By Walt Hickey
Welcome to the Numlock Sunday edition.
This week, I spoke to Nicole Carpenter, who wrote “The video game funding gap: How investors are failing marginalized developers” for Polygon. Here's what I wrote about it:
In 2021, video game companies with an all-male crew of founders raised $4.1 billion in funds across 223 companies, while the same statistic for all-female founded companies was just $1.2 million in five companies, and that is not a typo: It’s “million,” not “billion.” Companies with mixed-gender groups of founders raised $400.9 million across 62 deals. Since then, funding has crashed for the industry as a whole. Still, the disparity was ridiculous; gaming companies led by all-male founders made $400 million in VC funding, while those led by women made $1.6 million through October.
I loved this because games journalism is such a vibrant and interesting space and I’ve been keen to see some exciting data journalism within it. I talked to Nicole about this project when she was working on it and was super intrigued, I’m so glad it came out so clearly.
We spoke about video games in journalism, in the economy, and what it means for the American labor movement.
Carpenter can be found at Polygon and on Twitter.
This interview has been condensed and edited.
All right, Nicole, thank you so much for coming on.
Of course, thank you for having me.
You wrote a really, really fascinating story all about essentially an imbalance in funding when it came to different types of firms within the video game industry. I guess, what got you interested in this topic, and what did you find?
Yeah, I got interested in this topic because I saw some stories about these sorts of disparities in the tech industry. And it seemed logical that that would include the video game industry, but there weren’t statistics immediately available that demonstrated what exactly that gap was. So that's what kind of got this story going.
I've actually been pitching it for — well, I pitched it years ago to Polygon, and it just didn't come together until very recently.
Yeah, I really loved the approach that you took. And again, it just seems like this was a challenge, and that had meant that people didn't really cover it. You've got some really, really good numbers. How'd you go about reporting this out?
So the first thing, I had started just talking to developers, and they were giving me their anecdotal experience on what these meetings are like for them, or even leading up to these meetings, like, are they even getting meetings? Do they feel ignored? And so those stories were what came first.
And then I realized that, you know what, this story would benefit from data. And that's when we reached out to you, and you talked to me about data journalism, and how to go about it. So I reached out to PitchBook, and they kept that data. They have data on VC funding, and they do track it by gender, so they were able to get me some data for studios led by all-male founders, all-female founders, and then mixed-gender founders, as well. That was really, really important, I think, to demonstrate just how big this disparity is.
And then the anecdotal parts were, you know, the personal experience that I think gives the story a little bit of humanity. But yeah, I did a lot of interviews. And I think that the data really pulled it together.
The data couldn't be more jarring. It's not common that I have to put in a disclaimer that it's not a typo. One of these is $4 billion, and one of these is $1 million.
It's so wild. And I saw so many people saying, like, that’s an “m.” It's $1.2 million to $4.1 billion. It's so nuts. I was shocked when I first saw it.
And I knew it was bad. Like, I'd been talking to people, I've heard their experiences of not getting funding, and then what happens in the room when they do get funding. But yeah, I was shocked at just how bad the disparity was.
What effect does this have on the game industry?
I think it has a huge effect on the game industry. There was a GDC survey recently, and they had some data on age, and racial data with age. What they found out from their survey was that the majority of people with over 20 years of experience are men. Most of those are white men, and very, very few of those are women. There were no Black women. I can't remember it exactly, but I do remember clearly that there were no Black women who responded to the survey who had over 20 years of experience.
And that's not because they don't exist; that's because the industry has systemically pushed them out. This disparity in funding is one part of that, because if you're not able to get the money, how are you going to create your studio?
Yeah. I think you had a Scott Galloway stat, something like 90-something percent of people who are in VC are men?
Yes, 93 percent of venture capital dollars are controlled by white men. And you can see that they're giving that money also to white men.
One of the developers I spoke to was telling me a story about how she has a friend who was looking for funding at the same time she was. And, you know, he's having success. Because he realized, and was told from people investing, that the perfect model is three white guys right out of university. Because they can relate to that.
Oh, God.
Right? And that's what some of these venture capitalists are, you know, trying to mold.
I guess one reason that I also wanted to talk to you about this was because, in light of some of your broader coverage — I am just a gigantic fan of Polygon, I'm a huge fan of your work — and I think that one reason this felt like it potentially hadn't been covered to the extent that it deserves is that there's also sometimes a little bit of skepticism about video games as a medium.
But I think that your work has often been about the power of these games, and even the economic importance of a lot of them. How do you feel about the way that either games are covered now or maybe how that contributes to why some of this is a neglected area of coverage at times?
Yeah, I think that things have changed, and that a lot of what you would call enthusiast outlets are taking on reporting, and taking on more challenging topics. So it is changing. But I think it's still rare to have industry outlets that cover specifically the video game industry that have the resources to have reporters who are able to dig into stories like this. I think that part of it is the media landscape, and people just don't have the resources to be able to do that kind of work. It is being done, of course, but it's just not as much as I'd like to see.
And regarding video games as a beat in the mainstream, you're totally right that it historically hasn't been considered something worth coverage, or it's not a serious thing. But the reality is that coverage there is crucial, because these are deals. Deals are happening. Decisions are being made that impact not only video games, but the rest of the world as well, like antitrust. Stuff like that.
Yeah, it's insane to me that like, and I think there was a tweet going around to this extent, but it's like Amazon wasn't allowed to buy a vacuum company, but Microsoft can roll up the single largest game developer in the world, a few years after doing the same thing with Minecraft. It’s just kind of obscene, and I think that there are ramifications to that.
Right, exactly. I always think about, like I think it was Instagram who was trying to buy Giphy?
Right, yes.
And that's what had to go. It's so weird, and it's so interesting, because the video game industry makes so much money. I think some statistics say it makes more than a bunch of other entertainment mediums combined. And that influence is huge.
But beyond the economic impact and the legislative impact, it's also that a lot of people play video games. A lot of people use video games as a way to like, interrogate the world, in the same way you would with books or movies. And a lot of people play games who don't think they play games, whether that's on your phone, or board games, what have you.
Yeah, I had your colleague, Ana Diaz, on, I want to say last year after Breath of the Wild came out, because there was a statistic that she reported on that was like, this game made $1 billion in four days. And I was like, no movie's ever done anything close to that.
Right. And then the lifespan for that game is so huge.
Yeah, like the time spent from just the aggregate humanity on it is measured in centuries.
Right.
To talk about some of your more recent work — again, I really dig Polygon; I really dig the way that you guys see it. I know that you've written about some of the antitrust stuff, and I know you've written about some of the stuff around, like, Palworld. You had a very good story recently about this lawsuit between Squishmallows and Build-A-Bear that I really enjoyed. So I guess just as we kind of wind things down, how would you describe your beat?
I think my beat is sort of a mix of business and culture in the video game industry. Labor is part of it as well. I think that's the easiest way to sum it up.
But I do like to also, you know, write stuff that's fun. And it's not always just reporting. I wrote a story that I really enjoyed about a life-size Psyduck being available soon. One thing also is, a story today — I think it got published — about the EA college football stuff.
Yeah.
Yeah, so that's coming back. That has been litigated in court for years now. And this is something that has impacts so far outside of video games, as well.
Yeah, you know, you mentioned something earlier about labor. I love that you highlighted that story just because I feel like there are two amazing and fascinating legal stories going right now when it comes to the American labor movement. And it feels like one of them is what's going on in sports, specifically the amateur level sports in the NCAA, but also in games and some of the legal battles that have gone on there, particularly for folks who do QA, for folks who do game design, and whatnot.
So that's just such an interesting connection between those two things that I know you report a lot on.
Right. Yeah. The EA sports thing is so interesting to me because the original lawsuit from it was because this basketball player saw that he was represented in the NCAA basketball game that EA sports had.
And from that, it's built out so much, and continues to build out so many more protections for athletes who previously had none and weren't able to profit off their own likeness. And that was built out from a thing with a video game.
It is wild that that was one of the first dominoes when it came to athletes who were in college realizing that they had rights that were not being acknowledged.
Right!
So just to wrap things up, I suppose, where can folks find you? Where can they find your work? What are you interested in these days? Is there anything that you'd like tips on or folks that you'd like to talk to on this kind of stuff?
Well I am still on Twitter, @SweetPotatoes, trying to go over to Blue Sky, but it's just like a force of habit. But otherwise, my stories get published on Polygon. And I guess what I'm interested in lately is still kind of following the labor, labor in the video game industry.
And also, I think one of the big stories right now is about layoffs in the video game industry. This year feels on pace to pass last year, which was nuts because like 10,000 people got laid off in the video game industry. And we're not even two months into the year. So that's the big thing I'm following.
Well, hey, thanks for coming on.
Edited by Susie Stark