In today's competitive gaming market, fundraising is crucial for developers to secure the necessary resources to develop and market their games. It's also important to approach fundraising strategically. Game developers must understand the current market conditions and craft their pitches accordingly.Let's explore the current state of the gaming industry, delve into the funding landscape, and discuss how Xsolla Funding can support your game's journey.
The gaming industry today
The games market is experiencing significant growth. Global revenue is expected to increase from $144 billion in 2019 to $205 billion in 2026. Yes, it offers exciting opportunities for developers of all sizes. But it's also becoming increasingly competitive. While tools like Epic Blueprints, BaaS, and AWS make it easier than ever to release a game, market saturation means only a small percentage will truly stand out.Additionally, despite the industry's growth and the wealth of opportunities, player behavior can still be unpredictable. For example, we saw a dip in gameplay after the pandemic when people started returning to work. However, that trend has been recalibrating and will likely taper off by the end of this year.Looking back at the high-level overview of the industry, the increasing revenue, and changing player behavior, it only shows us that more people are playing games now than ever before – and there were some good signs in Q1 and Q2 of 2024.The bottom line? People are still playing games, and they'll continue playing them.What about the indie game market?Indie games have definitely captured the attention of players and industry professionals alike. While there's a lot of excitement and buzz around indie games, it's necessary to look beyond the headlines and understand the underlying trends. The reality of the indie games market is often more complex than what is portrayed in the media.But one fact remains: 90% of indie games make less than $10,000 over their lifetime. And that data covers just Steam; mobile gaming is a whole different beast. What are you doing to ensure your game isn't one of them? You must understand your target audiences — publishers, investors, and gamers — and deliver a unique and compelling gaming experience to attract their interest.New tech and innovations like AI are undoubtedly changing the industry, but they won't upend it. It's not just games themselves that are evolving; platforms and publishers are also facing challenges.
The 2024 funding landscape
No doubt, COVID drove a one-of-a-kind spike. Players were playing, so publishers were investing. Fueled by the Web3 fever, publishers typically over-signed their 2023-2025 slates. Then, they recoiled, closing up funding opportunities.While COVID-19 initially drove a surge in investment, the market has since stabilized. Despite this, there's still a lot of activity.To put it in perspective, let's look at the data on investment volume in the last few years. About 70% of investments are in early-stage development, while the other 30% are in late-stage development.In addition to the investment volume, the number of investment deals is also a good indicator. There were 875 deals in 2023, and 418 deals were made in the first half of 2024. So, while the numbers are down from their peak, there's still a lot of activity in the gaming investment market.What does all this mean?As investment deals and volume decrease, competition will only increase further, which brings us to the importance of fundraising. In a highly competitive market, you need to make it easier for publishers to say yes. And the post-pandemic era has brought about a reset, taking us back to the basics: giving your game its due diligence.A slow market means:
Expect long decision horizons.
Meet the publisher where they are.
Build a business case.
Most importantly, it means getting back to the basics. Ask yourself, "What is your 'unfair' advantage?" What makes your game stand out from the crowd?
How Xsolla Funding can help you
Xsolla Funding can contribute to that advantage. It bridges the gap between studios, publishers, and investors. For studios, it's a guide to setting up and growing their gaming business. For investors and publishers, it helps them find global investment opportunities from a diverse talent pool.Xsolla Funding ClubOne of our initiatives is Xsolla Funding Club, a curated, no-cost matchmaking platform that directly connects developers, investors, and publishers.Developers at any development stage and with any monetization model or platform can submit their games for consideration. Of the games currently looking for funding on the platform, 35% are PC-only, 34% are PC and console games, 14% are multi-platform games, and 12% are mobile-only.If you’re accepted into the Funding Club as a developer, you’ll have the opportunity to:
Get invited to game industry conferences, pitch events, and demo days
Increase their chances of securing funding (with 1 in 4 games receiving funding in the last year, which is more than 40 times the industry average)
Network with over 180 active investors and publishers
Get directly contacted by publishers or investors interested in their project
Access educational materials like XFC events, webinars, and more
Publishers and investors on the platform get to:
Find their next game opportunity with a collection of developers and their upcoming great games
Tap into a curated database of developers' games with different genres, budgets, and platforms
Save time and money by finding opportunities they might not have found otherwise, and more
Xsolla AcceleratorThe Xsolla Accelerator program provides developers with mentorship and practical educational materials tailored to their specific needs. Accelerator offers resources for every stage of development, with modules ranging from "Founding & managing your studio" to "The self-publishing path."The program has seen much recent success with its game developers:
4 games found a publisher or investor
2 developers launched their games
2 more launches are coming up in 2024 and 2025
If you're a game developer interested in applying for the Accelerator program, you must have a PC or console game version and a demo build available. All monetization models are accepted, including Premium and Free-to-Play.The gaming industry and its fundraising landscape are both constantly evolving, but with the right support, you can achieve your goals.Ready to take the next step toward making your game a reality? Feel free to contact an expert from our team or visit our website to learn more about the funding opportunities Xsolla has available to support you on your journey.
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