Gaming VC fund Konvoy Ventures has published its latest report on the state of financing in the industry. His findings show that enterprise capital funding overall increased by about 1% quarter over quarter, but growth stage funding increased. Overall transaction volume also declined quarter-over-quarter.
Konvoy’s findings show that the gaming market might be price $188 billion in 2024 and $223 billion by 2029. Private gaming financing in the third quarter of 2024 might be $811 million, an increase of 15% in comparison with the previous quarter. The total amount of personal funding for the three quarters of the 12 months is so far higher than the total amount of personal funding for the 4 quarters in 2023. However, this is mainly on account of Disney’s $1.5 billion investment in Epic Games.
The total variety of gaming VC deals in the quarter was 92, down 14% quarter-over-quarter. Growth stage financing – Series BD financing – totaled $262 million, higher than the 2023 average of $159 million. On the other hand, early-stage financing – pre-Series A – is the lowest since the first quarter of 2020.
Jason Chapman, managing partner of Konvoy, said in an interview with GamesBeat: “We are seeing encouraging signs of normalization in gaming VC funding over the last six quarters, despite macroeconomic challenges. The gaming industry continues to order people around and demand their time, proving its resilience. However, even as AI gaming deals have increased, traditional content studios are struggling with limited VC funding. The content itself does not seem to be a good fit for venture capital at this stage.”
Konvoy Report: Artificial Intelligence-Powered Finance
One of the conclusions of the Konvoy report is the increase in investments in gaming firms related to or referring to artificial intelligence. Such firms received 22% of funds in the third quarter, i.e. USD 113 million. That’s up from 10% and $52 million in the previous quarter. According to the report, the two largest investments in AI firms occurred in the third quarter: Volley’s $55 million fundraising round and Series Entertainment’s $28 million Series A financing round.
Chapman told GamesBeat: “We’re seeing a lot of VC interest in AI gaming startups, especially those focused on virtual characters that improve player experiences. Startups that help game studios create and edit content faster, especially in areas like graphics and video creation, which make up a large portion of production costs, are seeing significant interest. These AI-powered tools are improving game development and attracting more investor attention.”
Konvoy’s complete gaming industry report includes regional information and is now available on the company’s website.