There’s a lot of money going into the gaming industry these days. Most recently, mobile advertising network InMobi announced a US$25 million fund for indie game developers, while Tencent bought over a US$500 million stake in South Korea’s CJ Games. Now, Singapore-based Inflexion Point Capital, or IPC, is getting in on the action as well. They are looking to invest up to US$15 million in promising independent video game studios at an early stage, with initial seed investments of between US$100,000 and US$500,000 per studio.
Alexander de Giorgio, COO of IPC, was quick to emphasize that IPC is more than just an investment fund – it is “a synthetic publisher co-creating independent video game studios”. He elaborates:
As a company, we aim to combine the best elements of a business incubator, a venture capital fund, and a traditional publisher in order to invest in and support the growth of startup video game studios. In essence, we replicate the role of a publisher but provide significant additional benefits without handcuffing the developers with deeply unfavorable financial terms. Our goal is for the studios to become self-sufficient and self-sustaining as soon as possible.
The team is currently focusing on the Japanese mobile video game market, since it’s one of the largest and most profitable markets at the moment. According to App Annie, Japan overtook the US in terms of app store revenue, largely due to the success of domestic game publishers like LINE and GungHo.
It’s also ripe for disruption. “Globally, there is huge demand for Japanese gaming content, and within Japan there is a deep pool of talented creators and developers,” he says. However, they will also be considering related Asian markets, or other video game related plays.
Hands-on, lead investors
If your game studio gets chosen by IPC, expect to receive a lot of attention in all aspects of the business – de Giorgio and his team want to get down and dirty from the get-go. “We are explicitly positioning ourselves as hands-on, lead investors,” he explains. “We want to free developers and designers up to focus on creating the best game possible.”
This philosophy also extends to their board of advisors, which comprises of industry experts who have several years of experience and insights into all aspects of game development in Japan. One of their senior board advisors is Kenji Inafune, CEO of Comcept and the former creative director at Capcom, who oversaw a string of hit games such as Mega Man, Resident Evil, Onimusha, Lost Planet, and Dead Rising, and is an outspoken critic of the current state of the Japanese gaming industry.
Prior to investing, the team will work with studio founders to understand and prioritize their critical short and long-term needs in non-creative areas, such as operations and marketing. Following investment, they will then start to tick off the boxes, bringing in teams of experts as needed – all the while keeping sight of the overall focus on game development.
The team isn’t afraid of taking risks, and in fact readily embraces it in their strategy of only investing in early stage studios – in most cases, at the point of incorporation of the studio. “We want to take the risk that other late-stage investors are unable or unwilling to accept because we believe the potential upside is significantly higher at this stage,” de Giorgio explains.
Officially launching in August, IPC’s typical equity stake will range from 20 to 25 percent, and they are expecting to make up to three investments by the end of this year.
This article was first posted in Games in Asia.
(Image credit: Flick user Toca Boca)