Source: Eve Online
Venture Capital

A $30 Million Bet on Virtual Reality and Iceland’s Cult Classic PC Game Eve Online

Venture capital firm NEA led a funding round for the 18-year-old developer CCP Games as it preps an important release for Oculus Rift and PlayStation VR headsets.

The instructions were fairly straightforward: “You just have to put it on your face and play it.” The “it,” in this case, is Eve: Valkyrie, and Adam Kahn, a spokesman for the Icelandic developer CCP Games, is walking me through a demo.

The much-anticipated release, which follows the 12-year-old PC game Eve Online, is hugely ambitious. In Valkyrie, players nestle into the cockpit of a spaceship and then set out to destroy other space fighters in intergalactic battles. What makes the game truly special is that everyone who plays it will be wearing a virtual-reality headset. Facebook plans to put Valkyrie front and center early next year when it launches the Oculus Rift, which the two companies—as well as fans of the series—hope will usher in a new, meaningful era for virtual-reality technology that has, to date, failed to live up to its hype.

To get there, CCP says it raised $30 million in a funding round led by New Enterprise Associates, which the Reykjavik, Iceland, game company hopes will help make Valkyrie a success. The investment in CCP represents as much of a risk as virtual reality itself. NEA, after all, just bought into an 18-year-old “startup” that has struggled to advance beyond its first big hit.

Eve Valkyrie
A screenshot from the upcoming virtual-reality game Eve: Valkyrie.
Source: CCP Games

Founded in 1997, CCP became a major player in the game industry on the back of Eve Online. To call Eve a game would do it a disservice. It’s a sort of never-ending saga in which players set up their own universe in space that comes with complex economics and political machinations. Some players in Eve opt to mine asteroids for precious metals. Some serve as deal brokers. Others are generals who coordinate the actions of thousands of fighters. About 400,000 people pay $11 or more a month to play Eve—many of them doing so for years on end.

Eve’s cult-like following is so devoted that people have taken to writing down oral histories of the greatest battles that have occurred in the game’s universe. Two crowdfunding projects were fired up recently to turn these histories into books, in what appears to be the first instances of sci-fi nonfiction.

In 2013, CCP tried to extend the Eve universe from the PC to Sony’s PlayStation 3 through a game called Dust 514. While Eve is a massive multiplayer online game, Dust 514 is a first-person shooter. The idea was that gamers could blast away at each other on land from their game consoles and then link up to their characters, spaceships, and stories in Eve on their computers. That plan, however, did not quite work. The game suffered at the outset, and today the title has a “small but devoted following,” says Hilmar Veigar Pétursson, the chief executive officer of CCP. 

Last year, CCP revealed that a game it had been working on called World of Darkness would be canceled after years of development. It was designed to be a major break from CCP’s space heritage and sought to create a fictional world of vampires. With the game failing to live up to its promises, CCP sold off some assets and cut staff.

Eve Online
Source: Eve Online

Pétursson, whose thick red hair and red beard very much have him looking the part of a Viking, vows that CCP has learned from its mistakes. “With Dust, we learned that linking the games was super cool but that the actual game experience has to be fantastic,” he says. “We focused on the meta element first and the game after. With Valkyrie, we’re doing things the other way around.”

Valkyrie shares some of the backstory of Eve. Players will find themselves battling in space and fighting with ships that look similar to those found in Eve. At the outset, however, the games will not be linked. “If there ends up being a strong desire from the players to do that, we can,” Pétursson says. “We know from Dust that it’s relatively easy to do.”

While Valkyrie will also be available for the PlayStation VR, it looks to become a flagship game for the Oculus Rift when it goes on sale in the first quarter of 2016. This is, in part, because CCP jumped on virtual reality early. A small team of developers in Iceland began experimenting with a concept for a virtual-reality game in 2013, and their prototypes blew away Pétursson and other executives at CCP. After the company iced World of Darkness and shifted people off Dust 514, it had plenty of bodies to throw at the development of Valkyrie.

Harry Weller, a general partner at NEA, concedes that CCP is awfully old to be thought of as a startup. But he sees the company’s resiliency and its ability to keep milking a hit as reasons to believe that it will turn Valkyrie into a blockbuster. “They have always been ahead of the market and have always survived taking risks,” Weller says. “It’s extraordinarily rare to see a company go through all these swings and still be willing to take the risk to innovate.”

(Correction: The original version of this story included a screenshot from a different CCP Games title. It has been replaced with one from Eve: Valkyrie. The story also referred to Valkyrie as a sequel to Eve Online. While the games are related, Valkyrie is not a direct sequel.)

Before it's here, it's on the Bloomberg Terminal.