Video game investment ventures have been a longtime debate among its communities as changing market demands and an unpredictable audience have made it difficult to predict the industry's growth.
Serious investors avoid the industry like a plague, while those already invested always mention long-term profits.
With the gaming industry at another turning point, let us see if these notions remain true in the ever-chaotic game studios.
More Funds, Less Projects Done
Modern game development requires a lot of funds, so much so that many studios filed for bankruptcy after releasing their supposed "magnum opus."
Just look at the recent industry releases like Spider-Man 2, God of War, and Cyberpunk 2077, all reportedly cost hundreds of millions of dollars in development.
Yet beyond the skyrocketing expenses to build these games, only a select few can get finished. Fewer still are those that can achieve success and good revenues.
People investing through Kickstarter and Patreon have been aware of these risks from past experiences as upcoming developers run with the fundraised money after failing to reach their ambitious goals.
However, this trend has gone beyond the small game studios into bigger mainstream game development companies as more projects were abandoned midway after years in "development hell."
Even more are unfinished products released as a full game, further reducing people's confidence in these studios.
Unless you are a hedge fund firm, investing in the current state of the video game industry would only be a huge financial risk with only a growing chance of huge losses.
Increased Visibility in the Indie Scene
If there is one good option to invest in, it would most probably be in established indie game developers.
As the Game Industry noted, video game investment in mainstream studios is at a "rock bottom" that investors would have a better chance of turning a profit in smaller game development firms.
This is not to say that a net profit is already guaranteed. Investors would just be sure that the studio would have a relatively better chance of success as they already know the limits a small developer team can have.
It would also have a much higher chance of being acquired by a bigger game publisher due to its already established reputation in the industry.
Leveraging AI Technology
With the industry reporting record-high layoffs, it is easy to see game studios slowly leveraging AI technology to boost production and profits.
While the development and application of AI remain swamped in ethical and safety concerns, it also provides a leeway for many entrepreneurs to continue their investments into game studios without the high risk it usually poses.
Yes, AI development is another costly venture. However, it has a higher chance of turning a profit due to the sheer number of demands alone.
From a business perspective, investing in AI companies working with game studios promotes revenue growth for short-term income.
Long-term growths, however, remain contentious as government crackdowns force AI firms to slow down in the distribution and development of their next AI projects.
