For such a colossal industry (worth an estimated $218 billion annually), the video games sector has remained surprisingly simple in the way that games are built and financed. Actually, when you look at the mind-blowing capabilities of the latest unreal engine, perhaps the building of games isn’t that simple.
But when it comes to finance, particularly in the indie games sector, a publishing deal is still the Holy Grail for many developers. Only a small number of indie developers are willing (and an even smaller number able) to self-publish their games, instead preferring to stick to their core skills and outsource publishing.
Publishers in the indie and AA-rated game space have a conundrum: they have limited financial firepower and yet they know that a portfolio approach to games investing is most sensible due to the apparent randomness of which games “pop” and which are left unloved.
We are helping publishers to overcome this issue by co-funding games that are going through their greenlight process thereby allowing them to spread their pot of cash across more games with a partner who can be relied on not just for finance, but for helpful connections and investments in the games industry built up over the past 5 years.
This network is derived from ways we have supported and continue to support UK based companies with VGTR loans as well as specific equity investments into the wider games sector.
A couple of examples of businesses that we have invested in are:
1. Mod.io, which enables user-generated content (UGC) and since we invested has secured funding from Tencent, Lego and Sony to help it to the next stage.
2. Audiomob, which is seeking to improve in-game ads by making them less intrusive whilst remaining effective for brands.
Of course not all games can or will succeed but we hope that by partnering with the best publishers we can together give ourselves the best chance of backing winners and bringing more great games to market.