Blake Robbins – Investing in Gaming

**Patrick O'Shaughnessy** (0:04)
Hello, and welcome everyone. I'm Patrick O'Shaughnessy, and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, methods, stories, and of strategies that will help you better invest both your time and your money. You can learn more and stay up to date at investorfieldguide.com.

**SPEAKER_1** (0:24)
Patrick O'Shaughnessy is the CEO of O'Shaughnessy Asset Management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of O'Shaughnessy Asset Management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.
Clients of O'Shaughnessy Asset Management may maintain positions in the securities discussed in this podcast.

**Patrick O'Shaughnessy** (0:47)
My guest today is Blake Robbins, a partner at Ludlow Ventures. We talk about all things video games, including the major companies in the industry, how games monetize, how in-game economies work, how eSports have evolved, and much more. This is a fast growing segment of consumer attention and interest, and I believe we are in the early days of gaming going mainstream.
I also have a favorite ask. My team and I have built a small survey for Invest Like the Best listeners, and if you've enjoyed the podcast, I deeply appreciate if you took five minutes to fill it out at investorfieldguide.com forward slash survey. It will help shape the future direction of the show, which I intend to keep improving in the years to come. Thank you, and now please enjoy my conversation with Blake Robbins.
Blake, I've been excited to have this conversation with you for a while. You and I have been back and forth on some of the topics we'll cover, but more generally, I would just say my interest in the gaming economy and video gaming in general as a business has been on the rise for a long time. And whenever I ask around who to talk to about this, your name often comes up. So I'd love to begin with just an overview of sorts. If you would be willing to provide it on gaming as a business, what are sort of the key areas in your mind of this growing interest of people and how you might get involved in it as an investor?

**Blake Robbins** (2:08)
Thank you for having me, first of all. And I would say gaming, obviously, over the past, let's say a couple of years, five years or so, has really started to explode into the conversation. I think that's in large part to Fortnite and these other games starting to emerge. And I think a lot of that is actually credited to the tailwinds of these games, starting to realize that they should become free to play and become viewed as platforms or actually become platforms rather than just pure $60 one-time fee type games.
And so we're starting to see this split between the way the games are developed and there's sort of this push-pull, and depending on how you are as an overall developer. And some are continuing to focus, maybe the old school, we can call Activision Blizzard is sort of the bigger player in the space as more old school or electronic arts where they continue to sell copies of games at $60 a piece. And they're maybe sold in store as well. They have some digital sales as well. But most of it is around, let's just sell one copy. We'll make a new game every single year.
There's been a big shift starting with League of Legends and Fortnite, and these games really pushing it forward where they're completely free to play. The requirements to play those games are very low.
You don't need a great computer. I mean, Fortnite, you can actually play on your phone. You can play on, I think you can even play on a Chromebook. You can play on almost anything. And that's really what's led to this massive growth and especially growth as a conversation around it, where people are realizing that gaming is much more than just a pure hit-driven business.

**Patrick O'Shaughnessy** (3:44)
You've mentioned some of the names already.
The absolute biggest and most important business players across this ecosystem. And how relatively entrenched do you think they are? Meaning, like if you want to play this, do you just buy existing big companies or do you think there's a lot of upstart potential?

**Blake Robbins** (4:00)
Yeah, I would say the real giant in this space as far as they just get it is Tencent. Tencent has been incredibly proactive at acquiring studios and buying large stakes in studios. For example, I believe they own close to 40% in Epic, which is the creators of Unreal and also Fortnite. And they also bought the majority and full stake of League of Legends or Riot Games, which now has Valorant and these other games.