Meanwhile, A VC Fund Believes the Money-Making Opportunities In Video Games May Only Be Getting Better
The stock market is struggling. Yet, even as many retail investors flee equities, the European Union (as well as other governments) and a Venture Capital Fund may believe that now could be the right time to grow investments in the video game industry.
The EU Committee on Culture and Education (CULT) has unanimously adopted a resolution to vote on the prospect of the giant economic block’s long-term strategy on the video game and eSports industry.
CULT believes the video game industry in Europe currently has a critical shortage of development talent and wants to compete on the global stage. In order to accomplish this, they’re looking to increase the amount of government funding and incentives to help get them there.
Simply put, CULT sees incredible opportunity for the European continent and its citizens in video games, and believes investing in growth, right now, could be a great move.
Now, while China is strangling its domestic video game industry, other governments around the world understand the powerful economic and cultural value in video games, and are heavily investing.
Saudi Arabia, for example, recently announced a $38 billion investment in the industry, while both Canada and Australia have approved tax incentives for the development of their own domestic gaming industries.
Not to be overlooked, the state of New York is getting in on the action as well. In August, the state launched a 25% tax and credit program for video game companies opening and operating in the state.
Clearly, when governments seem to be going all-in on a particular industry, it may be wise for retail and private investors to pay attention.
It looks like Transcend Fund, a VC capital fund out of San Francisco, is paying attention.
According to VentureBeat, the fund “is doubling down on games and benefiting from the rise in games in popular culture and the growth of game platforms and their monetization opportunities. Transcend has already closed on a second fund and 100% of the LPs in Transcend I signed on to Transcend II.”
Andrew Sheppard, a managing director at Transcend Fund said, “As investors that have spent decades building game companies, we are very excited for the next chapter.”
Shanti Bergel, managing director and founder of the fund says, “The overall core of the business is monstrously strong. We’re just as excited today to be investing in games and digital entertainment. I don’t think there are many places that grow at this rate. Games are arguably at the intersection of culture and technology.”
The debut fund, Transcend I, has seen an invested rate of return exceeding the top 5% benchmarks for Q1 2022. While this fund, as well as Transcend II are closed to new investors…
There remain great opportunities in the industry; especially for investors in companies who are on the receiving end of a buyout or big fund investment.
Now, as evidenced by the record M&A activity this year, and a proclamation by Microsoft (and other giants) that it may not be done acquiring video game companies, finding, and investing in solid video game companies, especially those with strong IP, may be a wise move.
Last year, a record $85 billion in industry deals occurred. It’s now expected that 2022 will smash that record (it already has) to the tune of $150 billion in mergers, acquisitions, IPOs, financing, and direct private investment.
With this massive growth and capital flow occurring in the industry, it may be smart for individual retail (and private placement investors) to follow governmental lead and examine opportunities in the space.
Even in this bear market, the video game industry remains one of the bright spots and a potentially fantastic sector to invest in. With governments worldwide investing, VC funds outperforming and the gaming giants jockeying for position with mergers and acquisitions…
Owning stocks in select companies that operate in the video game industry could be incredibly lucrative.
Discover potential buyout targets, what’s becoming hot in the video game industry right now, and a company with patents in in-Game commerce, HERE
You can also read more about the EU resolution, HERE
Or read more about the Transcend Fund, HERE
Sources:
https://venturebeat.com/games/eu-resolution-calls-for-investment-in-video-games-and-esports/