The DeanBeat: Subspace emerges with $26 million to fix internet bottlenecks for multiplayer games

Subspace exists because the internet still has a lot of bottlenecks. The Los Angeles startup came out of stealth in the past week to fix those bottlenecks, sort of how Waze helps you — or at least once helped you — find your way around car traffic jams.

And nobody needs this kind of traffic unclogging more than multiplayer gamers, as the coronavirus has condemned us to our homes and doomed many of us to entertain ourselves with multiplayer games, such as Call of Duty: Warzone (my particular obsession), League of Legends, or FIFA.

Subspace helps by coming up with a combination of software and hardware that sets up a kind of parallel internet, or one that routes around the problem traffic and creates fast lanes for the game companies that pay Subspace for the speed.

And Subspace has raised $26 million to date from Lux Capital and others, and it has already generated “eight figures” in revenues in the last several months a private launch, said CEO Bayan Towfiq in an exclusive interview with GamesBeat. Among the customers is Funplus, a big Chinese mobile game company that has popular games like King of Avalon.

Millions of players are playing on Subspace networks today, but they don’t know it. Towfiq said the company has a significant population of players on PC, Mac, iOS, Android, PlayStation, Xbox, and the Switch. Lots of those games are sensitive to latency. In Counter-Strike: Global Offensive, for instance, five players square off against five others and the winners are those with split-second reflexes.

“We’re working with some of the biggest game companies in the world,” Towfiq said.

Bogging down

Above: The internet is busy.

Image Credit: Getty Images

This kind of improvement in internet speeds is coming just in time, as the coronavirus is bogging down networks.

Comcast said that overall traffic is up 32% on its networks, but gaming traffic has been up 50% to 80% thanks to games like Warzone. That is happening at the same time where voice queries are topping 50 million a day and video-on-demand traffic is up 25% from a year ago. Video conferences such as Zoom calls are skyrocketing 212% from a year ago as they have become a critical part of doing work. Verizon said gaming was up 75% on its networks. Cisco said that U.S. downstream traffic growth since March 1 is 20.1%, while upstream growth is up 27.7%.

French operators are considering throttling Netflix and YouTube, as well as Facebook. A Fortnite marathon allegedly caused a two-thirds surge in Italian internet traffic. These things can be quite scary unless you’ve built a global weather map for internet traffic.

“Real-time traffic like this multiplayer game traffic is incredibly sensitive to internet weather,” Towfiq said.

Subspace wasn’t planning to come out yet, but the company (named after the fictional medium in which objects/signals travel faster than light) wants to help alleviate the work-from-home challenges.

“With the pandemic lockdowns, as they spread through Europe, we saw this huge increase in usage and games exploding and our customers were coming to us,” said Towfiq. “The Internet has been structurally broken for real-time interactivity, like multiplayer games, but nobody had ever seen anything like this. There were reports starting a couple of weeks ago, out of places like France, where the government was talking about rationing and throttling certain types of content. To me, it seemed like kind of a failed Soviet solution to this problem. The rationing has all kinds of other negative things that come along with it in terms of morale.”

Towfiq didn’t want to see games get blamed for bringing down the networks, as he has an enlightened view of how they can help us during this time.

“There is this feeling still that games aren’t real, and the industry has been kind of plagued for a long time, like it doesn’t exist on the same level as other types of entertainment like film,” Towfiq said. “We didn’t feel that way.”

A seasoned team

Above: Subspace CEO Bayan Towfiq (right) and CTO William King.

Image Credit: Subspace/Adib Towfiq

Towfiq is a serial entrepreneur who sold his last company, Flowroute, to West/Intrado. He cofounded the company in 2018 with William King, chief technology officer and a real-time communications expert.

Shahin Farshchi, a partner at investor Lux Capital, is on the board. The president of Subspace is Bruno Schirch, former head of global publishing and esports operations at Riot Games. Ron Williams, vice president of operations, is former infrastructure and security vice president at Riot Games. Dan Roelker, vice president of product and engineering, is the former head of software at SpaceX. Maurice Dean, vice president of connectivity and infrastructure, is the former head of video infrastructure at Google.

Towfiq himself grew up in a family of early internet entrepreneurs. His father built the first cable internet network in 1994: the joint venture between Time Warner and Toshiba. And his uncle built one of the first California data centers.

“I grew up with telecom in my blood, studied computer science and physics and I was was a gamer from a young age, cutting my teeth on Doom and Quake multiplayer,” he said. “I was the low-ping bastard (LPB), because I had a cable modem in 1995 at home.”

Towfiq assembled a team with people like King that also had the internet and games in their blood.

“This was exciting way ahead of the coronavirus that has hit the world, but it is accelerating in importance in the online world that we are all enduring at the moment,” said Mike Gallagher, consultant for Subspace and founder of Intrepidity (and former CEO of the Entertainment Software Association). “They brought to my attention the worldwide phenomenon of discrimination against video game traffic. And you can imagine that I bristled at that instantly.”

Kevin Wollenweber, vice president of product manager in the service provider network systems business at Cisco, told me in an interview that the network has handled bandwidth problems pretty well, as it is built to handle surges like when Warzone gets released for everybody to download. More content has been pushed out to the CDN-style structures, where the content is closer to the customers, so the customer experience is better.

“If you have major issues in interactivity, or latency, that’s where you see issues,” Wollenweber said.

And that’s where Subspace steps in.

“When it comes to defeating latency, it really is transformational for the frustrations we have when using the internet,” Gallagher added. “The moment was brought to them. They chose the video game space to launch their service because it’s so perfect for them. But they can help with the broader problems of latency-sensitive applications. It’s pretty exciting to be around them with their meetings with the game companies.”

The team knows that solving interactivity is the challenge.

“Once you have the game downloaded, you’re not using bandwidth,” Towfiq said. “It’s just small packets that are very lightweight on it.”