The gaming venture world shows signs of thawing this spring, and Santa Monica’s Griffin Gaming Partners is laying the groundwork for growth following a long industry winter.
In the past few months Griffin has brought on new venture partners as it looks to the next potential fundraise.
In April Russell Binder, one of the top licensing agents for games in Hollywood, joined Griffin as an intellectual property adviser and venture partner. Binder runs Striker Entertainment, representing among others video game rightsholders as studios swap comic book heroes for single-player storylines.
Last year he executive produced “Five Nights at Freddy’s,” the movie adaptation of a wildly popular video game series which earned nearly $300 million at the global box office.
Binder has been the business architect behind the franchise building of games like Angry Birds, Candy Crush and Dead by Daylight.
His role at Griffin is still in the early stages, but Binder says he’ll work on both sides of the deal table.
“If I come across opportunities that I think could be a really interesting opportunity for Griffin, then I get to bring those opportunities to them for exploration,” Binder said. “The flip side of that is they’re invested in several different gaming companies, and they may have ambition to extend that IP into consumer products, film and television.”
Binder has worked with Griffin’s managing director and co-founder Peter Levin for years. He was the early licensing agent for Angry Birds, a product of Finland-based game developer Rovio where Levin was an executive adviser. Last year the developer was bought by Japanese gaming giant Sega for $775 million.
“It’s just such a great time to be at that intersection of gaming, media and sport,” Levin said. “I can’t think of a better athlete to have on your team who understands that than Russell.”
While intellectual property valuations have soared for popular games, the investment market dried up for early developer and tech companies last year as prospects for Web3 and esports plummeted.
According to the 2023 Games Investment Review published by Digital Development Management, the colossal Activision Blizzard acquisition by Microsoft masked a steep decline in value and volume of deals.
Griffin, however, didn’t slow down.
According to Levin, the firm moved in on early-stage companies while “tourist capital” left the gaming sector after investing in later-stage companies two years ago.
“At a bumpier market we’ve done some of our best underwriting in the last three quarters,” Levin said.
Griffin surveyed hundreds of gaming studios last year and found an overwhelming majority are developing “live service” games.
These are platforms designed to keep players logged on for as long as possible and push in-game purchases, a model employed by Fortnite and League of Legends.
These kinds of games require substantial developer workloads, and venture capitalists see a market gap for tools addressing current inefficiencies.
In this month alone, Andreessen Horowitz raised $600 million for its second gaming fund to invest largely in tech-fueled games startups, Bitkraft Ventures raised $275 million for its third fund to support game production, and Centre Court Capital raised $42 million for its first fund backing sports and gaming startups.
Levin says the firm has begun conversations for its third fund, but has a couple more investments to ink from its $750 million Fund II before moving forward. While interest is strong after solid capital returns from its first fund, Griffin has yet to disclose its next fundraising target.
