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33. Re: THQ Postmortem Feb 1, 2013, 14:16 killer_roach
 
Beamer wrote on Feb 1, 2013, 14:09:
But video games aren't particularly high upside. They're something very difficult to predict performance and they're costly. Most VCs aren't playing with the kind of money that multiple AAA game development would require.

Plus, the typical endgame for a VC is selling a company or taking it public.

What would a VC do? Would they finance a game? I don't see them liking that, as that's a loan not VC. They'd prefer to buy a studio. Again, as others said, new boss same as the first. VCs typically sell to PE firms, who wipe out old management and put in their own.

Typically. Although such investment in a smaller studio could be taken in the form of equity, at which point, after a success, they could sell the studio to an interested party (as they now have a track record). Additionally, you could sell revenue streams and IP just as easily as you could a company (although video games, unlike movies, have a much, much shorter tail - making it a proposition where you'd be looking to shop the IP, and possibly throw in a couple of the studio's creative directors to help manage it).

There are VC firms that do specialize in high-risk lending, but the terms are usually about as onerous as the above stated "you surrender control of the company and we'll help you get this out there".
 
 
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