Video Game VC Funding Slumps as Publishers Battle Covid Hangover

Venture capital funding for video games slumped to a three-year low last quarter, reflecting investors’ growing distaste for risk and rising costs to develop new hits.

VC groups invested $700.3 million in gaming in the third quarter, the lowest total since the second quarter of 2020, according to data from PitchBook. The industry attracted more than $2 billion in every quarter for two years ending in mid-2022.

Video-game companies are suffering from a hangover after a surge in play during the pandemic, with revenue in the $183 billion market down 5.1% last year. People are spending less time indoors, creating ...