Financiers and publishers invest huge sums in the video game industry annually, but only a small portion of that money is allocated to funding game companies led by women and those from other marginalized groups. Despite a surge in venture capitalist funding in 2021 in response to COVID-19 pandemic restrictions, video game companies headed by all-male founders secured $4.1 billion in funding compared to the $1.2 million for companies with all-female founders, according to data provided to Polygon from investment research company PitchBook. (In 2021, gaming companies with mixed-gender founders — i.e., those including at least one woman — received $400.9 million in 62 deals, according to the data.)
The discrepancy can be partly explained by the number of companies receiving investments. In 2021, the $4.1 billion went to 223 different companies led by men, while the $1.2 million went to just five companies led by all women. Even after considering the number of companies, there’s still a disparity. If those investments were divided equally, the all-men-led companies would have received about $18.4 million each, while the five women-led companies would have received $240,000 each. (Companies with both men and women as leaders would have received roughly $6 million each.) In other words, the companies led by all men received around 76 times the funding of those led by all women. However, the missing data is how many companies led by all-women founders attempted to secure funding and weren’t successful.
When investments decreased dramatically in 2023 — gaming companies led by all-male founders pulled in $400 million in VC funding, while those led by all women got $1.6 million in data up to October 2023 — companies led by women, again, received a smaller portion of the limited funding, though the total was up from 2021 for women-led companies.
“There is a massive disparity on how funding is allocated in the industry, with projects led by women and other gender marginalized persons grossly underfunded when compared with those from cis-male teams,” games fund Wings Interactive CEO Eliana Oikawa told Polygon. This disparity of funding and opportunities carries over and expands for developers from racially marginalized groups, which “creates a lack of different perspectives, lived experiences and cultures not only in the industry but also in the games we play,” Oikawa said.
(PitchBook was not able to provide data for investments related to race and ethnicity. “We acknowledge the importance of bringing awareness to the disproportionate venture capital investment in BIPOC and minority owned and founded businesses; however, after extensive investigation on possible ways to gather this dataset, we’re not able to compile a holistic view of investment activity at this time,” a PitchBook representative said.)
These statistics aren’t surprising, given the current makeup of the video game industry: White men account for 92% of the people working in the industry, and men overall make up 87% of workers with more than 21 years of experience, according to a recent Game Developers Conference report. To break that down, that means men are the most likely to hold the leadership positions that require such experience. The GDC survey found that 15% of Asian men, 8% of Hispanic, Latino, or Spanish-origin men, 6% of Black men, 5% of white women, and 5% of Asian women reported having more than 20 years of experience. No Black, Hispanic, Latino, or Spanish-origin women from the survey reported that level of experience. The lack of diversity across the industry, then, makes for an unwelcoming environment for leaders from underrepresented groups.
“We’re never given the chance to enter the room in the first place,” Dani Lalonders, founder of ValiDate: Struggling Singles in Your Area maker Veritable Joy Studios, told Polygon.
Ninety-three percent of venture capital dollars are controlled by white men, according to Scott Galloway, New York University Stern School of Business professor, in his book Post Corona: From Crisis to Opportunity. And data shows that they’re investing in people who look like them. It’s hard to ignore these statistics when you’re a developer from a marginalized background looking to fund your studio’s game, like 3-Fold Games’ Chella Ramanan and Claire Morwood, who were looking for funding for their game Before I Forget several years ago.
“We definitely started feeling like a statistic, because statistically, women are less likely to get funding,” Ramanan told Polygon. “It was like bearing out those statistics, and then adding to it. I’m a Black woman, and that reduces your chances of getting investment [even further].” Ramanan described a series of experiences a developer friend had when getting funding from Silicon Valley investors: “He found out that three white guys fresh out of uni is basically the perfect model for them, because they look like them,” she said.
Equity vs. equality
Strange Scaffold founder Xalavier Nelson Jr., who recently released El Paso, Elsewhere, said that it comes down to equality versus equity. [Ed. note: Xalavier Nelson Jr. has previously written for Polygon.] If we’re looking for equality, that’s giving the same opportunities to everyone — opportunities that will go further for people who haven’t faced the systemic burdens that marginalized groups have. Equity takes into account those systemic problems and adjusts that extra support to go where it’s needed most to put people on equal footing.
“There is a great deal of the games industry that is, at minimum, not explicitly racist or biased,” Nelson told Polygon. “There are a lot of people scouting and recruiting developers in games, who are not attempting to block people of color or marginalized genders or sexual identities from being a part of this conversation, from being able to make amazing experiences for gamers. But if they are applying the exact same litmus tests and requirements to these communities, which have suffered a systemic lack, and putting them next to projects produced under entirely different conditions from communities that have had a systemic over-representation in the past, then you’re going to see the same patterns repeat themselves in a cycle.”
Nelson pointed to a personal experience with a large investor that created a Black investment fund in the aftermath of the police killing of Michael Brown in Ferguson, Missouri. “I walk into these rooms and I’m ‘one of the good ones.’ They told me how happy they were to see me, because so many developers did not meet their quality bar. I took it as the compliment it was intended to be at the time, and continued the pitching flow. It was only after that conversation ended that I realized how insidious that compliment was.” A lot of the funding efforts that exist are more interested in plucking from the established pool, he said, instead of widening the pool.
Several developers and studio founders that Polygon spoke to described the quandary of needing experience to get experience — or, similarly, needing funds to get funds. One way this plays out is in bringing a pitch to an investor or publisher. Nelson told Polygon that developers are asked not only for a pitch deck and a prototype, but are more frequently being asked to submit a “vertical slice” of the game. Unlike a prototype, which can be rough, a vertical slice is a small, playable version of the game that’s expected to be of release quality, like a demo. Allie Ast, founder and creative director of Witchy Life Story’s Sundew Studios who self-funded her first two games, told Polygon that a vertical slice typically requires a team — people for art, programming, and writing. “It can easily cost $60,000,” Ast said. “It’s a big upfront investment for something that might not get further funding.”
Even in the unlikely chance that no money is necessary in creating a polished vertical slice, the time spent working is still a significant cost that not all can afford.
There’s too little funding in the places where marginalized developers and people just looking to break into the industry need: at the beginning. Eileen Mary Holowka and Jennie Robinson Faber are looking to fill the gaps with the Weird Ghosts fund for underrepresented founders in Canada. Born from Weird Ghosts is Baby Ghosts, a nonprofit offshoot organization and accelerator program in partnership with Gamma Space Collaborative Studio that’s designed as both a financial investment opportunity and a six-month mentorship program. The program gives founders and studios $25,000 to build an equitable studio structure before diving into assistance in pitching and production.
“We joke and say it should be called a decelerator program, because it’s actually slowing things down,” Holowka said. “That’s because you have to slow down to speed up, whereas capitalism tells us you need to go full blazing forward all the time.”
Inside the meeting room
Studio leads that spoke to Polygon described the massive time investment necessary in the work before the pitch happens: You network in the hopes of making that one important connection; research funding opportunities, whether that’s investments, publishers, or government arts funding; fill out those applications, which come with lots of hoops to jump through; and prepare a detailed presentation that outlines not only the game, but financials and other business priorities. If you’re lucky, you’ll get called in for a meeting — and that’s when you can start the pitch.
“It got to the point where it was really demoralizing,” Ramanan said. “We tried different things, like, ‘Let’s try to change our game so investors will invest.’ And then we were like, ‘We don’t want to do that, actually.’ We were stuck in this in-between place. We put in all this energy — emotional energy and time — and we haven’t developed the game because we’re applying for funding that’s not going to come.”
Even more frustrating for 3-Fold was that it wasn’t like investors didn’t like the game. They did. Ramanan and Morwood described an event — a Dragons’ Den-type scenario, Ramanan said — where all the investors loved it. “They were like, ‘It’s a really cool idea, a really cool story, but yeah — we can’t invest in it,’” Morwood said. The game, Before I Forget, was eventually released as a Humble Original and saw success with a British Academy of Film and Television Arts nomination. But it’s not a traditional game experience: It’s a short, emotional experience about a woman with Alzheimer’s disease. No matter how moving or poignant the material, for some time, investors still wanted to shape the game to fit traditional structures.
Often, publishers are still thinking about the stereotypical gaming demographic: Men, and largely men in English-speaking countries. But the reality is that nearly half of all players are women. Beyond gender, there are audiences that span differences in race, ethnicity, and country of origin. Nearly all of the founders Polygon spoke to reported they’ve been asked by investors and publishers, multiple times, who their game is for. And if they can’t see who the game is for, they’re unsure whether or not the audience will spend money on it. “Publishers won’t see games outside their point of view, which is problematic,” Lalonders said. “Everyone plays games.”
Ast, from Sundew Studios, pointed to the series of little things, microaggressions, that add up to an experience that feels gendered; she’s already going into the experience wondering if a publisher is going to respect her and the sorts of games she makes. “Sometimes, the answer is no,” she said. When pitching visual novel The Window Box, Ast said she met one publisher several — at least three — times and had to reintroduce herself repeatedly. Or in other cases, the investor comes to a meeting totally unprepared and keeps moving the goalposts. Then there’s getting to the advanced stages of these investment meetings only to get a rejection over social media. “It’s just not a pleasant experience,” Ast said. “After I pitched Flora [the game that would eventually become Witchy Life Story], I was like, I’m just never going to pitch to a publisher again.”
Chantal Ryan, founder of darkwebSTREAMER studio We Have Always Lived in the Forest, very quickly had to learn about investment and funding on her own when people became interested in game tech she was working on. “I couldn’t find any unbiased advice,” she said. “Everyone I could find to talk to about investment was a man, and men were giving me very different advice based on their own experiences.” And their experiences didn’t always apply to hers. That’s why she created the Women Leaders in Games network, to provide a space for women to swap stories and share advice.
But even that experience and knowledge didn’t keep Ryan from experiencing sexism in funding scenarios. She described an incident with a promising investor that turned weird when the man became too interested in her personally — eventually bringing up inappropriate topics, like detailed sex talk. “He’s interested in me because I’m doing things that he aligns with and believes in, but because I’m a woman, I come with this weird bonus of, like, Oh, she might come with a bonus surprise if I can fuck her,” Ryan said. “I’m finding that these deals and relationships that would have otherwise been tenable and good and normal and collaborative and productive are soiled by the fact there is this added element of potential conquest.”
It’s a disservice to both game makers looking for funding and video game players for the developer community to remain homogeneous, according to Wings Interactive CEO Oikawa. “Any industry whose creative force is mostly from an homogeneous group is leaving a huge part of creativity and innovation on the table. Innovation and creativity (and even productivity) are boosted by having various individuals with different perspectives collaborating within the medium they love. Just like when Steam opened its doors to all creators years ago, we saw a huge influx of massively distinct and creative games, in particular from indies.”
When you only give funding to the same communities, you’re going to see a lot of the same thing. Lalonders, of ValiDate: Struggling Singles in Your Area studio Veritable Joy, likened one potential future for the video game industry to Black arts funding in the ’70s and ’80s: “When they started funding Black arts, Black talents — and not just Black, but people of color in general — in movies and shows, you started to see shows and movies that hadn’t been done before. It’s so different from everything you’ve seen in the past.”
The future of funding
Handing out money to underrepresented studio founders to develop games won’t fix the industry’s underlying problems, but it is one potential way to move the needle. That’s where groups like Wings Interactive, Women Leaders in Games, Black Girls Code, and global accelerator and academy Code Coven come in. Created in 2018 by Tara Mustapha, Code Coven is a program for marginalized developers globally, at all levels. “Our mission is essentially to fix the pipeline end-to-end for marginalized developers, from beginners to people in senior leadership and management and those who are funding their own studios,” Mustapha said.
Cinzia Musio, Code Coven co-CEO, told Polygon that they’re seeing success from developers who’ve been through their programs — and then seeing these developers come back to Code Coven to support the next generation of developers.
Weird Ghosts, from Holowka and Faber, is doing similar work with its Canadian programs and investments, not only giving money, but support. Holowka and Faber have a clear focus on worker-centric studio sustainability: They want the Baby Ghosts program to help teams prioritize their studio structure, business model, and team development — to rethink traditional structures for something more equitable, like cooperatives. As the industry demands more — bigger games and somehow less risk — developers from marginalized communities get the short end of the stick. But without support, nothing changes.
The obvious undercurrent to the industry’s funding problems hinges on an incentive structure that exists in capitalist society. The impulse to grow financially — above all other priorities — doesn’t align with an industry that values workers. Government-funded grants are a viable option for game developers, but those initiatives are limited.
“We expect talent