As VC funding for gaming slows down, Frost Giant seeks fresh capital from its community.
Video games have long ceased to be a niche interest, yet the vast scale of the gaming industry remains underappreciated. In the United States alone, video game revenue amounted to a staggering $39.4 billion in the first three quarters of 2023. By comparison, the box office revenue for films in the U.S. for the entire year barely reached $9 billion.
Despite the industry’s immense revenue figures, gaming studios still face challenges, including layoffs. However, global consumers continue to invest in new titles and gaming hardware, making it an exciting time for gamers. But what about gaming studios? While the gaming landscape is flourishing, some studios are encountering decreased interest from traditional private investors.
Frost Giant, a venture-backed startup working on a real-time strategy (RTS) game called Stormgate, is pioneering a new fundraising approach by tapping into its community for additional funding ahead of the game’s launch later this year. This decision follows the company’s successful sale of millions of dollars’ worth of products to supporters on Kickstarter earlier this year.
TechCrunch recently spoke with Frost Giant’s CEO and production director, Tim Morten, to discuss the company’s decision to pursue community capital, a move aimed at securing additional marketing and operating funds.
The rationale behind this decision becomes clear when considering the current landscape of venture capital funding for gaming companies. Since Frost Giant’s last fundraising round—a $25 million Series A in 2022—the venture capital market for gaming firms has significantly contracted. With the imminent launch of Stormgate expected later this year (with an early access launch slated for Q3 2024), securing additional funds could provide Frost Giant with the necessary resources to successfully release its game and generate early revenue. This renewed financial stability may even position the company favorably to attract another round of traditional venture funding for future endeavors.
