The State of Game Investment: Where Has the Money Gone?

The game industry has experienced a significant shift in investment, with many investors who were new to the industry during the COVID-19 pandemic now withdrawing their funds. According to Lirui Ding, principal at Transcend Fund, this "tourism capital" disappeared because investors did not know how to invest in the industry. Additionally, a lot of game investment has moved from the US to Europe and now to emerging markets such as China, Turkey, and Vietnam. Meg Clarke, game scouting manager at Team17, believes that the money has not disappeared but has been diversified and redistributed to different territories, types of investors, and smaller projects. She notes that the game industry is resilient, and many people who were laid off after the pandemic have started new ventures and raised capital. However, she also acknowledges that the funding for higher-budget triple-A games has dried up. Cassia Curran, founder of Curran Games Agency, emphasizes that the COVID-19 investment bubble has burst, and the industry is now facing pressure from other forms of entertainment content, such as TikTok and social videos. She also notes that the game industry has not had a significant inflection point since the debut of smartphones in the late 2000s, but she believes that growth will come from areas of the world that have not yet fully embraced gaming. The panelists agree that the future of game funding will favor smaller teams and more innovative, fun, and exciting ideas. They advise developers to focus on making games that mean something to them, rather than chasing trends, and to be mindful of budgets in the early stages. They also note that marketing is a significant challenge for game makers, but fast, public prototyping can offer benefits in terms of proving market demand and showcasing a game to potential investors. The rise of AI is also seen as an opportunity for the game industry, with the potential to create new, innovative gameplay experiences and to build prototypes quicker and cheaper. Overall, the panelists are optimistic about the future of the game industry, with many opportunities for growth and innovation.