William Morris Endeavor talent agents Charles D. King and Michael Palank. Nichols described the team’s collective background in government, consulting, media, entertainment and talent management as its “superpower.”
In a venture capital industry where few people of color are decision-makers, MaC Venture Capital has looked to wield its influence to provide opportunities for founders of color. The firm says 69% of its portfolio companies were started by BIPOC founders and 36% are led by women, while MaC has also diversified its own ranks by adding female partners Zhenni Liu and Haley Farnsworth.
MaC’s second investment fund nearly doubled the size of the firm’s $110 million first fund, which it closed in March 2021. The new fund’s repeat institutional investors include Goldman Sachs, ICG Advisors, StepStone, the University of Michigan, the George Kaiser Family Foundation and the MacArthur Foundation, while the likes of Illumen Capital and the Teachers’ Retirement System of the State of Illinois also pitched in as new investors.
“It’s a great combination of having affirmation from people who have been with us from the beginning and new people coming in that want to be a part of it,” Fenty told dot.LA.
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Decerry Donato is dot.LA's Editorial Fellow. Prior to that, she was an editorial intern at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.