How Two of the Most Hyped Game Studios Became Cautionary Tales

on even worse news. So, this rumor has been around for a while since GDC, so I've been holding on to it, but it's been confirmed by multiple sources at this stage. Is that the company, The Believer, a Los Angeles-based company, and if you could remember this, it was founded by former Riot Games execs Michael Chow and Steven Snow, and it was a Andreen/ Lightspeed joint. What possibly could go wrong? $55 million of serious aid funding like in March of 2023. Again, led by Blight Speed Venture Partners, our friend Morates, Andrezen, Bitcraft, Riot, OneUp, Cleveland, and Michael Eisner's Turnante company, where the [ __ ] that is. All right, so they have been confirmed. Believer has shut down last Friday. Believer is [ __ ] crazy. Really? Is this the last AAA domino to fall? What's left? Probably monsters. Oh, no. This is this is the the revenge of the fat. We're just getting started, dude. We're just getting started. 2021

was disastrous investments in all kinds of companies that made no sense, and it's going to be $55 million. So, basically, my understanding, and people are going to be mad, I know, but they had $55 million in funding, blew that in two years, right? In less than two years. And generally speaking, it seemed like they had absolutely no oversight in terms of spend from their venture investors at all. And at the end of the day, when they came out to GDC, they had nothing to show for it, right? I don't even think they even had a vertical slice. I think they had more concept type stuff. So, they went to back for more funding at GDC and they couldn't get it right. So, I I wish the best for the 80 souls out there that 80 plus souls that are part of this company. 80, something like that. They break They were given like million dollars. I whatever I I heard all kinds of stuff. I I Nothing is confirmed, but I Anyway, we can use all this great talent in the big

publishers. So, let's hopefully they come back and do their thing somewhere else. There we go. That's So, we're going to talk about this in VCs and PES talk today because like the oversight is part of the things that private equity would do and definitely not something that that venture capital seems to do. But Chris, what do you think is the next one? Is Gardens the next one? I I really don't want Gardens. I really like those guys. I'm not saying like that's a bad team or anything. They're great and absolutely but like giving this trail is like but yeah, they had a lot more to show and they were further along and I think they were far more prudent with their investments and their salaries. They were actually acting like a startup company versus my understanding with what happened with Believer. So and theory Craft is another one, right? Theory craft is did the gold belly belly up or well I mean this next story is the same story really right a rocket boy oh so talk to me about rocket boy build a rocket boy all right so build a

rocket boy was founded by ex GTA Lie Benzes right and they are building a game called Minds Eyee which is a huge GTA style game and a more futuristic like more techy type thing right cyber punk. So anyway, they he had some issues with Rockstar and he left and it is unclear exactly how much money, but the one round that they did confirm was $110 million series D. Series D, mind you. So there's still A, B, and C. And so it could be I would imagine it's somewhere in the 300 million range at least. Maybe seven years in the running. Seven years. Yeah. Yeah. But they were acquired like an acquire I think by PlayFusion to further invest in this game right and so I don't know man they pushed this thing out right it clearly wasn't ready and it's been an absolute train wreck like this Mind's Eye game and the reason I found out about it which is even more crazy I am still in touch with what's going on but

I still didn't know about this game coming out but my son was watching this YouTube guy who's really funny by the way and he went on for an hour and showcasing all the bugs and all like the crazy [ __ ] that happens in this game that it's completely not ready for prime time. So, I think their ambition got a little bit ahead of their capability to some degree, but they had 300 people evidently in Edinburgh, Budapest, and Mia. So, this game has been labeled the worst rated game in 220,25. It has a Metacritic score of 37 out of 100, a user score of 2.5 out of 10. Oh, very solid. Yeah. So, technical issues, outdated gameplay, described as dystopian future that plays like it's from 2012, disjointed narrative, nothing was really good about this game at all. It was an absolute disaster. I mean, it was absolutely massive, too. And so, like, it must have cost a fortune to build. And they did a Beyonce drop on it, right? Isn't this the one where I don't know if

someone's going to talk about this where the two people left? Yeah. So, like cuz Chris went through the timelines and your timeline and then December 2024, but the real timeline actually continued to June 2025. The game released in June 2025, but also there was a couple of other releases. And those releases were the chief legal officer and chief financial officer left the company. And here's this, the CFO changed the name and URL of his LinkedIn account. Like I have no info about this, but this of course doesn't indicate anything very good. And with so much money raised and such a powerful set of investors that they have, they have like Red Bird and like these billiondoll New York funds that have put in money into them, this can turn really ugly really quick as they start looking for who is to be at fault. And now you don't have your second and first line defense, which is your chief legal officer and your chief

financial officer. So, I hope it's just a bad game. Let's let's just leave it at that. All right. So, we're covering a lot here. I wonder if someone is keeping track of all of these, you know, bigname founders who get a [ __ ] ton of startup money. Is there a scorecard? Because what feels like is going on is that your chance of being Crest's kid getting into the NBA is higher than your chance of being an ex bigname company winning at a startup. Is that the new bet? Yeah, that's a little unfair, but yes. No, in a good way. Like I actually think I can make it. I'm just joking. I'm just teasing. Um, can you give me a little bit more color, Eric, on like how would you do venture capital in AAA if at all? See, here's the thing, though. When I look at this on paper, though, it's a large amount of fixed capital for a series of revenue to be delivered later on. Like, that feels like a VC style problem is to take on those losses for

year after year after year. That feels like akin to the VC model. No, that's actually the opposite of the VC model. The VC model is you invest and you build it over time and you continue to invest as you scale over time. Yeah, that's the problem with AAA. That's why it works for mobile to some degree because you you revenue coming out. You build revenue, you spend money on UA, you raise more money and then you and you scale and then you sell or go IPO, right? Mhm. But with AAA, it's like you just build for five, six, seven years like a money pit. It releases, you get revenue for a few months and then you're done. You know, that's fair. They can't show any traction. Like at least when you're taking on losses with Uber, you can show, you know, increase in riders or drivers, but they have nothing to show. They have no real validation of demand, right? And once the game is out, you have to start that all over again. It's like five or six years. It's just not a VC model, right? And so, so we're starting to see these new publishing things start to come up like Kepler is coming. Whatever this thing joint is with Owen Mahoney and Bing and stuff like that, like another there like you know, I've been consulting foris which

is like a similar idea. It's like these are the ones that should be placing multiple bets across different types of products and different types of teams in order to build another publishing organization, right, to compete to some degree, right, with some of the bigger publishers and see some of these double A, single A, and then potentially AAA games come to market. That's the appropriate model for gaming, AAA gaming in general, right? Not the VC model. But but the publishing model is still the same though, right? like you're putting aside capital with no return in the short run over and over again every single month except with the publisher model. You have milestones. So there are deliverables to measure traction but it's still not validating demand, right? But a publisher model are people that are actually publishers like that know games. Like the venture capitalists don't know games, right? These people that are investing in games know [ __ ] all about games, you know? Like I want to double click on what Crest said because that's the point like with these big funding rounds. A lot of these

investors are generalist investors and they are the ones who are pouring these tens of millions because they're gigantic funds and that's what we're seeing also as a problem. There are funds that are run by people who actually are in gaming but they are not billion dollar funds. I mean some of them are kind of right now but they are the problem. They being thrown like $110 million round D on a company that hasn't shipped a game in seven years. You have to not know anything about gaming to do that. It's ridiculous for me to like second guess what was happening in 2021 when money was so cheap and there was just so much of it and people were trying to just get into the gaming space because it was hot hot hot. But at the end of the day, the right longer term model I think is more of a publishing model for gaming where you can make multiple bets and have like a pipeline of products and people that are managing the [ __ ] process which I think is the problem that happened with Believer is that they had no oversight, right? They were hiring engineers for like a million, $2 million salary. Something ridiculous like I was hearing. It's like that's not the way you build a startup, right? That's not a startup. What about

something else that doesn't seem to be tracking? Well, yeah. So, yeah, Bungie basically announced an indefinite delay for Marathon. So, it was supposedly coming out September 23rd, but as you recall, the feedback from the alpha test was very, very negative. So they are basically kind of reassessing the strategy and changing parts of the game. I think this is like kind of bad news, good news. Like it's really bad news that the game is delayed indefinitely clearly, right? But the good news is that Sony's not getting rid of it, right? They're not canceling it or shutting down Bungie, which is was another option for Sony in theory. So they're going to give it some time to like make it better and see if they can pull it off. I think it's actually kind of good. Yeah. Net net, you know, to me. Yeah. It's a marathon, not a sprint. [ __ ] dad joke. Oh my god. He was waiting for it. God damn it. I want to talk about remedy. So they launched today. I think today or yesterday they launched their version of Hell Divers, which is FBC Fire Break. It's not really

looking as a fire break. It has like 60% positive. So looking, you know, all righty. This game particularly, I'm not sure how long has been in development. I listened to the podcast with the CEO. I know that they have been developing this sort of a multiplayer shooter. It was first to be a free-to-play and then it changed to probably what this is for at least 7 years. It was called the project Vanguard. At one point it was being developed out of Finland, then it got developed out of Sweden. I don't know where this game comes from, but if it seems like a pivoted to this. In the podcast, the CEO said they spend about $30 million on development costs plus marketing of this game. This is the first self-published game from Remedy, which is interesting. He said that they need to sell, was it 10 million to break even? I think he said they need to sell two million to break even or something like that. So, it's not that crazy. The game costs between $30 to $40 if I'm correct. It has two different SKs. It was released though at the same time on Game Pass and PlayStation Plus, which

kind of indicates that they knew that the potential for this game is quite limited. So, Remedy is the last public gaming company on Finnish stock exchanged. It was interesting. I listened to the podcast with the CEO and interestingly enough because the reporter seemed to have read the hard truths about the Finnish game industry, my doof blog post that got that got very viral here in Finland and me deported. And so, the question that she was asking was pretty much from what I wrote, which was very interesting. And to summarize it, the remedy CEO kind of to be honest blamed the competition for limited the success they've had, saying that well the competition and he always talked about the west coast that the salaries on the west coast are so high and the budgets are so big and that's the competition and just the the situation in the market. But the reality is looking at remedy it is a fantastic studio. I think it's they've been live for 25 years. games like Maxpane, Alan

Wake, Control, really really good at at making these double A games. When they IPOed, it seems like they raised capital to the owners because they didn't build out their publishing function. And I think that is kind of influencing them still. You know, their product strategy is very focused on very much a niche singleplayer horror games like apart from Resident Evil, what's what's in this category? And they they kind of left out some of the games that they were doing before. Like I remember when I was a kid, I played Death Rally, which was one of their game, Max Pain. They sold that to Rockstars. All the IP rights. I think they are making a game now with Rockstar on that one. And their budgets, even though they're quite small, like when we're talking about $30 million a game, they're still too big to cover their returns because after the release of the last one, which was Alen Wake 2, it got insane Metacritics. They had to, I think, take a loan to kind of stay afloat. And when you look at their financial returns, they made $51 million

million euros last year in revenue and the EBIT was minus4 million. Didn't Epic publish that? Yeah. And so, so because they didn't build out their own publishing function, their games are published by all kinds of different companies and they kind of don't own their fate. Even though last year it lost like four million or so, that revenue was up actually 50%. So, that was a good year. And even on a good year, it wasn't actually that strong. So, Remedy is kind of perfect example of what's going on in the Finnish game industry. The market has changed considerably. Nevertheless, the game studios kind of retracted and are doubling down on what worked before. So, just focus on the game, focus on the gameplay, focus on on the experience, just craft a good product. And when you put in all your focus on the product and kind of leave everything else to others like publishing, like marketing, you end up building these really really goodlooking games, but your faith is in the hands of somebody else. It's in the hands of the publisher, right? It feels like they've they've made products that

that either misses the market or is just not competitive in the market. and and now they are as the CEO said going more towards what works in the market by building a multiplayer game in the setting that they have developed but at the same time this game doesn't have live ops and you know the the first kind of reviews coming in are not exactly hell divers so I don't know it's going to be interesting to follow but it's kind of sad that they didn't build this is a disaster I was looking at this I'm trying to be nice this is an utter disaster like when you look at the Steam numbers which you shared and we have on the screen right now. There is only about 2,000 peak CCU on Steam. And you're telling me this was released for free on PlayStation Plus and Game Pass, which sometimes I'm a fan of. You want to get initial distribution, especially in a live service game. But if you're telling me you're getting what, maybe 30 million from PlayStation Plus, that's just a random guess. And like let's say 15 million downloads off of Game Pass, I know that's extremely generous as well. You're telling me like they're getting

no uplift in PC from that massive console distribution? This is over. Like this is self-published. It's Dunzos. That updates your priors I think on the Game Pass and PS+ distribution, too. Be the game of the year for Finnish Game Awards in 2020. Five. Oh god, they should kick you out. In fact, we'll find out soon if they did. But but they do build they build amazing games and amazing single player games and and it kind of bums me out that that they are in this horror genre. So I feel like if they would control their own publishing they would be bigger. I don't know where where that IPO money went. I I don't know what they did with it because they've let others publish their game for eight years after the IPO. [Music]