The current state of games investment

gamesindustry.biz:

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While the games industry benefited from a surge of interest and investment during the pandemic, the market correction and global economic uncertainty means the environment for seeking finance has changed dramatically in just a couple of years.

At last month's GamesIndustry.biz Investment Summit in Seattle, a panel of experts discussed the investment landscape at the moment – a conversation we will continue at the next summit in London on Thursday, October 12.

Kowloon Nights content manager Anlu Lui observed that investors are currently being a lot more cautious due to the "tough economic environment," adding: "For equity investments, investors want to see strong organic growth and positive cash flows as opposed to growth via acquisitions, as it may not be sustainable. On the publishing and project financing side, investors are more cautious about team background, also less prototype funding and signing fewer first-time teams."

Hiro Capital's investment director Joe Yuan added that everyone has been slower in the ecosystem.

"Investors are taking longer to issue term sheets and complete transactions, strategics have been slower on M&A and reducing valuations as many of the big buyers are digesting acquisitions of the past, and publishers are being careful about filling up their pipeline with the right deals," he explained. "This means companies need to make their runway stretch further and show more detail on their progress as they look to close additional funding."

Matt Bilbey, a venture partner at London Venture Partners, observed that seed stage funding is still very much active – in fact, he said that valuations are now back in line with