Games Funding Has Dried Up
In these tough times, cash money reserves have dried up. It’s the same the world over, and the games industry is no different. Especially if you’re a start-up.
According to Games Investor Consulting director Nick Gibson “In the last four or five months there has been a collapse in venture capital and, more broadly, private equity funding for privately-held games companies”. These aren’t the big, publicly-owned companies like Activision or EA we’re talking about. These are the new guys, the small guys, the ones that rely on big cash investments to get up and running.
Gibson says things are so bad for the little guys that, according to Gibson’s research, “private funding for games companies” is down a whopping 60% from the same time last year.
So if you’ve got a great idea for a new game, and you and your buddies want some cash to get things started, you might want to hold off for a year or two. That or start saving.
Funds and Games [Develop]
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Comments (AU Comments | US Comments)
@PatrickF**kingStar: still, if the companies are too small, they wouldn't be able to afford the production costs.
Sony's Pub Fund, anyone?
One wonders what would happen if the big devs would help out these indie guys...
DredPriest
At least we have XBL Arcade, PSN, and WiiWare still around to help the little guys.
Well, I think everyone saw this coming. Though, if someone has a idea for a game that they think is great, they'll find the money somehow or go about it in a cheaper way.
Well, I think everyone saw this coming. Though, if someone has a idea for a game that they think is great, they'll find the money somehow or go about it in a cheaper way.
Incidentally, the Gov. of Texas just signed an entertainment industry incentive bill which will give cash payments to game developers based on a percentage of their project costs based on how much they spend so long as it's at least $100,000.
Suzaku
Not surprising.
As rampant as piracy is, nobody want's to invest into something and get no return.
Not surprising.
As rampant as piracy is, nobody want's to invest into something and get no return.
Lean times all around these days. Here's hoping the market will start to turn around soon and cash start flowing again.
Indie and start up game developers have traditionally been the driving force of true creativity in the industry, IMO. Less money for them means more regurgitated and retread games for us.
Lean times all around these days. Here's hoping the market will start to turn around soon and cash start flowing again.
Indie and start up game developers have traditionally been the driving force of true creativity in the industry, IMO. Less money for them means more regurgitated and retread games for us.
@PatrickF**kingStar: And Steam and Impulse on the PC side. Many great indie games were introduced to me by them.
syafiqjabar
@DredPriest: That's easy to answer.
They start working on Madden.
Black-Dog-Howls
@DredPriest: That's easy to answer.
They start working on Madden.
Black-Dog-Howls
I got laid off from my studio last month.
rich8606
@salmonellaboy: Maybe this will help to reverse the trend towards big budget, graphical "fluff" and bring the emphasis back to intriguing and novel gameplay? It would certainly be a more cost-effective approach.
@salmonellaboy: Maybe this will help to reverse the trend towards big budget, graphical "fluff" and bring the emphasis back to intriguing and novel gameplay? It would certainly be a more cost-effective approach.
@Xelmon: Right, because piracy is the only reason why people aren't buying games.
Groan...
Jonny Boon
@Xelmon: Right, because piracy is the only reason why people aren't buying games.
Groan...
Jonny Boon
@Xelmon: Right, because piracy is the only reason why people aren't buying games.
Groan...
Jonny Boon
@rich8606: Sorry to hear that:(
@rich8606: Sorry to hear that:(
@rich8606: Sorry to hear that:(
Thank god for things like Sony's pub fund and whatever Microsoft and nintendo are doing for there respective online platforms. I find myself looking forward to more cigital 5-10 dollar titles than AAA releases now. I bought a new game almost every month last year, I haven't bought a disc game since KZ2 and I am not getting another until Cross Edge and InFamous
Thank god for things like Sony's pub fund and whatever Microsoft and nintendo are doing for there respective online platforms. I find myself looking forward to more cigital 5-10 dollar titles than AAA releases now. I bought a new game almost every month last year, I haven't bought a disc game since KZ2 and I am not getting another until Cross Edge and InFamous
Thank god for things like Sony's pub fund and whatever Microsoft and nintendo are doing for there respective online platforms. I find myself looking forward to more cigital 5-10 dollar titles than AAA releases now. I bought a new game almost every month last year, I haven't bought a disc game since KZ2 and I am not getting another until Cross Edge and InFamous
@DeadMertz: um, that comment should have been directed to ryosen. /facepalm
DeadMertz
@DeadMertz: um, that comment should have been directed to ryosen. /facepalm
DeadMertz
@ryosen: On the contrary, salmonellaboy, that's what this article is about - investors moving away from small innovative developers. As typical with a bear market, the tried and true is where they will likely sink funds (games and otherwise).
DeadMertz
@DeadMertz: um, that comment should have been directed to ryosen. /facepalm
DeadMertz
@ryosen: On the contrary, salmonellaboy, that's what this article is about - investors moving away from small innovative developers. As typical with a bear market, the tried and true is where they will likely sink funds (games and otherwise).
DeadMertz
This is what killed Factor 5 (was around since the 1980s), Free Radical, etc. Sure Haze sucked but they had plenty in the pipeline (including a Star Wars game) and would've had no problem getting funding at any other time.
Mokon
@ryosen: When was "intriguing and novel gameplay" EVER the "emphsis"? Surely not last generation. Not the one before that. Not the one before that either. Or the one before that one.
No, the truth is the game industry has always sold the sizzle, and flash has always been what sells. This has not changed as long as I have been playing games. I don't think this generation is any better or worse on that front.
Mokon
@Cygnus_Mal: Lack of money isn't the problem. even if our economy was the best it's been in 100 years, we will still see the same regurgitated games and a few crummy indie games.
Big companies should release that new FPS, but at the same time let 15 people at the company make some mods and try out some innovative stuff, if it fails, what ever, cod10 is still going to make money. Otherwise your company has a new ip.
sereal
@Cygnus_Mal: Lack of money isn't the problem. even if our economy was the best it's been in 100 years, we will still see the same regurgitated games and a few crummy indie games.
Big companies should release that new FPS, but at the same time let 15 people at the company make some mods and try out some innovative stuff, if it fails, what ever, cod10 is still going to make money. Otherwise your company has a new ip.
sereal
@Xelmon: Yaya! piracy is the blame for everything!
Only people who really care about piracy is big companies who actually think a million downloads == a million less sales. Instead of evaluating their business plan, companies just blame piracy. How about releasing games for less money, offer more value for the dollar, and switch to the obvious money saver - digital downloads.
Piracy in the game, movie, and music industry is pretty bad; no ones going to deny that. Fighting piracy is nearly impossible and very costly as the music industry is finding out.
sereal
@Xelmon: Yaya! piracy is the blame for everything!
Only people who really care about piracy is big companies who actually think a million downloads == a million less sales. Instead of evaluating their business plan, companies just blame piracy. How about releasing games for less money, offer more value for the dollar, and switch to the obvious money saver - digital downloads.
Piracy in the game, movie, and music industry is pretty bad; no ones going to deny that. Fighting piracy is nearly impossible and very costly as the music industry is finding out.
sereal
@Koji Otaku: Or they'll go bankrupt, like dozens of studios have this year.
Cloral
@Mokon: People have selective memories. For instance, most people in my generation think that Transformers is somehow better and more legitimate than Pokemon, though in reality both are simply franchises created to profit off of kids.
Cloral
@sereal: Not the blame for everything, not blameless either.
@sereal: Not the blame for everything, not blameless either.
@sereal: Not the blame for everything, not blameless either.
@Cloral: And both are brilliant :)
@Cloral: And both are brilliant :)
@Cloral: And both are brilliant :)
With the insane dev costs and massive losses most companies are suffering I'm not surprised. I mean, what's the point in investing in something that's all too likely to fail unless a miracle occurs?
@sereal: Piracy killed my father, and raped my mother! D:
Mad-Hobo
@sereal: Piracy killed my father, and raped my mother! D:
Mad-Hobo
@sereal: Piracy killed my father, and raped my mother! D:
Mad-Hobo
@DredPriest: They would be swallowed up! Sorta like Legion... you know... ' I am one, I am many.' kind of thing.
I'll show myself out.
Mad-Hobo
@DredPriest: They would be swallowed up! Sorta like Legion... you know... ' I am one, I am many.' kind of thing.
I'll show myself out.
Mad-Hobo
@DredPriest: They would be swallowed up! Sorta like Legion... you know... ' I am one, I am many.' kind of thing.
I'll show myself out.
Mad-Hobo
Thanks high definition gaming!
Thanks high definition gaming!
Thanks high definition gaming!
My last day is today. Was a contract job and was told that I did a good job but monetarily speaking they couldn't afford to bring me on. Sad too because I liked working there.
My last day is today. Was a contract job and was told that I did a good job but monetarily speaking they couldn't afford to bring me on. Sad too because I liked working there.
My last day is today. Was a contract job and was told that I did a good job but monetarily speaking they couldn't afford to bring me on. Sad too because I liked working there.
@Xelmon: I think the global economy being in the toilet might have more of an influence on this particular turn of events.
This isn't my impression at all. Gazillion (in the bay area) is an example of a studio that just opened up and is hiring aggressively.
Chinese MMO publishers have plenty of cash, and companies like Blizzard, Bethesda, 38 studios, Cryptic, etc, seem to be actively staffing up. Iphone development seems to be turning into quite a community as well.
...And I'm normally very bearish on the macroeconomy.
MarionBarryHussein
@PatrickF**kingStar:
But how exactly will these "little guys" get the money to make these PSN, XBLA, and WiiWare games in the first place? That's the issue here - they need funding to develop the game, not sell it.
Blah8
@PatrickF**kingStar:
But how exactly will these "little guys" get the money to make these PSN, XBLA, and WiiWare games in the first place? That's the issue here - they need funding to develop the game, not sell it.
Blah8