In this episode, host Alexanda Takei, Director at Ruckus Games, sits down with Spike Laurie, Partner at Hiro Capital, to dissect gaming finance's grim reality in 2025. The conversation starts with a discussion on the industry's downturn, marked by studio closures and a reduction in funding, particularly at the Series A level. Venture capital, once a goldmine for game studios, is now retreating, and if not retreating, shifting many of their investments to infrastructure.

The duo discuss hard questions such as founders' frustrations that VCs have set the bar too high for the products they are making, whether investing in infrastructure actually sidesteps content risk (given the clients of ‘picks and shovels’ are venture-backed gaming studios), and whether a fund would ever return raised capital back to their LPs given the recent market’s low returns. They discuss what options founders have in 2025 and what Hiro may be looking for as they deploy Fund II ($340M USD). They also discuss Snowprint Studios' sale to MTG and how that relates to fund strategy in games. The episode concludes with a look at what the future holds for gaming VC in 2025, with a focus on the importance of backing resilient teams and innovative IP.

We’d also like to thank AWS for Games for making this episode possible. AWS for Games aligns purpose-built game development capabilities — including AWS services like Amazon GameLift as well as solutions from AWS Partners — to help game developers build, run, and grow their games. For more information, visit https://aws.amazon.com/gametech/

This transcript is machine-generated, and we apologize for any errors.

Alexandra: What's up everyone. And welcome to the Naavik Gaming Podcast. I'm your host, Alex, and this is the Interview and Insight segment. It is 2025, and since we're all following games, we know a lot of the business might be in for a tough year. Distribution is harder than ever, with an oversaturation of content across multiple platforms.

Hardly any new games have stuck around and hung in the top ten, although Marvel Rivals is certainly one to watch so far. And many Fortune 500 gaming conglomerates, or even large private gaming companies like Riot and Epic, took the downscaling momentum of the games industry and used this as rationale for continued layoffs and the right sizing of their businesses.

There was an estimated around 20 studio closures in 2024, and although there has never been a better time to be a player and a gamer, for the industry it's been challenging. And this is not only on the studio side, but also on the investment side. To recap and shout out, two of my favorite gaming investment reports, Convoys and Investgame, I'll restate some facts about Q4's 2024 investing landscape as we head into 2025.

So the first is that deal volume is down at 83 down 25 percent quarter over quarter from a year over year perspective. This is a 14 percent drop from 2023 into 2024. There's a drop in graduation rates to the series A only 11.5 percent of startups that raised a seed round raised a series a within two years.

This is compared to approximately a 20 to 30 percent series A attach rate at the macro startup level. So not just games. There's lots of funding going into gaming companies crosshatched with an AI proposition. And several buyers have been taken out of play, either because they went private, got swallowed up by someone else, or their consolidation play just isn't panning out.

Yes, we're looking at Embracer. And beyond this, there's a general sentiment and honestly, dubiousness to Games VC. The general party line is Games VCs are retreating from gaming content, shifting to infrastructure. Must a lamentation of game studio founders and so to discuss this challenging predicament and to engage in a discussion about the state of games financing and games M&A and distribution, I'm joined in honor to welcome Spike Laurie, partner at Hiro Capital. Spike, prior to Hiro, has background at Turtle Entertainment, which I believe got bought by ESL and then got bought by MTG and then might have been divested all over again, but I could be wrong. But Hiro Capital is a venture fund that invest in games metaverse, tech esports, and digital fitness, and is currently deploying funds too, which we’ll talk a little bit about later today. So, welcome to the pod, Spike.

Spike: Thank you very much for having me, Alex. I appreciate there is a lot to talk about there from that opening, and I'm really glad that you've opened the pod with some of those quite somber stats.

Alexandra: Yeah, yeah, yeah. And I'm excited to talk about it too. I think it'll be interesting to see, you know, how Hiro and how you were thinking about it. And so, I gave you a little bit of background there, but I would love for you to tell the audience a little bit more about yourself and also could you tell us why you joined Hiro Capital?

Spike: Yeah, it's great. Yeah, very happy to. So, I'm one of the partners at Hiro. I started out in games, actually in games publishing for Warner, and I got to work on some really cool stuff there, like Mortal Kombat X, Batman Arkham Knight. I've got some trophies and some signed comics and things in the background from working there. And that was sort of how I learned the industry. I then went to ESL, which actually got bought by Savvy for 1.4 billion a couple of years ago. I helped sort of in the mid stage of ESL's journe, running a few territories and continuing that kind of publisher focus, managing the relationships with game publishers. And I was very, very lucky that six years ago now, which feels like a lifetime, so Ian Livingston was setting up Hiro Capital, and asked me if I'd come on board and join and help shape and build a venture capital fund, something I had never done before, or probably should have ever been allowed to do, but here I am.

Alexandra: Excellent. Okay. And yeah, I think I would love to talk a little bit more about Hiro. It sounds like you had this background in games and you basically went on this new adventure to, you know, work in games VC. And before we kind of get into like some of the heavy, the somber stuff that we were talking about in my intro, I just want to learn a little bit more about, you know, you and your observations while you've been at Hiro Capital and about Hiro in general.

So maybe we'll start with Hiro. I am understanding that you're deploying fund two, which is a 340 million fund. I would love to learn a little bit about the funds focus. And you know, how much of it has been deployed and what that evolution has looked like for the firm over the past couple of years.

Spike: Very happy to. So we're a venture capital fund in games. Obviously, we got a little bit of digital sports and some other stuff as well, but, a lot of it is games and, you know, we are operators. So, we are, you know, the three founding partners, Sir Ian Livingston, Luke Alvarez and Sherry Freeman have all built and exited businesses themselves.

So, you know, when you ask about our focus and our approach, it's a little bit of we like to think that we understand a little bit about the founders going through, and it's quite a lonely journey, and it's a difficult journey. And so, you know, we, we approach it more as business partners than we do pure financing tools or, or, or financial analysts, but we've got some great analysts on the team.

We are deploying fun to at the moment, actually, you know, we're thematic fun. So while we probably set out to do seed and series a, we see ourselves going a little bit earlier in some respects where we want to get, where there's really talented founders and we want to help them accelerate or shape their business, but also we've gone a little bit later as well and done a few series B investments, so bigger checks.

So, we like to think that we, we know enough about games to kind of be a thematic fund. And also, you know, you, you alluded to earlier, this is great Universe around games as well. Right? Games is a lot of the time, the pointy end of the spear for some really great technology or some really creative ideas or intellectual property.

And, you know, you see that with the boom of Nvidia, right. In, in the world today, right. So started off computer graphics is now leading the charge on artificial intelligence and that really smart computing. So, we really think of games as the singularity of great technology, great intellectual property and actually to be honest, Alex, that's a really fun place to be actually, and to be able to help propel those founders.

Alexandra: Yeah, I mean, I definitely don't disagree. I've always said games is a great intersection of art, business, and tech. And so I think that the proposition of where that is and where you guys are sitting in your thematic fund is very interesting. And we'll actually talk a little bit about How the thematic funds or the specialist funds for games are working out later in the conversation today, but just to get the facts, I guess, one on one, you know, it sounds like you had three general partners who found the fund. How big is the firm today? Like, in terms of headcount?

Spike: Oh, great question. I think there's nine of us, although I think we'll get someone would challenge me, but I think there's nine full time. And we have some really good specialist.

So within the full time deal team, there's just nine of us, but where we need to, we pull really excellent talent. So on the blockchain side of things, which I know a lot of funds have been thinking through, and we've certainly been thinking through quite carefully over the last couple of years. John Jordan, for example, is an advisor to the business.

He founded blockchain gamer, co founded Pocket Gamer before that. So try to pull an expertise where we, we don't need full time sort of expertise, but in general, we're a small team of nine people.

Alexandra: Awesome. Okay. So you got your team of nine, you're deploying your second fund. And you've been at Hiro now for about five years.

And before we move on to the state of games financing, I want to kind of ask you maybe like a metaphysical question. Which has been, you know, what do you think has been a critical shift in the industry or at Hiro over the past five years, you know, something you joined here in 2019. What was something that you felt was unequivocally true in 2019 that has generally been disproven over the past five years, if anything?

Spike: Yeah, well, I think first of all, the first caveat there is, I feel I'm still learning my craft. I feel six years into a fund cycle is not a full fund cycle. And I think until you've lived and breathed a full fund cycle, you don't really know very much yet or you're still learning your craft. And, you know, this goes back to, you know, four or five years ago in the heady golden days of venture capital for games it was PVP. It was a PVP sport, right? Because you can, there was so much supply of capital. There were so many funds. Who wanted to, you know, all writing, giving out term sheets. And there were so many founders that were coming up to meet that supply. You were competing with three or four funds in every deal.

So the chat, the, the challenge was, could you get into a deal? Could you lead it? And that had some pretty negative, that had some negative effects, right? Because pulled up the valuations, it, it reduces, it reduced the structure. There was less due diligence. And you know, a lot of the, if you think, you know, a lot of those big names of people and funds, the people and the funds that were doing those deals, not all of them have still stuck around, right.

To see the outcome of that. And that's all well and good. Getting into deals, giving term sheets, giving cash. That's just one quarter of what you've got to do. You've then got to help those companies, right? You've got to, you've got to sit on the board. You've got to be the business partner. You've got to be the sparring partner.

You've got to help. You've got to challenge them and help them. And that means being quite candid with people. And it means having a dialogue with someone that transcends just we're best mates. We go out for drinks. We gave you some money. That's it. It's. You know, you've got to have some tough, difficult, commercial conversations with people, and that's a skillset of its own too.

Then you've got to, then you've got to exit the business, then you've got to sell the business, right? You've got to exit the business. You've got to help that founder realize the opportunity. And again, in a world where Embracer is buying a lot and they're giving money to their acquisitions to go and buy more stuff, you, again, you're in this kind of.

It's not, it doesn't look too hard, right? Looks quite easy. It's actually very hard and then, and then you've got to return the capital to your investors. You've got to actually give them cash, right? The fun stuff of telling them what great deals you're in, how exciting the progress is going, like, that's, that's not too hard, right?

But when you've got to turn up and say, oh, actually, this is how much cash you're going to get. And it's not the reality, which, you know, because I think a lot of funds were doing these, these quite big deals, quite big valuations that, and businesses that aren't around today. Only when you've gone through that whole cycle, I think, do you have the proper perspective on the craft of venture capital?

Spike: I think. That, you know, we're still, it's young industry because of that.

Alexandra: Yeah. Well, I really like how you laid that out. And I think that that's definitely true. And there are all of these stages. And so I guess there's a humbleness to admitting, like, I haven't done my full 10 year fund cycle. And so actually, I think this brings us to the topic of games financing and we'll talk about. Games financing and also the state of gaming VC specifically. And you kind of alluded to some of these, these topics here, but I know that you gave a talk at Dice Europe on games financing, you know, what happened and what happens next. You know, in a few short bullets, kind of like what were the key takeaways from that talk for you?

Spike: Yeah. I mean, in a few short bullets, there was too much money that was being invested in games and the reason for that was interest rates were very low. People were looking for. Returns games had just come off a huge covid height and it looked like a really good place to be. And so you had all this money coming into the sector you had and around that, you know, we talked about the high valuations, for example, being PvP sport at the time, you know, the sort of deal making it was happening was this is dance that the investors do with founders and the dance goes like this.

The founder wants to give away 20 percent of his business, and that's the implied wisdom of venture capital, right? And I don't think that's right. I think that percentage of the business you give away could be more, right, or less. And it depends. It depends on how much money they want. But the first part is the amount of dilution they want to take, or they think they should take.

The second part of the dance is the amount of money they need to make the game. Games are becoming more expensive to make. And, the asks from founders. We're quite high, 5 million, 10 million, 20 million, not unheard of. And so you have an implied valuation there based on the founder wants 10 million.

He's going to give away 20 percent of the business because that's the implied wisdom, the valuations, 50 million. There's your, there's your triangle right there. And. As a venture capitalist, you need to return a multiple of the investor capital to your investors and they're expecting a five X return that 38 percent IRR.

That's the kind of the gold standard. That's what you want to return. And so that and also, so I know these aren't bullet points. I hope this is right, Alex, but also the, I've just sort of mapping this out of my brain in real time. Also, the, yeah. You know that some businesses are going to fail. So you're not looking for a five X return.

You're looking for a 10 X return because some will fail. And therefore you can give five X to your investors. They're happy. Everybody makes profit. You raise another fund. The problem is that business that you valued at 50 million, a couple of guys with a PowerPoint with an idea to make a game raising 10 million, that has to be worth 500 million, half a billion dons.

In eight years, because a fund cycle is eight years. And so when you're making those bets, that's a very unrealistic expectation. And the best example of this, and I'm sorry to name names, I, I will name names, is it was 1047 games, right? We're who are making split game big. You can go and Google it now, big, splashy press release, light speed, invest a hundred million into 1047 games at a 1.5 billion valuation. And under the time you're looking at, and you go. Am I an idiot? Why can I not? I can't see how this math works. If you're investing a business at 1. 5 billion valuation today, that business has to be worth seven and a half billion. Let's give the best case your five X return was Scopely didn't even sell for seven and a half billion.

I think it was 5 billion off the top of my head or 5. 9 or something like that. Right. The odds are very long that you're going to be successful for also a first time founder, first time game person running a game studio. How, how, how does that, how does that math work? So a branting we've got off. We've got, I can't remember the question, but that was what it last four years.

That that's what it felt like, right? That's some of the symptoms of all this stuff that we're talking about. And, and why the drop now feels so severe we've come when you come from the top and you have interest rates came up, everything comes down and I feel, I feel really passionate about it, but I also feel angry about it because the people that are suffering, the people that are losing their jobs and in the mass layoffs that are happening in the games industry and really struggling at the moment.

Other, other UI designers, and the graphic designer, and the coders and the programmers who have mortgages to pay, rents to pay, and they have no job security. And they, and they're, and they're losing their jobs because of it. And it, and it, it's really, you know, it's good that this macroeconomic cycle is playing out that this, this, this, this, this is playing out because it's unsustainable.

But when you look at it. And real people, real jobs, real people's families, it's, it's, it's hard to watch, really. Sorry.

Alexandra: Well no, no, I mean, you're not wrong about that. I think like, you know, you started straying into the territory of, you know, specifically the state of games VC and the challenge of the predicaments of the fund structures.

And, you know, some of those auto corrections that we've spoken about, but, you know, you kind of bleep out.

Spike: The name of the, bleep out the name of the fund list. I'm joking.

Alexandra: No, they're very, very good friends of the pod so I don't know if they're sponsoring this episode. I don't think so. I'm looking at the slate.

I think you're AWS this, this sponsored by Lightspeed. But, um, you know, I think the, you know, you pointed out two things, interest rates, you know, perhaps a little bit of overzeal and perhaps maybe a little bit of an unrealistic perspective, you know, of. actual game development cycles and how long it takes to build a Scopely size Activision Blizzard size business in games, which is not, you know, four or five years.

And so, uh, but I guess the question is that, you know, and this is, we're going to the state of games financing versus games VC, but, you know, I did a talk at UCLA and our topic was financing alternatives in today's gaming market. We sort of laid out the options for those wanting to build a games content business.

And honestly, the options are very sparse. Until gaming VC, it was basically mostly limited to capital and project financing versus equity deals. And, you know, you can't go get a bank loan for games. Like you usually don't take on debt to do games, maybe like if you wanted to open a laundromat business, you could do that.

And so I'm just curious, you know, given that, you know, you have this perspective on games VC, right. And there's obviously like also a pullback and publisher financing, you know, what do you think is the founder's best option right now for if they wanted to raise money in games in 2025?

Spike: Yeah. Look, I think, I think VC is still a great option.

I think it's a great option. I like it for the investor because. Theoretically, you have a few shots on goal. The studio doesn't need to have a hit on the game that you're financing. It could be a few games down the line. And that typically is the case because it's a hit driven industry. It's a creative industry.

You can't guarantee a success. I think out the benefit is, you know, it's, it's, it's not as good time to be a founder of a game show as it was four years ago. It's still not bad, right? Because you know who the investors are. You can have a pretty good conversation with them. And actually one of the benefits of all this is there are less founders asking for money.

So while the amount of funds that, you know, that are sitting on their hands now has gone up, the amount of founders that are trying to set up game studios has also come down. So there's, there's a bit of a balance there, right? And you've got better quality on both sides, I think. So that's the first thing I'd say is I don't, don't discount VC.

You know, go and go and get it, but maybe temper your ask a little bit more. The second point is there are games financers who are being more creative now with funding methods who are exploring things like project financing or debt or other more creative methods to get capital to the founders.

Now, what that means is the founder needs to be more scrappy and needs to do more with less. And that means grants. It means, you know, we have a great thing called BGTR in the UK, which is tax relief, which you can get back and you can get. Factoring, you know, on that. So you get it in advance and there you can be really scrappy and really good.

But I agree with you, it's not, you know, kaleidoscopic or a Boris of funding that there was a couple of years ago.

Alexandra: Yeah. And I think, it's, it's interesting cause I think, and, you know, calling back to that discussion, I think we actually, you made a comment about this. And when we spoke a couple of weeks ago, but you know, about how capital financing was quote.

Better for games. There was more checks and balances and more control. And to some extent, I think I disagreed with you. And so I would love to kind of rehash that conversation on air, because it might be interesting to our audience, but, you know, when we think about innovation and who's going to fund it in games, right, there is a retraction on the publisher side to basically invest in anything in a new IP, right?

It's basically too much risk for them to basically make something new. You know, you're going to make call of duty 600. You're going to make FIFA. You know, eight rather than invest in a brand new organic IP. And that's not always true. But on balance, right? Like that's the way the industry is shifting.

It's the same trend that happened with Hollywood and sequel sequelitis, right? And so on the venture capital side, you know, you basically were able to fund new gaming studios who have an eye for innovation, for new mechanics, for something that they want to do that's disruptive. And, and new. And so I think, you know, and there's been this idea that there's something, you know, VC backing studios doesn't make any sense because of the fund structures and the returns, which we'll talk about a little bit later.

But, you know, my PR, I guess my perspective is that VC is a great. Method of financing, because it actually enables innovation in the scene to thrive and grow whereas capital financing is a bit more restrictive, given that you're building towards contractual commitments and deadlines, et cetera. So I guess, like, what's your kind of reaction to that argument?

Spike: Yeah, I, I think that's, I think it's really hard because the games industry is a hit driven industry. And I think if you're, if you're a venture capital investor and you're investing capital into a student, it's using all its capital to try and launch a new IP. The risk is very, very high. The reward is, is great, but the risk's very, very high.

But then we get back into that thing we talked about earlier about the amount of money it costs, the amount of money and time it takes and costs to launch a new IP versus the implied valuation versus the return potential, right? You get stuck in that mental Jiu Jitsu. I think some funds and founders are working with publishers a little bit earlier to try and.

Offset that risk together, but you know, if it's all right with you, I might use an example of one of our investments, which was keen games who have had, you know, huge success last year with enshrouded in early access. That was a team that had been making games for 20 years together. They had made ports for the Nintendo DS.

They had made, you know, this is real, you know, in the weeds team. They worked with a games publisher to launch Portal Knights. And portal nights had over three and a half million downloads now the terms that they had agreed with that publisher because of where they were at the time were heavily skewed in the publisher's favor and they didn't manage to break out from that and so when we looked at that investment you know the execution was de risked.

Because this is a team that has shipped games before has shipped a successful game before they had a bold idea that built upon the voxel based technology that they launched for Portal Knights. And so they had a really good building system in that and they could demonstrate that, but they wanted to make something that was more mature, bigger and in the open world survival genre, which was doing really well.

So that was a new IP and that was that is a great example of how I think venture can support a studio to go on and be really, really successful. But that isn't, I think how most people think of venture capital. I think most people think of it as a new team or a super team of people coming from, you know, who are breaking out, who've got a new idea, who want to launch something new and make it happen.

And, and that's the sexy stuff. That's the kind of like. You know, this is the, this is the cool stuff. This is a, you know, whatever. Whereas like looking at teams that are tried and tested have been going for 20 years and haven't quite had a hit that I think a lot of people have overlooked in the past when you think of

Alexandra: Okay.

Spike: Yeah, even in that, even in that, you know, as they were getting ready to self publish and launch, there were a lot of discussions between the founders and Hiro and other investors of should you self-publish or should you work with a publisher and thinking about the cut of upside versus downside versus risk versus all that sort of stuff.

Alexandra: Yeah, yeah, yeah, absolutely. And I think like, I think you're calling out really interesting thing is there's kind of like two different strategies here. I think there's definitely been, you know, some sort of, I guess, Attitude voices in the ether about, you know, having VCs backed a lot of ex big AAA studio founders with, you know, who had, who had fantastic pedigrees, but may not be well equipped to start a new business from scratch.

And here you're talking about a group of guys from enshrouded that had proven traction to be able to build something, had launched multiple games together over the past two decades and I think that these are kind of like, you know, two opposite sides of the coin, you know, thinking about, you know, what Zynga was with, you know, being Mark Pankis being like a first time gaming founder, right. And building one of the biggest gaming businesses, you know. Objectively, that actually could be considered a venture backed hit. And then you have all the way on the right, you know, a bunch of people that have worked in games their whole lives and know how to execute and know how to build great products.

And so, and we talked a little bit about this, you know, a couple of weeks ago, but a couple of years ago, I heard Ademi Iyajo, who's the founder of Base10 Ventures, talk about his three exits prior to becoming a venture capitalist. That don't know. At me is a three time entrepreneur ended up starting a venture capital firm after being a successful entrepreneur.

He ended up selling one of his businesses identified to work day. And there's like an interesting story about how he pivoted this from consumer enterprise. And I think that really demonstrates this kind of founder flexibility to find product market fit. And https: otter. ai You know, how do you grok, at least at Hiro, the needed necessity of knowing that the crew of people that you're backing can execute the gaming craft, , but also acknowledging that they might be so hyper specialized that they might not be able to pivot to another sector, and so TLDR, their unique ability to deliver against the craft of game making, might also inhibit their ability to pivot in a very classic Silicon Valley VC way.

Um, What's your reaction to that?

Spike: Totally right. And you know, one of my biggest learnings about venture is that ultimately it's a people business that you are investing in people. You are a business partner to these founders, to these people, to these to these game makers and. I totally agree with you that being great at making a video game does not make you a great founder business leader startup founder right and but there is a crossover there's a sim crossover now the problem is.

It's very hard to find out whether someone, how they react under pressure, or when things aren't in their favor, what they do, do they melt, do they, you know, do they rally everyone behind them, do they go, you know, double down and make something happen, do they grind through, and actually, goes back to that point of, you know, learning the craft over the last six years for me, is interacting with all sorts of different people, and having those And, and figuring that out and the goal, and you're totally right.

The golden sort of the perfect founder in games is someone that can do both who can, you know, have the, the foresight, the wisdom, the grit, the determination, the, I cannot fail mentality and excellent at their craft and those people. It takes a bit of time to figure out who they are once you work with them, it is, it is absolutely a pleasure.

Alexandra: Yeah, and I think like, I think that's the, the, the, the question there is that, you know, I think there, it does, it is a people business, right? And it is hard to understand, you know, what a team is going to be like, and as that team evolves over time, how they're going to react to certain circumstances.

But I think that's right. I thought that was kind of an interesting, more like academic way to look at the gaming VC landscape, as it's quite different from, I think, a lot of, some of the other traditional SaaS VC and is probably more akin to something like biotech, you know, long R and D cycles, long time for return and basically like hit on launch or, you know, this drug doesn't work.

It's not FDA approved, you know, no, it's just, you know, sunset and close the business,

Spike: 100 percent, and you brought up earlier about the, you know, the fact that, the rates of game studios that are then, you know, the funding from C to series A, et cetera, with the traditional business, there's revenue, there's metrics, there's a product, there's stuff you can see before you go to C to A to B to C, whatever. And I think one of the biggest faults of the venture capital industry over the last couple of years was the part funding of game studios. Of, we're going to get you to vertical slice, we're then going to get you another 12 months of development.

Then, you know, you need another. 6 million you know the 10 million you the 20 the idea that there's always going to be you know it's like a game of musical chairs i don't know if you have that in America but we have a game of musical chairs but you know you're hoping that when the music stops there's going to be a chair for you to sit on if you're you know and that goes back to that point about the industry today versus four years ago and we're still seeing i think we're still seeing unfortunately for the studios and the founders and those people we're still seeing another six months I think.

Of studios that were part funded out now looking for funding, they will not find that funded and a lot of them are having to go to early access without the proper marketing budget without the proper. Development tool, the product's not ready because the music stopped, unfortunately.

Alexandra: And okay, actually that brings us to kind of our next topic, which is the state of, you know, gaming VCs.

And I think, you know, before we're going to, we were going to, we're going to walk through one of your investments at Hiro, but before we kind of do that, you know, because you mentioned this topic of musical chairs, I'll kind of jump forward and go to another question, which is, you know, a big challenge for games VCs, right now is kind of the downstream funding problem where, you know, many folks sit at the precede.

Few sit at the A, corporate VCs and some bigger generalists. But essentially like every studio, like you were saying, faces that existential crisis of downstream funding risk. , you know, where they might be coming back for the series B or the series C, you know, after vertical slice to get to marketing, to get to early access, et cetera, , who in your mind, , ideally would fill that gap, right?

It's something that's currently like not necessarily being completely satiated, but paint your ideal picture. Who, who completes those rounds for game studios? Or should they just not exist at all?

Spike: I think, I think the, I think the angel round is a really good, that is a very healthy ecosystem. I think that works really well, you know, we're, we're fortunate that a lot of people in the games industry have made good money in the UK, especially, but I think all over the world, there's good benefits, tax benefits to being an early angel investor and businesses.

And therefore, I think to get the first couple of hundred thousand dollars into a business. It's not super easy, but it's relatively easy. And I think that works really well, especially in the UK. I think that seed stage, I think, you know, that bet that you're giving a studio enough money to get to vertical slice so that it can get a publishing deal or do that, I think, I think that's still a bonafide and good way to look at it, but I think the risk is much higher now than it was before. Not the, the risk is actually the same that the, that the product ships and is successful. It's just more risky now that the studio won't get a series A or a series B from a net ease or a Tencent or a strategic or whatever.

Right. Because those strategics were, were plugging that gap, right? Yes. And if you, and if you look at those strategics in particular, and this is obviously just scurrilous gossip, and I don't know anything about the inner workings of those companies, but they are both quite publicly pulling back from, from the scattergun strategic approach that they were taking, and they were funding a lot of those game studios at the Series A point.

So, that's dried up. You talked about the publishers drying up as well? You know, less of them, a lot of publishers I know as well as saying, well, you know, we're, maybe we're not funding development anymore, but we're going to do marketing support and things like that, that they're trying to be more creative to make their, you know, cash go further.

, So, so it goes back to the, so, so what I think, so, so all this is playing out. So what does it mean? I think it means that founders now are having to, and I think that's a good thing, do more with less. Be more creative about game modes, be more creative about how they make games. And we haven't used the AI buzzword yet, but everybody can take it on the bingo cards now, but the,using artificial intelligence, using more kind of structure on how you build stuff, and, and getting to getting out earlier to getting community feedback earlier, building your disc, all that sort of stuff is now becoming really important. And that I think is really healthy for the games industry.

Alexandra: Okay. So your answer is basically. Like, there is no one who's gonna plug your Series B or your Series C.

You have to do more with less. And so, I guess, this also leads to another perspective about, and I would love your thoughts on this, and then we'll jump back to talking through, you know, the, the, Portfolio company for Hiro as our example here, but, again, want to get your perspective on a framing like this.

And this is, I think, emblematic of have some founders feel some founders who are raising today feel there are impossible goal posts and gates to funding that have been impractical for the product that they are building, , as someone who's raised a series that with my own team and been out there boots on the ground, I can admit that the bar, like you said, is now extremely high.

You know, it's for a small team and low financing and so founders feel they have to have proven so much before they arrive at a VC. And there's kind of a frustration that there's all this capital that's been raised in the ether for games, but it's not being given to those that are making the actual content.

That's the lifeblood of the gaming industry. What's your reaction to that founder perspective that I think is very much kind of also floating in the ether on those seeking funding.

Spike: I think, first of all, the provocative answer is, I think there's a sense of entitlement among founders based on the last couple of years, you know, Oh, it's not fair.

That's your raised 20 million, right. And didn't even, you know, nobody did any due diligence on them. And why can't I raise 20 million? Right. I think it's a bit of that. And that's the investor's fault as well for, for doing it. We've talked about that, but I think it's a bit of that. And I think, however, and I think there's also a bit of, there are investors in the market today.

That do not have capital to deploy and are there for tire kicking there. Therefore, instead of saying no, I'm sorry, we're not going to do this investment. They are saying, Oh, come back to us when you've got some more metrics. Come back to us when you show a bit more of this, because it's, if you think about it, it's not in.

The venture, the investors or the publishers best interest to say no, because if they say no, they lose that opportunity forever. And if for whatever reason, opportunity X comes back and says, Oh, guess what? Overnight ninja streamed us and we've got 6 billion wish lists. Then the investor can say, Oh, ah, yeah, we're going to do that deal now.

Right. So I think a lot of it is poor discipline of the investors to just not say, no, I'm sorry. It's not for us. But I, but I also think the bar has gone higher and unfortunately, for founders, the expectation from the investors is that they do jump through all these hoops. And is that a good thing?

Probably, but do I agree that one or two? Lightning in a jar opportunities will slip through the net that way. Yes, probably. Hmm. Okay. Does that help? Does that answer your question or not?

Alexandra: It answers the question for sure. I, I don't know how many founders would be happy, happy about it or I'm sorry,

Spike: Founders, I'm very sorry.

Alexandra: But, um, it's, it's an interesting perspective. And again, like, let's, we're going to bring this back to, you know, because you guys are sitting on the side of the VC, right? And you pointed out all of these challenges to, to games funding. And I think I kind of want to walk through a Hiro investment, I think might be a good way to anchor this about like, okay, so you said all these things.

You're an investor, like, what are you going to do now in 2025? And so one of your, I think, sorry, sorry. I guess what you guys would claim is one of your most successful exits so far has been Snowprint. MTG acquired a 70 percent stake for a 1. x multiple on 2023 revenues, the remaining stake I think is supposed to be acquired over the course of 2025 and 2026 based on future valuations and performance, et cetera, et cetera.

Approximately 30 to 35 million in USD for revenues in the full year of 2023. And so one point X multiple on that is around like a 60 million cash consideration. I believe that the formal price was like something like 65, 650 million S. E. K. Which is like 60 million USD, right?

Spike: I don't think that's quite right. It's a bit low. Okay, I'll double up. It was quite complicated. It was quite a complicated structure.

Alexandra: Okay, well I just multiplied 1. x times 35, so that's how, for the audience, that's how I arrived at that math. 1. x multiple on 35 million in revenue, 63 million in cash consideration. Whichever it is, it's somewhere in the ballpark of, let's call it sub 100, maybe, right?

Spike: Yeah, that's right.

Alexandra: Alright, sounds good. This was done out of Fund 1, which I believe is around 130 million for you guys. And the predicament here is that this is actually a huge success case for you. But this doesn't return your fund at all, right? And so how are you guys thinking about that, right?

I think, and a question, I guess, that has been come up for a lot of games. VCs fund is that the funds themselves are too big. So let's just say you had that's that that let's just call it 60 million. If you had raised a 40 million fund and you'd made that bet and you had the same, obviously equity percentage, that would be a huge success.

And so. yeah, well, we'll play at the logic. And so I guess the question is, you know, for Hiro, you know, using this example as an anchor point, you have had a successful exit. That's fantastic, but what do you do to, you know, fix, get, get, get fund one to actually like return cash back to your LPs?

Because even though you've had the successful exit, it's not enough to bridge the gap.

Spike: Yeah, that's right. And I think, I think a few things, first of all, in that time period, and part of the decision you make is as an investor is about timing. LPs were delighted to have cash back, right? So that's one of the considerations.

And a lot of them were like, you know, we invested six or seven funds. We haven't seen a single penny in years. It's great to have some cash back. Thank you very much. The second point to make is it's about in price and that's really important. And I, and, and, and that deal was, you know, so first of all, Alex, Patrick, uh, John Wilhelm, that team at Snowprint were an excellent team.

They had spun out of King, the first game as just a soul guard. They had been invested in by King. And this is a really great point because they were struggling to raise money. And one of the reasons they were struggling from two of the two reasons they were struggling to raise money at the time was firstly, King had invested at a high valuation and, and, and that sort of, a lot of people were just taking it, Oh, it'll be a flat rank or, you know, and it was a very, it was a big valuation.

And most people just like couldn't do the mental maths to figure out to negotiate that. And we did negotiate that. And so to your point in price versus outprice actually was very nice. The second point is the studio had not been successful with legends of soul. God, it had made lots of million dollars, but it wasn't a super hit. And I think a lot of investors were like, this team can't do it. That was a failure. This is a distressed asset, this isn't kind of a team, this isn't the exciting, sexy bit where you're dreaming about how many billions of dollars you're gonna, you're gonna make. But what we saw was that this was a team that had now shipped a game together as a team, had, had built a tech stack, had delivered a game, had run the live operations, and had an idea now for two other games.

And so it was a down round on, on what they had done, but what they had done before. And that was difficult for the founders to get, to get around in that period. And I'm sure Alex won't mind me saying that, you know, him and I were quite contentious, some of those conversations, but we've, I'd like to hope that we're very good friends now.

So we gave them money the next game, Riven guard. Was really interesting. It created a new gameplay mode. So it was hex based tactical gameplay with the, um, character, leveling up collector, piece in the side. And what, what the game was showing when they launched it was the audience is engaged, but the CPI is too high.

We cannot buy an audience at the right price. And. They were very thoughtful and they said, we think the reason for this is we have made a new IP called Rivengard. We've had to make a barbarian, a witch, a wizard. We've had to give, create all these characters. So when we create, when we put out marketing materials, people like, okay, it's a witch, it's a wizard, it's a goblin, whatever.

Cool. They then licensed, they then did a license to do a games workshop for Warhammer 40k, and they use the same game engine, the same mechanics, and they put the Warhammer characters in it. And now your user acquisition car cost comes right down because you know, those characters you're investing, you're playing chief like librarian you're playing an orc soldier.

And so. That, that was when the engine got working, really was successful, and hence the exit to MTG.

Alexandra: Okay. Yeah, I mean it sounds, this is again, like, from the gaming, from the game studio side, huge, you know, a path of success, and yes, I remember actually, like, , cause I used to be at Activision, and on the King side, you know, I'd roll up King on the PNLs, and Soulguard was in there, and, you know, Arguably compared to Candy Crush, you've got Legend of Soulguard, not the same performance.

So I, I, you know, I remember, but it's obviously like a great story of resilience and pivoting and, you know, getting IP to bring down, you know, costs, costs for installs and UA costs and things like that. , but I think still the question is, is that, given that this was like, you know, an exit for you guys. And I guess maybe this is a little bit of an existential question for Games VC, but like, you know, for many of the Games VCs that raise large funds, that might be in the tune of, you know, your second fund is around 300, 40 million or something like that.

There are ones that are even bigger than that. And you know, what if your fund is basically like too big, like, can you rescale it? Do you return the money to LPs? I guess that's kind of a question is that if you can't have returns on a fund that's that big, how do you, how would you re architect it?

Is that even something that you would consider?

Spike: Yeah, I think, firstly, our fund is a little bit smaller than that. Okay. Although not, not by huge orders of magnitude. You raise a really good point. Do I think investors would ever return capital to LPs? I think they'd have to be very courageous to do that.

Alexandra: Yeah, you won't get your management fee.

Spike: You're not gonna get your management fee, right? And when you are on fund V or fund six and your funds, you know, three quarters of a billion dollars, I reckon that probably feels pretty good. And you know, the, the other thing is nobody marks your homework in venture capital for 10 years.

So That's right. When you think about the funds, that's right, We've got some funds now that are on fund five or fund six who have not, you know, got to the end of the fund cycle for fund one. Right. And so you are playing on this momentum. So I, you know, I think good investors will be prudent about the way they deploy capital, how they deploy it.

A lot of funds, you know, Hiro especially, you know, we hold back 50 percent of the fund for follow on investment. And that is about riding your winners really and giving them more capital to be more successful. But I totally take your point that, if funds can't return, what do they do? And, you know, I saw, you know, some really good data that I saw was that fund vintages, early 2009, sort of vintage funds, four years in, they had returned The fund, so four years into a 2007, 2012 vintage, something around that.

You can correct me later, by four years in, they had returned the fund and everything else on top was gravy over the next couple of years, 20 sort of 18 to 2022, four years in you're at 10 percent of the fund has been returned. That's a really stark difference, right? Between how successful VC was then and now.

And in games, I think a bit of that is. You need a macro tailwind. You need a big macro tailwind. And, so if you had a venture capital fund and they were very, very rare 10 years ago in games, there were very few people doing it. And I really admire those people that were, right? They regard people like that.

You were riding the macro tailwind of mobile. And so when you invested in super cell super early, the, the, the, yes super cell did very, very well, but it couldn't have been that big without the iPhone and without games on, on mobile. Right. And the question, the challenge to investors today is where are those macro tail winds and where, you know, how, how, where is that unfair advantage that you are getting, based otherwise you are just betting on great businesses doing super well in a mature environment.

Alexandra: Right, right. And actually, I think that is another question is that for, you know, like you said, very rare to have someone been doing gaming investments back in, you know, 2012, 2013. But a lot of those that were still doing it were at large generalist funds, a benchmark, Bessemer, client of Perkins, et cetera.

And so then there's the question of like before our games, VCs, VCs, so specialized, you know, thesis. I think thematic funds like you had spoken to, I guess I would call them specialist VCs crop up for games at about 2018, 2019, etc. Um, lots of people or quote investing in supercell because they think it can just be a good business right at the generalist VC level.

And so there's been many arguments. Basically very much recently that games shouldn't be housed in game specific funds and they should fold in with other sector diversification across consumer, other tech, financial services, etc. And basically do it at the generalist level. What's your perspective on that argument?

Spike: I'm not sure I agree with that. And I think there's two reasons. One, I think is access. I think the best deals in games are the ones where you have access before anybody else does. When you know the founders, when you know how talented somebody is, and you help them shape the business ask and what they're doing.

And if you're a generous, you don't know the games industry, you don't have that network or those connections. You just add luck, I think. Um, I think that's the first thing. And I think the second thing, which is kind of related is like, especially over the last couple of years, and you know, we haven't mentioned the crypto boom for games, blockchain games.

It was like, there was a lot of snake oil being sold. It was very hard to separate what was true and what was good versus what was just a really shiny PowerPoint presentation, right? And I think, I think, I'd like to think that, Yeah, people who really know games can sort that much quicker than somebody who's just really talented with Microsoft Excel.

Alexandra: Yeah, yeah, and I actually think like I'm conflicted on this one from the personal level as well, because I think that the counter argument here is that. Especially as the individual investor, one of the things you're looking at when you're joining a fund is you're basically is going to be your fund record, right?

You will be judged off the performance of the first fund that you deploy and the deals that you lead. And potentially some perspective is that if you go to big generalist fund that doesn't know gaming or isn't close to it, you also won't be able to get too many deals across the line because there's just a lack of understanding of the space.

And so then if you can't lead the deal and there's never anybody behind you, you know, yeah, you're leading gaming at. XYZ consumer VC, but you know, you've done zero deals because nobody gets what it is. And that would be for instance, that's changing. But I thought that it's an interesting perspective as well, is that you're more likely to get a gaming deal across the line at a thematic fund because everybody is there, like you said, kind of knows the space and understands it.

Spike: I think that, I think that's right. And I think your point earlier about the size of the fund versus the, how long it takes to return the fund, et cetera, is really valid as well, because obviously generalist funds. They're much bigger, right? And so in general, so you'd need to sort of that bet if you're only making one or two bets in games as part of a diversified strategy, those have got to be really got to hit.

Alexandra: Yeah. Okay. So we're going to do one more question on game VC before we quickly jump to distribution because we're, um, obviously we've had such a, like a robust and loquacious conversation, but we're, we're pushing up on our time slot here. But one of the big themes, and we spoke about this earlier was.

You know, people have noticed a retreat of gaming VC to infrastructure in Q3 of 2024 platform and tech investments in terms of dollar amount. It's actually outpaced content, about 500 million to platform and tech. And there was about 250 million into gaming content in Q3 of 2024, and you had an interesting perspective on this.

I'm wondering if you can share it again with the audience.

Spike: I'm going to try and remember what I said, but I think, I think if I forget.

Alexandra: I’ll remind you. Yeah.

Spike: Yeah. I think, I think, look, there was a lot of, a lot of investment into games, infrastructure sort of plays. And. I think a lot of them ended up being quite thin or quite focused pieces of tech in the stack.

And some of them were doing pretty clever stuff, right? Like back end as a service and things like that. There are some, some great examples of that, whether or not they're brilliant ideas. And I think there is something there to them for sure. They were relying, they were venture capital funded and their business model was, you know, once you will work with a game studio, once it launched the game, we'll take a percentage of the revenue and we'll do really well out of this.

Now, the problem is that all the studios that they were doing deals with. We're also venture capital backed game studios who were like, Oh yeah, no, that sounds great. We need a backend. Let's do it. We'll sign the deal. How much are you taking? Yep. Perfect, let's go. Obviously that's, I'm being a little bit facetious there, but, the problem is that those studios now, as we talked about, aren't able to get their funding, weren't able to self publish, weren't able to get a publisher, didn't do super well.

And so all that potential revenue that those infrastructure companies were banking on. Has fallen away. And they were very competitive when you're venture backed. You don't need to make commercial deals on day one because you're nicely funded and the money's going to come tomorrow. So, you know, I think, I think a lot of those businesses are struggling.

I think probably. A lot of the value proposition was probably a little bit thinner than was the expectation was of what it would fulfill. And I think the business model is just hard. You've got to convince the game studio to give you a percentage of their revenue. And actually, I think when people think carefully about that they don't feel super happy to do that.

Alexandra: Yeah, I think what you're calling out is that, the pivot or the retreat to games infrastructure isn't actually fully wiping away the risk because the customers of the picks and shovels are still the games VC back studios. And so you still have that dependency risk over the although it's slightly downstream.

And perhaps there's a bit more advantage of, you know, the different the platform infrastructure business model versus being a completely You hit space driven event with the gaming IP and new title, you're still have those dependencies. And I think that's actually interesting. And so I guess, you know, for Hiro, what do you think you'll start looking for in 2025 if it's not necessarily only infrastructure and there's this challenge with games content?

Spike: Yeah, I think, I think we're all, we're always committed to games content. I think, you know, Syrian Livingston has made a tremendous career, not out of just founding game studios, but as an investor in games, right? And I, and I am a super passionate gamer and I am very privileged to be able to work in the games industry and provide funding to people making content.

That's always going to be part of the puzzle. I think, you know, in terms of infrastructure, I think there are great opportunities there that are great businesses that are doing really good things. And I'd like to think that we will be participating in supporting those businesses. You know, we've also had a lot of success in the sports technology sector.

We believe in the gamification of the human body, the gamification of life. And sports and whether that sort of carve, which is sort of the gamification of skiing, and, you know, instant on demand lessons and that state that data and statistics and leaderboards on in the real world, like that sort of stuff's really cool and really exciting.

It goes back to that original point I made about when we talk about games and, you know, games now touch so much of everything that. And being a thematic fund, like we want to seek out just great, cool stuff that people are building that can be very, very valuable and any shape or form we're open to it.

Alexandra: All right. Nice. Okay. And so now we're going to move to our, our last topic. I think we're going to skip distribution just simply because we're running short on time here. Sorry. I'm sorry. I'm a bad guest. I'm sorry. No, it's all, it's all good. This has been fascinating. But I want to talk a little bit about maybe one question on M&A, right?

And so. My perspective is that, and I guess maybe from, from data and from the news, et cetera, is that the buyer scene for games, and that's one of the challenging, you describe the four pieces of the journey, you know, like there's the getting the founder, then there's the guiding them, then there's the sale part, , and then there's returning capital LPs, but the sale part, Has been challenging for games because the buyer seen if anything has shrunk, right?

It's the same big players. It's Sony, it's Microsoft, et cetera. And actually many of the buyers have been taken out of play because even bigger buyers have eaten the middle stage buyers, and so I guess my question to you is that who do you think will buy gaming businesses in the next five years? Like in 2025, who's like your ideal buyer? And how's that going to change over the next four years?

Spike: Yeah, I, I, so obviously the big, a lot of people who are very spashy have come out, I am, you know, what has been really interesting in the last couple of weeks is four or five companies who I did not think of as serious buyers have been coming and saying.

We're in the market. We're looking for this. We're looking to buy revenue. We're looking to buy profit which is really, really promising. I don't think I can name names. Unfortunately, I'd love to. But, and these are kind of mid mid mid. These are not the big guys. These are kind of mid size companies.

So I think there's going to be a lot of companies. Oh, gaming companies, gaming companies.

Alexandra: Okay.

Spike: And I, so I think there's going to be some aggregation and that actually it's common sense because in this type of market, when valuations come down, businesses are struggling to, to, to fund themselves. Like though, you know, that sort of aggregation is, is a natural part of the cycle.

And so that is happening this year. And, and, and, and, and that's really promising. And I think the second thing to think about is. Additional types of owners are coming online. And that's sort of like private equity, for example, is an example. It is a good example of like a classic financial instrument that.

Over the last 10 years has been educated about games. And now the people that were analysts are now, you know, now associate then partners now in those private equity funds grew up with gaming. They're in their kind of late thirties, early forties, early thirties. They're in that kind of age group now.

And they're the sort, they understand it in a way that I think the previous generation of private financiers probably didn't. And so they're more, they understand recurring revenue that some games can bring. Runescape and Jagex is a brilliant example of the private equity owned business, right? And the type of business that PE would acquire.

So I think that's another, that's another sort of owner that's coming online and I think that's a generational thing.

Alexandra: Hmm. Okay. Interesting perspective. And yeah, I think Jagex is definitely kind of like the flagship private equity by, I mean, they've been tossed around between like Carlisle and a bunch of others a couple of times, so that's some crazy, crazy, crazy owners.

Unclear whether or not that rigmarole has been good for the product or not. But let us stand that private equity is now, you know, basically a potential exit pathway for games. And so, okay, so I want to wrap up and move to our conclusion. I've got a couple of like four, like three or four rapid fire questions for you.

And so my first question is, you know, what is, what's one thing that you hope goes right for gaming in 2025?

Spike: I would like to see the, the craft of games. Development and making tighten up and become a re like really, really sharp the way that game games are made and the way that founders are making games with their teams.

I'd like that really like that sharp and because it will attract, it will really attract capital back into the market.

Alexandra: Okay, got it. My next one is how confident are you in the gaming VC? Sorry, how confident are you in gaming VC as an asset class for the future? You gotta rate it between 1 to 10, 1 being like, doesn't work, 10 being like, super easy, head out of the park, if you aren't in Games VC, you know, you're just, you're just losing money, missing the opportunity of a lifetime.

Spike: 8 out of 10, I think, right approach, right partner, can do super well.

Alexandra: Alright. Tangential to that, pick for me two winners on the VC side for 2025. Um, you cannot name Hiro. And why are their funds going to succeed?

Spike: Yeah, I really racked my brain about this one, just because I, I'm, I'm actually not super au fait with like what all the other funds are doing.

But, so if I'm, if I might, I might just choose one and that is, that's Makers. I really rate Michael and I think that I think they're really smart and I think, you know, they just have incredible success with the dream as an example. And that was something that. I think I was a little bit blindsided by actually like that just that mega success of like, and you think about you like, you, you think about that as if someone came to you and said, we're going to take on Candy Crush, you'd, you'd be like, okay, good luck to you.

And, and, and now they're absolutely smashing them. And I think, um, so I'm going to choose them, because I think Michael's super smart and I really like what they're doing.

Alexandra: All right. Nice. Yeah. Maybe it's also interesting because there's like, you know, I think one of the interesting things about games we see is that there are some different fun structures and different like theses and focuses on geo and fun size.

That's a, that's a good one. And then, similar to that, but just for fun, what's your public stock pick for 2025 in gaming?

Spike: I don’t know if I'm allowed to say public stocks and things, but I would say, , I'm gonna say Games Workshop. Okay. And I think it's just become a FTSE 100 company, which is super exciting.

I think the businesses run really smartly. I think the fan is really engaged over their lifetime and spends huge amounts of money. I've probably spent thousands of pounds on that, right, as a gamer myself. And I think they've got such a brilliant opportunity, they've seen the Space Marine, that it can now hit the, it can hit the mainstream, it can hit, and with Henry Cavill working with them on the films, and the series, and now more games coming out, and they're tightening up their licensing. I think it's a great stock to own. And I think it's a good one. I mean, I have a little bit to be honest, but most of my public investment is given to Bill Ackman to Pershing Square Holdings to look after for me. Cause I think he's a pretty smart guy.

Alexandra: Yeah. Oh, this is just a, it was just for fun, in terms of basically kind of like of the companies that are not venture backed, you know, who you're excited about. But okay. It's like, this was such a pleasure. And I think, you know, today we talked about some pretty hard questions in the space and, you know, it's definitely challenging out there both on the studio side and the founder side and on the investor side.

So thank you so much for coming on air and sharing your perspectives for M&A, games financing, financing in general. It's been, it's been awesome.

Spike: Alex, it's been a pleasure to be here. And I really, I know I, sometimes I can come across as a little bit hard on the founders and the ecosystem, all that sort of stuff, but I just, you know, it is such an incredible job that founders do of building a company and building intellectual property and like the amount of entertainment and fun that our industry brings to people's lives.

Like it's just the most. Sensational thing. I really my hat goes off to anyone who can do that and run a business and run a startup because it's just incredibly difficult.

Alexandra: Yes, it's certainly not for the for the faint of heart. And so again, maybe we'll close it on that. Shout out to the founders that are still out there and kicking and, you know, good luck in 2025. And so with that, as always friends, if you have feedback or ideas, hit me up at [email protected]. Always open. And with that, that's our episode, and I'll see you next time.

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