Ask HN: Has YC or other VCs invested in gaming startups? | Hacker News Reader

Ask HN: Has YC or other VCs invested in gaming startups?

22 pointsmondoshawan35 comments

My sense is production companies / studios are a risky investment, but infrastructure (twitch.tv being the prime example) are more of a lucrative target for VCs.

The studio risk is that the creative output of the individuals is the value you're investing in. Very few studios produce quality content in a machine like fashion, though there are exceptions (EA maybe? Lucas Arts in it's prime?).

Zynga might be another example of a VC funded "gaming" company.

Indeed: http://www.gamasutra.com/blogs/NicholasLovell/20100324/86975...

Yes, YC has invested in multiple gaming companies the most successful of which is Machine Zone. As for other VCs, the most active in the sector are Bing Gordon, Rick Thompson, and IDG Ventures USA. Lots of others throw money around, but it's common for investors to specialize in the sector.

I was in the YC 08 batch with the machine zone guys, great guys. It is worth noting that they didn't really start as a gaming company when YC invested in them. They built a social network app called "add her" that was designed to get people more followers. They pivoted into mobile gaming after YC and had huge success.

Signia has also made some gaming investments and had a gaming focused EIR for a while.

Signia = Rick Thompson

Some examples from YC

OMGPOP: http://techcrunch.com/2012/03/21/omgpop-iminlikewithyou-ycom...

Game of War, Machine Zone: http://blog.ycombinator.com/machine-zone-yc-w08-debuts-game-...

A Thinking Ape

Machine Zone is the maker of "Game of War" and they were YC W08: https://mobile.twitter.com/ycombinator/status/36050111121759...

Dots raised 10mil in their series A: https://www.crunchbase.com/funding-round/6f028590c883b23dfbe...

Yes. Minomonsters is one example of several.

Several people in this thread are pointing out Machine Zone. However, when YC invested, it was "Addmired" - http://techcrunch.com/2008/02/13/myspacers-will-love-this-ad...

They did move to freemium mobile games a while before the Machine Zone/Game of War stuff with some success [0] though.

[0] http://techcrunch.com/2012/03/27/freemium-game-dev-addmired-...

Yes, but they weren't a gaming company when YC invested.

Code Combat is a game for learning programming. They used to be a marketplace and hold competitions. These days I think they are experimenting with microtransactions.

Riot Games was largely funded by venture capital.

In 2008 they raised 7 million in VC funding from Benchmark Capital and FirstMark Capital.

Here's the press release: http://www.riotgames.com/sites/default/files/uploads/080710_...

You can get a gaming unicorn (Minecraft). However, Mojang didn't start getting interest from investors until they had enough cashflow to sustain their own growth.

There have been some recent IPO successes (Zygna, King). (And king.com is starting to look like a one hit wonder with Candy Crush Saga.)

AFAIK, Mojang didn't take any investor's money. It was just 3 partners and no outside money.

Once they were a success, investors did come soliciting. They didn't need it, as they had sufficient cashflow.

If Notch had solicited VC before he was a hit, the VCs probably would have just laughed him out of their office.

Chobolabs raised $7.3MM Series A round for the development of multiplayer mobile games. https://www.crunchbase.com/organization/chobolabs

I remember attending a talk by Eric Diep from "A thinking Ape" (gaming studio) at Hack the North.

If I am not mistaken, he mentioned that they were backed by YC and a couple other high-profile investor in the valley.

ZowPow was a YC gaming company: https://www.crunchbase.com/organization/zowpow

I worked for Plain Vanilla when they received a big round of financing lead by Sequoia. If you want to ask me questions: jokull@solberg.is

FYI http://yclist.com and CTRL+F are very helpful :)

Sure. Some examples include: TinyCo (a16z), ngmoco (acquired by DeNA), Gree, Kixeye. Maybe you mean "in the last year"?

Ironically, I /work/ at TinyCo now -- wasn't sure how they did their funding, though -- haven't broached the subject with our CEO yet. =op

[edit] Yeah, I meant in the last year.

Ha, I am a TinyCo alum who started his own gaming company. Let me know if you want to get coffee one of these days.

Would highly recommend you have a finished game + some revenue before you hit up institutional investors. In the mean time, find angels who respect you. Believe you are an engineer, so people won't often doubt your ability to produce.

http://instantesports.com

I guess I should have been more specific: I meant gaming as in video games.

Instant eSports is about video games even if they don't themselves make video games.

Thoughts on investing in a project vs investing in a company?

Wow, you are expecting HN to do research for you? The data should be easily available via crunchbase but it seems like you don't want to put the work in for basic research

The better question is will YC or VCs ever invest in gaming startups again and the answer (at least for YC) is most likely no. There are a few VCs that do specialize in gaming though.

YC is open to funding gaming startups if there's some reason to believe they could have a long-term sustainable advantage. With so much time spent gaming, there are surely more great new businesses to be built. I'm most optimistic about game engines, gaming hardware, and esports streaming and news. Or some new business model I haven't heard of yet.

(I'm a YC partner)

Do you speak for YC? Where do you get that information?

Just my opinion. Look at the last three batches or so of YC startups. The type of companies YC invests in today are the furthest things away from gaming.

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