Investors Say There's Still Money to Be Made in Games

Traditional game publishing is no different than newspaper publishing, Gus Tai of Trinity Ventures said at a panel discussion held at the GamesBeat conference today in San Francisco. They are broken from a content standpoint, and they are broken from a distribution standpoint. It is the companies willing to step in and disrupt the status quo that Tai and his fellow venture capitalists want to invest in.

Yes, despite the recession, money is still being made investing in the gaming sector. As Tai disclosed, he’s looking to invest between $2 million and $10 million in companies during their formation stage — particularly those that are bringing new content, distribution, or monetization angles to the industry. “Companies that are easy to invest in have a first-play advantage,” says Tai.

That $2 million-$10 million range is popular among VCs. Benchmark Capital’s Mitch Lasky is searching for companies in the social space to drop a few million into during their first and second rounds of funding; he’s also interested in payment systems. While Janice Roberts of the Mayfield Fund, which has invested in the likes of casual portal PlayFirst and free-to-play game company Acclaim, is more interested in targeted demographics than a particular game category — she’s chasing after women and kids across platforms.

But Lightspeed Venture Partners’ Jeremey Liew says you can’t make money investing in a single game, that you need visionaries who can crank out multiple projects and find ways to expand upon their successful titles with new levels and content. His focus, subsequently, is on gaming factories.

“The traditional game company is dead,” Gus Ta said simply. “Five to 10 years from now, they will be where newspapers are today.”


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