The Future of Games With AI
Fenwick Corporate Partner and Games Industry Group Co-Lead Kat Duncan recently interviewed Moritz Baier-Lentz, partner at Lightspeed Venture Partners who guides the firm’s gaming investments.
The talk between these two avid, lifelong gamers spanned how Moritz sees AI changing the sector, why he thinks now is a great time to start a gaming company and Lightspeed’s gaming investment focus.
Below are brief excerpts from their talk or watch their full conversation.
KD: What are some of the AI trends impacting gaming companies?
MBL: In the last three and a half years, I’ve met with 300 to 400 companies at the intersection of gaming and AI seeking investment. Most are workflow improvements, which are less interesting. But it’s helping game developers build games better, faster, cheaper and helping with animation.
Others are novel or new experiences--not just improvements, offering something completely new. We see a lot of opportunity for more intelligent non-player characters (NPCs). Most interactions with agents are pretty shallow: guided by decision trees, text options, etcetera. Having more interesting agents, made possible by AI, is an exciting new avenue.
KD: How do you see AI applications having an impact on retention?
MBL: AI is going to make games stickier, including immediate A/B testing. Take Candy Crush for example. Gemstones or other elements of the puzzle are switched with cat or dog faces. Which is performing better–the cats or dogs? Immediate feedback will help create a stickier version of the game.
KD: Do you have advice for game developers who want to leverage AI for projects?
MBL: From where I’m sitting at least, gaming valuations haven’t cooled off in early stage. In Q1 this year I saw more quality gaming opportunities than any time in my career. There is no excuse not to build a gaming company right now.
KD: What indicators are you looking for when evaluating investment opportunities?
MBL: We are very selective in our gaming investments, only six to eight per year. Half are platforms and technology, and two to three game studios per year. The bar is high for studios. I love to see one of the studio cofounders having previously been lead designer of a product that grossed at least $250 million per year. For companies focused on platform technology, previous experience matters less in those cases, and we are primarily focused on the concept and the metrics. We like to go in as early as possible, preferably in the seed round.
KD: How do you look around the curve?
MBL: By partnering with universities, for talent and subject matter experts. We also host AI and machine learning founder events in San Francisco, New York and Los Angeles, to get in touch and network.
Watch the full interview here: