Deal focus: Reworld turns gamers into creators

Reworld wants to be TikTok for gamers. The global video game market is enormous – US-based Grand View Research values it at more than $151 billion – but Reworld has spotted an additional monetization opportunity: a platform that turns gamers into game makers.

“On TikTok, you share short videos; on Reworld, you share games or virtual realities you’ve created,” says Guangshi Yao (pictured), co-founder of the Beijing-based start-up.

Central to Reworld’s offering is a physics engine – computer software used to replicate physical systems – that lowers the entry bar for game design. Throw a ball into the air and a physics engine will automatically generate the sounds and visual effects of its return to the ground, based on the nature of the material and the size of the object.

“Video game creators no longer need to write complicated codes to generate such effects, our physics engine can take care of all details,” says Yao.

Reworld has been working on its 3D physics engine ever since the company was founded more than two years ago, accumulating dozens of patents. Given creating games is harder than producing short-form video, the company also offers full training. It collaborates with online educational institutions as well as some 20 brick-and-mortar universities and technical schools.

There are around 1,000 creators on the platform who have produced more than 1,000 pieces of content, including 100 complete games. They are supported by an internal staff of 20. About 100 creators have signed contracts with Reworld and qualify for subsidies. In some cases, game design has become a full-time job. Designers retain ownership of the intellectual property and receive a majority share of the revenue it generates.

However, making money is currently not top-of-mind for Reworld. “Revenue can be generated through membership fees, game access fees, and the sale of in-game accessories. There are many mature models. But right now, our priority is to make Reworld a social place for young people to share ideas and play games created by others,” says Yao.

Following the company’s recent RMB300 million ($42 million) Series B round led by Joy Capital, the question is whether user-generated content has enough potential to thrive as the broader gaming industry goes through a period of consolidation. Gamers are increasingly flocking to a handful of very popular titles, such as Tencent Holdings’ “Honor of Kings.”

Yao argues there are two totally separate ecosystems within the industry: “When you watch films, you go to the cinema but that doesn’t stop you from watching TikTok’s short videos on your mobile phone when you are on the way to the cinema.”

A benchmark for Reworld is Roblox, a US start-up launched in 2004 that allows players to create their own games using its proprietary engine. Popular titles include role-play game “Adopt me!” As of August 2019, Roblox had over 100 million monthly active users who transact on the platform using a virtual currency that can be purchased with real currency.

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• Topics
• Greater China
• Technology
• Early-stage
• China
• Joy Capital
• TMT