Abstract
This article examines the role of venture capital (VC) in the financialisation of the videogame industry. It analyses investment data to map the political economy of VC in the videogame industry and public-facing industry discourse to explore how VCs frame their investments. Findings show that VC investment is concentrated in scalable, high-growth areas such as mobile gaming, production and distribution infrastructure and emerging technologies like blockchain and AI. Investment is largely early-stage and geographically skewed towards established technology and production hubs. Discursively, VCs position themselves as driving technological innovation and cultural growth, and as playing a key role in shaping the industry’s future. The article contributes to debates on financialisation in the media industries by situating VC as a key (yet underexamined) institutional actor in contemporary game production.
Introduction
In a process commonly described as financialisation, financial actors, practices and institutions extend well beyond the market and into social and cultural life (Van der Zwan, 2014). The influence of financialisation on culture is particularly evident when it comes to the media and cultural industries – bearing on both the texts it produces and its industrial norms (deWaard, 2024; Galuszka and Legiedz, 2024; Wasko, 1982). The financial sector has had a significant – yet relatively underexamined – impact on the videogame industry. In this article, I contribute to an understanding of financialisation in the videogame industry by examining the influence of one specific financial intermediary: venture capital (VC), financiers who provide entrepreneurial funding and managerial resources to early-stage companies with high growth potential (often in exchange for equity stakes). As I show in what follows, VC in games has surged in recent years – likely due to a combination of factors: the industry’s status as a fast-growing high-tech cultural sector (Egliston, 2025; Nieborg et al., 2020) and subdued macroeconomic conditions (Hammond, 2024), representing a shift from a project-financing landscape traditionally dominated by large software publishing conglomerates (Kerr, 2017; Nieborg, 2021).
In this article, I explore the role of VC in the political economy of the videogame industry, presenting findings from two studies. The first maps VC investment in the videogame industry by analysing investment data, asking:
Research Question 1 (RQ1). How are patterns of VC investment in the videogame industry structured across firms, funding stages, geographies and technological foci?
This analysis identifies the leading VC firms investing in videogames, examines their portfolios and traces broader patterns of capital allocation to reveal VC’s meso-level influence on the videogame industry. Yet VCs are not only financial actors; they also work to legitimate their investments and shape perceptions of technological innovation through discursive means (Birch, 2023; Sadowski and Beegle, 2023). Building on this, the second study shifts from financial data to discourse, asking:
Research Question 2 (RQ2). How do VC firms frame the value of their investment and investment practices in the videogame industry, and what logics underpin these framings?
Through an analysis of public-facing material, I explore how VC firms construct narratives of investment that position and legitimate them as central actors in shaping the technological and cultural futures of the videogame industry.
Together, these studies provide a comprehensive account of the structural and discursive dimensions of VC in the videogame industry. By examining both patterns of investment and the ways these are legitimated through public discourse, the article contributes to understanding the political economy of financialisation in games. It shows how VC not only directs the flow of money into particular firms, technologies and regions, but also shapes the values and futures imagined for the industry. In doing so, the analysis extends debates on financialisation by demonstrating how speculative capital operates within cultural production (see e.g. DeWaard, 2024).
In what follows, I introduce related work conceptualising financialisation and setting out the concept as I understand it in this article, along with work on the financialisation of the media industries. From there, I introduce previous work on VC, along with explaining the mechanics of VC financing and the underlying logics that guide it. I then outline my approach to studying VC. The remainder of the article presents the findings of Study 1 and Study 2, concluding with a discussion of study limitations and implications for future research.
Related work
Financialisation and culture
Financialisation is widely understood as a phase of capitalism that has accelerated since the 1970s, exemplified by a ‘pattern of accumulation in which profits accrue primarily through financial channels’ – such as speculation, credit and rent-seeking – ‘rather than through trade and commodity production’ (Krippner, 2005: 174). Structural approaches to the study of finance, drawing from fields like law and political economy have examined how legal and institutional factors shape financial systems and markets (see e.g. Braun and Christophers, 2024; Palladino and Lazonick, 2022). Differently, economic sociology and anthropology have examined the micro-level settings in which finance ‘happens’, with ethnographies of traders showing how financial knowledge and technique are shaped by both material and cultural contexts, and how financial technologies and devices fold back to influence financial practices (Ho, 2009; Muniesa et al., 2007; Zaloom, 2006). Extending beyond the finance sector, a wider body of work has increasingly approached finance as a deeply embedded cultural and social condition. From this perspective, finance is understood as a range of discourses, practices and symbols that shape everyday life (Adkins et al., 2020; Haiven, 2014; Martin, 2002).
In this article, I integrate structural and cultural analyses of financialisation, examining the role of financial actors and practices while also exploring how financial logics have meso-level implications a specific sector: the videogame industry. To do so, I draw on Cooiman’s (2024) framework, which conceptualises financialisation as both a structural process – encompassing financial institutions and market actors – and a social phenomenon that embeds financial rationalities into culture and daily life. Cooiman describes this process as ‘imprinting’, offering a way to bridge political-economic perspectives with an analysis of financialisation’s consequences as materialised in life and culture.
Media, technology, games and finance
The media industries are one such area of life ‘imprinted’ by finance. The financialisation of the media industries, particularly film and television, has been a long-standing yet relatively underexamined concern within media studies. Operating within the tradition of political economy of media and communication, which seeks to understand the institutional power relations that shape media and communication production, distribution and consumption, foundational work by Wasko (1982) examines the ties between the film industry and its financiers (for instance, banks) throughout the 20th century. Subsequent scholarship in fields like ‘media industries studies’ has increasingly examined the economics underpinning media production (e.g. Havens and Lotz, 2016; Holt and Perren, 2009). This field of research has investigated how financial institutions and logics influence key stakeholders in the media industries at both meso and micro levels (see e.g. DeWaard, 2024; Galuszka and Legiedz, 2024; Lotz, 2019; Papadimitriou, 2017).
Beyond considering media industries in terms of creative and cultural production, recent work in sociology, science and technology studies (STS) and media studies has examined the financialisation of media technologies, including software and apps. The technology sector has long been (and continues to be) sustained by intense speculative investment from the financial sector (Crain, 2014; Sadowski, 2025). Sociological scholarship has explored the on-the-ground impacts of financialisation on work and innovation in the technology sector. For example, Neff (2012) shows how workers managed the risk and instability of the dot-com era. More recently, Shestakofsky’s (2024) study of an American startup highlights the push-pull between VC investors’ forward-leaning expectations and the practices through which startups work to remain aligned with them.
Despite research on financialisation in other media and technology sectors, it remains underexplored in studies of the political economy of the videogame industry. Over the past two decades, political-economic analysis of the videogame industry has tracked a series of shifts. Early scholarship examined industrial consolidation and organisational power in the (largely Western) videogame market during the industry’s formative years, focusing on the relations between a variety of firms and institutions – hardware manufacturers, software developers, publishers and the state (De Peuter and Dyer-Witherford, 2009; Kerr, 2017; Kline et al., 2003). Since the 2010s, platform studies have shown how firms such as Valve (Thorhauge, 2023) Apple and Google (Nieborg et al., 2020) and Unity (Nicoll and Keogh, 2019) have reshaped the sector around platform-based business models, consolidating control over production and distribution chokepoints. Indeed, as I show in what follows, the rise of production and distribution platforms has spurred much of the recent VC interest in the videogame industry.
Within videogame industry and production studies, research has examined project financing as a key force influencing industrial practice. Studies of entrepreneurial finance in games have shown how developers secure investment capital through government support schemes (Sotamaa et al., 2020), publishing agreements (Parker, 2020; Whitson et al., 2021) and crowdfunding (Smith, 2015). Ethnographic accounts detail the on-the-ground implications of these arrangements. Whitson (2018), for example, shows how Canadian indie developers internalise incubator funding guidelines that mandate workflow rationalisation via metrics and data analytics, with consequences for both labour and creative autonomy. In the Australian context, Darbas (2024) highlights how state funding produces tensions in a small commercial industry (namely, between creative ambitions and funding schemes underpinned by neoliberalised investment logics). As this literature highlights, project financing influences the practice of game production.
Distinct from project financing, a smaller but growing body of work has begun to interrogate the relationship between videogames and the finance sector. One line of research centres labour, showing how firms seeking to maximise shareholder value constrain working conditions and creative practice (Bulut, 2020; Legault and Weststar, 2021). Another examines corporate governance, with Nieborg (2021) tracing how Activision-Blizzard’s franchising and IP extension strategies are justified through promises of shareholder return. However, scholarship on VC in games remains limited. Media-historical work has noted VC’s role in specific regional contexts, such as Stuckey and Harkin’s (2025) account of Australian game development in the 1990s (with US VC investment from the tech sector stimulated by a comparatively weak Australian dollar, see pp. 5–7). Other studies have mapped investment but confined their focus to esports (e.g. Niculaescu et al., 2023; Partin, 2025). More recently, research has turned to the role of corporate venture arms (e.g. the corporate venture arm of Ubisoft), with attention to speculative investments in cryptogames (Egliston, 2025).
Building on the limited attention to VC, this article examines VC’s political-economic implications for the videogame industry, showing how this speculative form of capital has grown in prominence and now shapes the industry in ways distinct from historically dominant models such as publishing. Attending to VC in this way follows Robert McChesney’s (2004) call to better understand ‘how capitalism works’ (p. 45) in media and communication, which requires attention to constituent parts and stakeholders, finance being a crucial one. Examining VC therefore not only highlights an increasingly influential source of financing but also sharpens our understanding of the political economy of the videogame industry more broadly.
Venture capital
VCs are asset managers (Braun and Christophers, 2024) focused on purchasing equity-linked stakes in privately held companies. Over the past decade, VC investment has boomed, spurred by low interest rates and significant growth in investment focus on the technology sector (Shestakofsky, 2024). While a history of VC is beyond the scope of this article (see e.g. Sauter, 2020), it is worth noting that VC has played a central role in providing early-stage financing to many of the world’s companies. As Lerner and Nanda (2020) observe, VC financed 47% of US IPOs (of non-financial firms) between 1995 and 2019 (pp. 239–240). Relatedly, recent research has mapped the flows of VC investment across a variety of sectors (e.g. Komlijenovic et al., 2023) and geographies (e.g. Mason, 2007; Mkalama and Ouma, 2024).
In this study, I focus on a particular form of VC: private VC, financial sector firms that operate as pooled investment funds for their investor clients, rather than the VC arms of corporations or governments. While these latter forms of VC are also motivated by investments in early-stage enterprises, they may have additional goals, such as advancing strategic corporate objectives or aligning with national industrial priorities (see, e.g. Chesbrough, 2002). 1 Generally, VCs operate by buying stakes in early-stage companies. In so doing, VCs provide financial and managerial resources to help build up the value of those companies and then exit their investment by selling off their stake following a public stock issuance, or more commonly, through the portfolio company’s acquisition (Hellman, 2022). VCs raise funds from outside investors (known as limited partners) – ‘qualified’ investors, which could include wealthy individuals and families, but also organisations like public and private pension funds, university endowments and foundations, and insurance companies. These funds are invested by those who manage the VC fund – known as general partners (or, who we may mean when we say ‘venture capitalists’). Because VC firms aim to exit their investments, they tend to invest in companies with potential for significant and fast growth. It is as such that the technology sector – with startups having the potential for ‘hypergrowth’ (Cooiman, 2024) and to reach astronomical valuations – is fertile ground for VC investment (Sadowski, 2025; Shestakofsky, 2024).
Notably, a VC’s interest lies less in the immediate performance of a company than in its potential as a speculative asset (Cooiman, 2024: 593). Since most portfolio firms are expected to fail, VCs depend on a few outsized successes to offset losses. Profitability in the near term is therefore not the central concern; what matters is sustaining the impression that a company could one day generate significant value, thereby preserving the possibility of a lucrative exit (Howard, 2024). Indeed, this differs sharply from the videogame industry’s historically dominant publishing model, where firms such as Electronic Arts, Activision-Blizzard and Ubisoft fund development through a range of revenue-share or recoupment agreements (Kerr, 2017: 45). Here, financing is tied directly to the strong commercial performance of individual titles.
VC funding typically follows a structured process involving several stages, each with its own set of requirements and expectations (for a detailed account see Birch, 2023). Central to this process is the concept of valuation, which determines the monetary worth of an investment and influences the amount of equity a VC receives in exchange for their investment. Generally, a higher valuation generally allows a company to secure more funding while giving up less equity. Valuation is influenced by factors such as the company’s growth potential, market opportunity, competitive landscape and past financial performance (as well as other less tangible social and affective factors, see Elder-Vass, 2022). After initial valuation comes a seed funding stage. Here, the company is usually in its earliest phase, often just an idea or prototype. Seed funding helps companies cover initial expenses such as market research, product development and initial team building. Valuation at this stage is often based on the potential of the idea and the capabilities of the founding team rather than performance of an existing product. Once the company has demonstrated some success, typically with a working product or service, it may seek Series A funding. Series A investors are typically looking for evidence of market demand, scalability and a viable business model. Valuation at this stage is often based on the company’s current revenue, growth projections and market size. Subsequent rounds of funding (Series B, C and beyond) occur as the company continues to grow and scale its operations (with these stages offering larger amounts of funding commensurate with the company’s growth potential).
While VCs are important financial intermediaries, they are also important cultural intermediaries. Where value and valuation is configured through financial metrics, it is also shaped socially. As Elder-Vass (2022) neatly puts it, ‘value depends on what we think about it’ (p. 3). There is a discursive power that shapes value. Indeed, this is true of value in the finance sector, as economic sociologists have shown in studies of the discursive role played by securities analysts in their reporting to investors and fund managers (Beunza and Garud, 2007). It is also especially true in the technology sector, as accounts of the social construction of technology (Pinch and Bijker, 1984) and socio-technical imaginaries (Jasanoff, 2015) show. It is also especially true of VC. VC not only play a key material role in project financing but also act as a voice of advocacy for the projects (and sometimes wider industries) in their own portfolios. VCs have notable public profiles (across social media, the trade press), maintaining significant symbolic or cultural capital – and seek to boost the growth trajectories of their investments socially, shaping the collective commitments of investors and the growth trajectories of portfolio companies through their significant cultural capital and public profiles (see Sadowski and Beegle, 2023).
Contributing to growing attention on the sectors in which VC operates and building from the premise that VC exerts tangible influence on the economy and society, in what follows I examine the political economy of venture capital in the videogame industry. First, I analyse how VC shapes the videogame industry’s composition by exploring the companies that VCs are investing in. Second, recognising the social character of VC and drawing on approaches in the political economy of communication (Corrigan, 2018), I consider the discursive strategies through which VC legitimates its place in the videogame industry.
Approach
To address RQ1, I analysed investment data from Crunchbase using a Crunchbase Pro account and conducted a content analysis of investment data (from between January 1, 2019 and December 31, 2023). Crunchbase aggregates publicly available information on corporate and investment activity, drawing from press releases, interviews and regulatory filings. It is widely used by investors for due diligence and scouting portfolio companies, as well as in political economy scholarship on financing in the technology sector (e.g. Baker, 2023; Komlijenovic et al., 2023; Mkalama and Ouma, 2024).
While Crunchbase offers numerous default search configurations, I tailored my search parameters to identify who the VCs were, how much they invested and which areas of the videogame industry they focused on. Given that seed and venture funding rounds typically involve multiple investors, pinpointing the exact financial contribution of each can be challenging. To address this, I restricted my sample to investment rounds led by VCs (or private financiers offering VC services). Lead investors typically initiate funding rounds, contribute the most capital and play an active role in guiding and supporting ventures. Focusing on lead investors provided a clearer measure of the most committed financiers. Before finalising my search terms, I configured Crunchbase’s search parameters to exclude corporate venture capital (CVC) rounds, as my focus was on private VC investment. I further refined the search by using keywords such as ‘video games’, ‘esports’ and ‘game development’. This process initially yielded 1794 results. I then manually reviewed the data, removing misclassified entries and those with insufficient investor information, resulting in a final sample of 701 investment rounds led by 457 unique investors. I exported the dataset as a CSV file into Excel.
Following these approaches, I categorised the data using both Crunchbase’s default classifications – such as investment type, geographic location and funding stage (e.g. seed, Series A) – and a supplementary coding schema developed through inductive analysis of the dataset. I added additional categories not captured by the default Crunchbase search features – including the technological focus of investment recipient companies (e.g. mobile casual games, PC/console development, VR/AR applications) and investor type (e.g. generalist VC, technology-focused VC, videogame-focused VC). I verified company-level and investor information through Crunchbase profiles and triangulated this data with external sources, including official company websites.
Coding of data followed established procedures in quantitative content analysis (Neuendorf, 2017). While Crunchbase-derived variables were manually checked by the author, categories requiring coding and subject to potential variance were addressed together with a research associate (working across a broader project on game monetisation, but prior to coding unfamiliar with this article’s dataset, ensuring blinded coding). While coding was primarily undertaken by the author, reliability was ensured by independently double-coding a random 10% sub-sample with the research associate. The sub-sample was subjected to intercoder reliability testing that accounted for chance agreement (Krippendorff’s Alpha and Cohen’s Kappa). For all non-Crunchbase defined variables (investor type, portfolio company primary category and portfolio company secondary category), scores reached at least 0.8 on both measures, a threshold commonly accepted as indicating a very high level of intercoder reliability (Neuendorf, 2017: 236). 2
To address RQ2, I conducted a thematic analysis of public-facing materials published by VC firms (initially but not exclusively identified through the Crunchbase dataset). Material was published between 1 January 2019 and 1 August 2024. Material included how firms discursively frame their investment portfolios as well as the more general practice of investing in the videogame industry. The sample was narrowed to firms that (1) had investment exposure to the videogame industry and (2) maintained public profiles discussing their investments (e.g. on social media or at industry events). The material, primarily sourced from documents such as social media posts and industry presentations, also included secondary sources like interviews in trade publications. This yielded a sample of 147 documents. 3
I employed an inductive and iterative coding approach. Initially, I familiarised myself with the materials, taking notes and identifying preliminary themes (see Braun and Clarke, 2006). Coding was conducted inductively and through an iterative system, allowing themes to emerge directly from the data rather than being imposed from predefined categories. I first manually coded the material using inductive coding, organising data according to patterns or concepts in the material. From there, I consolidated the material to form a final set of categories which captured the essence of discursive framing of VCs about their investments across the study period. I focus on two dominant themes in how VCs frame their investments in the games industry: investment as ushering in technological futures and cultural futures.
Venture capital investments in the videogame industry
Investment value
Financial data provided a clear picture of the volume of capital invested by VCs and of how that capital was distributed across the sample period. VC investment in videogame-related ventures (across all stages) totalled $10.6 billion. Most of this investment was concentrated in 2021 – totalling $4.95 billion. Investment peaked in the fourth quarter of 2021, with a total of $1.78 billion raised across 64 investments. This period coincided with subdued pandemic macroeconomic conditions – namely, low interest rates, a factor commonly attributed to a broader boom in VC investments (see Hammond, 2024), as cheaper capital made it easier for VC limited partners to allocate funds more freely, fuelling investment in a wider range of areas, including riskier and less conventional ventures (including those in the videogame industry, see Sinclair, 2018). The highest valued investment during this period was a $725 million investment in Forte, a platform that integrates blockchain technology into videogame development.
The subsequent onset of post-COVID economic conditions and tightening monetary policies curbed the flow of cheap capital into the economy. This made access to capital more expensive for limited partners and, as Figure 1 highlights, was a period of downturn in investment. After interest rate hikes began in March 2022, both the frequency and value of VC investments declined sharply – from a high of $1.78 billion across 64 investments in the fourth quarter of 2021 to a post-COVID low of $99 million across 19 investments in the fourth quarter of 2023. While the highest frequency and value rounds tended to be in the periods of most active investment (across 2021–2022), there were notable outliers in the data – such as a $400 million series D investment in mobile game developer and publisher Scopely, one of the largest in the sample that took place in a relatively inactive quarter (the fourth quarter of 2020). 4
Total VC investment value ($US) and frequency of investor rounds per quarter.
Relative to wider VC investment, VC deal sizes in videogames are modest (and total investment globally in games is only a small fraction of what VCs invest in the US alone, see PitchBook NVCA, 2024). Moreover, recent high-profile videogame company acquisitions, such as those financed by Savvy Games, backed by Saudi Arabia’s Public Investment Fund (see Joseph et al., 2025), have eclipsed the value of much VC activity (e.g., the Saudi Arabia Public Investment fund, in September 2025, leading a $55 billion acquisition of videogame publishing giant Electronic Arts). Relative to what publishers and platforms may spend on IP licencing rights, even these comparatively small VC investments remain significant – yet the former remains much of the focus in the production studies literature (see e.g. Kerr, 2017; Nieborg et al., 2020).
Investor type
While VCs broadly have the same aim to invest in a portfolio across high-growth areas, firms have their own specific areas of focus and areas of investment interest. Findings provided insight into the different types of VC investing in the videogame industry. First were generalist and technology-focused VCs (n = 518). These VCs invested in a wide range of industries, largely with a focus on the technology sectors (n = 333) Generalist firms included large investment entities with VC arms, such as Tiger Global Management (a generalist American asset manager, with exposure to a wide range of investments across the economy) and Silicon Valley’s Andreessen Horowitz (a tech generalist VC firm), both of which have provided early-stage financing to major tech companies like Facebook. For generalist firms, games typically make up a small portion of their overall investment portfolios. For example, Sequoia Capital – a large American technology generalist, with a reported total of $85 billion assets under management – was a lead on 5 rounds (totalling $425 million). Reflecting similar investment patterns in the screen industries by VCs and other institutional asset managers (cf. DeWaard, 2024), the generalist VCs in the sample invest in games as something of a hedge, a part of a much wider and diverse portfolio.
Second were blockchain-focused VC firms (n = 149). Blockchain investors actively invested in games particularly following the early success of games like CryptoKitties, and later, the pandemic-fuelled boom of crypto tokens (e.g. NFTs) and cryptogames. These firms, unsurprisingly, concentrated nearly all their investments on blockchain-related projects. 5 Even when these firms invested in non-blockchain ventures, they often involved projects that would later incorporate blockchain technology. Notably, while crypto specialist firms made up a sizable portion of the sample, VC investment in blockchain ventures was not limited to blockchain-focused investment firms (and indeed, the largest crypto-related investment – Forte – was not led by crypto focused investment firms). Indeed, critical game studies highlight the social costs of blockchain investment. Zaucha’s (2024) study of the VC-funded game Axie Infinity promised wealth to users in the global south (namely, Vietnam and the Philippines) through crypto tokens but in practice delivered earnings below minimum wages, collapsing with token price decline. Such blockchain games exemplify how VC investment reproduces exploitative logics, positioning the developing world as a resource for sustaining technological innovation (cf. Shestakofsky, 2024: 73–99).
Third, a final cohort of investors was firms specialised in the videogame industry (n = 175). Among VC firms specialising in videogames, Bitkraft – a San Francisco based firm – emerged as a leading player in terms of lead investor rounds (n = 51). Bitkraft focuses heavily on emerging technologies like Web3/blockchain and VR/AR within the videogame sector – and its portfolio includes significant investments like $60 million in Series B funding for Immutable, an Australian blockchain gaming platform, and $4.7 million in Seed funding for Frost Giant Games, a startup founded by former Blizzard Entertainment developers. While there were far more generalist and tech focused VCs in the sample, the most frequent lead round investors were games focused VCs (see Figure 2) – 6 out of the top 10 most frequent lead round investors were videogame-focused VC firms.
Frequency of lead rounds by VC firm (top 10 by frequency).
Investment stage
Most investment in the sample, by frequency, was allocated to early-stage startup financing. Most of the funding (n = 447, with a $1.77 billion value) went towards early-stage seed funding. From there, early-stage venture funding, primarily in the form of Series A (n = 178) and B (n = 56) rounds, was the most common. Following this, and to a lesser extent, were a further 20 later-stage funding rounds from Series C to E (see Table 1). VC investment occurs over multiple valuation rounds, typically progressing from Seed funding to Series A through E (Birch, 2023). These rounds are structured to produce an exponential growth curve in valuations, signalling that portfolio companies are on a successful trajectory and attracting further investment. This growth is often predicated on speculative, forward-leaning markers of market validation, suggesting that a viable market will exist in the future rather than in the present. By contrast, publishers and platforms that acquire or licence game IP tend to define success more conservatively, privileging established franchises and serialisation (Nieborg, 2021). For publishers, profit and sales are central measures of financial performance, both to signal market viability and to generate reliable returns for a broad base of shareholders (with many publishers large, publicly traded firms).
Frequency of funding rounds by type (seed, series A–E).
Across the entire sample, 479 investments received only a single round of funding, the majority of which was a single round of Seed funding (n = 349). A total of 81 companies secured two rounds of funding, 12 companies received three rounds and six companies advanced to four rounds of funding. While this distribution offers insight into companies that either gained or lost momentum during the study period, it is notable that most firms did not progress beyond their initial round over the 5-year period. In some cases, this can be explained by a company securing a single but substantial round of funding (from which it may IPO or be acquired afterwards); however, in most instances, it reflects the reality that many early-stage startups fail to scale, especially given that a considerable area of investment was in blockchain and crypto games – an area rife with fraud, scams and vapourware.
Investment scope
Findings provide insight into the nature of VC investment portfolios. The majority of investments (n = 397) are in videogame software publishing and development – specifically, in companies that develop videogames as commercial, entertainment products. It was common to see mobile and casual games (n = 66) – an area with potential to yield breakout successes, like Fortnite or Flappy Bird. While it was broadly true that VC are interested in investments that might scale, the sample did include VC investments in companies more aligned with ‘artistic’ goals. For example, in 2022, American game developer Thatgamecompany – a company self-described as making ‘experiential’ games, like 2009 BAFTA winner Flower – received a $160 million investment in a round lead by Silicon Valley VC Sequoia Capital. Beyond entertainment, yet less frequently represented in the sample, was financing for ‘applied’ gaming ventures – games that had highly domain specific use cases (and thus representing smaller markets), such as education technology games and ‘exergames’ (that is, those for fitness, wellness and health, n = 37). Adjacent to games were game services (n = 114) – for instance cloud platforms for hosting multiplayer games, or videogame social networking applications that purport to connect players of a particular game.
Beyond software, there was funding emphasis on production infrastructure and tools (n = 122). These included game development platforms, such as game engines (software and graphics toolkits for making games), as well as advertising networks and platforms. Here, we see investment strategy cohere with wider investment approaches in technology – one where firms seek to invest in those that come to function as widely utilised ‘infrastructural platform services’ (Van Dijck et al., 2019). Indeed, this focus for VCs is perhaps unsurprising given that incumbents in the videogame industry have historically benefitted from (and in many ways innovated) walled-garden business models. As exemplified in recent years, there is considerable gain in controlling production and distribution chokepoints (Nicoll and Keogh, 2019; Nieborg et al., 2020), and indeed, as I show in Study 2, infrastructuralisation is a major focus of how VC firms rhetorically frame their investments.
Predominantly across game services, software development and production infrastructure, VCs had an affinity for investing in emerging technology – that which has the potential to significantly grow in value in the case that it becomes widely adopted. The sample period coincided with two major booms in speculative technologies in the videogame industry. The first was a multi-year boom in blockchain and crypto tokens (such as cryptocurrencies and Non-Fungible Tokens) – with games playing a central role in driving institutional and retail investment hype (Egliston, 2025). Across the primary investment categories in Table 2, the most common emerging technology category was blockchain (n = 177) – for instance, blockchain-enabled game software, or game production and monetisation technologies that incorporate blockchain elements. Following this, were investments in AI (n = 43), such as generative AI-enabled game engines for asset generation. In addition, another emerging technology investment was in spatial computing technologies, like AR and VR (n = 37) – coinciding with growing investment interest in the ‘metaverse’ (Carter and Egliston, 2024). In this respect, while it is common to hear VCs self-mythologising as pioneers of innovation, findings indicate that VCs exhibit a strong degree of herd mentality, investing predominantly in ‘hot’ technological areas.
Frequency of primary areas of investment.
Beyond financing game software, VCs frequently invested in game ‘culture’ – areas outside but related to developing or publishing game software. Key here were investments in esports or streaming related ventures (n = 69). This included investments in esports organisations, such as those that managed and provided resources (such as training facilities) for esports teams, as well as platforms for videogame livestreaming. Financing also extended to areas peripheral to esports, such as esports fantasy league services – those that might encourage continued engagement and consumption of a particular esports game or franchise (pioneered to great success by companies like Valve, see Boluk and LeMieux, 2017: 207–274).
Investment and space
Beyond revealing the scope of VC investment, the data provide insight into the global flow of VC investments (see Figure 3). Investment rounds were predominantly for companies incorporated in North America, specifically in the United States. Of the 701 rounds, 295 were for US based companies. There was a high concentration of investment rounds for companies based in established software and technology hubs such as New York, Los Angeles and San Francisco. This tendency to concentrate investment in ‘established’ hubs of technological and cultural production reflects a broader contradiction identified in existing accounts of the geography of VC (see Mkalama and Ouma, 2024). While the VC community often mythologises itself as embracing risk – and indeed, as seen above in high failure rates and investment in emerging technologies, this is true to an extent – the geographic breakdown of investment likewise reveals a pattern of risk aversion and conservatism, particularly in the channelling of capital into established regional markets.
Frequency of VC investments by country/territory.
While North America was the dominant market, there was also significant VC activity within wealthy regions of Southeast Asia, particularly Singapore (n = 43), and to a lesser extent, in established East Asian markets like South Korea (n = 15) and China (n = 17). A notable trend in Asia – beyond the wealthy and established East Asian markets – is the relatively high level of investment in India (n = 43). While the dominance of Western companies is expected (and consistent with the historical industrial dominance of the videogame industry by a handful of Western videogame publishers and platforms, see Kerr, 2017), these investment flows underscore the need to more closely examine the complexities of the global videogame political economy, particularly in regions outside the Western industrial core (Young et al., 2024).
Framing VC in the videogame industry
Mapping the flows of VC investment – how much is invested, by whom and where – reveals the economic priorities of these speculative financiers. But VC is also deeply social. Beyond capital, VCs wield symbolic and cultural authority, attract investment into portfolio companies and sectors and shape entrepreneurial activity (Sadowski and Beegle, 2023). In other words, discursive and communicative practices of VC serve to legitimate financial activity (Ho, 2009). VCs framed their investments in relation to the future, often casting themselves as actively bringing that future into being. One framing, common across the sample, emphasised the future as technological, where investments were positioned as catalysts for innovation; another stressed the future as cultural, where investments were depicted as supporting production, broadening the industry’s scope and promoting ethical practices. In both cases, VCs sought to do two things: frame games as valuable investment assets (highlighting their potential for growth and scalability), and present VC as a valuable presence in the games industry. In doing so, they worked to create a sense of legitimacy and value in a sector that has historically seen relatively little VC investment.
Technological growth and innovation
While often situated within the cultural industries, videogames enjoy a strategic alignment with the technology sector, as Keogh and Hardwick (2024) note – an alignment that can be mobilised when advantageous. For VC, because the technology sector exemplifies significant growth potential, games were often framed as driving wider technological growth or having the potential to scale, capable of taking on infrastructural roles (Van Dijck et al., 2019). In this framing, VCs sought to move beyond the logic of ‘hits’ – individual bestselling titles (often subsequently spun out into franchises by risk-averse publishers, see Nieborg, 2021) – towards the creation of ‘unicorns’: billion-dollar companies, often software-based firms that promise infrastructural centrality in society.
As Moritz Baier-Lentz, partner at Lightspeed and head of the firm’s gaming investment fund, explains in an interview, the potential for technological scalability is a central motivation in the firm’s investment strategy in videogames. Lightspeed, like many other VC firms, seeks to deliver substantial returns, aiming to ‘3x, 4x [our investments] and return money to our LPs’ (VC59). This approach contrasts sharply with common publisher financing models, which are typically based on upfront payments with recoupment (it is increasingly so that publishers do not pay any revenue to developers until their investment has been fully recouped, necessitating the importance of sales, see Ismail, 2022). In this same interview Baier-Lentz highlights the firm’s stringent selection criteria, which prioritises investments in videogame infrastructure and platforms over individual game titles or studios. This strategy is exemplified by Lightspeed’s focus on companies developing videogame production and distribution tools – with Baier-Lentz making the reference to widely adopted game engines like Unity, Roblox and Unreal, all of which have attracted venture funding over the last two decades. Similarly, Scott Rupp, founding general partner at Bitkraft, emphasises the importance of investing in videogames as scalable infrastructure, particularly in social gaming platforms. He points out that social games have historically shown ‘speed to scale’ – acquiring users rapidly – often at a pace exceeding that of social media platforms like Facebook (VC13). The comparison is not merely about highlighting rapid growth, but about positioning games as equivalent to technology companies, an already proven and immensely valuable investment, offering a pathway to hypergrowth and future returns.
Beyond an investment in scalable technological infrastructure was the speculative investment in emerging videogame technologies, technologies still in the early stages of development or adoption but with the potential for large-scale impact. These are often framed as catalysts for broad technological change. This focus is evident in the above financial data, with a sizable portion of investors focused on areas like blockchain, AR/VR and artificial intelligence. In this context, their investments in games are not merely seen as convenient applications of these technologies, but as strategic opportunities to drive innovation and shape the future of these emerging fields. Games were often framed as drivers in broader technological innovation. As a memo from Andreessen Horowitz has it, in describing the firm’s motivation for their games fund: Over the past decade, games have radically transformed from packaged entertainment to social network-like online services that scale like consumer technology companies. Today’s games also drive innovation across the entire consumer ecosystem through new methods of engagement, retention, and monetization. We believe that games will play a pivotal role in defining how we socialize, play, and work over the next century. (VC49)
Games – in other words – are framed as a way that VC firms might further capitalise on booming, multi-trillion-dollar markets (such as crypto or AI). This is a particularly profitable opportunity as games are not just downstream of wider technological developments but play a key part in their growth.
One common rhetorical strategy, in framing games as driving forces in the development of emerging technologies, was to invoke the past. Particularly, one technique was to show how earlier developments in games have influenced broader technological trajectories. Scholars of science and technology, like Jasanoff (2015), recognise the importance of the past in shaping present and future technological innovations, with the historical longue durée stabilising uncertain futures by giving them value and meaning. Radical Ventures, which invests in the Canadian generative game AI company Artificial Agency, highlights the long-standing ‘symbiotic relationship’ (VC60) between games and AI, noting how games like Chess, Go and StarCraft have historically served as benchmarks for AI – and thus, by extension, legitimating more recent investments in generative AI for game production (learning and creating games based on training on inputs from other games). Similarly, blockchain proponents, such as Chris Dixon of Andreessen Horowitz, emphasises how principles guiding cryptocurrency and cryptogaming, such as token-based systems, have roots in gaming (such as virtual economies and currencies) further illustrated by Andreessen Horowitz’s investment in CCP Games, creators of EVE Online, where virtual economic practices and principles – namely, systems of exchange, and structures untethered from traditional state control – are central to both gaming and blockchain development (VC107). In the case of both AI and blockchain, the past serves as a guarantor for the speculative technological potential of the future.
The question of speculation, particularly around emerging technologies, was a contested one. For some, it was to be embraced – as suggested above, where investing in infrastructural futures, from cryptogames to AI, could yield substantial returns if these technologies achieve widespread adoption. Yet the future remained uncertain and debated. While some framed emerging tech as a pathway to broad technological change, others cautioned against overhyping its potential. Lightspeed’s Baier-Lentz warns against excessive speculation, particularly for startups pitching to VCs. ‘It’s very easy to fall in love with the future’, (VC59) he notes, using investment in XR as an example – something he describes as occupying significant ‘mindshare’ (VC59) but still lacking widespread use cases. Baier-Lentz highlights that VCs typically operate within a ‘5-7 year window’, (VC59) during which they build up portfolio companies with a view to exiting their investment. Thus, while the future remains the terrain for speculative VC enterprises, it must be a future within distance of a visible horizon. This debate around speculative investment in emerging technologies comes amid declining VC investment post-2022. Kishen Patel, an investor at Greycroft, attributes much of this slowdown to ‘the lack of later rounds in those 2021-era startups that weren’t required to adequately diligence their market’ (VC102), specifically pointing to investor over-exuberance in metaverse and Web3-related financing.
Cultural futures
Elsewhere, VCs saw themselves as fulfilling not only the role of financial intermediaries bringing about technological advancements and futures but also key cultural intermediaries. Cultural intermediaries can be understood after the sociologist Pierre Bourdieu (1984) as individuals or groups who mediate between producers and consumers in the cultural field, playing a crucial role in shaping tastes, preferences and consumption patterns. By investing in the right game developers, and emerging game development markets across the world, VCs saw themselves as playing a key role in fostering the future and ongoing growth of a cultural industry.
One discursive element positioning VCs as key figures in shaping cultural futures is their portrayal as possessing the domain expertise necessary to make investments that are both economically and culturally informed, framing themselves as integral participants in the culture of videogame production (particularly, given the role that publishers, rather than VCs, have historically played in game financing). For example, Sisu, a Finnish VC specialising in early-stage investments in the Nordic videogame industry, emphasises that ‘Sisu’s own investors come mostly from the game industry’ (VC53), highlighting the alignment between investment and industry expertise. Similarly, Behold Ventures, a Swedish VC also focused on the Nordic region, claims its fund is driven by the ‘passion’ and ‘expertise’ of its investors, noting that ‘there is great value to be found in the sector if it’s done by investors who truly understand the gaming industry and can help entrepreneurs build highly successful and lasting companies’ (VC103). This alignment of financial and cultural interests is presented as a way to ‘usher in a new generation of game developers’ (VC103). Generalist technology VCs like Lightspeed Venture Partners echo this sentiment, stressing their embeddedness within the videogame industry. In 2023, Lightspeed launched a dedicated games investment division, emphasising that it ‘combines authentic industry expertise from our own time as pro gamers and gaming company founders’ (VC137). In a similar vein, Hiro Capital’s Spike Laurie critiques traditional venture models lacking this embedded expertise, warning that firms exogenous to the industry risk funding game development without proper ‘checks and balances’, leading to investments without clear market validation (VC117).
For others, VC is seen as essential for the financial sustainability of the videogame industry, particularly in supporting emerging game developers and markets. Financing and cultural production are framed not as antithetical, but intertwined, and in a way particularly well served by the VC. In a public-facing report, American tech VC MaC highlights its focus on investing in gender and racial diversity in game production, citing its portfolio investments in this space. However, this commitment to a social benefit is framed within a highly commercial logic, positioning diversity as a strategy to ‘capture more attention and dollars from an increasingly large portion of the population’ (VC106). VCs such as Sisu and The Games Fund frame their investments as addressing structural industry problems – like sexism, racism and precarious labour – by funding ‘ethical’ (VC132) developers and ‘progressive company culture’ (VC148). While it is unclear from these statements alone whether VC ultimately achieves its stated goals, such discourse nevertheless frames VC as promising more equitable and just creative conditions – aligning with a broader tradition in which financial sector investors foreground ethical and social responsibility (Hellman, 2020).
Elsewhere, there was a focus on using VC to support the growth of a diverse industry through investment in specific regional development hubs. While financial data indicated that most portfolio companies were located in North America, there was a rhetorical emphasis on diversifying cultural and geographic production hubs beyond established North American centres. For instance, for Jonathan Huang – a principal investor at Bitkraft – publishers, in the Asian context have diminished interest in funding new ventures and instead focus on existing IP: ‘We see a lot of publishers are pulling back investments in new studios, they’re pulling back investments into incubating new startups’. This represents an opportunity for VCs. ‘VC [is] well-positioned to fill the funding gap for early-stage gaming companies’ (VC30). Beyond an opportunity to capitalise on a gap in the market, for Huang, there is also a broader cultural value of VC intervention here. As he puts it, ‘VCs have this great opportunity, this privilege. . .to serve as this discovery mechanism for startups’ (VC30). Asia, despite lacking VC investment in IP, is portrayed as a leader in IP innovation, while the US is framed as a hub for technological and infrastructural advancements. Put differently, Asia is positioned as an untapped cultural vein rich with potential. In this framing, the VC is positioned as a pioneer, charting new frontiers in a way that publishers cannot.
This discursive positioning of the VC as shaping the industry in positive ways resonates with Parker et al.’s (2018) study of the Megabooth game expo, which likewise shows how non-publisher actors carve out legitimacy in the field by presenting themselves as necessary intermediaries. In both cases, the claim to cultural intermediation hinges on articulating their value relative to publishers: acknowledging the limits of publishing while also situating themselves as distinct (and positive) forms of industry influence.
Conclusions and future work
This article has examined how VC shapes the videogame industry by mapping investment flows (RQ1) and analysing how VCs frame their investment portfolios and practices (RQ2). The investment data show that VC is concentrated in areas promising scalable returns, such as infrastructure and mobile/casual games, alongside a strong emphasis on companies intersecting with ‘hot’ technological areas like blockchain, AI and spatial computing. Financing typically targets early-stage companies located in established regional hubs, particularly the United States. While generalist tech VCs dominate the landscape, gaming-specialist VCs play a crucial role in supporting smaller studios, especially in markets with less publisher-driven investment. The speculative orientation of the VC privileges investments aligned with VC’s expectation of high returns, while leaving other types of cultural and creative work underfunded or excluded. Although this model differs from the iterative, cyclical and highly risk-averse logic of publishing (Nieborg, 2021), it remains conservative in its own ways.
Discursively, VCs present themselves as key actors shaping both the technological and cultural future of the games industry. Their investments are framed as drivers of innovation not only within games but across adjacent sectors such as AI and blockchain. At the same time, VCs claim to foster cultural growth by supporting diverse production, broadening the industry’s scope and emphasising ethical or socially responsible development. In doing so, they work to legitimise VC as a necessary presence in a sector historically marked by limited VC involvement, simultaneously making games legible as a viable asset class (particularly important given VC tends to skew towards certain sectors and investments of which creative industries tends not to be one, see Lerner and Nanda, 2020) and positioning VC itself as a productive force in the industry’s future.
Beyond accounting for VC, the broader intervention I make through this article is to highlight how financialisation should be more central to political-economic analyses of the videogame industry. Rather than a broad acknowledgement that game production operates within late capitalism, there is a need for a more precise understanding of the specific structures and flows of financial capital that shape industry composition, decision-making and, ultimately, the games that get made. Such a perspective offers a necessary complement to existing accounts of shifts in capitalism in the games industry, including platformisation (Nieborg et al., 2020) and globalisation (Kerr, 2017).
To further develop studies of financialisation in games, future work could build on and refine the methods used in this article in a number of ways. First, comparative analysis across multiple investment databases – such as those that provide more granular detail into specific regional sectors (e.g. Qichacha for the analysis of China) – would help overcome the limitations of relying on a single source. Second, research could extend beyond private VC to examine the role of corporate VC arms, asset managers, private equity and angel investors. Methods from political economy and social studies of finance – such as mapping investor networks (Regan and Khwaja, 2019) or tracing how investment intersects with identity and privilege (e.g. founder educational backgrounds, see Mkalama and Ouma, 2024) – would further deepen understanding of how financialisation is reshaping ownership, control and cultural production in the global games industry.
Importantly, future work could also build on the limitations of the present study. Investment data provides insight into financial patterns, but it does not tell us how capital is mobilised within portfolio companies (or about the relationship between investors and workers at portfolio companies, as has been examined in work on the wider technology sector, see e.g. Shestakofsky, 2024). Likewise, VC discourse offers a window into investor priorities, yet only partly captures how financiers legitimise their authority (cf. Ho, 2009; Zaloom, 2006). To address these gaps, future research could pursue a more micro-level focus – examining the on-the-ground relationship between VC and game work, as well as how VCs themselves imagine and enact financing practices.
Footnotes
Funding
The authors disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This research was funded by an Australian Research Council DECRA (DE240101275).
