Key Takeaways
- AI is transforming game design with generative content, dynamic difficulty, and personalized storytelling that keep players engaged for the long term.
- The global gaming market is on track to surpass $300 billion by 2026, driven by explosive growth in mobile gaming, esports, and immersive technologies.
- Esports revenue is projected to reach $5.4 billion by 2027, fueled by live streaming platforms and professional leagues that attract millions of users worldwide.
- Advanced AI monetization tools, such as real-time in-game purchase recommendations and predictive ad placements, are boosting player lifetime value and revenue potential.
- Venture capital interest in gaming remains strong, with investors targeting AI, VR, AR, and next-generation social gaming experiences across global markets.
As we advance into a technologically-driven future, gaming has evolved beyond mere entertainment. It converges art, technology, and commerce.
For founders in the gaming industry, understanding the intricacies of current technological advancements, especially in AI.
AI’s transformative impact promises to shape the very fabric of gaming experiences, ensuring that they remain dynamic, engaging, and continuously evolving
- Revenue is expected to show an annual growth rate (CAGR 2023-2027) of 9.54%, resulting in a projected market volume of $5.40 billion by 2027.
- The largest market is Esports Betting with a market volume of $2.13 billion.
- With a projected market volume of $871.00 million, most revenue is generated in the United States.
- In the Esports market, the number of users is expected to amount to 720.8 million by 2027.
VC Firms Investing in Gaming Companies
Konvoy Ventures
About: Konvoy Ventures is a venture capital fund dedicated to esports & video gaming
Thesis: We invest in the infrastructure technology, tools, and platforms of tomorrow’s video gaming industry.
Wonder Ventures
About: Wonder Ventures invests in entrepreneurs who build the world’s most innovative technology companies.
Thesis: Our mission is to invest earlier than anyone in Southern California’s best founders.
Lumikai
About: We are India’s first gaming & interactive entertainment venture fund. We catalyse game-changing, early stage founders building the future of gaming and interactive media.
Thesis: We are curating and supporting a select tribe of India’s most forward thinking, creative and talented founders. Our vision is to find and fund game-changing early stage founders with a bold vision for the future and to help them achieve outlier success. We bring decades of sector strategic experience and knowledge, while leveraging our all-star local and global networks to help propel our founders to success.
Kakao Ventures
About: Kakao Ventures (circa 2012 as K Cube Ventures, rebranded in 2017) is the most active seed stage VC in Korea, with over 190 portfolios and AUM of $300M (330B KRW) as of date. Kakao Ventures believes in harnessing the power of startups to change our world. Our mission statement is to be the backers of smart entrepreneurs who set their courses, in the form of startups armed with competitive edge, to solve real-world problems. Hence we hold entrepreneurs in the highest regard, and leads us to our raison d’être – making the world a better place for talented people to continuously make an impact to the world around theirs.
Serena Capital
About: Serena Capital caters to technology companies with seed, early, and later stage venture investments. Investment strategy: We handpick on average four to five teams per year and focus on helping them reach their maximum potential. We are not looking for early exits. We back Europe-based entrepreneurs willing to build continental or worldwide category leaders. We strongly prefer to lead or co-lead rounds.
Thesis: Serena was founded by entrepreneurs on the belief that your VC should work for you and not the way around. We are not industry-specific as long as your business model is scalable and your product is digital. We have a special affection for DeepTech, enterprise software, marketplaces, and entertainment.
BITKRAFT Ventures
About: Built by founders for founders, BITKRAFT is a global early- and mid-stage investment platform for gaming, esports, and interactive media. We focus on Seed, Series A, and Series B investments in game studios, interactive platforms, and immersive technology.
Sweetspot check size: $ 3M
Traction metrics requirements: No hard requirements; preference for second-time or serial entrepreneurs
Thesis: Vision of Synthetic Reality (https://www.bitkraft.vc/vision/)—the increasing convergence of the physical and digital worlds
WndrCo
About: WndrCo is a holding company that invests in, acquires, develops, and operates consumer technology businesses for the long term.
Andover Ventures
About: Andover is a venture fund investing in early stage software-enabled start-ups ranging from Pre-seed to Series A. We are sector agnostic; however, our team has a background in software development and financial technology. We make co-investments alongside larger funds, angel groups, and other family offices.
Aura Ventures
About: We are an early stage venture capital firm dedicated to investing in ambitious entrepreneurs to define and dominate a new generation of commerce.
Velo Partners
About: Velo Partners invests and manages a portfolio spanning the global gaming and gambling industry across mobile, online, land-based, real-money, social, B2B, and B2C assets.
Thesis: Velo typically invests in Series A or early growth stage rounds. Our ideal investment candidates demonstrate strong early traction and a clear understanding of their unit economics and growth trajectory. We also work in association with a gaming accelerator called RNG FOUNDRY for earlier stage investment opportunities. Once invested, we typically follow our rights for later investment rounds and work with management to define good corporate governance and reporting. We will opportunistically evaluate later stage investments on an ad-hoc basis.
Hiro Capital
About: Hiro Capital invests in UK, European and North American innovators in Videogames, Esports, Streaming and Digital Sports. We invest in Metaverse technology founders and Game creators who are building the future. We believe that Games and Games technologies will be at the heart of next generation human societies. For us, play is deep. We are battle-scarred entrepreneurs who back next generation entrepreneurs. We have founded games and technology disruptors worth billions of dollars. We have led companies from startups to IPO in London and New York. We are gamers and sports nerds. We love games, stories, characters and deep tech.
Thesis: We Invest in the innovators building the future of Games, Esports, Digital Sports
Griffin Gaming Partners
About: Griffin Gaming Partners is a leading venture capital firm singularly focused on investing in the global gaming market. We are founder-friendly, care deeply for our industry and bring decades of investment, advisory and operational experience.
Andreessen Horowitz / a16z
About: Andreessen Horowitz was established in June 2009 by entrepreneurs and engineers Marc Andreessen and Ben Horowitz, based on their vision for a new, modern VC firm designed to support today’s entrepreneurs. Andreessen and Horowitz have a track record of investing in, building and scaling highly successful businesses.
Sweetspot check size: $ 25M
Thesis: Historically, new models of computing have tended to emerge every 10–15 years: mainframes in the 60s, PCs in the late 70s, the internet in the early 90s, and smartphones in the late 2000s. Each computing model enabled new classes of applications that built on the unique strengths of the platform. For example, smartphones were the first truly personal computers with built-in sensors like GPS and high-resolution cameras. Applications like Instagram, Snapchat, and Uber/Lyft took advantage of these unique capabilities and are now used by billions of people.
Makers Fund
About: A venture capital fund created to support founders, combining deep industry experience with multi-stage investment across Seed to Series B.
March Capital Partners
About: March Capital Partners invest in breakthrough technology companies in Silicon Beach, Silicon Valley, and the world.
Thesis: March Capital is a top-tier venture capital & growth equity firm headquartered in Santa Monica, California and investing globally since 2014. We identify entrepreneurs with a provocative vision to lead the future and later-stage companies poised for hyper-growth, then dare to go all in by leading rounds with deep conviction and concentration risk.
Northzone
About: We’re a multi-stage venture capital fund partnering with founders from Seed to Growth. Across Europe and the US.
Bessemer Venture Partners
About: Bessemer Venture Partners is the world’s most experienced early-stage venture capital firm. With a portfolio of more than 200 companies, Bessemer helps visionary entrepreneurs lay strong foundations to create companies that matter, and supports them through every stage of their growth. The firm has backed more than 120 IPOs, including Shopify, Yelp, LinkedIn, Skype, LifeLock, Twilio, SendGrid, DocuSign, Fiverr, Wix, and MindBody. Bessemer’s 16 investing partners operate from offices in Silicon Valley, San Francisco, New York City, Boston, Israel, and India. Follow @BessemerVP and learn more at bvp.com.
Sweetspot check size: $ 15M
Atomico
About: Atomico is a risk capital group. They are entrepreneurs with global perspectives who invest their own capital in passionate entrepreneurs with powerful ideas. Through their experience building Skype, Joost and Kazaa, they understand the value of game-changing business models and have created a worldwide ecosystem to help accelerate the growth of the companies in which they invest.
The Games Fund
About: TGF is an early-stage VC fund founded by video game industry veterans.
We invest in future leaders: game developers, gaming technologies, and services.
We share best practices and offer our experience and personal touch.
Resources & Good Reads
- Gaming VC profiles in Visible’s Fundraising CRM
- YC Advice for Gaming Startups
- The NeverEnding Game: How AI Will Create a New Category of Games
- The Generative AI Revolution in Games
Communities
- The International Game Developers Association (IGDA) is the world’s largest nonprofit membership organization serving all individuals who create games.
- The Game Developers Conference (GDC) is the world’s largest annual gathering of game developers.
Gaming Now and In The Future
“Gaming is a massive market that will only continue growing, it is on track to generate over $300 billion in 2026. Bigger than all other forms of entertainment.” NFX
The gaming industry is one of the fastest-growing industries in the world, with a market size of over $200 billion. The industry’s future will be heavily influenced by advancements in AI, VR, and AR. These technologies are shaping immersive gaming experiences and will continue to hold a significant role. However, the real game-changer will be the effective application of AI technologies.
The five key areas where AI is having an impact on gaming: generative agents, personalization, AI storytelling, dynamic worlds, and AI copilots. By harnessing AI, games can become “neverending”, maintaining their appeal indefinitely through personalized experiences, AI storytelling, and dynamic, evolving worlds.
The rise of social elements in games, powered by AI copilots and intelligent chat functions,.will drive engagement and longevity in the player base, heralding the future of social gaming
Business Implications of AI in Gaming
AI’s integration into the sector offers a transformative experience not just for players but also for gaming businesses. From enhancing player engagement to providing advanced monetization avenues, AI is in fact game-changing.
Monetization Models Enhanced by AI
- Optimized In-Game Purchases: AI can monitor player behavior and preferences, offering real-time personalized suggestions for in-game purchases. For instance, if a player frequently struggles at a specific game level, AI might suggest a power-up or equipment purchase that can assist them. This not only increases potential sales but also enhances the gaming experience for the player.
- Dynamic Subscription Models: Instead of a one-size-fits-all subscription model, AI enables gaming platforms to offer tailored subscription packages. By analyzing a player’s gaming habits, frequency, and genre preferences, AI can suggest a subscription model that offers the best value, encouraging higher subscription rates.
- Smarter Advertisements: AI’s predictive analysis can forecast when a player is most likely to be receptive to advertisements, thereby reducing ad fatigue and increasing click-through rates. Furthermore, AI can customize ad content based on player preferences, ensuring higher engagement and conversion.
Market Analysis and Forecasting
- Predicting Market Trends: AI can analyze vast amounts of data from forums, social media, and other platforms to spot emerging trends. By identifying what players are discussing or showing increased interest in, developers can prioritize certain game features, genres, or mechanics that are gaining traction.
- Player Retention Forecasting: AI can predict when players are likely to stop playing, allowing developers to introduce timely interventions, whether it’s through in-game events, updates, or other engagement tactics. This leads to increased player longevity and, consequently, higher lifetime value.
- Adjusting Game Development Strategies: By monitoring real-time feedback and player behavior within a game, AI can help developers understand which aspects of the game are most loved or which areas need improvement. This feedback loop can be invaluable, especially during beta testing, ensuring that the final product is better aligned with market demands.
AI for Game Design & Player Experience
The infusion of AI into the gaming industry is not merely about adding smarter enemies or more realistic visuals. At its core, AI has the potential to revolutionize how games are designed and how players experience them. The intricate dance between game mechanics and player response is more sophisticated than ever, thanks to AI. Let’s dive deep into its multifaceted impact.
AI Integration in Game Design
- AI in Procedural Content Generation: No longer are game worlds static or bounded by the limitations of manual design. With AI, games can generate levels, terrains, and even entire universes on-the-fly. This not only ensures each gameplay is fresh but also vastly enhances the replayability of games. Imagine embarking on a new adventure each time you play, with unpredictable terrains and challenges.
- AI in Game Testing: Quality assurance in gaming is paramount. However, with expansive game worlds and intricate mechanics, manual testing can be labor-intensive and might not cover all potential scenarios. Enter AI bots, which can simulate countless hours of gameplay, identifying glitches, and ensuring a seamless player experience.
- Dynamic Difficulty Adjustment (DDA): One-size-fits-all is a passé concept in modern gaming. AI can continuously monitor a player’s performance and adapt the game’s difficulty in real-time. This ensures that games remain engaging and challenging but stop short of being overly frustrating. It’s about striking the right balance to keep players invested.
AI in Player Experience
- Player Behavior Analysis: Each player is unique, and AI recognizes that. By studying patterns, preferences, and behaviors, AI can modify game environments or suggest personalized paths, ensuring an immersive experience tailored for each gamer.
- Customized Game Narratives: Story-driven games have always been popular, but what if the narrative changed based on every choice you made? AI can weave intricate storylines that diverge and converge based on player decisions, ensuring that each gameplay tells a distinct tale. Your choices matter more than ever, and the narrative payoff is genuinely your own.
- AI in Multiplayer: The multiplayer realm benefits immensely from AI. Beyond crafting smarter Non-Player Characters (NPCs) that challenge even the most seasoned gamers, AI can step in when human players drop out, ensuring the game continues without a hitch. This seamless blend of AI and human intelligence creates dynamic multiplayer arenas that are unpredictable and exhilarating.
Incorporating AI into game design and player experience has shown it’s not about replacing the human touch but enhancing it. It’s about crafting expansive, responsive, and deeply personal gaming worlds where every player feels seen, challenged, and, most importantly, immersed.
Gaming Essentials to Include in Your Pitch Deck
Overview of Your Game:
- Type/Category
- Supported Devices
- Revenue models, Key Performance Metrics (if known)
- Current progress stage
- Primary technology (like game engine)
- Consider incorporating a demo video, early versions, or visual snapshots.
General Info:
- Brief game concept overview (1-2 sections)
- Titles that inspire you
- Fundamental gameplay elements
- Intended player demographic
- Game universe/background
(Divide this into 2 or 3 slides for clarity)
Distinguishing Features / Selling Points:
- What makes your game unique from competitors?
- Why players will be drawn to it
- Basic gameplay and overarching game narrative
- Primary game cycle
- Secondary game narratives
- Highlighted characteristics
(Organize this info across 2-3 slides for visual appeal)
Monetization Strategy:
- Free or Paid model?
- Plan for in-game purchases, advertisements, or both? Types of in-game offerings envisioned? If it’s a paid model, potential pricing?
Artistic Direction:
- Showcase visual inspirations, preliminary designs, prototypes, animated sequences.
(Recommendation: Integrate visuals from the actual game not just here, but throughout the presentation for consistency and immersion)
Projected Development Journey and Funding Needs:
- Duration of current production time?
- Anticipated project milestones?
- Financial projections and needs?
- Beneficial to include: Visual representation of the development journey, manpower allocation, and post-release content strategy.
Team:
- Your base location?
- Team size and roles?
- Competencies and strengths?
- Any previous successful launches?
- Your overarching mission and goals?
Find Gaming Investors with Visible
As we previously mentioned, a venture fundraise oftentimes mirrors a traditional B2B sales and marketing funnel. Just as sales and marketing teams have dedicated tools to track their funnel, shouldn’t founders have dedicated tools to manage their most important asset, equity?
With Visible, you can track and manage every part of your fundraising funnel.
- Find investors at the top of your funnel with Visible Connect, our free investor database
- Add them directly to your fundraising pipeline directly in Visible
- Share your pitch deck and data room with investors in your pipeline
- Send Updates to current and potential investors to keep them engaged with the progress of your business.
Take your investor relations to the next level with Visible. Give Visible a free try here.
Related Resource: Gaming VC profiles in our Fundraising CRM
FAQ
How is AI changing the gaming industry?
AI is reshaping the gaming industry by enabling generative content, personalized storytelling, and dynamic difficulty adjustment. These innovations create never-ending gameplay and tailored experiences for each player. Founders can leverage AI to improve player retention, optimize monetization, and streamline game development processes for faster market entry.
Why is mobile gaming a key growth area for startups?
Mobile gaming leads global market growth, expected to reach $377 billion by 2027. The increasing adoption of smartphones, enhanced graphics capabilities, and platforms like Apple Arcade drive demand. Startups that design mobile-first games can tap into massive audiences and flexible monetization models, from in-app purchases to dynamic subscriptions.
What opportunities does esports investment offer gaming founders?
Esports revenue is projected to hit $5.4 billion by 2027, creating opportunities in team management, tournament platforms, and betting services. Founders can build scalable businesses around live-streaming technology, community engagement, and sponsorship deals, positioning themselves in a rapidly expanding segment of the gaming industry with global reach.
How can AI improve game monetization strategies?
AI enhances monetization by analyzing player behavior to suggest personalized in-game purchases, optimize ad placements, and design dynamic subscription models. These tools increase player lifetime value and engagement, helping gaming startups create sustainable revenue streams while improving the player experience with timely and relevant offers.
What should a gaming startup include in a pitch deck for investors?
A strong gaming pitch deck highlights game concept, target audience, revenue model, and technology stack. Founders should showcase unique gameplay, visuals, and milestones, along with AI or VR/AR integrations if relevant. Clear funding needs, development timelines, and team expertise help investors quickly assess market potential and growth strategy.
