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31. Re: THQ Postmortem Feb 1, 2013, 14:03 killer_roach
Beamer wrote on Feb 1, 2013, 13:52:
Why would a venture capitalist give money to a video game company when it can go to a safer investment?

Typically those are the sorts of investments VC will go after, although the best ones also correlate downside risk with upside risk. If there's a good chance they could lose everything backing a game... they want the potential there to make them ludicrously wealthy. High alpha means high expected returns to capital in the VC world.

Your point about risk distribution is also a good one, and it's something where the large publishers truly excel. Not only do they have multiple baskets to put their eggs in, they're all different types of baskets - you have some core titles in various genres, you have a few licensed titles, you have some toes dipped in the digital distribution waters, you have some mobile games, some long-tail plays, some budget titles, maybe some F2P titles, some merchandising of your properties, perhaps a couple of funded indies in the hopes of finding the next big thing (in the best cases, ones that could just about fund your next AAA tentpole title)... it's all a game of hedges. If one goes down, another (hopefully) goes up.
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