PRINT THIS PAGE Playing to win: should Israeli VCs invest in the video games market?
25/04/2006. Source:Israel Venture Capital Journal (IVCJ).
Israel has potential to be a significant force in the video games market, maintains Allon Bloch, general partner of venture firm Jerusalem Venture Partners, in this Israel Venture Capital Journal article. But Israel is currently notably absent from the video game market ecosystem. While the industry has risen to become a mainstream medium, rivaling the TV and movie industries for the attention of the under 35s, Israel has not been part of this landscape. We have no game publishers or game developers to speak of. Nor do large console makers come over to partner with our leading graphic chip companies.
Historically, Israel had players that competed in this market. Most notably, Pixel developed games for leading game publishers. However, for various reasons, a stronghold was not created, and any Israeli gaming veterans were dispersed worldwide.
Many would argue that this is natural. The game industry is a hit-driven content creation industry. Similar to the movie industry, it tends to concentrate in places that have a large local market, such as the US and Japan, where content can be tailored to local tastes. Indeed, as the cost of developing games for consoles skyrocketed from $1 million-$2 million in the early nineties to $10 million-$15 million today – and growing quickly as licensing and complexity of games increase – the game industry preferred scale when developing and publishing games.
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This article appeared in the Israel Venture Capital & Private Equity Journal (IVCJ). IVC Research Center publishes the Israel Venture Capital & Private Equity Journal, a quarterly review of trends and developments in the Israeli-related venture capital industry. IVCJ, distributed worldwide, is dedicated to provide wide-range coverage of Israel's venture capital industry. For more information please visit www.ivc-online.com
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