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Fortnite x Jordan Blends Your Real-World and Online Personas

Fortnite x Jordan Blends Your Real-World and Online Personas

This week, Fortnite launched its latest licensed content partnership, this time with Jordan. There’s a new Downtown Drop limited-time game mode and new skins that feature the Air Jordan 1s. The Jordan partnership comes just a week after Fortnite had its John Wick crossover event, promoting the new movie, John Wick Chapter 3: Parabellum.

Fortnite appears to be accelerating its efforts to integrate pop culture, including the virtual Marshmello concert, two Avengers promotions, John Wick, and the NFL.

Increasingly, Fortnite allows players to build their personal brands. For digital natives, digital and real personas are one and the same. The NY Times recently profiled 100 Thieves, an esports organization, highlighting the rise of style in the gaming community. As gaming goes mainstream, traditional brands are taking an interest in the space and players have a broader range of options for self-expression. 

Via Fortnite, the Jordan brand brings its gear into virtual worlds — an incremental and synergistic market — just as Jordan and Nike did with NBA 2K. In our view, the arrival of Jordan footwear into the world of Fortnite takes the strategy a step further, outside of basketball into esports more broadly.

For gamers, their online persona is an extension of their real-world persona. The purchase decision is not about a skin with Jordan shoes; rather, it’s about aligning with the Jordan brand. Virtual goods are a massive business today and will continue to grow, particularly as we get closer and closer to the metaverse. For example, we estimate that the Fortnite x Marshmello concert generated more than $30M in revenue from virtual goods, compared with $5M to $10M on a typical day.

It’s early but we’re starting to see commitments from brands with deep pockets and big budgets. Net-net, Fortnite is well positioned to remain the leader in building a dominant virtual world.

Disclaimer: We actively write about the themes in which we invest or may invest: virtual reality, augmented reality, artificial intelligence, and robotics. From time to time, we may write about companies that are in our portfolio. As managers of the portfolio, we may earn carried interest, management fees or other compensation from such portfolio. Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making any investment decisions and provided solely for informational purposes. We hold no obligation to update any of our projections and the content on this site should not be relied upon. We express no warranties about any estimates or opinions we make.

Gaming
2 min. read Show less
Why Everyone Is Talking About Playdate

Why Everyone Is Talking About Playdate

iOS software maker Panic just reminded us how fun technology can be. The company unveiled Playdate ($149) a pocket-sized game console that comes with a “season” of 12 games that arrive weekly. And everyone is talking about it.

Playdate is resonating for (at least) three reasons:

  1. Nostalgia. Last week, I brought my Game Boy Color (c. 1998) into the office. The first thing most people notice is that the Game Boy’s screen has no backlight. Same with Playdate. Its black and white screen and primary controls (d-pad, A+B buttons) recollect a time when gaming was simple and fun. Nostalgia is winning right now — Netflix’s Stranger Things, for example — by tapping into a collective resistance to “better” and “faster.” Playdate will take us back.
  2. The anti-iPhone. When the App Store first launched, games led the way (Cro-Mag Rally, anyone?). Now, we associate our phones more with mindless scrolling than we do with fun. Teenage Engineering, the Swedish hardware design firm that worked on Playdate, explicitly set out to “break people of their touch psychosis.” Playdate rejects the touchscreen, multi-tasking paradigm to which we’ve become accustomed, instead providing a device dedicated to games. Playdate will give us a break from our phones.
  3. A gadget to love. Playdate conjures a fresh sense of joy. Something bright, fresh, and new. Despite its retro look and feel, Panic is innovating on both the hardware and the software fronts. The device features a crank — a rotating analog controller — that unlocks differentiated gameplay. And the software is delivered in “seasons,” every twelve weeks, with one game arriving over-the-air each week. Paul Ford’s recent piece for Wired, Why I (Still) Love Tech, points to the fundamental insight here: “Something about the interior life of a computer remains infinitely interesting to me; it’s not romantic, but it is a romance. You flip a bunch of microscopic switches really fast and culture pours out.” Playdate reminds us why we love tech.

Time will tell if Playdate delivers on the hype. Panic says pre-orders will begin later this year and the device will ship in 2020. But Playdate has already struck a cultural chord.

Disclaimer: We actively write about the themes in which we invest or may invest: virtual reality, augmented reality, artificial intelligence, and robotics. From time to time, we may write about companies that are in our portfolio. As managers of the portfolio, we may earn carried interest, management fees or other compensation from such portfolio. Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making any investment decisions and provided solely for informational purposes. We hold no obligation to update any of our projections and the content on this site should not be relied upon. We express no warranties about any estimates or opinions we make. 

Apple, Gaming, Google, Microsoft
2 min. read Show less
Outlining Tesla’s China Risk

Outlining Tesla’s China Risk

Tesla shares are down 27% in the last month. At the core of this decline is investors’ heightened concern about baseline demand following the fulfillment of initial pent up demand for Model 3 and the declining tax credit. More recently, since the breakdown of US-China trade talks on May 5th, the case for Tesla missing their numbers has been strengthened. Prior to May, analysts had expected Tesla to deliver less than 360k vehicles in 2019 (vs. guidance of 360-400k), but recent revisions have further reduced expectations. Our takeaways:

  • We have lowered our 2019 delivery estimates by about 10% from 340k to 310k vehicles. Guidance as of the March earnings calls for 360-400k vehicles.
  • We have lowered our China delivery estimates for the balance of 2019 from 70k to 40k vehicles. We now expect China to account for 13% of deliveries in CY19 compared to our previous estimate of about 25%. As a point of reference, China, the world’s largest EV market, accounted for 17% of revenue in Mar-19 with limited Model 3 deliveries.
  • We are lowering our numbers as a precautionary measure related to two unknowns. First, we are now factoring in that Tesla deliveries will be impacted by tariffs entering China. Ours is a minority view because most investors expect Tesla will be exempt from tariffs given the company’s investment in the Shanghai Gigafactory. Second, non-tariff factors that will impact China demand include Chinese consumers boycotting Tesla and Chinese officials adding complexity to the delivery process.
  • Despite these negative revisions, we continue to believe the company will survive to capitalize on the global EV growth curve. Our optimism about the company’s ability to weather the storm is based on Tesla’s cash position following the most recent capital raise, which now stands around $5B.
  • Our high-level math suggests the recently raised $2.7B gives a two-year cushion if deliveries come in at 300k for both 2019 and 2020. If deliveries fall below 300k in each of the next two years, the cushion will be less than 2 years.

Disclaimer: We actively write about the themes in which we invest or may invest: virtual reality, augmented reality, artificial intelligence, and robotics. From time to time, we may write about companies that are in our portfolio. As managers of the portfolio, we may earn carried interest, management fees or other compensation from such portfolio. Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making any investment decisions and provided solely for informational purposes. We hold no obligation to update any of our projections and the content on this site should not be relied upon. We express no warranties about any estimates or opinions we make.

Tesla
2 min. read Show less