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A Glimmer Of Hope Amid VC Drought: Gaming Startups

This story was written by Rory Maher.
As VCs have tightened their belts over the past year, digital-media entrepreneurs have struggled to get funding. Still, if the past couple days are any indication, investor interest in gaming remains is as vibrant as ever. OMGPOP raised $5 million on Tuesday; SuperSecret raised $10 million earlier today; RotoHog announces it has raised $2 Million from Mission Ventures and DFJ Dragon, bringing its total raised to date to $8 million; and Blade Games World announced a $4 million first round.

Tameka adds: The common thread among these investments is that they're all PC-based online games with strong social components. "Casual" gaming companies already appeal to investors because they cost less to make than most console titles, and VC's have been bullish on social gaming because of the multiple revenue streams: micro-transactions, virtual goods and advertising.

RotoHog's fantasy-sports angle could be quite lucrative: eMarketer said brands spent about $150 million on ads and sponsorships of fantasy sports sites in 2006, a number that has likely risen; there are also subscription revenues, since players often pay to run their fantasy leagues. SuperSecret has the virtual-goods angle, and while tweens will pay to customize their avatars, advertisers will also pay to launch free, branded merchandise in-world. OMGPOP's dating/gaming/social hybrid seems the most reliant on advertising, which could be a concern, unless they have alternative revenue streams on the back burner.

By Rory Maher