Bad Economy, Bad Games?

This Joystiq post, quoting consultant Nick Gibson, suggests that VCs are getting more hesitant about funding game companies because of worries about additional risk in more experimental games.  As a result, games are going to be more traditional and less able to push boundaries.

The argument seems like a perfectly logical one to me, but let me suggest a counterintuitive argument for pursuing riskier games, albeit smaller ones.  First off, although people are buying fewer games, there’s a few reasons that a AAA title will be more likely selected over a cheaper or more risky one: more money for promotion, more evidence that people like that style of game, and a larger market than for a niche game.  That said, you can produce 2 or 3 smaller games for the cost of a AAA title, and you only need one or two of them to be successful to make your money back.  So I could easily see that approach working.

The problem, of course is that this only works in a portfolio approach.  If a new developer comes out but is too small to be able to develop more than one title, then it’s far, far riskier - you’re more likely to end up with an unsuccessful game and bankrupt the company.  So sadly, it’s more likely that small developers with a highly focused interest are less likely to get funded.  But I would encourage bigger companies to take a look at them… maybe they can be integrated into a broader product portfolio.