The green and red flags of games investment and publishing deals

For years, the investment and publishing landscape in the games industry has been a challenging one for studios around the world - though some markets like Türkiye are defying that trend.

Speaking at UKIE’s The Funding Formula conference, The Game Angels founding member and former Jagex CEO Phil Mansell, Playstack CEO Harvey Elliott, Play Ventures head of talent Joe Burridge and Finstock Capital co-founder Oliver Jenkinson discussed the green and red flags they see when discussing deals with developers.

Team trust

One thing investors might look for, according to Mansell and Burridge from an angel and VC perspective, is the team's experience and broader company plan, rather than specific mechanics for a game.

Burridge said as a hard and fast rule, Play Ventures doesn’t invest in solo founders. He discussed the importance of a team that has built trust and, even better, shipped games together before.

He said it was “definitely a flag” and ups the risk if a new ‘“Avengers-style” team has come together but hasn’t shipped together before, highlighting the potential for the team falling out a year from now. 

Burridge said it was more interesting seeing a plan for a studio’s production pipeline and how this will impact development. For example, a studio could show a plan of how they will use the investment to launch 20 games over two years, with only one of those needing to be a success.

Burridge also noted how, over the past 12 to 18 months, he was seeing more growth or performance marketers on the founding team, or as the first hire. This can create trust with investors that a team can not only build products, but also scale them.

Mansell added during the pitching phase, there is a clear difference from developers that know their audience, versus those that don’t.

Publishing deals

Elliott, in response to a question about publisher red flags, said developers should look for partners that believe in and understand their vision. 

He advised to take references to understand who you're potentially working with. Elliott said there are also things developers can put into a contract to protect themselves.

On specific deal terms, Elliott said these should reflect the work and investment going in from the publisher.

PocketGamer.biz is a media partner for The Funding Formula.