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Investor/Devs Gaps


Sjonsson
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Hey everyone!

I attended to this years Nordic Game Conference 2014 in May where I attended something called Nordic Game Summit, there was a panel with gamebiz icons and investors as well as some mingling inbetween the sessions. Never did I write an article (beware of errors) like this before but I thought I'd give it a shot to share what I learned.

I also what to discuss these Investor/Dev Gaps that was mentioned in the panels. Does anyone here have experiences with these gaps? Dos' and 'donts?

Since the sessions focus a lot on the Nordic region I am very interested in the difference.



 

 

Nordic Game Investment

Author: Stefan Jonsson
Date: 2014-05-22

 

Description

This article is a compendium of the knowledge I have gained from reading, talking to other developers and game business people alike. During the Nordic Game Conference (20-23th of May, 2014) I was invited to an event called Investing in Games Summit which was the main my main inspiration for making a compilation. During the event it was thoroughly discussed what investors think about developers in the Nordic region and what they are looking for.

After the event it came clear to me that there is a gap between developers and investors in terms of communication and it is this article’s purpose to spread what I learned during the sessions; what developers can do and not do to appeal to an investor. It should also be mentioned that this article is directed towards the Nordic region, yet it may contain tips applicable for other regions.

If you have views that differentiate from this article, feel free to contact me and discuss it - I will gratefully listen. Lastly, the text may contain statements which I lack of knowledge to defend or explain.


Why the Nordic region?

During the Investing in Games Summit it was discussed whether there is a Nordic Phenomenon or not and how investors relate to the subject. It was concluded that there is indeed a phenomenon but what is it and why does it exist? Something that is seen in the Nordic is a notion of clusters where developers tend to keep a steady connection and help eachother out. One theory is that it could be related to the historical culture of supporting one another due to the cold climate and harsh winters.  

Undoubtedly, there are some kind of family feelings among nordic developers and it is believed that this could be a reason to why new success stories keep appearing in this region. Some believe that when a company has a success story it invokes a confidence for success among other connected companies. Among other things nordics have in common it was stated that they tend to be honest and humble in their way of thinking and how this is different to other regions. Another difference  stated was that nordic developers’ game pitches are not as impactful as other regions, that the weakness of the nordic region is the presentation of the product rather than the development and quality of the product.

Sustainability
No matter if there is a phenomenon or not, it is a fact that there are quite a few success stories happening but for how long? Are the nordics actually inside a bubble that at some point will burst and what could we do to prevent that? According to investors there are some challenges we need to overcome where one of those are taxes and further collaboration with governments. Where some countries like Canada have tax breaks or tax credits others do not where the investor stated that this plays a role in the interest of investing in a company - that the countries who has neither tax breaks nor tax credits should start a dialog with their government as soon as possible.

Furthermore, the game industry is a very iterative environment and just as there are success stories there are failures where projects go down the drain. It is important for all parts involved to learn from the failures, get up on the horse and keep on going. Investors pose that in order to have the game industry blossom we need to create a system that allows this kind of failures and it is here governments get uncomfortable. The game industry needs to make governments understand this process and accept it - which is undoubtedly a big challenge.

Investors have also posed that developers need to learn more about how business works, how to pitch a game and as a consequence become more appealing. There are  gaps between investors and developers where these have to be found and bridged. A sign of these gaps are the lack of angel investors in the nordic region and it is believed that this is because they are from other industries and lack of insight.

Credits
I want to thank the following people for sharing their pool of knowledge and experiences.

Claus Lykke Jensen, Moviestar Planet

David Gardner, London Venture Partners
Lasse Seppänen, Playraven
Jarkko Paalanen, Fingersoft

Jørgen Tharaldsen, CEO Megapop

Jason Della Rocca, Execution Labs

Martin Walfisz, Gaming Startup

Nic Parker, Parker Consulting

 

 

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After the event it came clear to me that there is a gap between developers and investors in terms of communication and it is this article’s purpose to spread what I learned during the sessions; what developers can do and not do to appeal to an investor.

During the event it was thoroughly discussed what investors think about developers in the Nordic region and what they are looking for.

 

 

 

Hey man, I've seen a fair amount of pitch documents over the past 2 years and I enjoy talking about this subject. Just a short feedback regarding your article: it says in the beginning that it would provide information on what investors are looking for and how devs can appeal to investors. From this angle I didn't find the article to be very informative. Maybe you can add more advice that you've picked up while you're there. Did David Gardner talk about what LVP look for in a game or team? Did Jason Della Rocca say what he looks for in a pitch? etc.

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I agree, it's an interesting subject. In terms of GDDs, what kind of layout, how much information et cetera, seems to be getting best pitch feedback?

Also, you're completely right about the article being misleading. I was making this article out of notes I took some three months ago, should've written it sooner when I had it fresh in memory. Gonna go over it a second time and see what changes I can do, wish I was good on taking names so I could quote people but I didn't, next time I'll be doing that for sure. 

Thanks! :)

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I agree, it's an interesting subject. In terms of GDDs, what kind of layout, how much information et cetera, seems to be getting best pitch feedback?

 

No GDD. Investors don't care what enemy awaits the player in world 4, level 5. Investors typically invest in a company - not a single product (publishers are a different story). What amazing market opportunity have you identified that will make your company a big success? Show them data that backs up your claim, show them a prototype instead of a design doc and convince them that you've got the perfect team to see it through. How much money do you need to break-even? How many of your company shares are you willing to give up? Put everything in a few straightforward power point slides, here's some advice: http://blog.guykawasaki.com/2005/12/the_102030_rule.html

 

Watch this and the 10 key lessons for gaming start-ups from Slush '13 as a start:

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That makes a lot of sense, thanks! This is going to help us a lot if our Kickstarter fails, which means we're targeting publishers.

When you present a team and our strengths et cetera, what should you put a lot of effort into mentioning? Is it how well we work socially? How skilled we are? How long time we worked together? I really have no clue.


Damn, wish I could attend to more events. Need to learn moaaar! :)

 

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That makes a lot of sense, thanks! This is going to help us a lot if our Kickstarter fails, which means we're targeting publishers.

When you present a team and our strengths et cetera, what should you put a lot of effort into mentioning? Is it how well we work socially? How skilled we are? How long time we worked together? I really have no clue.

Damn, wish I could attend to more events. Need to learn moaaar! :)

 

 

Are you going to approach publishers or financial investors (or both)? Note that there is a difference in what kind of deal you can get and what they are interested in. As far as the team presentation goes, there is admittedly not much of a difference. Mention previous projects and employers of the team members that are related to the company/game you want to build e.g. if you want to develop mobile games it helps when you mention that your team is made up of people who worked at Rovio, Supercell and Gung Ho before. If none of you has shipped a similar game before you will need a very strong prototype and/or KPI to be convincing. Make sure your team is diversified and if you don't cover all bases yet then mention that you're going to hire somebody for the job. If you've worked together as a team before - great, mention that.

 

BTW. what kind of game/studio are we talking here?

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I know there's a difference between publishers and investors, but the definition I am not aware of, please enlighten me! Once again it feels as though Juniors, with all reason, will have a harder time to get funding from publishers or investors. I guess it all comes down to how good you're at presenting your strengths and make an impression.

It's Frogsong Studios, you've never heard of it since it's a start-up and we haven't released any of our games yet. It's me on Design/Ux/Scripting/PR, 2 programmers and 2 artists.

http://frogsong-studios.com/

Also we have a wip, presskit if you're curious: http://www.frogsong-studios.com/presskit/ 
Be ware, it haven't been corrected and polished just yet.


 

Edited by Sjonsson
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