Image by: Ian Lamont
By Steven Morrison II
The video game market is huge and it is only going to get bigger ($15 billion and counting). The new model for game makers – targeting social media and apps only – has not only breathed life into the once-stale market, it has also made a bunch of new millionaires in the process. Those smaller video game makers are a hot commodity on the angel investor and venture capital scene.
So if you have a cool idea for a little game, now is the time to strike. These days, angels are eager to get in on the ground floor of a gaming venture and write that starter check for a half million. And scores of venture capitalists are waiting to strike deals after that angel lifts you off the ground. Don’t have a game idea? Get yourself some angel wings and fly … or find some like-minded investors and form a VC group.
And according to a happening video game producer, the hottest cities for game development are Austin, Seattle, Los Angeles and San Francisco.
The hottest buzz is around “mid-core” games, the type that fall somewhere in between the more hardcore games such as Call of Duty and casual games such as Angry Birds. “Mid-core” mobile titles keep gamers coming back for more with plenty of action and a compelling story line. Mid-core is considered a better bet than the lock-yourself-in-the-basement-tethered-to-a-headset types as they appeal to both men and women.
OK, true – the once-mighty Zynga is struggling right now, their stock has plummeted by 75%, they just reorganized their management team, and mass layoffs and office closings are rumored. But the guys who brought you hit Facebook games such FarmVille and CityVille made everybody a bunch of money … including themselves. Remember that glorious IPO?
But companies such as Zynga are looking to rebound on the back of the “mid-core” trend. Zynga just snapped up November Software, an exciting young “mid-core” maker. The specifics have yet to be revealed in that exchange. The point is, both Zynga and November were able to get to the point of profitability much cheaper and much faster than “old school” console game makers, who have many more hurdles to overcome before hitting the market.
The Great White North is hot right now, thanks to a steady stream of successes unrelated to hockey, back bacon and beer. Tapping into that momentum is Execution Labs, which recently raised $1.4 million in VC from a multitude of sources. Execution Labs doesn’t make games, but helps other aspiring designers to bring their ideas to market. That’s an interesting model as well.
“The move shows that games are still attractive to both investors and entrepreneurs, and mobile gaming is becoming the focus of most game startups,” says Venture Beat‘s Dean Takahashi.