After a strong start to the year, venture capitalists’ interest in gaming and esports appears to have flagged in the second quarter of 2024.
The past year has been a challenging period for the gaming industry. On one hand, gaming is more culturally ascendant than ever before, with the number of gamers worldwide skyrocketing in 2023. On the other hand, game publishers have been forced to pivot their business models due to the rise of free-to-play games, resulting in a record-breaking wave of layoffs during which over 10,000 game developers lost their jobs in the first half of the year.
Given the mixed signals listed above, it’s not surprising that prospective investors have been inconsistent about their approach to gaming this year. In spite of venture capitalists’ present wariness around gaming, VC funding of game start-ups had increased by 81 percent quarter-over-quarter between Q4 2023 and Q1 2024.
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