Pixel P&L: Indian Web3 Gaming Startup Surges to a $500M Valuation

Good Morning. It’s Friday, November 22. Kratos Gamer Network just raised $10M, tripling its valuation to $500M. In today’s newsletter we contextualize its new valuation and explore how this Indian gaming startup is redefining gaming ROI and how it aims to double its ARR to $25 million by next year.

We also explore Minecraft’s new partnership with Europe’s largest theme park operator, an AI-Powered Ad Creation Tool for Game Studios, cloud gaming being added to Xbox Game Pass Ultimate, and more.

Web3 gaming startup Kratos Gamer Network (KGeN) has raised $10 million in a funding round led by Aptos Labs, with participation from Polygon and Game7. The round tripled KGeN’s valuation to $500 million, positioning it at a 41.7x revenue multiple based on its $12 million annualized revenue run rate (ARR). This premium multiple significantly outpaces that of Zomato, the food delivery giant, which trades at about 18x its annual revenue. Founded in 2022 by former Nazara Technologies CEO Manish Agarwal, KGeN has onboarded 10.8 million gamers and aims to double its ARR to $25 million by next year.

KGeN is carving a niche as a decentralized platform for global gaming publishers to reach emerging markets, with 60% of its users in India and the rest spanning Brazil, Bangladesh, and other regions. The startup is eyeing the Middle East for its next phase of growth, citing the region’s potential as a high-value gaming market. "Markets like the US, South Korea, and China have plateaued. The Middle East is where the gaming growth will be for the next decade,” Agarwal said. The platform earns revenue through partnerships with over 180 gaming companies, helping them acquire users and drive spending, with campaign ROI reportedly outperforming Meta and Google by 30-60%.

KGeN plans to use the fresh capital to scale its platform, enhance its Web3 capabilities, and expand into new markets. CEO Mo Shaikh of Aptos Labs commended KGeN’s role in empowering gamers with ownership of their digital identities. By blending decentralization with scale, KGeN is positioning itself as a pivotal player in the Web3 gaming ecosystem, a sector that continues to attract significant investor confidence despite broader market challenges.

Minecraft is set to expand into real-world experiences through a partnership with Merlin Entertainments, Europe’s largest theme park operator. Merlin plans to invest over £85 million ($110 million) in creating Minecraft-themed rides, attractions, hotel rooms, and retail outlets, with the first two attractions slated to open in the UK and US in 2026 and 2027. The initiative, titled "Adventures Made Real," aims to bring the game to life and expand its reach globally.

Merlin, which operates over 135 attractions worldwide, including Legoland and Alton Towers, views Minecraft as a strategic fit for its expansive network. “We are in 23 countries; what brands can play at that level? You have to be one of the biggest brands in the world,” said Merlin CEO Scott O’Neil. He added that this partnership follows similar collaborations with iconic franchises like Lego and Peppa Pig, marking Minecraft as its latest marquee partner.

“This is about expanding Minecraft beyond the game,” said Microsoft’s Kayleen Walters. “We are everywhere digitally, Merlin is everywhere physically.” The partnership combines Mojang and Microsoft’s expertise in digital engagement with Merlin’s prowess in location-based entertainment, promising an immersive experience for Minecraft’s vast global community.

Join the ultimate celebration of gaming and entertainment at STANfest 2024, India's biggest creator gathering, happening on November 24th at Phoenix Palassio Courtyard, Lucknow. With over 200+ top creators like Ashish Chanchlani, Mortal, Round2Hell, and Abhishek Malhan, fans can experience a day packed with excitement.

Highlights include Zupee’s mini-tournament, the thrilling Esports LAN finals with a Thailand trip prize, live music performances, immersive themed zones, interactive booths, and a cosplay arena featuring award-winning artists. Don’t miss the Meet & Greet Zone for exclusive moments with your favorite creators.

Entry is free—just download STAN to grab your pass!

Reforged Labs Launches AI-Powered Ad Creation Tool for Game Studios

Reforged Labs has launched an AI-powered service to automate video ad creation for mobile games, catering to indie developers and smaller studios. Currently in open beta, the platform uses an AI engine trained on thousands of successful game ads, offering templates and the ability to generate highlights, animations, and localized content in over 30 languages. Developers can upload gameplay footage for tailored ad creation without the need for lengthy briefs or large budgets. “Our solution levels the playing field for resource-strapped studios,” said CEO Robert Huynh, highlighting its potential to simplify the costly and time-consuming creative process.

Sony Delays PS5 30th Anniversary Launch in India

Sony has postponed the Indian release of its PS5 30th Anniversary Limited Edition console and accessories, initially set for November 21. Retailers across Mumbai, Bengaluru, and Delhi report varying launch dates, ranging from November 22 to November 27, with the delay attributed to disruptions from Maharashtra elections, according to Indian games industry analyst Rishi Alwani.

Microsoft Launches Beta for Streaming Personal Xbox Game Libraries

Microsoft has launched a long-awaited beta feature allowing Xbox Game Pass Ultimate members to stream select games from their personal libraries through the xCloud service. Initially announced in 2022, the feature lets users play on TVs, browsers, smartphones, PCs, and tablets across 28 countries where Xbox Cloud Gaming is available. Corporate VP Ashley McKissick said the update addresses player demand for flexibility beyond the Game Pass catalog. The program supports 50 titles at launch, with plans to expand to Xbox consoles and the PC app next year, as Microsoft continues refining its cloud gaming offerings.

Xsolla to Establish APAC Headquarters in Busan

Xsolla has partnered with Busan Metropolitan City and the Busan Digital Asset Nexus to establish an APAC headquarters in the South Korean city, aiming to position Busan as a global hub for game development and technological innovation. The initiative includes a talent development center to provide mentorship, resources, and funding, while also exploring Web3 advancements to drive economic growth. “This partnership is a testament to Busan’s incredible potential as a center for games and technology,” said Rytis Joseph Jan, Xsolla’s VP of Global Strategic Partnerships. While no timeline has been set, the project underscores Busan’s ambitions in the gaming sector.

A Single Line of Code Fixed Aliens: Colonial Marines' AI

When Aliens: Colonial Marines launched in 2013, fans criticized the clumsy AI of the xenomorphs, which made the terrifying aliens appear more comical than threatening. Years later, a modder discovered that the issue stemmed from a single line of code containing a typo.

In the game’s configuration file, the word tether, which controlled how xenomorphs tracked and engaged players, was misspelled as teather. This tiny error disrupted the AI’s pathfinding and attack coordination. Correcting this single line of code restored much of the intended behavior, making the aliens smarter, more aggressive, and infinitely more terrifying.