VidCon 2022 Insights, LIV Golf’s $405M Purse, and 4 Insights from the Web3 / Video Games Nexus

July 29, 2022 by  wearerockwater

What We’re Reading

3 articles + RockWater analysis to make you a better investor and operator.


My Belated VidCon Takeaways

The RockWater Take by Chris Erwin

Here’s part 1 of my belated VidCon wrap-up. It’s based on founder and investor mtgs since I spent little time on “the floor”, w/ 3 takes on creator alt-financing, hiring changes, and creator-product gap…

💸 Lots of excitement about creator alt-financing structures e.g. the funds from Spotter, Jellysmack that give creators upfront liquidity for rights to their back catalog. But current alt-financing products are still early, and product-market fit is far from perfect.

Many creators pass on company proposals, saying they don’t need the $$, want more $$, or don’t want to give up back-catalog rights and want different rights / payment structures. In-market teams say they’re working hard to evolve their offerings, and I hear new int’l upstarts are emerging to provide further innovation in the space.

📉 Startup founders from the creator economy and social commerce are using the new macro slowdown as a catalyst to (1) clean up their team orgs, and (2) setup for cash-efficient growth.

Junior teams that made sense for quick-and-dirty scaling in the first 1-2 years of a company lifecycle will be replaced by more seasoned staff (3-5+ years experience incl middle management) in BD, sales, marketing, and customer success. This is most relevant for startups increasingly focused on enterprise sales opps. And there’s expectations that the employer / employee power dynamic and competition for new hires will shift to giving more leverage back to hiring managers (i.e. access to more higher quality candidates at reasonable comp levels).

🛒 Social commerce investors and founders badly want to solve the creator-product matchmaking problem. Because many platforms focusing on creator UA are learning that most creators don’t have their own products to sell, and that the sales cycle to gain access to brands’ product catalogs can be long.

Multiple founders building creator economy tools and digital storefront platforms thus expressed interest in strategic partnerships with companies solving this problem, as a way to bridge the gap until their own solutions / BD teams are built.

And investors who had exits in affiliate / social commerce over the past couple years are interested in doubling down on this marketplace problem for companies with a different revenue model VS the standard affiliate fee…and ideally before Instagram / TikTok / Amazon launch their own viable solutions (we know they’re being built!).



LIV Golf Announces 14-Tournament League with $405M Purse
Front Office Sports, 7.27.2022

The RockWater Take by Alex Zirin

As secondary leagues continue to populate the sports market, traction for each iteration has started to take hold. The USFL is coming off the heels of a relatively successful first season. The XFL is back in a big way, with Bob Stoops of Oklahoma fame headlining the list of coaches for its new edition coming next spring. The Premier Lacrosse League just announced a new round of funding, including investments from WWE and Kevin Durant, that doubles its last valuation.

Now, as LIV golf continues to shave talent away from the PGA tour, it seems that golf’s newcomer has the legs to compete. The Saudi-backed league, with $2 billion in funding from Saudi Arabia’s Public Investment Fund, has yet to recruit any top-ten players from the Official World Golf Rankings (OWGR). Although their players aren’t among the current world’s best, stars and fan-favorites like Dustin Johnson, Brooks Koepka, and (the leagues’ latest edition) Bubba Watson are bringing major fan interest. Even beloved veteran commentator David Feherty has jumped over.

Much of the coverage around the league has centered on its eye-popping payouts to players that make the move, with some commanding guarantees well into the 9-figures. To some, it has been viewed as an enterprise focused solely on gaining attention and serving as PR-Kevlar for the Saudi government, with little focus on potential profitability. To that, LIV has pressed forward with an even greater prize purse for its next season — up to $405 million from this season’s $255 million. For context, the PGA Tour will pay out $427 million this year, but to nearly 4 times the number of players.

Unlike the PGA Tour, LIV players are divided into teams. Although they compete individually on the course, team members can earn prizes well-above their personal performance. At the most recent tournament in North Plains, Oregon, Pat Perez earned over $900,000 after carding a score of 80 on the tournament’s final day. For those that don’t follow the sport closely, a final-round 80 on the PGA tour would likely lead to winnings in the $50-70k range depending on performance earlier in the week. But luckily for Perez, his teammates carried him to the finish line, netting him winnings well in excess of a solo-2nd place finish in most PGA tour events.

Regardless of what LIV means for the ‘soul’ of the game, LIV is starting to win the media war. A league that once seemed doomed by the comments of its most infamous supporter has made it very clear that they’re not going anywhere. I expect the PGA Tour will always be the home of ‘real’ golf, but LIV has shown that, for secondary leagues, money plays.



The Metaverse: Blockchain, Gaming, and NFTs; Navigating the Internet’s Uncharted Waters — NewZoo Trend Report 2022
NewZoo, 6.28.2022

The RockWater Take by Michael Booth

Really good research report by Newzoo on the intersection of #web3 and #videogames, and the trends that will shape it for years to come.

🎮 “49% of unique wallets interacting with decentralized applications were active in blockchain games as of December 2021. The number of unique active wallets (UAW) does not automatically translate into daily or monthly active users. Players generally have more than one wallet, especially in games that run on blockchains with low fees such as WAX or Harmony.”

💰 “As the space is still young, the market is currently dominated by financially-oriented P2E titles whose core focus is on the economic aspect rather than the gameplay itself. This is partly because developing complex gaming experiences is a time-consuming and delicate process. Consequently, most of the current blockchain games are plagued with sustainability issues. Players are not incentivized to play most titles for reasons other than financial gain, which leads to a system that can only sustain itself if there is a continuous influx of players to the game.”

🌏 “The core audience for the current iteration of blockchain games comes from growth markets such as the Philippines, Vietnam, and Brazil. Most players in these countries are not primarily interested in the richness of the gaming experience, but rather the ease with which they can use these games as income-generating activities. This may explain why games with rudimentary gameplay have picked up in popularity—they provide an easy on-ramp for earning-oriented players.”

👗 “Digital Is The New Black – As the gap between physical and virtual continues to blur, digital identity is poised to challenge the importance of physical appearance. Higher-fidelity experiences and better hardware will encourage many consumers to spend more time in immersive virtual worlds where 3D avatars will be the primary medium of interaction with other people. Therefore, it is vital that avatars and digital garments can reflect a user’s personal tastes. To this end, a number of digital-only fashion houses have taken the market by storm.”



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