Investor interest in gaming poised to rise in 2016
According to CB Insights, the gaming industry has moved through a variety of phases, which explains the fluctuations in investor interest. When consumer interest in social gaming companies like Zynga declined, so, too, did venture capital. Now, however, the rise of eSports and virtual reality is making the potential for gaming exciting again all over the world.
In 2014, CB Insights explained, $542 million in startup funding was awarded to a virtual reality company called Magic Leap, whose technology will, in part, be used for gaming experiences. This investment initiated the rejuvenation of the gaming market. Because virtual reality headsets from companies like Magic Leap are expected to be available for consumer purchase soon, new companies have sprung up that develop games that utilize them, along with the infrastructure and online communities to support them. Despite a drop in investments in game-related companies between 2014 and 2015, the industry is expected to grow this year.
Sergio Monsalve, a partner at Norwest Venture Partners, recently provided CNBC with a few of his predictions for the state of venture capital in 2016. Among those predictions was the rise of U.S. interest in the eSports industry. Currently, the market is strongest in Asia, but it is growing in popularity around the world.
While international venture capital investment in gaming has fluctuated over the years, the eSports industry, combined with the rise of virtual reality, is in a position to help it grow again. Monsalve referred to eSports as an "addictive form of entertainment" that the U.S. consumer will not be able to resist.
Who has gotten funding?
The most recent announcement of startup funding in gaming came on Jan. 26, 2016, from London-based multiplayer gaming platform FaceIt. The Press Release said the company received $15 million dollars in Series A funding. The investment firms involved in the funding round were Anthos Capital, Index Ventures and United Ventures. FaceIt recently opened its U.S. headquarters in Los Angeles and plans to use this funding to further develop its technology. The company was founded in 2012 and already has 3.5 million users.
"The eSports market is expected to undergo massive growth over the next several years, and FaceIt has the potential to shape how developers, players and brands participate in and experience the industry," Alex Birns of Anthos Capital said in a press release.
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