Now that the COVID-19 pandemic has forced millions into isolation, video games are seeing a surge in usage as people seek entertainment and social interaction.
When we surveyed gaming-focused VCs in October, Andreessen Horowitz partner Jonathan Lai predicted that “next-generation games will be bigger than anything we’ve seen yet,” eventually reaching “Facebook scale.” This month, when we asked 17 VCs how this era would impact consumer startups, gaming was one of the top verticals they named.
We wanted to learn more about how the venture community thinks about the future of this sector, so we asked five experienced gaming investors about where they do — and don’t — see new opportunities within this trend:
- Kevin Zhang, Upfront Ventures
- Ryann Lai, Makers Fund
- Shanti Bergel, Transcend Fund
- Bertrand Vernizeau, Game Seer Venture Partners
- Siamac Kamalie, Skycatcher
Below are their responses, edited for space and clarity. We’ll follow up with surveys on other gaming categories in the next couple of weeks.
And if you’re interested in understanding the challenges for gaming companies aiming to become next-generation social platforms, be sure to read my eight-part series on virtual worlds.
Kevin Zhang, Upfront Ventures
There are a lot of experienced teams launching studios to build socializing-centric games right now. What’s your framework for identifying which are most compelling?
Experienced team part is very important, games and genres and trends can shift, it takes a team that is disciplined to balance all the changing needs while still having a strong vision for core gameplay. Development speed and internal processes for decision-making are also very important. I’m less interested in AAA, 3+ year development cycles (nothing wrong with it, just less suitable for venture), more interested in teams where constant testing and experimentation from the beginning is valued and practiced within a fast and transparent decision-making process.
What’s different about MMO game studios founded recently versus those founded three or so years ago? Any distinct change in strategies, team composition, etc.?
Directionally as most large-scale game genres go they’re getting even bigger in scale and ambition. As well, it’s encouraging to see MMO now expanding beyond the traditional RPG tropes into many new setting and play styles, especially around more cooperative gameplay.