Spatial Announces First Season of In-House and UGC Games

Spatial, the 3D social platform to build, share, and play interactive games on the web, mobile, and VR, today announced its first season of in-house games; Punch Hero, Racing Empire, Infinite Ascent, Shooty Shooty, Mostly Only Up, Buddy Blitz, & Cyber Punk: Neon Ghost, as well a host of games from leading gaming studio, IzyPlay. The team states that the announcement marks the first of several releases for Spatial in time for the holidays, with more Spatial-built and external games to be announced.

Spatial’s User Generated Content (UGC) platform gives developers the ability to leverage Unity, including C# scripting, in the same way as Roblox does with Roblox Studio and LUA. The main strength is there’s no need for developers to learn new tools or for players to download an app meaning that five million Unity developers can build and code with the tools they know and then publish that content to the web. 

Spatial offers up to 50% revenue share to any developer, with no additional hidden costs once it's published giving the ability to meaningfully monetize their games. 

"Gaming is the new medium for content on the web," said Anand Agarawala, CEO and Co-Founder at Spatial. "We are expanding the magic of the Roblox model to five million Unity developers, allowing them to reach 200 million web gamers - as many active players as Roblox or Fortnite."

"We’ve made this breakthrough that takes advantage of improvements in WebGL, WebAssembly, and GPUs, to bring the types of games you’d typically have to download to the web - no account set up, simply click a link and you’re playing. We’ve taken away all complexity for developers who can for the first time build complex and thrilling games in the browser," added Agarawala.

The team also announced the hire of Charles Ju, new Head of Gaming – an industry vet who launched games with over 100m in downloads and $50 million in revenue, including Sessions, Beat Fever, Battle Camp, and PlayMesh.

"One of the things that drew me to Spatial aside from its ability to bring console-quality gaming to the browser, is its unwavering support for creators and digital storytelling. Spatial is leveraging the vast Unity community and offering monetization options that make it a truly viable option for any developer. Spatial’s SDK lets developers deliver beautiful gaming experiences without friction. I’m hugely excited to be part of the future of web-based gaming," said Charles Ju, Head of Gaming at Spatial.

Our CEO Kirill Tokarev had a chance to talk to the Spatial team and discuss what's next for them. 

Jacob Loewenstein, Head of Growth at Spatial: I think you had a chance to cover Shooty Shooty and the headline from that was sort of like, "Oh, wow, it's kind of crazy that you can build a beautiful-looking, 3D interactive multiplayer game like this, and it just works in a web browser? But for this conversation, I think we wanted to take a little bit of a step back. And I think the answer is like, why are we even doing this, and why is it we think important for the industry? And I think that there are a couple of things going on that have motivated us. 

The first thing we've been thinking a lot about is what's been going on with IDFA and how difficult it's become for mobile game developers to run a sustainable profitable games business. We talk to all these mobile game devs, and they're like the cost of user acquisition has skyrocketed, we can't do attribution very well, so we don't even know who to target and who we're bringing in, and the model has kind of broken. 

The second thing we're thinking a lot about is distributing games and, in particular, mobile games, there are these big gatekeepers that make the business hard. So if it's on a phone or a tablet, you have to go through Apple or Google, and they're taking 30%. If it's on PC, you're going through Steam, and because of this app store model that exists now, it's become really expensive to try and get your game discovered by people and downloadable from consumers. 

And we're excited about the model that Roblox and UFN are sort of going hard on, where it's easy to publish a game. But we think there's still too much friction. Maybe for kids, they're very motivated, they're going to download this heavy Roblox app and go through it. But for anyone else that's not like 9, 10, or 11 years old, it's kind of a big pain to have to go through this whole process of downloading this app and getting set up. So we're trying to ask the question of like how can we bring the Roblox development model to the masses of developers, where they can get their games published easily, rapidly accelerate the development cycle, and make the economics better, but how can we make the user side way, way, way more accessible.

And then, of course, on the developer side, to bring it to the masses, the thing we think about is like Roblox, it's this whole different toolset, you have to learn a whole different scripting language with Lua, most developers don't know that the biggest community of developers is on Unity, and then UFN is a very limited toolset. We're excited about both platforms, but for this huge mass of developers, it's just not feasible for them to go jump into this, and that's where we come in.

Anand Agarawala, Co-Founder at Spatial: I think that Roblox and UGC are the future of web gaming. We bring the magic of that model to 5 million Unity developers and then 200 million+ web gamers. That's the other really interesting thing is that, as we've kind of peeled the onion, we realize that there are about as many web gamers as there are Roblox and Fortnite players, which is crazy. And right now, they're very fragmented across many portals. And so there's a lack of kind of one big unified place for them and then two high-quality gaming experiences. So today, we're announcing the launch of a whole bunch of games from our side. We're also working with some of these portals. 

In this world where platforms have evolved, reminiscent of the past when Flash sites like Congregate offered accessible Flash games and the emergence of social media platforms like Facebook, followed by the introduction of smartphones and app stores by Apple and Google, we now face challenges in user acquisition. Given the enduring availability and cross-platform nature of the web, isn't there an opportunity to offer businesses an easy solution for distributing their games, especially for mobile developers grappling with Apple's changes and declining revenues in Unity? Could you elaborate on this about how this concept works? Does it align with your current perspective?

Anand Agarawala, Co-Founder at Spatial: The only thing I'd add is that the quality of games now, unlike back in the Flash days, is really good just because of the advancements in WebAssembly, WebGPU, and GPUs in general. You can get these graphics; these are all running in a web browser powered by Unity’a AAA game engine. And so you can get these without a download. That's the kind of big advancement here; nobody wants to download another app. We're cross-platform; this runs on mobile. We all know that mobile is a key gaming platform in the world. But that's the big kind of breakthrough.

The other thing that has happened since we last talked is that Unity developers can now publish their games directly in C#, the only platform to be able to do that. With Roblox, you've got to learn Lua, Spatial is straight-up C#. And what's amazing is this lights up the whole Unity Dev community. So we've got Unity Asset Store; a lot of that stuff just runs out of the box or with little modification. There are just tons of open-source games out there that we can bring to the platform. That's the kind of big technical breakthrough we've had since we last chatted as well to just make life way easier for developers.

Is the dependency on Unity a significant concern despite the advantages of browser accessibility, and can you explain how you manage this issue to mitigate competitive pressures in your platform?

Anand Agarawala, Co-Founder at Spatial: If you want to develop a game on Spatial, you have your own Unity license, and you publish it. You can get a personal license or whatever. You publish it to Spatial; you click a button from the Unity editor, and it publishes to our site. It's hosted with multiplayer and works on multi-platforms: web, mobile, and VR, and then it has a monetization layer. So you've got your own Unity license. If you end up becoming a 20-person studio, you've got your kind of Unity license there, and then we've got our Unity license as well.

I think of us as YouTube. When you publish a video to YouTube, you've got your own Premier license or whatever video tool you want to use. The same thing goes here.

Where do the users come from?

Jacob Loewenstein, Head of Growth at Spatial: They're coming from a couple of different sources. We have our platform, and a significant number of people come to it. Two million worlds have been published on it since its inception. There are the owned and operated Spatial properties themselves, our website, IOS and Android apps, and an app in the Meta Quest store as well.

Our games are now starting to be distributed on big portals like Crazy Games or Y8. We increasingly expect discovery to happen on some of those platforms.

Because of IDFA, the cost of user acquisition on mobile platforms is really high. But on the web, we're finding that the cost of user acquisition is significantly lower because of the wrenches that were thrown into attribution that make targeting so difficult, that's not true on the web. So we're also able to acquire users on the web for a pretty significant discount to what it would be on mobile.

Right now, anyone can build and distribute on Spatial. If you go to Spatial, you'll see that there are a ton of different experiences that have been published. We have an algorithm that essentially directs traffic to games that exhibit certain signals we think give them more or less potential on the platform.

For games that exhibit real potential, there's an internal program where our game designers look at the game and provide feedback on how to improve it. In exchange for taking action on that feedback, we provide a certain number of guaranteed plays to their game.

That's the most casual level. On top of that, for games produced by more professional studios, we enter into special deals from our game fund, providing minimum guarantees and a guaranteed number of plays. If you don't make that revenue through in-app purchases, we backstop that through a minimum revenue guarantee.

The third tier is that we're building some games ourselves. We're taking components of those games and releasing them to our developers as template packs. We're also releasing an AI chatbot for developers to help them navigate the documentation and get onboarded into our platform more quickly.

Given your existing user base and metaverse features, how do you plan to leverage this advantage to overcome the challenge of attracting players, and do you intend to foster a symbiotic relationship between creators and players to enhance the platform's growth?

Anand Agarawala, Co-Founder at Spatial: Where we started was definitely through these 3D social metaverse-type experiences, and that helped us take off. We've got a bread-and-butter kind of use case of people using it for that. What we saw was that people were just making, and those folks were bringing their own audiences – they were throwing events, virtual events and that was really cool.

The web 3 stuff, virtual galleries, they're bringing their own kind of people, and folks stuck around and continued to build the community. People wanted to make more and more richly interactive stuff, you know, game-like or just straight-up games, and so the more we supported that, the more people kind of built in that direction.

I mean that's where this kind of new chapter comes in, where now we're developing first-party games because we can see the quality of game we can build is really, really high, and we want to show people what the platform is capable of.

In terms of recruiting players, the other thing is we're pretty permissive in terms of like, as a platform, if you build on Spatial, you can go launch your game on Crazy Games or Y8 or wherever you want. So you can attract your own players that way.

One interesting thing is that brand is an area we've been really successful. Brands like BMW have built an experience, Jack Daniels, Walmart, etc. They'll build experiences, and those folks will actually come with a marketing budget to attract players to the platform as well and make sure their experience is robust, and they're seeing pretty good return on ad spend because. You can attract players cheaply and then keep them in the experience for 5, 10, 15, 20 minutes, which is, you know, a lot more than you get from like if you were to run an ad.

We think one thing that's going to help attract this new audience or this new kind of category of players that just were able to level up the type of experience you can have. So developers can make really high-quality experiences, and that can hopefully not only serve the existing 200 million web players but bring a new type of audience that's used to like, you know, higher-fidelity games, uh, that they see elsewhere. So we want to bring people from elsewhere there we're so flexible as a platform.

Jacob Loewenstein, Head of Growth at Spatial: We really are inspired by what Roblox is doing, and we think that this system of in-app purchases is great. And so we have a similar digital currency called coins. It's a web-two currency. It's pegged to US Dollars. People can monetize tons of elements within their games: cosmetics, power-ups, new levels, weapons, you know, whatever.

And we offer a significantly more favorable revenue share to developers. So it's between 40 and 50%, depending on which package of coins the user buys. It can be up to 50%. We can offer that because the majority of our users are on the web. We have 60 to 65% of our users on the web. And so, because our users are on the web when users make those purchases, we're not getting hit margin-wise like a mobile company would, where 30% is automatically going to Apple or Google. So we'll take a bit of a hit there, but on the web, the idea is that we can offer substantially more.

That's another huge win for the web is that we can offer substantially more to developers because a huge chunk of that is not being taken by the App Store. And I think that's important. We do follow a similar model to Roblox, which is to say that like them we fund a lot of the services. That's part of what's motivating us to charge anything to developers because we need to fund the services that underpin what we do. From the economy standpoint, we need to be able to pay for, to support payments or cashouts, you know, from a just a pure game tooling perspective, we have to be able to support multiplayer and all the costs, storage, and all that stuff. But the economy is designed to support it.

And the reason we can offer a substantially larger share to developers is because we're on the web. We can cut out the app stores, which takes a huge cut.