Why VC Bets on ex-Riot & ex-Blizzard Founders Are Failing | Game Industry Library

[Music] all right moving on to get another MOA Crest can on again one of these big a16z joints was The Seekers of Sky Veil the elod games right that is now shutting down because they can't get additional funding right so it sucks you know but like first of all I don't know why they're making a freeo playay MOA to begin with as I've said many times exraction MOA let's not forget that adjective that's true that's true they threw a lot of words at it description so anyway I just wanted to point that out as one of the potential you know victims of the the shifting strategies over at a6z so let's see freetop play MOBA extraction game Seekers of Sky veils shut down 18 days after launch and they had raised 32.5 million I don't think you're giving yourself enough credit here right because this is the second after Spectre divide and I just want if we're going to

continue to see more and more dominal fall from these direct to Consumer no publisher VC funded AAA games I mean there hasn't been one successful company in this group that I can think of anyway and I'm not throwing second dinner in there yet because they have to make another game did you see the dream Haven announcement kind a lackluster yeah so for those who don't know dream Haven did a live stream that was you know speaking of Jeff Keeley it was a it was on the game awards Channel I saw that during the live stream I think it only had 5,000 people watching but when I looked up the video it had 50,000 views for the VOD you know dream Haven is X morine is it ex blizzard founder if I have that right and the product is really quirky I'll say it's like a very deep strategy game but you have to like play on your phone and also I don't know anyone want to explain the game better than there were a couple games they announced right because they have a bunch of different Studios underneath their belt if you remember

this is X blizzard this is Mike morheim who founded blizzard thought they were going to do something much bigger than what we've seen so far because they were spinning up Studio after studio and they're doing the traditional publishing that we talked about on the live GTC podcast like there hasn't been a lot of like true third party publishing it feels like it's almost evaporated and so they have linked which has been already out in Early Access which is from X dice La people I really love that game it's Animal Crossing with Rogue likee elements super interesting it's coming to console it's going to have its version 1.0 so they announced that cute IP and the other one they announced I've seen it described as wild star which was this old MMO from NC soft meets sea of Thieves and it looks not beautiful that IP did not look great for my estimation but no one's really gone after The Sea of Thieves thesis I would argue in a more deliberate way in this one they really are emphasizing the role of ships and Co-op so let's see how they do they said they went through a huge funneling process to get to these Concepts to actually launch these games

I find it hard to believe that ex blizzard people especially Mike morhan would just launch absolute stinkers I mean this is a publisher to watch for sure this just seemed like a lackluster announcement I think they may have overplayed their hand on how strong they thought their brand was going into this yeah the thing that was interesting for me is how much they leaned into morheim as a I guess as a personality and a draw for people like let's see what the founder of Blizzard did I mean do you know as a marketer I'm like do players know and Care like are you following him I that that's kind of my you know did you talk about Sund so sufolk was the one that was kind of weird the Tactical RPG inspired by a love of board and tabletop games this was like you have to like use your phone to play on other devices that was the one that I thought that the IP looked weird I think for that audience it was very like naturey and tree folk and cozy with a hardcore

Starfield like T hex based RPG okay anyway sorry for the impromptu side quest that we didn't prepare for Phil you want to do party club yeah very quickly I just wanted to review party club you know this is in a game that did Gang Busters in terms of Revenue or in terms of units it's described as Gang Beasts Meats overcooked but I think what's interesting here is the 100% free giveaway they do for the first 24 hours so this is very similar to content warning they give the game away for free and then they end up charging after the first 24 hours I think we're going to see a lot more of this right now starting with a lot of Indies who're just trying to get distribution but I expect AAA developers to start adopting a strategy to get some initial burst of downloads and the reason for that is because I think we've seen something similar when it comes to the Playstation subscription ps+ I me if you go back you remember fall guys this is how they initially got distribution which is being on ps+ you go back even further you look at Rocket League this is something that they also credited to their success where looking for

distribution channels are ways that we can get games into the hands of players and I think if you're a paid game it's a lot more of a struggle and I think this is one opportunity we're going to see more devs take advantage of in the future and I think it's going to work its way up to bigger and bigger titles the other thing I just want to quickly point out here is this is a Turkish stat and mostly turkey has Pen Match Games but it's good to see them start to take some of that experience in games and expand other vectors in HD so again it's a very small title but I think we're going to see more and more of the strategy but if you're a triaa diff then why wouldn't you just use ps+ or game pass on day one you can I remember that's just one service that you have on PlayStation now this gets you steam distribution and remember that ps+ is limited the extent of the subscribers I can buy this strategy like percolating up towards the triple ey type of thing and maybe lowend ablea but all the way to AAA when you can negotiate a pretty strong deal already with Sony or Microsoft on any of those subscription Services feels like why would they go this route versus that well so if you

can get money from those subscription Services go for it from what I've heard it's very hard to get money out of those subscription services like from what I understand about fall guys like they only got their servers paid for that was it they didn't get any actual money from those Services yeah but I think as a triple A you typically can add a bit more weight to those negotiations go for it you know if you can get more money go for it but I think if you want to maximize the distribution of your product especially if you're a live service game you got to get into the hands of as many players as possible yep that makes sense you just SK to is warranted I think it'll be incremental I think okay next big game tries this next big game tries this okay is this continuing to work or not y [Music]

Summary

Venture capital investment in PC gaming startups founded by former Riot Games and Blizzard Entertainment developers has faced a recurring pattern of failure, characterized by high-budget projects that struggle to gain market traction. A primary example is Elodie Games, which recently shuttered its studio and cancelled its free-to-play MOBA extraction title, Seekers of Skyveil, just 18 days after launch despite having raised $32.5 million. This trend suggests that the industry’s reliance on the pedigree of veteran founders is an insufficient strategy in an evolving market where player expectations and distribution dynamics have shifted significantly.

The core issue lies in the flawed logic of applying traditional, high-cost development models to modern PC gaming. Projects like those from DreamHaven, led by Blizzard co-founder Mike Morhaime, illustrate the difficulty of translating past success into new, independent ventures. Despite significant industry anticipation, these studios often struggle to generate broad consumer interest, as evidenced by lackluster engagement metrics for recent product announcements. The reliance on founder reputation as a primary marketing tool appears increasingly ineffective, as modern players prioritize gameplay innovation and accessibility over historical industry credentials.

To combat these challenges, developers are experimenting with aggressive distribution strategies, such as the 24-hour free giveaway model utilized by indie titles like Party Club and Content Warning. This approach aims to maximize initial player acquisition, a critical metric for live-service games. While subscription services like PlayStation Plus or Xbox Game Pass offer alternative paths to distribution, they often provide limited financial upside for developers. Consequently, the industry is seeing a shift toward creative, direct-to-consumer distribution tactics as a necessary response to the high failure rates of traditional, venture-backed AAA development.