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hiya, author here. Palworld is a wild, wild game (think pokemon meets ark:survival evolved, or simply pokemon with guns), and it follows a number of other super

hiya, author here. Palworld is a wild, wild game (think pokemon meets ark:survival evolved, or simply pokemon with guns), and it follows a number of other super-successful indie games that got made with no VC funding. i myself work heavily within the VC ecosystem, so it got me thinking about how games and VC tie together. while the article is written in an opinionated manner, i don't mean to present it as fact - more some musings and steelmanning of why VCs aren't needed

larsiusprime 3y ago
Having worked in games for 10+ years, and having recently joined a more traditional VC-backed startup outside of games, I think you are 100% on the money. The VC model doesn't make a lot of sense for games. So many outsiders come into games thinking they know what they're doing and they learn some hard (and expensive!) lessons fast. Thanks for writing this.
- monero-xmr 3y ago
  Games are a hit making business, much more similar to movies than to product businesses. Sequels and spinoffs can reduce the risk by leveraging the existing IP and fan base, but it's still a hit making business. Indie games are more like self-published novels or youtube creators - you are trying to find a core fan base who will support your artistic endeavors. Sometimes they crossover into mainstream, but 99.99% of the time it remains a niche. At best you can earn a liveble wage that grows over many years. I have seen many VCs dabble in games and they learn their lesson quick. VR / AR / Metaverse attracted a lot of VC investment, all of which is now burned into nothing.
  - LarsDu88 3y ago
    This is correct. The distribution of successful games just like movies, youtubers and onlyfans creators is extremely skewed towards a power law distribution. Games are amazingly difficult to make. Much harder than building web services, but the product success rate is even lower and with much lower stickiness amongst users. What most silicon valley backed successful VC funded companies fundamentally are, are attempts to get software based network monopolies. Things that users won't immediately abandon for the next new shiny thing down the road.
- kyriefh 3y ago
  thanks for reading and sharing your perspective! i'm arguing against my own interest here as VCs indirectly pay most of my income, but as you also observe the standard playbook doesn't quite seem to copy paste well
minimaxir 3y ago
Palworld is an extreme lightning in a bottle and is not a consistent model for game development success. For every Baldur's Gate 3 and Among Us, there are thousands of games that never reach that level of popularity. It's a similar survivorship bias as typical VC.
- MichaelZuo 3y ago
  The world's game industry only needs, at most, about 12 'lightning in a bottle's like this per year, so it seems like a perfectly workable model for such a small number. The existing game studio system can already handle all other established niches in practice.
  - Ekaros 3y ago
    12 sounds a lot, but it is actually not that many. Considering Steam had 14516 games last year. So that would be less than 1 in thousand. And you will also have self funded and games from traditional publishers.
- TillE 3y ago
  I've seen a couple people refer to BG3 as if it's some out-of-the-blue success. Larian has a strong history of consistent success, and reached another level by licensing an extremely popular franchise. Similarly, nearly every AAA franchise game will do very well. Maybe there are some ups and downs, but overall it's boringly predictable. I can absolutely guarantee that GTA6 will be one of the best-selling games of all time. Among Us is an actual weird indie hit, yes.
  - minimaxir 3y ago
    BG3 was an iteration into a niche genre (CRPGs) where previous iterations in that genre underperformed (Pillars of Eternity and Divinity: Original Sin). Everyone, including Larian, was surprised.
    - Ekaros 3y ago
raincole 3y ago
Palworld's budget is 1 billion yen (6M dollars). If you're willing to invest $6M out of your or your family's pocket yes you don't need VC. For most people $6M budget means VC.
- nottorp 3y ago
  Are they even indie or they had a publisher?
candiddevmike 3y ago
Palworld may end up being the first "big" GenAI-based copyright infringement case if Nintendo/Gamefreak decide to pursue it.

larsiusprime 3y ago

Having worked in games for 10+ years, and having recently joined a more traditional VC-backed startup outside of games, I think you are 100% on the money. The VC model doesn't make a lot of sense for games. So many outsiders come into games thinking they know what they're doing and they learn some hard (and expensive!) lessons fast. Thanks for writing this.

monero-xmr 3y ago
Games are a hit making business, much more similar to movies than to product businesses. Sequels and spinoffs can reduce the risk by leveraging the existing IP and fan base, but it's still a hit making business. Indie games are more like self-published novels or youtube creators - you are trying to find a core fan base who will support your artistic endeavors. Sometimes they crossover into mainstream, but 99.99% of the time it remains a niche. At best you can earn a liveble wage that grows over many years. I have seen many VCs dabble in games and they learn their lesson quick. VR / AR / Metaverse attracted a lot of VC investment, all of which is now burned into nothing.
- LarsDu88 3y ago
  This is correct. The distribution of successful games just like movies, youtubers and onlyfans creators is extremely skewed towards a power law distribution. Games are amazingly difficult to make. Much harder than building web services, but the product success rate is even lower and with much lower stickiness amongst users. What most silicon valley backed successful VC funded companies fundamentally are, are attempts to get software based network monopolies. Things that users won't immediately abandon for the next new shiny thing down the road.
kyriefh 3y ago
thanks for reading and sharing your perspective! i'm arguing against my own interest here as VCs indirectly pay most of my income, but as you also observe the standard playbook doesn't quite seem to copy paste well

minimaxir 3y ago

Palworld is an extreme lightning in a bottle and is not a consistent model for game development success. For every Baldur's Gate 3 and Among Us, there are thousands of games that never reach that level of popularity. It's a similar survivorship bias as typical VC.

MichaelZuo 3y ago
The world's game industry only needs, at most, about 12 'lightning in a bottle's like this per year, so it seems like a perfectly workable model for such a small number. The existing game studio system can already handle all other established niches in practice.
- Ekaros 3y ago
  12 sounds a lot, but it is actually not that many. Considering Steam had 14516 games last year. So that would be less than 1 in thousand. And you will also have self funded and games from traditional publishers.
TillE 3y ago
I've seen a couple people refer to BG3 as if it's some out-of-the-blue success. Larian has a strong history of consistent success, and reached another level by licensing an extremely popular franchise. Similarly, nearly every AAA franchise game will do very well. Maybe there are some ups and downs, but overall it's boringly predictable. I can absolutely guarantee that GTA6 will be one of the best-selling games of all time. Among Us is an actual weird indie hit, yes.
- minimaxir 3y ago
  BG3 was an iteration into a niche genre (CRPGs) where previous iterations in that genre underperformed (Pillars of Eternity and Divinity: Original Sin). Everyone, including Larian, was surprised.
  - Ekaros 3y ago

raincole 3y ago

Palworld's budget is 1 billion yen (6M dollars). If you're willing to invest $6M out of your or your family's pocket yes you don't need VC. For most people $6M budget means VC.

nottorp 3y ago
Are they even indie or they had a publisher?

candiddevmike 3y ago

Palworld may end up being the first "big" GenAI-based copyright infringement case if Nintendo/Gamefreak decide to pursue it.