A platform for success: investing in the video games sector

18 June 2012

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Early in June more than 45,000 people attended one of the video games industry’s most established trade shows, the Electronic Entertainment Expo (E3), in Los Angeles. Traditionally the platform for new games console releases and launching big budget software titles, this year’s show was focused on Nintendo’s plans for its new Wii U console with much chatter about how console markets could harness the cloud, social media and the rise and rise of tablet gaming. But the video game industry is not just about the battle for market share between the console giants Nintendo, Microsoft and Sony.

Like many sectors in the media landscape, the games industry is rapidly evolving as digital platforms and business models disrupt more established business models. Game Development & Management (GDM) is a UK-based video games project management and development business, GDM offers a unique solution to video games publishers; project managing the development of high-end console, PC, browser and mobile games whilst sharing the associated costs of development. As Tim Gatland, GDM’s chief technology officer, explains “the business allows publishers both the time and resources to concentrate on multiple projects whilst GDM actively manages the development process to deliver high quality games on time and on budget.”

The media team at Octopus recently made its first investment into the video games sector, investing £2 million of Octopus VCT and Octopus VCT 2 funds into GDM. GDM is led by an experienced management team with over 30 years of commercial and technical experience in the video games industry. However, they had grown frustrated by the reticence of traditional finance providers to back their business plans. But now, powered by the investment from Octopus, we see significant potential for GDM’s model to become one of a growing number of options for games publishers and developers as market forces drive them to seek new ways to approach development, funding and marketing of games.

The video gaming industry is fast moving and highly competitive, so companies such as GDM which provide cost-effective management solutions to games publishers operate in an area with huge potential. GDM chief executive Charles McMicking told us why GDM chose to partner with us: “Octopus took the time to listen to us and work out how they could adapt their existing media investment structures to meet our needs and those of their investors. They moved faster than another interested party when it came to closing the investment and we’re very excited about growing GDM with their backing.”

We’re very excited about the potential of GDM too and we think that this investment is great news for investors into Octopus VCT and Octopus VCT 2, even those non-gamers who don’t know their DS from their PS3.


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