Western investors believe that the time of crazy money in the mobile app market has passed. Game developers will now be bought with more caution and for much less money.
A week ago, a workshop of game developers was held in San Francisco under the patronage of YetiZen. Within its framework, an investment section was held, in which representatives of companies such as Blumberg Capital, Sing Tel Innov8 and GameStop Digital Ventures participated.
The state of affairs of Zynga was one of the central themes. Investors tried to answer Dan Takahashi, our colleague from VentureBeat, to the question of how the fate of Mark Pinkus’ company affected the entire industry. Did the stock crash of Zynga really bring down prices in the market?
Investors agreed that this event definitely had an impact on later-stage investment (carried out after the project has already become known).
If a few years ago they invested in a popular project, as they say, without looking, now there is much less of this. Moreover, this affected not only the gaming industry, but also the entire IT industry as a whole, said Chris Gottschalk, vice president of Blumberg Capital.
Jeff Karras, Managing director of Investments at Sing Tel Innov8, agreed with him, noting that investors have begun to assess the market more soberly. As a result, the value of companies in the eyes, including potential buyers, went down. However, top companies can still be rated very highly.
GameStop Digital Ventures manager Chris Petrovic recalled the unenviable fate of large acquisitions, citing Ngmoco and OpenFeint as an example. The first, according to him, has turned into something completely different since the acquisition, the second has ceased to exist at all. And it is unlikely that their buyers were happy with what happened (although they put their hands on it in both cases). So, in a sense, it became a lesson for the rest.
As a result, both Gottachlak and Petrovik almost in unison repeat that we will not see big deals anymore.