Despite the findings of Pitchbook’s Q3 2023 Gaming Report, which found a decrease in the investment dollars spent in the gaming industry, VC investors want to clear up one thing: they’re still out there, and they still want to invest.

In a recent piece by Christopher Dring, investors spoke freely about the state of the industry and how it’s affected investing, ultimately assuring developers that their dollars are still available. They’re just being far more cautious with what they’re investing in, and cautious investors mean that the process to secure funding is getting a little more difficult.

As VC Hiro Capital partner Spike Laurie states, “The bar is super high right now. Before, a great game idea plus a great team used to cut it.” Laurie goes on to explain that teams need to bring more to the table. Investors need to see a viable product. Regardless of how cohesive and well-organized the development team may appear, it’s not the selling point it used to be. 

Especially in a climate where layoffs are frequent. For teams that emphasize pushing a creative idea over following the trail of preexisting successful ideas, this shift may very well be a good thing.

“One of the big learnings for games venture capital over the last couple of years is just because you’re really good at making games in a corporate structure, that doesn’t necessarily mean you have the entrepreneurial mindset. And that mindset is unique,” Laurie said. 

Reading Between the Lines: It’s Time to Get Unique

Picking apart Laurie’s comments actually paints a potentially positive picture for the future of the gaming industry, so long as developers are willing and able to play along. Investors no longer want to opt for the safe, corporate bet. They want a team that is passionate about their project and has an eye toward what the market needs. No longer will trends drive the industry, as it tends to as recently seen with the surge of Games as a Service (GaaS) titles. 

Unfortunately, that does mean more work for the indie developer. Anyone seeking an investment will need to start by displaying their market-driven approach. The project needs to reek of new ideas and unique concepts and shouldn’t seek to ape similar titles. But while it may be harder on developers, it’s better for the consumer.

Consider the surge of P.T.-inspired, slow-burn horror games that were released shortly after the brief demo for the now-canceled Silent Hills released. How many were simple asset flips, using the same formula and just barely tweaking the concept? Steam’s library was ripe with copycats, some better, some worse. But developers weren’t stretching their creativity, and consumers were settling for recreations of an original idea.

As we move forward, that approach won’t appease investors, and it’s more likely that recycled or even marginally different ideas will be overlooked. “Those who should be most concerned are those producing just another game that has marginal improvements on other comparable titles,” London Venture Partners principal Harry Hamer stated.

Appealing to New Investments

There is a lot that factors into whether VCs are comfortable investing, and much of it developers have no control over. Things like interest rates on loans and inflation are beyond the scope of the development team, so all that can be focused on is the game itself. 

At Loopr Partners, we stress the pitch, and the dialogue in the GamesIndustry.biz article really supports this approach. You need to have a strong pitch for your game now more than ever because while the investor dollars may be out there, they’re tightening the purse strings, so to speak, and only opening them when they can really get behind an idea.

“It’s about how are you validating [the investment]? What can you show me… have you made a trailer? Do you have a Discord community that really loves the concept? Are you using companies to play test so you can validate and get real feedback,” Laurie explains. “There is a lot more scrutiny.”

So, what should you focus on as a developer seeking a VC investment? We stress it often, but you should be able to present:

• A trailer / vertical slice
• Gameplay
• A tailored market/audience
• Community feedback

Loopr Partners is Here to Help You Secure Your Investment

At Loopr Partners, we’ve watched the industry grow somewhat stagnant and have seen the fallout from underperforming games and lofty expectations. AAA development teams have been put under the microscope, and the practices that have led to frequent layoffs and subpar releases will be corrected. 

While the industry undergoes this correction, indie developers have an opportunity to step in and steal the spotlight. This is your time to shine, and we’ll use our knowledge of the industry to help develop the pitch that’s going to earn you an investor’s attention.

Let’s talk about how we can use this shift in investment strategy to your advantage. Contact Loopr Partners to get started, learn more about your investor goals, and secure funding for your one-of-a-kind gaming experience.