Gaming investments were down 81% in H1 of 2023 compared to the equivalent period last year, according to the latest report by Investgame. It’s not that consumers are spending less time playing games, but rather investors are being more selective in what companies they back. The majority of the decline comes from much lower investment volumes in the growth stage, but also fewer companies getting funded in the early stages.
Figures released by Carta paint a similar picture.
If you’re a gaming founder, at the earliest stages, looking to raise money, below are a few tips to maximise your chances of success.
- Do your research and understand the market. Before you start pitching to investors, make sure you have a deep understanding of the gaming market, including the latest trends, the target audience, and the competition. What genre are you in? How big is that market? Is it growing? Who would be your closest competitors? Having clear answers to this will help you to create a more compelling pitch and demonstrate that you have a good understanding of the business.
- Build a strong team – this sounds obvious, but is especially important at the early stage, where there are less metrics or revenue to assess the attractiveness of your company to investors. Investors are more likely to invest in a team with a proven track record and a strong passion for the gaming industry. Make sure you have a team of experienced professionals who are committed to making your game a success. It’s better if the team has a track record of working together, and if they bring best practices from larger gaming companies.
- Have a clear vision and strategy for where the current round takes you. Investors want to know that you have a clear vision for your game and a plan for how you are going to achieve it. They are thinking about the next round and it’s important you’re able to articulate where the funding you’re looking to raise will take the company in terms of milestones/metrics. Be able to articulate your vision in a concise and compelling way. What roles will you need to hire? Do you have the skills in house to do UA/ retention? Sometimes, it’s better to think about starting with a smaller round to hit the right D1 and D7 KPIs, but without those it would be tough to raise a seed round.
- Demonstrate traction. Investors conversations go much easier when you already have some form of validation that your game mechanics work well even with a small cohort of testers. If you have a test flight version, offer investors to play the game, even ahead of a pitch. Investors want to see that there is already some interest in your game. This could include things like pre-registrations, social media following, or positive press coverage. If you can demonstrate that there is already some demand for your game, it will make it more attractive to investors.
- Think about innovation and differentiation. Take Steam for example – over 12,000 games were released on Steam in 2022. Assuming the 2023 has a similar rate, new games on Steam are expected to hit 13,728 this year…which is 37.6 games, every single day. How do you stand out in this environment? Is your studio embracing technology in a way that will help you reduce cost, increase speed and maximise KPIs? Generative AI poses a lot of interesting new opportunities in this space and you’ll be smart to be ahead of the curve.
In addition to these tips, it is also important to be persistent and patient. Raising investment can be a long and challenging process, and not every game will necessarily fit the venture capital model. Even if your pitch didn’t succeed at first, take note of investors who are supportive and offer help and keep them posted on your progress. At Remagine Ventures for example, we love to meet founders early in their journey and provide candid feedback. Want to have a chat? You don’t need to wait for a warm intro, just get in touch with us at info @ remagineventures dot com.
I'm a former general partner at google ventures, head of Google for Entrepreneurs in Europe and founding head of Campus London, Google's first physical hub for startups.
I'm also the founder of Techbikers, a non-profit bringing together the startup ecosystem on cycling challenges in support of Room to Read. Since inception in 2012 we've built 11 schools and 50 libraries in the developing world.
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