Lionhead taps Brit banks for bucks

Studio founder Peter Molyneux taps VC community to fund game development, raising $12.7 million.

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While "cashing out" is almost always foremost in the mind of successful studio owners, one noted authority on the subject of game creation, Peter Molyneux, is taking a different approach. To maintain a private hold on his internally developed intellectual property, Molyneux has secured funding from a number investment firms in the United Kingdom. The funds will go toward ongoing game development at Lionhead Studios.

"Capital investment is necessary for any development studio wanting to create triple A titles and previously it has been the industry norm for this investment to come from publishers," Lionhead CEO Molyneux reportedly said. As far as what led him to seek such partners, he told The Times of London, “The gaming market is becoming extremely competitive, and more expensive, and so the stakes are higher.”

Lionhead remains one of the few internationally recognized developers who has resisted selling itself to a large-size publisher. However, that strategy must now be called into question. VC investments are not made out of the goodness of anyone's heart; they are most often made with the sole objective of cashing out, near-term, at a profit. And cashing out is typically accomplished by taking the company, which was invested in, public or selling it to another enterprise.

Reportedly, IDG Ventures Europe, Ingenious Media, and Add Partners are the consortium of banks that have invested in Lionhead.

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