Gaming Industry Report Q1 2023

Apr, 2023 Gaming Industry ReportQ1 20231

Gaming: at a glance•2023 market size: $201b (+9% YoY)•Public markets: up 10-20% YTD•Venture funding in Q1 ‘23: $761m across 109 rounds (funding is +29% QoQ)Total gamers in 2022 by region:1,746(55%)Asia-Pacific488(15%)Middle East & Africa430(13%)Europe315(10%)Latin America219(7%)North America3,198mSource: CB Insights, Newzoo, Sony, Microsoft, Nintendo, public reporting, Drake StarKey Trends•Artificial Intelligence in Gaming•Regulation update: M&A finalization, TikTok ban•Epic opens up EGS publishing: Going head-to-head with Steam•Epic brings UGC to its 70m Fortnite MAUs•Google’s shift to cloud services•Roblox successfully ages up2

Gaming was a $184b global market in 2022 and estimated to reach $201b in 2023$20$22$23$26$28$32$42$55$60$64$68$71$77$85$93$107$122$138$152$166$180$184$201$219$238$260$28320032001200520092007201120132015201720192021202320252027+8.94%ProjectedActual$ in billionsSource: IFPI, Newzoo, Arstechnica, MPAA, Mordor Intelligence3

Gaming funding: private markets overview41: Includes transactions such as Private Equity, Growth Equity, Corporate Minorities, PIPEs, and others. This excludes M&A; 2: 2022 data includes ~$4.4b in PIPE activity, primarily from large investments into Playtika, Embracer, Nexon, and NCSoft; Note 1: VC includes Pre-Seed through Series I VC; Note 2: Historical data across reports is subject to change, as source adds new deals as they become public; Source: CB Insights$ in millions$529$305$934$729$541$411$738$591$761$626$287$55$276$658$511$594$810$586$137Q4-19Q3-19Q1-20Q2-20$1,950Q3-20$1,041Q4-20$1,919Q1-21$1,777$1,470Q2-21$1,469$2,247Q3-21$1,709$3,196Q4-21$1,812$2,308Q1-19$5,438$1,402Q2-22$1,023Q3-22Q4-22$101Q1-23$1,156$593$1,035$784$817$1,069$2,687$1,552$2,513$3,246$3,716$4,905$4,119$6,841$1,833$1,177$898Q2-19Q1-22Other Transactions1VC2019: $3,5682020: $6,1252021: $14,38020222: $13,9702023: $898

Gaming VC funding: Returning to pre-2021 levels2019: $2,4982020: $2,7302021: $8,8322022: $5,324 $228$108$229$358$164$225$305$237$862$771$571$472$432$301$197$180$227$86$433$363$438$879$631$452$329$525$11$150$100$825$145Q2-20$0Q3-20$440Q4-20$664$430Q1-21$0$1,032Q2-21$900$468Q3-21Q1-20$2,189Q4-21$0$1,278$1,030Q1-22$0Q2-22$0Q3-22$0Q4-19$119Q4-22$0$360Q1-23$529$305$934$729$541$411$738$1,041$1,919$1,470$2,247$3,196$2,308$1,402$1,023$591$761Q3-19Q2-19$0Q1-19$0LateGrowthEarly$ in millions52023: $761Note 1: Early = Pre-Seed through Series A, Growth = Series B through D, Late = Series E+ VC; Note 2: Historical data across reports is subject to change, as source adds new deals as they become public; Note 3: CCP in Q1-23 ($40m) is classified as a Series B (unattributed publicly), Believer is classified as two Series A rounds (not tagged as gaming in source); Source: CB Insights

Gaming VC deals: early-stage is vibrant, late stage is quiet2019: 3122020: 3622021: 5832022: 599765176707168888710410610717520113710899103162116212722161109Q2-1929Q3-19Q1-1910Q4-19810Q1-2017Q2-20011Q3-202Q4-202Q1-210Q2-213Q3-211Q4-210Q1-220Q2-22011Q3-2205Q4-2206Q1-23846087818276991051271221312032231531191041090LateGrowthEarly62023: 109Note 1: Early = Pre-Seed through Series A, Growth = Series B through D, Late = Series E+ VC; Note 2: Historical data across reports is subject to change, as source adds new deals as they become public; Note 3: CCP in Q1-23 ($40m) is classified as a Series B (unattributed publicly), Believer is classified as two Series A rounds (not tagged as gaming in source); Source: CB Insights# of deals

Gaming in the public markets: up 10-23% YTDStock performance of Gaming ETFs: ESPO & GAMR, % change from January 2019-2 0%0%20%40%60%80%100%12 0%140%160%20202021201920222023ESPOGAMRYTD change:•ESPO: 23.4%•GAMR: 10.4%Source: Public reporting as of April 11, 2023; Note: ESPO seeks to track the MVIS Global Video Gaming and eSports Index (MVESPOTR), GAMR seeks to track EEFundVideo Game Tech Index7

Public gaming companies hold $48b in cash and equivalents; a healthy M&A environmentGaming companiesTech companies with Gaming divisionsCompanyCash & equivalents2(USD)$9.7b$7.1b$6.0b$3.6b$3.1b$3.0b$2.2bOthers1$13.0bTotal$47.7bCompanyCash & equivalents2(USD)$53.9b$22.8b$21.9b$20.5b$15.6b$14.7b$9.7b$5.1bTotal$164.3b1: Bandai Namco, Ubisoft, Konami, Unity, Square Enix, Sega, Applovin, Take Two, Playtika, Embracer, Krafton, NCSoft; 2: Does not include short-term investments; Source: Latest public reporting (as of April 11, 2023)8

Q1 2023: Largest game content VC dealsGame content investments –Q1 20231: Source classifies Believer funding as two Series A rounds, one in Q4 ‘22 ($25m) and one in Q1 ‘23 ($30m) –deal is reflected as such in all other sides. In this slide, both are aggregated here to be shown as one Series A round in Q1 2023; * denotes Konvoy portfolio companies; Source: CB InsightsCompanyStageRaise, $mRegionSeries B$40.0EuropeSeed$21.0North AmericaSeed$20.0AsiaSeed$20.0North AmericaSeries B$15.0 North AmericaSeed$14.4AsiaSeed$13.0North AmericaSeed$10.1 EuropeSeed$10.0North America9KratosStudiosKratosStudiosCCP GamesMiAOSeries A$55.01North America*

Q1 2023: Largest gaming tech & platform VC dealsGaming Tech & Platform investments –Q1 2023* denotes Konvoy portfolio companies; Source: CB InsightsCompanyStageRaise, $mRegionSeries C$265.0AsiaSeed$32.0North AmericaSeries A$27.0AfricaSeries A$18.0 North AmericaSeed$10.0 North AmericaSeries A$10.0 AsiaSeries A$9.6EuropeSeries A$7.0North AmericaSeries A$7.5 AsiaSeed$6.5North America10*

Regional Breakdown11

Gaming deals globally: at a glanceNote: Early = Pre-Seed through Series A, Growth = Series B through D, Late = Series E+ VC; Source: CB InsightsGaming venture funding in Q1 2023, $m$97$234$61$27$265$21$43$0Europe$0North America(NA)$0Africa$0$0$0$0South America$0Asia$0$6Australia$362$255$104$27$6$6$6Number of gaming venture deals in Q1 202340411822220Europe0North America(NA)01Africa000South America0Asia01Australia424320121012LateEarlyGrowth

Asia: received most venture funding globally in Q1CompanyDateDeal size$265.0m$20.0m$14.4m$10.0m$7.5mFeb-23Feb-23Mar-23Jan-23Jan-23Note: Early = Pre-Seed through Series A, Growth = Series B through D, Late = Series E+ VC; Source: CB InsightsLargest gaming venture deals in Q1 2023Gaming venture funding from Q1 2019 through Q1 2023, $mNumber of gaming venture deals from Q1 2019 through Q1 2023Q1Q3Q3Q4$62Q1Q4Q2Q1Q2Q3Q4Q1Q1$774Q2Q2Q3Q4$29$83$892$71$45$73$241$219$531$375$276$440$528$362$14450Q428Q1Q3Q2Q1Q2Q23218Q3Q4Q1Q2Q174Q4Q139Q3Q429232437345950100664742Q32019: $228 2020: $5952021: $2,1202022: $1,8402019: 1072020: 1182021: 2332022: 2521320232023KratosStudiosMiAOLateEarlyGrowth

NA: similar quantity (but smaller) deals vs AsiaLargest gaming venture deals in Q1 2023CompanyDateDeal sizeJan-23$32.0mMar-23$21.0mFeb-23$20.0mMar-23$18.0mNote: Early = Pre-Seed through Series A, Growth = Series B through D, Late = Series E+ VC; Source: CB Insights; * denotes Konvoyportfolio companies14Gaming venture funding from Q1 2019 through Q1 2023, $mNumber of gaming venture deals from Q1 2019 through Q1 2023Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1$422$168$787$557$444$288$232$688$1,237$722$1,535$1,906$657$558$513$236$255Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q126363236302841334152736345374043262019: $1,9342020: $1,6522021: $5,4002022: $1,9632019: 1202020: 1352021: 1992022: 18520232023LateEarlyGrowthMar-23$30.0m

Europe: investment activity has slowedCompanyDateDeal sizeMar-23$40.0mJan-23$10.1mFeb-23$10.0mFeb-23$9.6mFeb-23$5.2mNote: Early = Pre-Seed through Series A, Growth = Series B through D, Late = Series E+ VC; Source: CB InsightsLargest gaming venture deals in Q1 202315Gaming venture funding from Q1 2019 through Q1 2023, $mNumber of gaming venture deals from Q1 2019 through Q1 2023Q3Q1Q3Q2Q4Q2Q4Q1Q2Q3$217Q4$145Q1Q2Q3Q1Q1$79$55$62$144$67$34$47$127$356$204$473$489$285$210$104Q4Q3Q4Q1Q235Q1Q431Q2Q3Q1Q1Q2Q3Q4Q21722Q3Q4Q1291619302127292551292420472019: $2622020: $3532021: $1,1772022: $1,2022019: 812020: 1012021: 1312022: 13920232023CCP GamesWorldwide WebbLateEarlyGrowth

Africa: early yet has almost 200m gamersNote: Early = Pre-Seed through Series A, Growth = Series B through D, Late = Series E+ VC; Source: CB Insights, Disrupt Africa; * denotes Konvoy portfolio companiesLargest gaming venture deals in Q1 2023CompanyDateDeal size$27.0mJan-2316Gaming venture funding from Q1 2019 through Q1 2023, $mNumber of gaming venture deals from Q1 2019 through Q1 2023$0$0Q4Q4Q1Q3Q2Q3Q1Q2Q1Q1Q2Q3Q4Q1$0Q2Q3$0$0Q4$0$0$3$0$0$0$6$2$22$1$1$27Q4Q30Q2Q4Q31Q1Q1Q2Q4Q41Q110Q22Q1Q3Q1Q2Q3000201233012019: $02020: $32021: $82022: $242019: 02020: 32021: 52022: 820232023*LateEarlyGrowth

South America: first deals done since Q2-2022CompanyDateDeal sizeLateEarlyGrowthNote: Early = Pre-Seed through Series A, Growth = Series B through D, Late = Series E+ VC; Source: CB InsightsLargest gaming venture deals in Q1 202317Gaming venture funding from Q1 2019 through Q1 2023, $mNumber of gaming venture deals from Q1 2019 through Q1 2023Q4$0Q1Q2Q4Q2Q4Q3Q1Q1Q3Q1Q2Q3Q4Q2$0$10Q1$0$0$0$60$0$120$2$0$4$34$3$0$0$6Q3Q4Q1Q2Q31Q3Q4Q3Q1Q1Q2Q1Q230Q3Q4Q1Q2Q4000001111010022019: $602020: $1202021: $162022: $372019: 12020: 12021: 32022: 420232023Mar-23$6.0mJan-23$0.1m

Australia: nascent and sporadic deal activityCompanyDateDeal sizeLargest gaming venture deals in Q1 202318Gaming venture funding from Q1 2019 through Q1 2023, $mNumber of gaming venture deals from Q1 2019 through Q1 2023Q3Q2$7Q4$38Q1Q4$0Q3Q2$214Q1$0Q2$0Q3Q1Q1Q2Q3Q4Q1$0$13$0$5$1$0$17$0$68$27$6Q4Q4130Q1Q16Q2Q2Q4Q3Q3Q2Q1Q3Q4Q1Q2Q30Q4Q11012103304332019: $142020: $82021: $1112022: $2582019: 32020: 42021: 122022: 11Jan-23$6.0mNote: Early = Pre-Seed through Series A, Growth = Series B through D, Late = Series E+ VC; Source: CB InsightsLateEarlyGrowth

Trends + Current Events1Artificial Intelligence in Gaming2Regulation update: M&A finalization, TikTok ban3Epic Games opens up Epic Games Store (EGS) publishing: Going head-to-head with Steam4Epic Games brings UGC to its 70m Fortnite MAUs5Google’s shift to cloud services196Roblox successfully ages up

Artificial Intelligence in Gaming1AI as a trend is not a net new investment trend20AI equity financing (not gaming-specific) Q1 2019 through Q1 2023, $b•While AI has been a hot trend in gaming, at the macro level, it has been a hot investment trend since 2020; the spike in funding in 2021 was likely due to larger deal sizes•Gaming has recently been the next industry to receive a wave of investment interest•In gaming, AI investment trends over the past quarter include AI-generated assets and conversational AI$7.1$9.6$9.3$7.1$9.0$8.0$7.7$11.2$21.1$20.7$17.9$12.9$8.4$9.6$5.4706723786711671631710767781759976840891816729631558020 040060 08001,0000510152025Q3Q4Q1Q2Q3Q4Q1Q2Q1Q4Q1Q2Q3Q4Q1$18.3Q2$17.5Q3Number of dealsVenture funding20192020202120222023$33 $36 $78 $48 $5 2,926 2,779 3,356 3,067 558

Regulation update2M&A finalization, TikTok ban21Tik Tok Privacy Concerns•TikTok is on track to be the most adopted social platform for Gen Z •Concerns around CCP influence may shut down access in the US, with other markets to follow•Unclear clear how the US banning TikTok will affect gaming near term -while a popular category, content is not a product of direct marketing / advertising spend•Banning TikTok could have future negative effects on gaming UAMeta completes acquisition of Within•The FTC abandoned its suit to Meta from acquiring Supernatural developer, Within•As anticipated, the FTC did not have a strong enough reason to block the acquisition for anti-competitive reasons•The deal closed in February 2023MSFT <> ATVI•No update from the FTC•Japan Fair Trade Commission approved the acquisition on 3/28•The EU is likely to approve the deal, with the full verdict due by the end of April•Sony remains committed to its attempt to block the deal outright even with a 10-year licensing deal being offered by Microsoft•For context, Playstationstill has a 70:30 global console market shareSource: Microsoft, Meta, FTC, Japanese Fair Trade Commission, The Verge

Epic opens up Epic Games Store (EGS) publishing322•Epic’s distribution strategy has historically focused on a curated games library with a particularly strong emphasis on exclusives•In March, Epic announced that its game store (EGS) was launching self publishing tools for the first time –this is the first major competitive threat to Steam in the game distribution market since the announcement of EGS itself back in 2018•Today, EGS has ~68m MAUs (vs Steam’s 135m+ MAUs)•EGS will not only provide developers all the tools they need to build, test, and distribute games, it will also offer a compelling fee structure of 12% (vs Steam’s 30%)Source: Epic Games, Steam, VentureBeat

Epic brings UGC to its 70m Fortnite MAUs4Epic sidesteps UGC “chicken-and-egg” problem by leveraging Fortnite audience23•UGC has received a lot of attention over the past 5 years (Roblox), with clear benefits -by outsourcing development to a passionate player base, platforms are able to more efficiently scale their content library•However, one of UGC’s core challenges is overcoming the “chicken-and-egg” problem, where a lack of players reduces creators’ willingness to build new experiences, while a lack of compelling gameplay disincentivizes players to come utilize the platform•Epic is able to solve for this by integrating directly with Fortnite, one of the most popular games of all time•To capture the attention of prospective builders, Epic has pledged 40% of Fortnite’s net revenue to creatorsSource: Epic Games

Google’s shift to cloud services5Google Stadia officially shut down in January 202324•Google launched its latest gaming initiative through Google Cloud: Google Cloud for Live Games•This shift from owning the medium to owning the infrastructure is a better fit to leverage the Google Cloud infrastructure•There are 3 primary levers for this strategy:•Serve players everywhere: helps developers connect players with game servers built on the world’s largest, most secure network•Collect and organize game data: easily store critical game and player data at scale with extremely low latency•Unlock player and game insights: helps developers understand what’s working to find and retail players with Google’s analytics and AIGoogle Cloud gaming customersSource: Google Cloud

Roblox aging up successfully622% increase in daily active users YoY259.714.616.117.220.521.423.825.628.327.731.932.467.313.317.919.319.521.321.523.123.625.524.226.426.00.60.90.80.40.3Q10.3Q20.4Q30.3Q40.3Q10.3Q20.5Q3Q1Q423-Feb23.633.436.237.142.143.247.349.554.152.258.858.8Q4Q3Q20.4Daily active users by quarter, millions•Since Roblox announced they were expanding support for their over-13 age demographic, Roblox has seen a consistent increase in both daily active users (DAUs) and revenue•In February, Roblox reported that they had 67.3m DAUs (+14% increase since Q4 2022, +22% increase YoY; there has also been a ~20% increase in concurrent users in Q1 2023 vs Q4 2022)•While a demographic breakdown for Q1 is still unreleased, we anticipate that the increase in activity is due to the over-13 age demographicSource: Public reporting, RomonitorUnknownU13O132020202120222023

Top gaming industry conferences / events2023 events scheduleEventLocationDatesCategoryPocket Gamer Connects*MultipleMultipleGamingDesign, Innovate, Communicate, Entertain (DICE) Summit*Las Vegas, NVFebruary 21-23, 2023GamingSouth by Southwest (SXSW)*Austin, TXMarch 10-19, 2023Gaming, MediaGame Developers Conference (GDC)*San Francisco, CAMarch 20-24, 2023GamingNFT.NYCNew York, NYApril 12-14, 2023Blockchain, GamingAugmented World Expo (AWE)*Santa Clara, CAMay 31 –June 2, 2023Gaming, TechnologyElectronic Entertainment Expo (E3)Los Angeles, CAJune 13-16, 2023(Cancelled)GamingGamescom*Cologne, GermanyAugust 23-27, 2023GamingTokyo Game ShowTokyo, JapanSeptember 21-24, 2023GamingBrazil Game ShowSão Paulo, BrazilOctober 2023 (TBA)Gaming, MediaSlush*Helsinki, FinlandNovember 30 -December 1, 2023Gaming, Technology* denotes events our team at Konvoy plans to attend26

Konvoy: Summary + Team27

Konvoy: by the numbersOur top newsletters published in Q1 2023:1.The Good and Bad of Free-To-Play2.All Eyes on MENA3.Will AI Kill UGC?4.Brands Loosen Your Gr-IP5.Future of Transmedia EntertainmentNew investments in Q1 ‘2322Deals led in Q1 ‘23$252mAssets under management (AUM)3Funds37Portfolio companies38%Of all funds invested outside of NA28

Konvoy invests in the platforms and technologies at the frontier of gamingInvestment StagePre-Seed, Seed, Series ACheck Size$1m -$5mSubmit your company idea hereFund III$150m29

Left to right: Philip Collins, Dani Tran, Taylor Hurst, Jason Chapman, Jackson Vaughan, Dhinuka Perera, Josh ChapmanKonvoy TeamLink to our socials here30