Blake and Mitch discuss the current environment for funding games and some of the challenges and opportunities for founders in the games space. They begin with a short survey of the current venture capital environment and the difficulties presented by industry consolidation, which has taken several of the important buyers out of the market. They also look at the pivots of some of the major game-specific venture funds, and how their investment strategies are changing to meet the current moment.
They turn to discussing the need to do more work, to show more proof, with less cash. They talk about the need for founders be prepared to answer questions about AI (and its implications for reducing costs). Regardless of whether AI will actually make games less expensive to create, venture capital investors will assume AI leverage in a new studio. They warn against trying to hand-wave or finesse the AI question, and instead argue for a purposeful, first-principles approach to this new, disruptive technology.
Your hosts turn to a look at the history of Stardew Valley and show how it has become a shining example of an independently-developed Forever Game that reached extraordinary success in an incredibly capital-efficient manner. They talk about how Stardew Valley (and Jenova Chen's Sky) might be templates for a low-burn, long-iteration approach to making a successful Forever Game.
Mitch and Blake close the episode with a look at how intellectual property has changed from marketing and customer acquisition leverage to a stand-alone value creation opportunity itself. They look at Hollywood's current obsession with games, and how some of the most successful movies in recent years have been based on game IP. They also look at the recent deals where game companies licensed their telemetry data to AI companies for training purposes, and how the new General Intuition company is using game telemetry from their previous Medal clip business to train AI models.
Netherlands