The global video game industry earns more money every year than combined films and music. But that does not mean that the sector was immune to macroeconomic impacts in recent years. Gaming companies have held Size LayoffsAnd the financing of the company in the category A reached a hollow of five years in 2023. But the VCs are optimistic that things will turn this year.
The game startups raised $ 2 billion last year, according to a report From VC vc konvoy vc vc vc. The total of 2023 was considerably decreasing compared to 2021, $ 9.9 billion and 2022, $ 6.7 billion.
Many VCs think that 2024 could be a bloodbath for startups, in general, because outings are not likely to return to any type of normality until 2025; Many companies will lack money and will have to close. But video games could be an aberrant value, according to some VCs.
On the one hand, there were still a lot of positive milestones for the sector in 2023. There were several titles published last year which collected a general public, including Baldur’s Gate 3 And Hogwarts inheritancewhich has each sold more than 22 million copies. Despite a flat year for growth in terms of the overall games industry, video games should still become an industry of $ 229 billion by the end of the decade.
The category also changes, which opens the door so that startups are launching alongside new trends. While the drama around Apple App Store costs continues to persist, the industry is moving away from mobile games – which has traditionally collected the most money – and to multiplatform games, which are more expensive to Do it, but more lucrative too. Unlike certain categories, AI is just in its first sleeves in video games and will probably start to play its place this year.
Josh Chapman, co-founder and director of director at Konvoy, said that industry should regain normal growth in 2024. The increase in activity caused by tourist investors arriving due to peaks of fuel game in pandemic and The people of the crypto-there from the web 3 game all withdrew in pandemic. Industry can return to organic growth this year, he said.
“Many web3 and crypto stuff in the game somehow evaporated last year,” said Chapman. “The lack of web game companies that weigh on the market have resulted in an overall drop in transaction flow. It is a sub-sector of the game, everything else has remained strong enough. »»
Ilya Ereeev, managed and general associate with the game fund, told Techcrunch that despite the industry that comes out of a more difficult year for fundraising, there are a lot about it. One of the main things is the amount of developer talents available after the industry has lost thousands of dives through layoffs last year. In addition, the remuneration of these positions has decreased, which means that startups could be able to win the best talents on this market.
While some of the tourist investors have left space, companies remained active and began to participate more in the early stages. It also goes against the wider venture capital space trends, where business VCs participated in the lowest percentage of the American agreements in 2023 in nine years, according to Pitchbook data.
“Strategies in Asia trying to manage operations abroad in Europe and the United States, in particular in Europe, they realized that there was an opportunity for growth in this region,” said Ereev. “Sometimes they have accumulated a lot of capital, they must invest and are more open for high -risk transactions and they invest at an early stage.”
But the biggest trend to watch in video games this year is AI. Although the frenzy of the AI in 2022 has sparked many existing companies to praise their AI prowess or many companies to start building quickly, it was not as immediate for a jolt of the Gaming Sector Video, said Ereeeev. But companies are starting to get started, and they could have major implications – in particular with regard to costs associated with the creation of games.
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Mobile reigned over the play space for a long time, not only because the games were popular, but because they were not as expensive to produce as an immersive PC game on data. This made them more supported by an adventure. Sofia Dolfe, Partner of Index Ventures focused on the game, said that watching AI will take place in the video game sector is one of the things it follows most this year.
“We are in the first round of AI, it will reduce the ability to create something, it will also reduce the barrier of certain areas of play that have been less invested in VC,” said Dolfe. “Triple AAA Quality Games on PC which had very long creation cycles, it does not lend itself as much with the capital model I am excited.
Another development to watch. There could be really interesting advances where games can become more a choice of your own adventure in a way if AI allows users to fully control all aspects of the game, including NPCs (non -playable characters). This must of course have railings and directives, said Ereeev.
Interestingly, no investor mentioned the RA or the VR as an area of growth that entered them this year. But with the current list of large versions of video games planned for 2024, and with Disney taking a 15% stake in Epic Games last week, VC investors can have good reasons to be optimistic about this and startups of long -term video games.
“It will be a very delicate and stimulating year for the game industry, but incredible opportunities will emerge,” said Chapman. “If you look at Halo, Halo was built in 2001. League of Legends was built in 2009. Different times produce incredible businesses.”