Last week, veterans from Riot Games and other studios announced they were able to raise $37.5 million to launch their own game studio, Theorycraft Games. The six-person studio currently operates out of both Los Angeles and Seattle.
Some of the companies involved in this round of investment include NetEase, NEA, Bitkraft Ventures, Griffin Gaming Partners, and Sisu Game Ventures. According to VentureBeat.com, the company will use this investment to bring a diverse and talented team to TheoryCraft in order to develop a community-driven, player-vs-player game that can be played on a variety of different gaming platforms.
Joe Tung, the CEO and Founder of Theorycraft Games, described his vision in an interview with GamesBeat. “We want to make deep, 10,000-hour games that are better when you play with your friends,” Tung said. “We want to make games that are worthy of being theory crafted by players.”
The Profit‘s Take:
The pedigree of the founders at Theorycraft is impressive and we can all hope they make a great game. Betting on a solid team is important in any investment, and that box is checked here. However, any Bitkraft investment deserves a critical look, as the fund lacks serious VC and operational experience and their track record is littered with examples of large investments in overvalued companies. Theorycraft, while sounding exciting, seems to fit this pattern. It looks like a $37.5M investment into an idea on paper – not even a prototype of a game – and the declared focus is incredibly generic and vague. Investing in game developers isn’t much different than investing in movies or Broadway shows. The chance of success is low, but if they produce a hit, the upside can be large. In this case, Bitkraft and others likely massively overpaid with a ton of risk that they don’t really understand or factor into their investment calculations.
(All information was provided by VentureBeat.com)