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Griffin Gaming Partners Co-Founder Peter Levin chats with Yahoo Finance Executive EditorBrian Sozzi about managing over $1.6 billion in gaming investments, the massive untapped potential of indie sports games, and his personal journey representing early MMA legends before investing in Scott Coker’s new combat sports venture.
All right. Welcome to a new episode of Power Players. Uh, really jacked up for my next guest here, uh, Griffin Gaming Partners co-founder and managing director Peter Levin. Good to see youhere.
Thanks for having me. Uh, it’s a pleasure.
I cannot hold a candle to your knowledge on gaming. Like we were just talking about board games before we even came on here. Like, is that where your love of this industry began? Just a, just a good old classic.a tabletop boardgame.
Uh, I mean, yes, uh, and I am gonna update some of your, uh, your catalog back here. Thank you. I gonna hook you up a little Settlers of Catan, a little ticket to ride, um, but I’ve been a gamer my whole life, so, you know, I’m, I’m one of those very lucky folks who was kind of able, was able to thread the needle of pursuing, you know, a career that, that speaks to, uh, my passion. So yeah, tabletop gaming, board gaming.But video games, you know, video games has always been my jam. First check I ever wrote into a company, uh, back in 1998 was a company called GameSpy Industries, uh, down in Orange County. And, um, you know, back in the day, no one was writing checks into video game businesses, and this was more of a software infrastructure platform play.Uh, but if you were a gamer at the time, if you were playing games like a Duke Nukecomb or a Half-Life or a Quake or a Duke
Nukecomb Quake, wow, you’re taking me back to high school.
that was, those were big games.
Well, you couldn’t play those games with other people without GameSpot, so it became this kind of prior to, you know, the proliferation of, of the internet, um, and the only other way you could play with others was through LAN parties, was through GameSpot. It was kind of an, an internet crawler.Um, and so that company almost went out of business 4 times in 4 years and then just went on a parabolic curve, and we were able to scale it, um, sell it to IGN and the News Corp.
Talk to me a little bit about, uh, Griffin Gaming. What do you, what do you do there?
Um, so we’re the, you know, one of, not the world’s leading investment vehicles that singularly focuses on the gaming sector and its adjacencies, which very much includes sport, um, but everything from, when you think about, you know, trading card games and, and even board games and tabletop, um,You know, I’d say the adjacencies are broadening if, if you look at, uh, what’s happening in the global media landscape. So we managed just about 1 billion across our multiple vehicles. We have, uh, strategic partners from all over the globe. We are stage agnostic, uh, we are geography agnostic, um, and we invest in platform infrastructure, developers, publishers, etc. How
isit different today, uh, writing a check to invest in a, in a gaming company compared to what you did in 1998?
Oh boy. Well, I mean, the market has gotten so big. You mentioned earlier you spoke to, to Mark Pincus, you know, recently. Yeah, he, he’s about his, uh,
Zynga founder, of course.
Yes, uh, and someone we’ve partnered with, just a, a, a, a legend in the industry. Um, the, the industry has grown significantly in a, in a variety of different indexes. I mean, today you’ve got 3.6 billion gamers, one third of the world’s population plays games for an hour a day, um.It’s larger than music, movies, and publishing combined as an industry. Um, last year in the US you had 2 times the amount of hours spent by people watching other people play games than Netflix. Um, so I think it’s the size of the market. And the other thing that happens psychologically, COVID.It was a huge, um, I think, moment in time for the industry where the numbers were gobsmacking, but they were still very antiseptic, in particular here in New York with analysts. I was, I was reading the quarterly reports, you know, from, uh, from the banks, and, um, they were always arm’s length. And then during COVID, when folks weren’t taking the subway into the city and they were home with, you know, Sally and Johnny and had a game.
I dusted off my Xbox 360 during the pandemic. You haven’t used it
sinceyou and hundreds of millions of other people did, but it was also parents were watching their kids. Hey, they’re not watching TV. They’re not watching movies. They’re either gaming or they’re watching other people play games. And I think that psychological hurdle, um, was a big moment for the industry.
If you don’t mind, I’m gonna jump around alittle bit because I, I really love the gaming industry. I had this interview had me thinking back to my first.Two experiences with gaming. One was Oregon Trail, I think it was Commodore 64 in school, but then the Power pad for Nintendo and, and what the little gun for duck hunt. So, those were my first like interactions with gaming. It was, it feels like yesterday, but like you mentioned Netflix. Now they have tried to get into gaming, um.Do they have a place in gaming, and I can’t even find their games on the platform.
Um, well, certainly on, on the, you know, the mobile, um, interface, it’s, it’s, it’s somewhat front and center. They absolutely have a place. I mean, if you look at Netflix, if you look atAmazon, if you look at Google, um, they’ve all taken shots on goal. Uh, they will continue to take shots on goal. They have to take shots on goal, and I mean, one of the primary reasons, if I’m Netflix, do I want to drive people off platform to go consume interactive storytelling experiences on someone else’s platform, right? It’s, it’s hard enough to bring customers on platform. It’s expensive enough, it’s cost prohibitive to reacquire them.So, they’re all trying to figure it out. Um, have all their shots on goal, um, you know, been runs on the board? No, they haven’t, but that’s OK. These are, you know, these are businesses with tens of billions of dollars of R&D, um, and firepower, and they, they have the ability, um, to be ambulatory, to, to react to what’s happening, um, in the market. But I think at the end of the day, you’re gonna see.Each and every one of these streaming platforms is gonna be a player in gaming one way or another.
I think you’re the right guy to ask this one. on Netflix, does it make more sense for them to build games or go out and inquire, you know, I acquire. I look at a company, Electronic Arts, huge Madden franchise. I see what Netflix is trying to do in live sports and various live events. Does it make more sense to make a bid for that company or a company like it?
Yeah, I mean, I, I, I don’t think it’s mutually exclusive. I think, I think they should explore both. First of all, it’d be great for me.
Why is that?
Well, because we have, you know, a portfolio of games businesses, you know, north of 100, so we’d love for these folks to become more acquisitive. But I think you’re gonna see them, all of them, um, explore both. I think organic growth is challenging at scale. Uh, you really have to have, you know, the right athletes in place to manage those businesses, um, but I think you’re going to see.Absolutely, you’re going to see, you know, more M&A, um, you know, there’s, there’s very few opportunities, you know, at scale these days, uh, for these folks to acquire, you know, tens if not hundreds of millions of, of customers, and these guys, again, they have the resources to do it. Um, I think, you know, I, I’m one of those who looks at some of the moves that have been made, and unfortunately, there have been layoffs within the industry, but at the same time, there’s been a lot of hiring.Um, you know, within other sectors and subsectors of the industry, but the gaming.Industry, you know, for decades has much more reflected that of enterprise software, meaning that it’s a bit more mercenary, you know, they’re able to cut the fat when they see it versus legacy media, right? And if you look at legacy media, film and television, the music industry, I mean, the film and television industry got lapped by Netflix, like overnight, you know, but not for Spotify and Pandora and Apple Music and touring. The music industry was kind of on its last breath for a minute there.Um, but technology, right, and kind of enterprise software kind of breathe life back in, you know, due to new distribution paradigms. Um, so, you know, I think change is good, and I think you’re going to see folks like Netflix, um, you know, both acquire and try to build organically.
When I saw the,that huge Xbox layoff news, my first thought was they’re preparing to spin off that company or divest that business to improve the economics of it and prepare for a sale. Did you read it that way?
You know, I think it’s been read that way. It’s astute observation. I think it’s been read that way for a while. Right at the end of the day, if you look at the macro business of Microsoft,You know, Xbox and gaming kind of barely moves the needle, right? And so, if that doesn’t change dramatically, you know, in a very truncated window, uh, I could absolutely see that that being the case, and they’ve got some incredible IP.
Well, how, how attractive is that asset? Just push aside the fact that, you know, the expense structure might be better. I mean, I think about the Xbox Live, the, the entertainment, the, you know, you’re talking to different gaming players, you got the franchises. I mean, it’s huge.
It is, umIt, it is. And I think at the end of the day, when you look at the acquisition of an asset like, um, Bethesda Xanamax, you know, fallout and the portfolio of IP, you know, just, you know, within, within that little basket of, of, of brand equities, um, you know, that alone, you know, it’s a multi-billion dollar asset at this point. So, there’s a lot in there. Um, there’s some smart folks there, you know, folks smarter than I with respect to how they’re going to manage their business. So, I wouldn’t be surprised.You know, if we saw them, them spin it out.
Are you surprised that really the last big deal going back to Mark Pincus, I mean, was Zya sale to take two. Was that one of the, that was one of the last kind of big deals in the space?
Well, you had Savvy by Scopey, you know, you had EA, you know, uh, EA was recently purchased. You’ve had a lot of, I
it’s a big one, but again, that had been rumored for a really long time, and I mean, I remember.20 plus years ago where, you know, the rumors were Disney was gonna buy EA and then prior to that, the rumor was that EA was gonna buy Disney, right? Kind of prior to, you know, um, Hager taking the helm. Um, so, I think there’s gonna be more M&A probably, um, in that kind of medium-sized, um, acquisition space. I think a lot of these players in legacy media.are trying to figure out, you know, how, again, this is the most attractive and the most elusive demographic within the global media.
I mean, the last public, thelast public video game company from right, it’s Take-Two, right? And they’re out there with Grand Theft Auto in that community.
Yeah, and then you’ve got, well, you know, you’ve got Discord, right? Folks are, there’s a lot of chatter about what’s gonna happen with Discord, you know, whether or not they’ll be exploring the markets and, you know, the next few quarters or so. So, while not a publisher or developer, you know, they certainly are the most meaningful communication platform to, to the gaming demographic.
As someone in the trenches with gaming, what takes so long to get a Grand Theft Auto out? Like why all these years before this company could get this game out?
Yeah, I mean, I, AAA gaming is in particular at that. I mean, that’s rarefied error. There’s nothing like GTA, um, certainly not venture-friendly, right? You, you, you’re talking 10-year cycles plus, but it doesn’t really matter if you, the, the most successful individual piece of intellectual property in the history of intellectual property was GTA 5.Right, so if you just think about that, what, what GTA 6 is going to mean to the market, just their pre-sales, those numbers are, you know, incredible. Uh, but it’s not, you know, it’s not for the faint of heart, and Strauss Zelnick, you know, at the helm of Take Two is, he’s an apex predator. That guy’s, uh, as alpha as it gets.
So yeah, he’svery alpha. I know he loves working out. He’s a, he’s an interesting cat. Like, what, why, why, how do you explain the staying power of a game like GTA after all these years?
Community.Um, they’ve done such a great job of providing experiences and offerings and wink nods, um, Easter eggs, you know, to that, that audience, um, over the years and over the decades. And it’s also, you know, it’s, it’s a, they provide for you.Um, kind of an architecture within which you can operate, but you can create your own experiences, you know, you get to play and engage with your cohort, um, so it’s a very social experience, um.And it’s one of those things where, you know, I played GTA back when, right? So it’s a lot of folks who discovered it, you know, early on within their, you know, their gaming career, if you will, um, and they, they look forward with much delight to the next installment.
What is the future for a company like a Roblox look like? I’ve, you know, I’ve had the opportunity to talk to Dave Bazuki, um, founder, a good number of times, and their growth every single quarter has been very, very strong. Um, how do you explain that and what does the next 5 to 10 years look like for them?
First of all, you know, one of the smartest guys within our industry. I mean, Dave would be successful, you know, selling coffee, uh, at scale globally, um.I, they’re a company I would never count out, you know, there’s a lot of folks that say, oh, are they plateauing, you know, what is next? Um, there are so many millions of creators that create on platform, and as they continue to figure out, you know, how best to both monetize that, but also incentivize that creation, I think they’re gonna be coming up with, you know, new models, uh, with which to both incentivize and monetize.But they also have to, to focus, you know, um, not, not throwing the baby out of the bathwater on, you know, making sure it’s a secure and safe environment, um, for that demographic, in particular, the younger part of their demographic. Now, you’re reading a lot about them targeting, you know,Somewhat of an older demographic, which again, that’s not a guy I’m ever gonna bet against.
Yeah, no,Dave is, uh, Dave has done some very good work. You mentioned about 100 companies that you’re invested in. 100+, yeah, 100+. How big of, where are you taking your bigger bet, biggest bets, and within that portfolio, how focused are you on sports? Everyone I talked to right now is just betting big on sports in different areas of their operation.
Yeah, and I, I think we’re, you know, we’ll touch on, you know, Scott Coker’s MMA platform that, that, that we invested, you know, within as someone who’s invested in sports, as long as I’ve been investing in gaming, um, you know, if it’s immature, I’m your guy, right? If it’s comic books, if it’s trading cards, if it’s video games, if it’s sports, if it’s Arrested Development, um, uh, I’m, uh, sign me up. Um, but I thinkWhen you look at what’s happening in the world of sport, I mean, we’re, you know,Thankfully, I’m gonna be attending the final on Sunday here, you know, in New York, the World Cup Final. Uh, yeah, it was a last-minute invite. I was very pleased to be included, uh, you know, I happen to be here on business. But if you look at what the World Cup has done,You know, just the, the numbers, um, of eyeballs that are tuning in through legacy media, through streaming platforms, um, but the micro clipping, right? You know, um, the amount of social media generated by the Europeans coming over here, you know, the, the Asian fans that have come over here to, uh, delight in the World Cup experience. Um, it’s been an incredible, you know, advertisement for the United States. I think we’ve done a great job, Mexico as well. Um.TheThe fear though that brands and marketers have when they look at legacy media, in particular, you know, broadcast television, um, you know, those eyeballs are gone.And the eyeballs that remain are not all that attractive to those brands and marketers. If you talk to the WPPs and the IPGs and the Unilevers and the Procter and Gambles, etc. Um, and so, sport, you can build a moat around. Sport is tribal, sport, much like gaming, sport is communal. Um, you know, these people want to don a jersey and they want to cheer for their team. Um, it’s something, it immediately gives context.And so, it is not surprising, you know, that we’ve seen the amount of capital being deployed, um, into, you know, the world of sport. Um, it, in particular for folks who invested in legacy media where there’s a tremendous amount of disintermediation. Uh, we talked about some of the streaming platforms, you know, you look at someone like David Ellison, you know, he’sYou know, native digital, you know, comes from an extremely forward-thinking, you know, digital environment. You’re gonna see more and more of that DNA, I think, taking over of legacy media, which is great. Um, but I think you’re going to start to see more of the legacy media businesses continue to invest significantly, um, in sport.
How doessport translate into the gaming industry right now? When I think gaming, I still think Madden.I still think what EIA has done with FIFA, like what’s next in the space?
Yeah, I mean, EAFC or, you know, FIFA back, you know, prior to it, um, nothing’s bigger, you know, globally, um, you know, Madden, you know, NBA 2K, um, you know, PGA 2K, um, prior to that, Tiger Woods golf, um, I will
Woods golf. Yeah, I’m kind of with you on, on, on that. Um, you’re gonna continue to see, you know, football manager, um, you know, there, there are so many sports that are under levered in gaming.Um, MMA being one of them, um, you know, these are sports where the fan bases are extremely invested in athletes or teams, um, you know, the ability to build your own stable of fighters, for example, you know, build your own dojo, if you will. Um, again, in a simple, it is, I think so, right? And I, I, when I, when we look at the landscape of sports gaming, um, there’s a lot of the very obvious stuff, um.You know, again, the titles that that we’ve already referenced, but it’s the, I think the, the simm-like titles, the indie titles in sport, uh, have yet to be, you know, tapped into. And if you look at, you know, indie gaming is probably one of, if not the most exciting, um, verticals within the gaming industry right now. The numbers on Steam, which is the primary distribution and acquisition platform for indie gaming.You know, those numbers are, um, incredible, you know, on this month there’ll be 10 billion hours of content consumed on Steam. There’ll be 9 billion of Netflix, right? So, um, there are, you know, 20,000 titles will be published on Steam this year. 15 years ago when it launched, there were 275 titles. Um, and one of the areas that is, you know, underexplored is sport.And I think you’re gonna start to see a lot more um indie titles uh in the world of sport, which will be great, you know, for the greater gaming community. Can
you tell me alittle more about the MMA MMA investment you made, like what, what boxes were you looking to check when you put that money to work?
Yeah, well, I mean, I’ve, it’s the, it’s the one deal I I told my, uh, my partner Nick Tosto when, you know, we uh a co-founder and umUm, partner in crime. He doesn’t like when I say that because, but, uh, uh, was, look, there’s this, you know, there’s one area, uh, MMA that, uh, you know, I’ve been involved with for a very long time. Um, I go back to the early 2000s. For a minute, I, I represented about 20 to 25 of the world’s top MMA fighters. Um, so,Mark Coleman, you know, Randy Couture, Quentin Jackson, how did you get into that?That’s all, we’re not, we’re not, we’ll have to have you back because that’s pretty wild. OK, so at the time, I’ll, I’ll make it quick. My, I worked for a guy in LA who we very unsuccessfully, unfortunately, um, he was trying to bring the NFL to LA, um, and so, and I was his, you know, uh, lieutenant. Um, and so I got to, to be the tip of the spear on a lot of those conversations and, and at the time, we had access to a lot of the, uh, the information with regard to the global sports.Landscape and the ecosystem and um what was um the heat map and what was popping where.And whenever you looked at at Asia, in particularly Japan, um, and then in Eastern Europe at the time, there was this MMA thing.And it, you know, the numbers, um, again, were, were just absolutely gobsmacking, and, um, so I bopped over to Japan to investigate, and at the time, it was dominated by pride. Uh, if you’re familiar with, you know, the org, which the UFC eventually purchased in K1. Um, this is, you know, at the time, the UFC was only legal, I think, in two states, Nevada and New Jersey.This was prior to New Jersey, yeah. Prior to Zufa buying it, prior to Dana and the Fertitta brothers, uh, buying it, um, and, um, I wanted to get in. So I tried to figure out a way to get into the cap tables, in particular, uh, Pride and, and, and K1, and they wanted nothing to do with me in Japan, and they sent me packing. So, my thesis was, OK, let’s, let’s go out, and I had a partner at the time, a guy named, uh, Jeremy Lappin, uh, we formed Battle Management andLet’s go out and sign as many of the world’s top MMA fighters as we can and kind of reverse engineer the economics because we knew they’d have to deal with us then. And so that’s what we did. Dan Henderson, again, Randy Couture, Quentin Jackson, Boss Rutten, Matt Lindland, Mark Coleman, um, Marco Huas, just a ton of these guys. And so then they all had to deal with us. Uh, and I, you know, tons of negotiating with, um, uh, the pride folks at Kakibara back in the day and Kancho Kwan andEventually, Dana White, uh, when, you know, the Fertittas bought the, the UFC and what I learned in those 1st 3 years of being in the trenches, kind of the bottom up, there’s only 2 guys on earth that know how to run a global global MMA platform at scale profitably. And one is Dana White and has a really big job, and the other is this guy, Scott Coker, um, whoUm, has become, you know, one of my, my best friends, you know, brother from another mother, um, just an incredible operator, a generational operator. And so I went to Scott and said, look, I, you know, this whole fight of representation thing was kind of a means to an end. I would love to aid and abet your, your efforts, um.And so he allowed me into the cap table as an advisor and an investor, and, um, from there, I, I had a front row seat, watched him scale that business, you know, helped advise a little bit on, on his EAMMA deal, which was a lot of fun, and, um, you know, was a sounding board on his ESPN, um, and other distribution, you know, relationships. Um, and then, you know, eventually he sold that business to the UFC. But I, from, from the day he sold it.Uh, to the day his non-compete was up, I was begging him, I’m like, Scott, you’re, you’re the only guy that could throw your hat back in the ring and, and, um, you know, and plant a flag in this sport. Uh, you’ve done it, and then he did it twice. He turned around Bellator for Viacom.He took it global for them, um, he got it profitable for them. And then, like most legacy media, they kind of drove it right into the ground. You know, they really didn’t understand what they had. In particular, they didn’t understand what they had in Scott. Um, and so, for 10 years, I was, you know, chirping in his ear, like, please, you know, get back at it. And so finally, he, he came to me last year and he said, you know, I, I think I’m ready to do this, andI’m gonna test this format, um, up in San Jose, where, you know, he’d been promoting for 40 years, and he was off to the races, he put on 5 local events. I think by the second event, he was profitable, you know, sellouts, close to sellouts, each of these small events, and he’s just got what it takes. And I think when you look back at theAt the history of, of MMA and when it became mainstream, you, you know, you gotta, you gotta thank people like Dana White and the Fertittas and Scott Coker. The guy who gets overlooked is Craig Peligian though. He’s the guy who put the Ultimate Fighter. He was the showrunner, you know, for the Ultimate Fighter, and Kevin Kay, um, who put that show on TV because that was the moment that that sport went mainstream. That’s when it went from, you know, John McCain calling it cockfighting, etc. etc. to,You know, tens of millions of households knowing these athletes by their first name and getting invested in them, and that was the, the moment, you know, the paradigm flipped. Um, but for us as a, you know, as an investment vehicle, um, it was a no-brainer to have some skin in this game. It’s an underlevered sport in the world of gaming.It’s an underleveraged sport, you know, in all of the ancillaries, you know, we’re, we’re joking about trading cards before we kick. I’m a guy who owns a 500,000 trading cards, so
50,000 trading cards. Oh yeah. Oh, we gotta have you back on that one. I like, I, I, I’m out of time, but I really wanna have you back because I.You’re one of the most purest experts we’ve ever had on this show. Like, you are a true domain expert. Like I could say nerd, but no, no, this is, I wanna talk about the trading cards. Oh, I wanna talk about. All right, well, we will, I will, I promise we’ll have you back. Um, thanks for doing this. I appreciate it. It’s great, Peter, good to see you. All right, that’s it for the latest episode of Power Players.
