The Video Game Industry Is Facing A Venture Capital Funding Problem

gameranx.com:

A new report suggests that the video game industry’s struggles in 2023 run deeper than firing staff and closing studios.

To be clear, 2023 has already been a rough year for the industry. While it’s true that we have not seen this much high profile releases come out in one year for a very long time, it’s also true that behind the scenes, the video game industry has been quietly in turmoil.

This week was particularly rough, with a series of official and unofficial updates revealing layoffs at multiple studios, including Naughty Dog, Sega’s Creative Assembly, Epic Games, Team17, Blizzard, Ubisoft, and Mediatonic.

But as was noted in this article from The Gamer weeks earlier, if you were paying attention, there were many other signs that the industry was quietly in turmoil. They note other layoffs in Microsoft, Sega outside of Creative Assembly, Firaxis, Take-Two Interactive, CD Projekt RED, and others.

We may have also not interpreted it this way earlier in the year, but this year’s cancellation of E3 is another bad sign for the industry. Even fans who think Geoff Keighly can gamely fill that void have to acknowledge that E3’s struggle to stay relevant did lead to people getting demoted or losing their jobs, a lost opportunity for many companies to promote their games, etc.

And now, there are new revelations from a new report from Bloomberg, using Pitchbook data. As reported by Video Game Chronicle, venture capital firms invested $ 700.3 million in video games in this year’s third quarter. That was a precipitous drop since those investments peaked at $ 5.9 billion just the year before, in 2022’s second quarter.

It also represents the lowest amount of investment in video games since the second quarter of 2020.

Some of this