Hundreds of followers descended on MCM Comedian Con at Excel London final week, many of them in extravagant costumes, all keen to satisfy their heroes and spend lavishly on tie-in merchandise. However whereas all that was happening downstairs, for those who’d ventured as much as the third flooring and appeared behind the Cosplay Hospital (sure, it is a factor), you’ll have discovered dozens of games business people gathered in the greyest room you’ve got ever seen, all speaking about money and the way greatest to get it.
The GamesIndustry.biz Investment Panel shaped half of the Investment Summit put collectively by Recreation Republic at this 12 months’s EGX/MCM Comedian Con (the two had been mixed in 2024). The stellar panel was made up of Cassia Curran (former head of enterprise growth at Jagex and founder of Curran Games Company), Lirui Ding (principal at the gaming enterprise capital agency Transcend Fund), Simon Byron (managing director of Yogscast Games), and Meg Clarke (recreation scouting supervisor at Team17).
The subjects beneath dialogue included alternatives for funding and the future outlook for the games business. However first, in my obligation as chair, I had a urgent query for the panellists: the place did all the money go?
“I believe there are most likely two components,” replied Ding. He defined that the first half is that the games business attracted quite a bit of what he referred to as “tourism capital” throughout its COVID increase years. “These are the individuals who do not actually know the gaming business that nicely: Some of them do not even play games,” he mentioned. “I believe it disappeared as a result of they did not know the way to make investments. […] Heaps of the investment sadly failed, in order that money disappeared.”
The second half is that quite a bit of the games business investment has been shifting out of the US and into Europe over the previous few years. “However then from final 12 months, we’re actually seeing quite a bit of money truly going from the US and Europe to different rising markets,” he defined, “whether or not it is China, Turkey, and even Vietnam.”
“I suppose for me the money’s not gone,” replied Clarke when requested the similar query. “I believe it is simply diversified and redistributed – clearly you’ve got already touched upon [the money] going to completely different territories, differing types of traders. I’d say there is a band of funding that has undoubtedly dried up and that’s these increased finances triple-I games. However the wonderful thing about the games business is it is extremely resilient, and quite a bit of these folks which were laid off after COVID, they’ve began new ventures, they have been in a position to increase capital. There’s hundreds of little boutique publishers popping up, hundreds of funds for a lot smaller initiatives. […] There’s quite a bit of money there that may be invested into grassroots initiatives and into smaller corporations.
“So there may be money there, it is simply not the place it was earlier than. There is a band that is dissolved and melted right down to the smaller initiatives beneath, and it is gone a bit wider over the world. So we’d really feel it just a little bit extra right here in the UK, the place our value of dwelling is quite a bit increased attributable to many components. However some of these smaller territories, these upcoming territories, are [seeing] much more investment, as a result of their initiatives are extra reasonably priced to traders, particularly new traders.”
Curran emphasised that the COVID investment bubble undoubtedly burst some time again. “However at the similar time, I additionally suppose that we’re seeing continuous strain upon not simply games, however all types of leisure content material,” she mentioned. “There’s simply far more of the whole lot. So there’s strain from TikTok, social movies, streamers, there’s so many free choices to entertain your self.”
In different phrases, it isn’t simply the games business that is feeling the pinch: Curran gave the instance of cinema revenues being down in 2024 from pre-pandemic figures. “Additionally, with games particularly, you used to have a refresh of content material with each new console technology,” she continued. “That is now not taking place, and you are not solely competing with new games, you are competing with previous games – folks enjoying for nostalgia functions. I believe everybody right here has obtained an enormous Steam backlog of disgrace.”
Basically, as a result of digital distribution means customers aren’t restricted to purchasing what’s on store cabinets, new games are competing not solely with the different games launched that week, but additionally with games going again years. “So even when the quantity of gamers continues to be rising, the quantity of content material is rising even sooner.”
Byron mentioned that this 12 months hasn’t felt like an enchancment. “I used to be promised final 12 months that if we survived until ’25, it was all going to be nice,” he mentioned. “Effectively we’re right here, and it’s fairly tough.
“The money’s nonetheless there, proper? Publishers have to publish, so there may be money there. I believe the actual problem is that the whole lot has shifted. In case you take a look at the folks which might be doing nicely now, they don’t seem to be the people who had been doing fairly so nicely two years in the past, 5 years in the past – and people foundations that the greater corporations had been constructed on are being eroded.
“You are seeing corporations coming in and discovering success by being extra agile, extra nimble, and simply rolling their sleeves up. We enjoyment of seeing games pop off on Steam at the second, and sometimes they arrive from folks you’ve got by no means heard of.”
In brief, all bets are off. “The previous belongings you used to depend on – these indications of success and the belongings you thought you needed to do – are fully completely different nowadays.”
Ding emphasised that the scenario varies by area. Whereas he discovered that folks had been nonetheless gloomily speaking about “survive to ’25” at GDC this 12 months, he seen the temper was “completely completely different” at ChinaJoy, Tokyo Recreation Present, and Gamescom Asia, which had been buoyed by the successes of games like Black Delusion: Wukong from China and Stellar Blade from Korea.
Alternatives
On the subject of discovering alternatives in the present market, Clarke emphasised that builders ought to concentrate on making games that imply one thing to them, reasonably than chasing developments.
“I listened to a podcast with Willem Dafoe, and he mentioned one thing that I preserve reusing, which is: ‘Do the factor to do the factor.’ Do not do issues to please different folks, as a result of if they do not prefer it, you make one thing that you just hate. So for those who make one thing that you just get pleasure from that is impressed by issues that you just obtain enjoyable, good vibes from, […] that is the greatest begin.”
Clarke emphasised that trying to chase developments is prone to see your recreation being misplaced in a sea of related content material. “In fact, some folks see success with genre-chasing,” she certified, “nevertheless it actually relies upon how agile you might be, how progressive you might be.”
Nonetheless, the days of publishers signing new games on the energy of a paper pitch alone are lengthy gone. “We undoubtedly want at the very least a prototype,” mentioned Clarke, including that that is the case for many publishers she is aware of. “It is even true for sequels: we nonetheless need to have the ability to see that new mechanic or that new factor starting to be confirmed out. So you will want a pitch deck, you will want a manufacturing plan, and you will want a prototype.”
Curran highlighted a really particular alternative for builders in the VR area that she mentioned is just prone to exist for the subsequent 12 months or so. “Free to play on VR is definitely breaking out,” she mentioned. Whereas the free-to-play market on PC, console, and cell is at the moment mature and exhausting to interrupt into, it is solely simply rising in the VR area by multiplayer titles like Animal Firm.
This market is being pushed by a brand new demographic: VR natives. “They’re principally youngsters, actually younger folks, who after college, they go residence, placed on their headset, they usually’re leaping into Animal Firm, Yeeps, or Ruffnauts,” she mentioned. All of these games use related locomotion strategies to Gorilla Tag, and all are extremely social. However Curran emphasised that point is working out to affix this market earlier than it turns into saturated. “This can be a very particular area of interest pattern alternative that can shut.”
Ding added that in phrases of funding alternatives, Transcend is on the lookout for each distinctive games and those who fall into beforehand profitable genres. He gave the instance that Transcend has funded Midsummer, the studio shaped by XCOM artistic director Jake Solomon, which is engaged on an “AI-native” life simulation recreation – a recreation that “folks have by no means ever seen earlier than,” mentioned Ding. “It took us some time to know what the recreation is about.”
On the flipside, Transcend can be funding a co-op shooter made by Ruckus Games, a workforce led by the former artistic director on Borderlands 3, Paul Sage. “That is a really, very confirmed style, however we’re seeing quite a bit of innovation inside that particular style as nicely. So we’re fairly versatile.”
The future
Lastly, what does the future appear like for games funding? “I believe usually it’s actually encouraging to see quite a bit of builders reinvesting in the business,” mentioned Clarke. “We’re seeing quite a bit of funds and publishers crop up from profitable devs. Clearly they are going to be slicing their tooth in the precise publishing area, however they’ve revealed their very own recreation earlier than, and now they’ve determined to assist others. And I believe that is a extremely encouraging signal that the money will not be being taken away from games and put into different locations.”
However she added that funding will not return to the highs we noticed a number of years beforehand. “I do not suppose we’ll bounce again to COVID numbers – except a horrible world occasion occurs.”
Clarke suggested builders to entry prototype funds to assist pull a demo collectively for pitching – and to be aware of budgets in the early phases. “You actually need to carry these beginning prices right down to as little as you’ll be able to,” she mentioned. “However getting that prototype collectively is what is going on to maintain the curiosity of traders.”
“You actually need to carry these beginning prices right down to as little as you’ll be able to”
Meg Clarke, Team17
She famous that the future will favour smaller groups. “There was this bubble of actually excessive investment, actually giant groups, that sadly simply did not repay. The gross sales weren’t there to help that mannequin. However we’re seeing hundreds of success with hundreds of micro groups and actually progressive, enjoyable, thrilling concepts.”
Curran mentioned that the games business hasn’t actually had an inflection level that triggered a model new space of development since the debut of smartphones in the late 2000s. However she thinks there can be development in areas of the world that have not but totally embraced gaming. “That is the place you may see the funding occur.”
Except for that, she highlighted authorities investment in the UK games business as a optimistic signal, and she or he additionally emphasised that making games must be about ardour first. “There are a lot simpler methods to make money – don’t make games simply to make money.”
Slightly than funding, Curran mentioned the largest downside games makers face is advertising – slicing by the noise and discovering an addressable viewers. However she added that this was the place quick, public prototyping can supply advantages, whereby builders can showcase an early, tough and prepared prototype on TikTok. “If it takes off, then they double down on that, and if it would not take off, then they make one thing else. So truly the very first thing they do is show that there is market demand for it.”
Byron suggested builders who wish to fund a recreation to work out precisely what they need forward of time. “I believe publishers are easy creatures who wish to know what it will be like, how a lot it will value, and when it will arrive,” he mentioned, including that some builders come to him with no agency funding determine in thoughts. “Simply work out what it’s that you just want, and ask for it.”
“In case you’re beginning to make a friendslop recreation now, it’s too late”
Simon Byron, Yogscast Games
Once more, he emphasised that “publishers want games to publish, so there are alternatives on the market,” though he echoed Clarke’s warning about pattern chasing. “Friendslop is in vogue at the second, however once more, for those who’re beginning to make a friendslop recreation now, it’s too late. Do what you wish to do, make the recreation that you just wish to make, and make it enjoyable. Ensure that it is enjoyable for you: if it is enjoyable for you, hopefully it is enjoyable for others, too.”
Ding ended the discuss on a optimistic be aware. “I believe the future seems fairly vivid in my opinion,” he mentioned. For one factor, he notes that at the moment there is a most of round 4 billion individuals who play games of one type or one other, which signifies that there’s nonetheless greater than half the inhabitants of the world to entice into the world of gaming.
He additionally highlighted how games have develop into one of the foremost social actions for the present youthful technology, utilizing his personal children for example. “Each time I ask them, ‘Do you wish to invite your pals over for a play date?’ they are saying, ‘Can we play video games?'”
Then there’s the rise of AI to think about. “I am truly just a little bit stunned nobody was speaking about AI on this panel,” Ding mentioned. “I believe there are quite a bit of issues that folks can do with AI, to construct a prototype faster and cheaper. There are additionally alternatives in the sense that I really feel the greater potential of AI will not be about value slicing and doing issues faster and cheaper, however to give you new, progressive gameplay experiences.
“My favorite analogy is at all times inventing a spaceship. The entire level is to not go from London to Edinburgh or to Newcastle faster. The entire level is to get on that spaceship and take it to new locations. I really feel like there was quite a bit of dialogue about how one can leverage AI instruments to do issues faster, which is nice, however what about the different aspect of the coin? Have you considered how we are able to use AI to construct a brand new progressive, immersive recreation expertise that would make gamers be extra engaged, and even convert some of the non-players into gamers?”