Samson Amore is a reporter for dot.LA. He previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Samson is also a proud member of the Transgender Journalists Association. Send tips or pitches to samsonamore@dot.la and find him on Twitter at @Samsonamore. Pronouns: he/him
When the pandemic forced entertainment to go virtual, it created a crush of rookie influencers on Twitch and YouTube looking to cash in on the creator industry.
StreamElements, an Israeli streaming services company with leadership based in Los Angeles, picked up steam by measuring that streaming content for free. The company's platform usage grew 233% over the last year, largely catalyzed by the pandemic.
On Wednesday it raised $100 million led by SoftBank's Vision Fund 2. The funds will help it to build out its platform, add to its troves of data on streaming and recruit more streamers to join its steadily growing count of users.
"Because of the quarantine mandates, entertainers flocked to live streaming platforms to connect with their fans," Hirsch said.
The pandemic spurred the growth of live streaming on platforms like Twitch, which surpassed 2 billion hours watched this year. Non-gaming content on Twitch also continues to attract more viewers, and since 2020 people have tuned into over 4 billion hours of non-gaming related content. YouTube Gaming reported it had over 40 million active gaming channels streaming regularly and surpassed 100 billion hours watched last year.
"One of the other big changes is that brands are now coming to us to coordinate sponsorship activations rather than us having to educate them about the market and our role in it," he said.
StreamElements reported that 1.1 million creators use its broadcasting and monetization services, up from "a couple hundred thousand users" a year ago. The company added that 60% of its top creators (people with over 20,000 views) use its broadcast tools but none of them pay to do so – the service is free. Instead, the company makes money by taking a cut once it connects brands to influencers for sponsorships.
But its fate is tied to the success and strategies of streaming platforms like Twitch and YouTube, where it measures content.
And it's not alone. Texas-based Restream operates a similar model for creators to get monetized, and so does San Francisco-based StreamLabs. Santa Monica-based Mobcrush is also a player in this space, but it focuses on gaming and live streaming exclusively on mobile devices, contrary to StreamElements' focus on all devices.
StreamElements offers its streamers the ability to earn donations through its platform while they're live, and it doesn't take a cut – though they do take a percentage of merchandise sales facilitated through the platform.
"As a creator-first company, our goal is to help them make money rather than making money off them," CEO Gil Hirsch said. "We never take a cut from their tips when they use our tipping service."
The round brings StreamElements' funding to roughly $111 million since its 2017 launch, according to PitchBook Data Inc. New investors MoreTech Ventures and PayPal Ventures also joined the round, along with existing investors State of Mind Ventures.
The raise also comes with a shake-up in the executive suite. Co-Founder Hirsch took over as CEO from co-founder Doron Nir, who will now serve as the company's president and focus on building out the U.S. business.
StreamElements also named Yuval Tal as chief operating officer, Jason Krebs as chief business officer, and Udi Hoffmann as CFO. The company has offices in Culver City, but is operating remotely for now.
Hirsch said the funding will mainly be used to expand StreamElements to other platforms and focus on analyzing the video-on-demand market, a newer area of focus for the company.
"This type of focus requires a larger workforce so extensive recruiting comes with the territory, including ensuring we have best-in-class executives to lead the charge," Hirsch told dot.LA.
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Game development can be a grueling task, with designers and engineers working inhumanly long hours to ship games on tight deadlines.
The process is known as crunch, and up until recently, it's been accepted as a necessary evil in the gaming industry -- with triple-A studios justifying the workload with high-selling titles, like Treyarch's "Call of Duty" series or Naughty Dog's "The Last of Us II," which saw employees working more than 12 hours per day.
After years of working at EA Games and its subsidiary DICE, the founders of FuzzyBot Games decided the industry needed to do away with crunch for good.
FuzzyBot Games raised a $3.5 million seed round largely from European investors, it said this week. The funds will be used to begin making its first game, this time with as little crunch as possible.
CEO Tatyana Dyshlova said in a statement that FuzzyBot is trying to do away with the "inflexible high-crunch culture" that most big-name game studios have.
Dyshlova's co-founder and creative director Max Spielberg, worked with her at DICE. FuzzyBot is a team of ten now, and Dyshlova said it'll use most of the funding to hire new developers and grow its team by at least five people.
Sensor Tower analyst Craig Chapple said the pandemic prompted many companies to re-evaluate work-life balance as people began working from home, and that included game developers.
"Development crunch has long been a topic of intense scrutiny in the games industry," Chapple said. "More developers have begun reflecting on best work practices as a result of an unforeseen shift to remote work, since the already complex process of creating games was suddenly upended and new wrinkles were introduced."
Chapple added that employees are more likely to stay in a job where their personal time is valued.
"The increased discourse this has created around crunch will hopefully be to the benefit of hardworking employees, but will also ultimately help companies retain talent," Chapple said.
FuzzyBot wouldn't disclose the title of its upcoming game or when it might release. The company did say it'll be a "long-lasting" title that will mix the combat and repetitive levels of a typical roguelike dungeon crawler game with the typical open-ended choices and progression of a life simulator game, like "Stardew Valley."
Berlin and San Francisco-based BITKRAFT Ventures led the seed round. Finnish investors Sisu Game Ventures and 1Up Ventures, based in Washington, also participated.
Sisu Ventures also backed Finnish company Small Giant Games, which was acquired by San Francisco-based mobile gaming firm Zynga in January 2019.
FuzzyBot is trying to blend two game genres to create a new one, which could either be a risky gamble or very rewarding bet. BITKRAFT Ventures partner Malte Barth told dot.LA he invested because he thinks the former EA team has the chops to shake up the industry.
"FuzzyBot's ambition is to synthesize a new games genre," Barth said. "When a games development company can succeed with such an attempt, it has the potential for significant revenue growth."
Isolation during the pandemic has caused gamers to look increasingly to multiplayer games that heavily feature a social component.
While there's no data for the new genre of games FuzzyBot is targeting, Chapple said subsets of it are gaining steam. Chapple said Sensor Tower measured a roughly 34% increase in players using simulation games on mobile devices during the first half of this year, making it the fifth fastest-growing genre by revenue.
During the first half of 2021, games like "Fortnite" "Roblox," where players can create collaborative worlds, drove spending. On iOS and Android users paid roughly $1.1 billion, driven by in-game purchases in the game.
BITKRAFT wants to go deeper into simulation. It's already backed other social-focused game startups including Manticore Games and Pocket Worlds. It also was an early funder of "Fortnite" developer Epic Games.
FuzzyBot chose European investors because the region values a healthy work-life balance, more than North America. EA is partly based in Sweden, and while working there Dyshlova realized that there could be a better way to make games than endless all-nighters, because the company focused on a no-crunch culture.
"There's a lot of game companies that came out of Sweden, it's a really creative country, but they have this really great balance between leaving work, and then being dedicated to their family, their friends and their hobbies," Dyshlova said. "We happened to connect really well to investors that are based out of Europe and share some of those values."
Disney CEO Bob Chapek acknowledged the ongoing tensions developing among high-profile talent and studios that have put their blockbusters on streaming channels instead of releasing them first in theaters.
"The talent deals going forward will have to reflect the fact that the world's changing," Chapek said, speaking virtually at the Goldman Sachs Communacopia Conference. "There's a bit of a reset going on right now."
"Black Widow" star Scarlett Johansson sued Disney in July for releasing the film directly to Disney Plus instead of theaters, and argued that was a breach of her contract. Chapek didn't reference the lawsuit or name Johannson directly, but he implied it could change how Disney does business.
Johannson was to be compensated based on box office performance and could have lost up to $50 million from the movie skipping theaters, according to the Wall Street Journal.
Chapek said that many of the deals brokered with stars were done so before the pandemic altered the theatrical window.
"So we're sort of putting a square peg in a round hole right now, where we've got a deal that's conceived under a certain set of conditions," he said.
"We'll think about that as we do our future talent deals and plan for that, and make sure that that's incorporated. But right now we've got sort of this middle position where we're trying to do right by talent," Chapek added.
The dispute is unfolding amid larger concerns for Disney. Chapek warned investors that Disney Plus subscriber growth is likely to slow in the fourth quarter adding users in the "low single-digit millions" as pandemic-fueled production delays limited their movie debuts.
Coronavirus pandemic lockdowns and regulations put a massive strain on Disney's ability to churn out content for its streamers at the rate it typically targets and it has also thrown a wrench in their theatrical release schedule.
"COVID-induced production delays is a kink in the supply chain for new content," Chapek said, adding that "this is short term."
He reported Disney has 61 movies and 17 shows in production right now. The Disney TV division has over 200 active productions globally.
Former NBC Studios president and UCLA School of Theater, Film and TV Lecturer Tom Nunan said production delays are standard for an industry reeling from the pandemic.
"The production footprint around the world has been forever changed by COVID," Nunan said. He added there's a sort of post-coronavirus "hangover from just the obscene kind of buying that consumers went on (subscribing to streaming services) during the height of the pandemic, here and abroad," as people begin to resume normal life.
Nunan said it was surprising Disney only had 200 global TV productions active given the number of properties they own across film and television.
Disney shares closed down 4.17% on Tuesday.
The company reports fourth quarter earnings Nov. 11.
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