As Web3 gains traction, indie game investors update their wishlists

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2021 was a record year for investment in the video game industry, with game deals exceeding $85 billion out of 1,159 deals announced or closed. This year has already surpassed that record, with over $107 billion in total investment in the first six months of 2022 alone.

But while money is pouring in from all sides (gamers, esports viewers, individual investors, M&A, growth funds, etc.), it's still hard for indie games to get noticed and grow. get the support they need in an increasingly competitive marketplace. , says Owen O'Donoghue, co-founder and CRO of InfiniGods. This is all the more true as the interest in Web3 innovations is accelerating.

"I have the impression that in the coming year, venture capitalists will become more cautious in terms of investments," he explains. “Growth funds will increasingly seek real traction from the companies they are considering investing in. That may not mean less fund investment, but they are less likely to take a risk on an idea. pure."

Why investors want a strong team

In the mobile gaming space, VCs are digging deeper into practical considerations and want to see more progress, including a minimum viable product, user engagement, proven monetization, scalability potential and more. However, the strength of the development team is becoming increasingly central to a company's narrative.

Investors are looking for experience in the industry, such as whether they've been able to scale a business (especially if it's a gaming company) and their success in recruiting people. teams in the past. They want to know that team members have not only been able to successfully ship a product, but that they keep up to date with updates, fixes, bugs, and player feedback, and that they are able to optimize it. Investors expect a game and business plan to change over time, especially in web3, but they want to be able to invest in the right team to ride that wave. While the idea remains primary, they're also taking a closer look at the team's ability to pivot based on changes in the market or as new metrics come in once the game is live.

“Investors are more likely to say this team has done it multiple times with larger companies or through similar startups, and had a level of success, a level of learning,” says -he. "They are happy to support this team even though they think the idea may change over time, as they believe the team will be able to evolve and adapt, given their background."

For example, when O'Donoghue and his partners met with investors for InfiniGods, they leaned heavily on their experience as individuals, he says the company's co-founder started and scaled a nine-figure business in the mobile gaming space, while O'Donohue himself has helped several companies scale and monetize through Facebook.

“We heard some investors say it was a real team game, as they expressed interest in investing, and others said there was capacity within of this team; we know the industry is going to change here, and we believe this team can adapt to that,” he explains. “Focus on your unique team differentiator, in your abilities. It may not be about the game. It may be about your ability to excel at user acquisition, live operations, or game analytics."

Teams are still essential for Web 3 investors

Now that blockchain technology is gaining traction, investors are steadily pouring money into crypto games. Blockchain game companies saw $2.5 billion in investment in the first quarter of 2022 alone – and analysts predict that figure could reach $10 billion by the end of the year. Blockchain game companies regularly raise over $3 million in rounds based on their ambitious plans to not only create a game, but also create an innovative tokenomic platform or loop.

Investors continue to pour money into infrastructure; for example, Thirdweb, which provides NFTs as a service, recently raised $24 million, some of it from Shopify, in a third round of funding. On the gaming side, the VCs are starting to move away...