The Big Story

A free-to-play unicorn

Splitgate became the talk of the game industry this summer after the free-to-play shooter exploded in popularity in similar fashion to indie viral sensations like Among Us and Fall Guys. All the buzz led to 1047 Games' announcement last week that it had secured $100 million in funding at a $1.5 billion valuation.

Becoming a unicorn in a matter of months is just the latest unbelievable turn of events for CEO and co-founder Ian Proulx and his small development team, which first soft launched Splitgate two years ago and slowly refined it on PC before it arrived on console this summer. Proulx chatted with Protocol last week about the journey from early access and how his team intends to use the influx of capital to grow his startup into a major game development studio.

So what's Splitgate's secret? In an ironic twist, it was 1047's utter failure to keep up with player demand that ultimately piqued the interest of investors. Proulx told me the company's back end wasn't equipped for the influx of new players, and the game had to be pulled offline in late July just weeks after its official beta launch.

• In a matter of weeks, the game grew from less than 1,000 concurrent players to more than 200,000, faster than last year's breakout indie hit Among Us.
• "What we didn't take into account was the explosive organic growth," Proulx said. "We projected linear growth, and obviously that's not what happened."
• Investors came knocking. The following month, after bringing the game back online, Proulx had set up meetings for his third round of funding in just as many months. Last week, the team announced the $100 million round led by Lightspeed Venture Partners.

The Splitgate team isn't shy about copying. 1047 Games has never tried to hide its influences, even advertising the game as "Halo meets Portal." Some players may find it shameless or unoriginal, but the straightforward marketing has helped Splitgate cut through the noise.

• Splitgate does indeed fuse Halo with Portal, but in doing so the team created a unique shooter with a surprising level of depth. The game also borrows much of its monetization and growth strategies from many of the biggest free-to-play games.
• Copying popular mechanics is in the game industry's DNA. Many of gaming's most popular and enduring genres were created as PC game mods, like Counter-Strike and PlayerUnknown's Battlegrounds.
• Just look at Fortnite. Within months of the game's launch in 2017, Epic pivoted to include a battle royale mode cribbed almost entirely from PUBG. The latter may have suffered in the short term, but both games are now massive, genre-defining hits.

Why so much for yet another shooter? The game industry underwent extreme growth last year amid the COVID-19 pandemic, resulting in record levels of funding, mergers and acquisitions this year as money pours into new gaming ventures and industry consolidation has picked up. But investor fervor isn't the only reason. In Splitgate, investors see something unique.

• Instead of hopping on newer trends, the Splitgate team reinvented the classic arena shooter genre. The team's stated goal is now to "usher in an era of 'new' classic games," with "new takes in well-known, globally recognized gaming genres."
• Few games can outlast flash-in-the-pan success that's built around a hot new trend. Many of gaming's most popular genres — like the hero shooter, the MOBA and battle royale — have little room for more than two to three major products. Many games enjoy some early popularity only to be shut down months later.
• If 1047 can mine older, out-of-style genres to deliver new twists, it may be able to more easily re-create the success of Splitgate and, devoid of many competitors in those genres, preserve those products' popularity for longer.

Proulx said the immediate future for Splitgate involves building out the team and turning an engineering division of five people into one of 30. Characterizing the scope of the game going forward, Proulx said he thinks of it as 25% done, with a lot of room to keep growing. And 1047 will have to do just that if it's to avoid a post-viral slump that could doom Splitgate's chances at long-term viability.

"Technically, we're still in beta and there's a reason. Originally, it was because of servers. But the reason now is that my vision of the fully launched Splitgate is very different from what it looked like two months ago," he said. "Our attitude is: The sky's the limit."

A version of this story originally appeared on Protocol.com.

A MESSAGE FROM FOURSQUARE

As of February 2021, roughly one year into the pandemic, the urgency around obtaining location intelligence had skyrocketed, with one survey conducted by Boston Consulting Group finding that 95% of executives view geospatial data/mapping as important to getting business results.

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Overheard

• "Management could have responded with humility and a willingness to take necessary steps to address the horrid conditions some ABK workers have faced. Instead Activision Blizzard's response to righteous worker activity was surveillance, intimidation, and hiring notorious union busters." ―Tom Smith, the national organizing director for the Communications Workers of America, commented on the union's labor complaint filed last week against Activision Blizzard. The CWA filed the complaint with the National Labor Relations Board.
• "The additional friction inherent in forwarding a user to a web-based payment processor, especially if it requires the input of a credit card number, undercuts the opportunity presented by the prospect of web-based payments. This is true generally, but it's acutely true for mobile games, and Apple should recognize this." ―Game analyst Eric Seufert reflects on the lack of meaningful change likely to result from the Epic v. Apple verdict.

Lootbox

• Nintendo's Switch price drop isn't coming stateside. The rare reduction in the handheld console's MSRP in parts of the EU and U.K. is exclusive to those markets, Nintendo told Axios last week.
• Twisted Metal is getting revived as a TV show. Sony is making good on its pledge to expand its game series into new formats with a Twisted Metal series featuring actor Anthony Mackie of Marvel fame, Deadline reported.
• Ex-Ubisoft developers have harsh words for their former employer. A new studio of former Ubisoft employees, Nesting Games, is rejecting the publisher's "'massive open world' model" and will focus on games that "respect the player's time," Kotaku reported.
• Another gaming unicorn, this time in the esports space. The Indian mobile esports company Mobile Premier League has raised a $150 million round at a $2.3 billion valuation, VentureBeat reported last week. The platform launched in July, and it offers players prizes in exchange for competing in free-to-play mobile titles.
• Composer of iconic Bungie soundtracks found in contempt of court. Martin O'Donnell, known best for his work on the Halo and Destiny franchises for Bungie, was ordered to pay $100,000 in legal fees. O'Donnell has been engaged in a legal feud with his former employer since 2015 over his reuse of Bungie-owned music.
• Snapchat is getting its very own Among Us clone, courtesy of Zynga. Snap has partnered with the FarmVille developer to create ReVamp, a social intuition game very similar in design to Innersloth's Among Us, The Verge reported. Snap's push into games has so far been a success, with over 30 million monthly active players on the platform.
• On Protocol: Pokémon Go creator Niantic is closing down Catan: World Explorers, the augmented-reality app based on the popular board game, in November. The app never officially launched outside select markets, and Niantic says the app "got a little too complicated and a little too far from the original Catan game."
• Apple is done fretting about the Epic trial. In an all-hands meeting on Friday, the details of which were reported by The Verge, Apple CEO Tim Cook said, "I'm sort of looking forward to moving forward now" when reflecting on the trial verdict, which landed largely in Apple's favor.

Look out for

New World approaches the runway

Amazon Game Studios is preparing to release its new massively multiplayer online game, New World, on Sept. 28 — for real this time. The game has seen four delays since the start of 2020, but the team is now gearing up for the official launch, starting first with an open beta that's running through Sunday.

Knowing the state of the modern game industry — EA delayed Battlefield 2042 by one month last week — we can't rule out a last-minute change of plans. But all signs are looking good for New World's on-time arrival.