State of the Industry: game startup funding down 38% in 2009

Gaming startups raised 38% less money in 2009 than they did in 2008,  according to a report in GamesBeat, VentureBeat’s gaming site.  That’s not to say that startups in the industry weren’t busy: the final count for dollars raised in 2009 hit $600.5 million. This comes after a 2008 in which startups in the industry scared up over $935 million.

These figures come from Dean Takahashi, one of our favorite writers in the biz, and VentureBeat’s own analysis.  No one covers gaming startups as closely as they do, so we see littlereason to doubt the validity of the numbers.  Upon looking for a reason for this drop in startup funding, Takahashi submits that it could be as simple as two words: the recession.  The economic downturn apparently had a serious effect on the valuations investors placed on gaming startups: the average round of funding in 2009 was $6.2m as opposed to $8.3m in 2008.

Startups bring new life and new innovations to the industry, so while it may be easy to be discouraged by this news of a decline in funding it is important to look at the numbers with one eye and the current recession with the other.  You don’t want to see decline in general, lest the next epically innovative indie game never sees the light of day, but when you think of this subjectively and consider the realities of the world economy in 2009, one will see there’s plenty to be optimistic about in the gaming industry.

The full list of all 97 game companies to start up in 2009 and their funding activities can be found in Dean’s post, be sure to check it out.

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