Why we invested in Space Rock Games
We are excited to announce our pre-seed investment into Space Rock Games which is also our first foray into gaming studio investments.
We are excited to announce our pre-seed investment into Space Rock Games which is also our first foray into gaming studio investments. We were also the lead investors in this deal with Co-investment from NZ Capital Growth Partners.
Rob and Alex are avid gamers and the thought of investing in games brought delight to our hearts. In early February of 2021, we were introduced to Zsombor Pirok, a Hungarian turned Kiwi, through a chance encounter during our 2021 Startup Capital Roadshow where he laid out his ambitions to create a gaming studio that was built off the philosophy of ethical game development, social gaming and creating games that bring people together.
Fast forward half a year and we have led their first round of outside capital. Here are the reasons why we are excited about Space Rock Games and investing in gaming studios in general.
As with all Hillfarrance investments, our conviction to invest in Space Rock Games is driven by the founders personality, vision, drive and the team behind them. In this case, the five founders who make it up – Zsombor, Kieran, Vanessa, Varun and Mitch! Having all studied at Media Design School together, this closely-knit bond has added to the strength of their entire team as well as complemented each other. Vanessa was also most recently a Motion Editor at Weta Digital – a hub of exceptional creative talent in New Zealand. Unlike most start-ups, Space Rock Games has a fully-kitted out team already. Having ten team members already means that Space Rock Games does not run into the age-old issue of hiring talent on the fly, which means they can solely focus on the development of their game.
The vision and values of the founders
We were thoroughly impressed with the founders of SRG, especially the CEO, Zsombor. Zsombor’s vision seeks to break past the mainstream ethos of what game developers call, “crunch”, which is a term used to describe the exuberant amount of hours spent working on a game before it is released. Instead, the entire SRG team adopts an ethical game development culture, which ties perfectly into the cooperative game that they are now developing called, “Criminals Within”.
Perhaps the most critical part of our decision-making process is that SRG are making games that we are excited to play.
As an investment, games are one of the fastest-growing industries in the post-covid world. Worth over $250 billion annually now, video games are the largest sector of the entertainment industry worldwide and New Zealand is already home to some established and globally successful studios. Aside from our incredibly keen interest to play the game that Space Rock Games is developing, games generate incredibly large sums of revenue. With the significant volumes of people staying indoors, came a drastic shift and adoption towards gaming as a way to maintain social connections with friends and family, and cure boredom. In 2020, the global Video Game Industry (VGI) grew 20% from this mainstream adoption.
Similarly, the New Zealand Game Developers Association (NZGDA) reported a 42% growth rate in revenue in 2020, a 30% growth in 2021 and generated revenues of roughly $280 million in 2021 – $20 million more than the previous year.
Comparing Space Rock Game’s proposed cooperative game with those that have already been released, both mediocre and successful games sold anywhere between 500k to 5 million copies, which equates to eight to nine-figure revenues, which ultimately could create some exciting venture-scale returns. We are excited to see their IP grow into further game sequels, DLC and other verticals if the game does exceptionally well.
This investment is the first line in the sand for Hillfarrance in the early stage game development sector. This market is one of our core investment areas and you can expect to see much of fund deployed in this space in the future.
Last but most definitely not least, we would like to acknowledge Alex Dam‘s efforts and hard work alongside the SRG team to close out this round. Well done!