Games Industry Venture Capital Plummets 22
Thanks to ElectricNews.net for a synopsis discussing the difficulty of raising venture capital for the games industry. They reference a Wall Street Journal article mentioning that only USD37 million was invested in games-related firms in the US in 2002, down from USD66.9 million the year before and a peak of USD295.3 million in 1999. According to the article, apart from the wider downturn in VC activity since the late 1990s: "'Historically, in the games business, a lot of companies really succeeded by hitting it big with one blockbuster,' says Jon Callaghan, managing director at Globespan Capital Partners. 'As a VC, it's very hard to invest in that.'"
State of the industry (Score:5, Interesting)
It's a tough time in the games industry, and anyone contemplating getting in should do the research thoroughly. While the risks are high, I believe game development could be refined into long term sustainable, profitable business by re-thinking the process of game creation.
Meanwhile, even government organizations like TEKES [tekes.fi] in Finland have started to seriously support the development of games and related technology and IGDA [igda.org] has already networked thousands of game developers together. Individual developers may fall, but game development is still a growing industry [idsa.com].
And we all heard about the return of shareware [cnn.com]. PopCap's Bejeweled [popcap.com] may not turn the heads of VCs with it's content, but a million copies sold is no peanuts.
Maybe if I finally updated my Palm games [hybrid.fi] (/shameless plug) I could get rich quick, too. :-)
Jouni