APRIL 2021 REPORT FUNKO DISCORD AND MORE NFTS,

V4.21 PATCH NOTES |

IMAGE: THE VERGE BIG TAKEAWAYS PAGE 3 A quick summary of what stood out to us

TABLE OF TRENDING PAGE 4 Trends we saw in the past month and the impact we expect them to have

BRAND ACTIVATIONS PAGE 9 Interesting activations from some nonendemic brands

OTHER IMPORTANTS PAGE 12 A hodgepodge of information from data to missteps

PAGE 2 BIG TAKEAWAYS

Gaming collectible companies look to digitize with new focus on NFTs.

Big brands look to acquire community-driven platforms in hopes of tech and built-in fanbases.

Amazon continues to invest in game development despite past stumbles. APR 2021 Gaming brands continue to show an impressive APR 2021 awareness of what’s happening in current culture. IMAGE: CTRL APR 2021 APR 2021

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TRENDING NO.001 SECTION

WHAT’S INCLUDED A collection of new and interesting things that caught our attention last month.

IMAGE: DISCORD FUNKO JUMPS IN ON NFTS

IMAGE: FUNKO WHAT HAPPENED Funko has decided to join the hottest trend on the Internet,

WHY IT MATTERS nonfungible tokens (NFTs). They purchased NFT startup TokenWave and plan to begin launching NFTs with the physical Funko Pops. Funko While the concept of NFTs is simultaneously fascinating and confusing, the

also announced plans to have a weekly NFT sale starting at $10. The buzz around them is familiar. Brands have long searched for ways to 001 NFT plan is scheduled to launch this June. Funko joins a long list of monetize popular new trends and platforms like social media. As for Funko, NO. brands taking advantage of the NFT craze in the news. Brands like we think the move is brilliant. They make one of the most recognizable Taco Bell and Pizza Hut are leaning into NFTs as marketing stunts collectibles on the market and adding NFTs to their already popular product more than long-term business strategies. While others like Gucci, 100 lineup makes perfect sense. Their investment is low enough that if the NFT Thieves and even seven-time Super Bowl champion Tom Brady view bubble does burst, they will be able to backpedal quickly and still keep NFTs as legitimate investments for the future. collectors happy with their physical Pop! items. But the fact that they’ve already got third party partners across almost every popular entertainment group means their NFTs should be impressive out of the gate. TRENDING PAGE 5 IMAGE: THE VERGE DISCORD STAYING INDEPENDENT WHAT HAPPENED Microsoft was rumored to be in exclusive talks to purchase Discord for somewhere in the ballpark of $10 billion. Microsoft has a reputation for throwing money around when it comes to gaming acquisitions. They spent WHY IT MATTERS $2.5 billion on Minecraft creator Mojang Studios in 2014 and more recently Discord will join TikTok and Pinterest in the “what if” category of Microsoft acquisitions. Say spent $7.5 billion on ZeniMax Media. It is a little bit shocking to see the price what you want about some of Microsoft’s swings for the fences (we’re looking at you tag for Discord be the equivalent of those two purchases combined. Discord Windows Phone), but when it comes to gaming, it has been one of the outright leaders of has become the go-to app for PC gaming, and many console fans have been developing technology or identifying existing platforms gamers love and acquiring them. clamoring for integration. That integration will likely be on hold now that While this feels like a loss for Microsoft, it could be good for Discord. Discord has a booming Discord has chosen to stay independent and set its sights on a possible IPO. community of 140 million members and they continue to improve functionality. It is still possible that another big player makes a push to acquire Discord, but we believe they will remain focused on improving their user experience and going public for the time being.

IMAGE: DISCORD NO. TRENDING 002 IMAGE: GETTY IMAGES IMAGE: ROCK PAPER SHOTGUN

PAGE 6 AMAZON IS SERIOUS ABOUT GAMING

WHAT HAPPENED When Amazon’s new CEO Andy Jassy claimed they were “committed to making video games” it came across as a typical new leader statement, but those words have been backed up as Amazon is opening a new studio in Montreal. The team will be led by some industry veterans who worked on the incredibly popular Tom Clancy’s Rainbow Six Siege. While it will likely be years before we see a game come out of this studio, it is a clear sign that Amazon is dedicated to gaming. The popularity of Twitch and Amazon’s e-commerce dominance provides the perfect combination for advertising new game releases. The hurdle Amazon has to overcome is successfully making a game people want to play.

WHY IT MATTERS As we have mentioned in previous months, game development isn’t an exact science. It takes a keen sense of what is popular today, what will be popular tomorrow and the resources to act quickly. Google, Apple and Amazon are all companies that have the perception of being infallible. Gaming has proven to be a beast the tech giants have yet to perfect. One reason for this is the

increasingly knowledgeable gaming audience. Crush the development team in the process, 003 they’ll find out about it. Cut corners during the design phase, they’ll post every bug on Reddit. NO. For any of these companies to be successful in the long term, they will need to focus on giving their development studios the time and resources they need to fully flesh out their ideas. They all have the resources to avoid the crunch and pressure we see placed on developers by other publishers around the industry. Bring us along for the journey. Much like other popular games like Fortnite, it can be an iterative process — just be transparent and humble when approaching it.

TRENDING

IMAGE: CRUCIBLE PAGE 5 ALSO NOTEWORTHY 07. Razer is actually making the N95 masks When we featured these masks back in our February report, they were still very much seen as ALSO NOTEWORTHY conceptual, but now it appears Razer will in fact ALSO NOTEWORTHY send them to production for the masses. 08. Twitch streamer stays live for a month Ludwig Ahgren added 10 seconds to his stream every time someone subscribed to his channel. It went on so long he had to sleep on stream in “a big, bleary-eyed slumber party where everyone’s just vibing.”

09. Fortnite adds Stonks Guy skin Fortnite now has a “Diamond Hanz” skin in the item shop as part of the “To the Moon” set. For 1,200 IMAGE: CTRL V-Bucks, you get a crash test dummy in a suit, modelled off the “stonks” meme, along with a 04. CTRL, gamer meal-replacement hits stores wearable rising orange arrow. CTRL, a startup that makes healthy shakes/nutritious food for gamers, is now available in 750 Vitamin Shoppe stores, further helping gamers focus on a healthy lifestyle and disproving archaic stereotypes.

05. TSM launches female Valorant team TSM was one of the first organizations to jump into the IMAGE: DRAGONIMAGE: TSM AGE 4 professional Valorant scene in May 2020 and now joins Cloud9 (and soon Gen.G) as the only two prolific organizations with men's and women’s Valorant rosters.

06. Tiger Woods returns to golf video games After more than a decade, Tiger Woods will return to the front cover of PGA Tour golf games from 2K Games, an announcement that came just prior to Woods life-threatening car crash. IMAGE: EPIC / KOTAKU

BRAND ACTIVATIONS NO.002 SECTION

WHAT’S INCLUDED Nonendemic brands that decided to get in on the esports action last month.

IMAGE: RAZER PIZZA HUT CREATES PAC-MAN AR GAME ON PIZZA BOXES

ACTIVATION NO. 001

WHAT HAPPENED IMAGE: PIZZA HUT As part of their “Newstalgia” campaign, Pizza Hut launched limited-edition WHY IT MATTERS pizza boxes with a playable Pac-Man AR game. Gaming has never been more popular and nostalgia is a huge driving factor in that community. The underlying trend to take away is the focus on user experience. This is especially important with While the popularity of pizza hasn’t waned, there is a lot of competition in younger generations. Millennials and Gen Z are expecting a complete experience from brands. The the space. Gaming in the augmented reality space has been growing process of buying the product and what packaging it comes in are just as important as the quality of rapidly as implementation has become easier. The combination of those the product itself. Many brands have attempted to use AR to modernize their packaging or gamify factors leads to an innovative way for Pizza Hut customers to engage elements of it, but few in the gaming industry have explored this. There is plenty of room in the gaming with their product. space to be more competitive with user experience, but those who will succeed will find meaningful enhancements to the user journey and not just add tech in a gimmicky and nonbeneficial manner. PAGE 10 OTHER BRAND ACTIVATIONS

BURGER KING HOSTS TRICK SHOT CONTEST IN NBA 2K21 Burger King Spain built a custom Burger King court in NBA 2K21 complete with different products. If users hit shots from these spots, they have the chance to win real-world prizes from the restaurant.

NO. 002

IMAGE: RAZER

RAZER LAUNCHES SMART GLASSES Following up its recent smart mask, Razer continues to NO. 003 push the limits of its product offerings with a new version of smart glasses that feature blue-light blocking and built-in headphones. IMAGE: BURGER KING

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OTHER IMPORTANTS NO.003 SECTION

WHAT’S INCLUDED The other things we didn’t think deserved their own section but do deserve your attention.

IMAGE: STAR CITIZEN MISSTEPS HERE ARE SOME THINGS THAT DIDN’T QUITE GO AS PLANNED LAST MONTH.

FaZe drops Meyers Leonard Star Citizen Devs Angry

You can’t say that in any arena. No you don’t have power, but that’s no reason to stop working.

EA investigating FIFA scandal XQC forgets to pay electricity bill

You should have stuck to stealing the office stapler. Alexa, lights on … Alexa ...

IMAGE: XQC

PAGE 13 IMAGE: FAZE POPULAR GAMES VIEWED PLAYED TWITCH, YOUTUBE (HOURS VIEWED M) PC (PLAYER SHARE)

GRAND THEFT AUTO V - 201.0 MINECRAFT - 20.3% LEAGUE OF LEGENDS - 166.0 LEAGUE OF LEGENDS - 17.6% FORTNITE - 146.0 CS:GO - 17.0% MINECRAFT - 114.0 COD MODERN WARFARE - 13.0% COD MODERN WARFARE - 107.0 VALORANT - 11.6%

GENRE MOBILE PC (PLAYER SHARE) APPLE, GOOGLE (MONTHLY USERS M) SHOOTER - 48.1% AMONG US - 141.0 ADVENTURE - 42.0% JOIN CLASH 3D - 106.0 BATTLE ROYALE - 29.9% SUBWAY SURFERS - 66.3 ROLE PLAYING - 27.3% GARENA FREE FIRE - 58.4 SANDBOX - 26.9% ROBLOX - 56.5

SOURCE: NEWZOO MARCH DATA IMAGE: VALORANT TWITCH TOTAL TWITCH PEAK POPULAR CHANNELS TOTAL HOURS VIEWED (M) PEAK VIEWERS (THOUSANDS)

XQCOW - 30.2 TOMMYINNIT - 517 GAULES - 14.9 PQUEEN - 357 ESL_CSGO - 12.4 QUACKITYHQ - 344 LUDWIG - 12.4 TUBBO - 333 SUMMIT1G - 12.1 GEORGENOTFOUND - 301

YOUTUBE TOTAL YOUTUBE PEAK TOTAL HOURS VIEWED (M) PEAK VIEWERS (THOUSANDS)

MBL LGNDS BANG BANG - 5.2 FREE FIRE LATAM - 1,292 CEROL - 4.8 FREE FIRE BRASIL - 539 FREE FIRE BRASIL - 4.3 TECHNOBLADE - 321 THEDONATO - 4.0 LIÊN QUÂN MOBILE GARENA - 311 TYPICAL GAMER - 3.2 MOBILE LEGENDS BANG BANG - 278

SOURCE: NEWZOO MARCH DATA IMAGE: TUBBO ON THE HORIZON

AT&T ANNIHILATOR CUP Beginning on April 2, AT&T will host a 5-week tournament that pits top Twitch streamers against each other in popular titles like Apex Legends, CS: GO and Among Us. SONY BUYS PART OF EVO Sony has made investments in other gaming companies, but this is their first dip into competitive gaming. This could signal the beginning of a more serious approach to esports. E3 RETURNS AS A FREE EVENT E3 was on the decline before COVID-19 and the cancellation of in-person events felt like a deathblow, but E3 is attempting to modernize by becoming a free, digital event in 2021.

PAGE 16 THANK YOU THANK YOU THANK YOU

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