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US game investment down in 2009

Venture capitalist firms turn from blockbusters to casual games

The amount of money invested into US games by venture capitalists apparently shrunk in 2009, from 35 investments in 2008 to 25 last year.

According to data from PricewaterhouseCoopers, reported by The Boston Globe, the amount of capital invested dropped from $214 million to $153.7 million.

The reason, said investors, is that the hits-driven business is becoming less appealing, with games costing millions to make with no assurances they will end up as the next Modern Warfare 2.

"There's been a transition in the VC market to a more conservative view, with the economic meltdown in the last 18 months," commented former Turbine president Jeffrey Anderson.

Instead, investors are turning to low-cost casual games for social networks such as Facebook, and are also interested in companies providing tools and services for game development, such as internet chat software.

According to a report published by Engage Digital Media last month, the number of investments in virtual-goods related companies reached an all-time high in 2009, increasing more than 100 per cent to $1.38 billion - a figure fuelled by a number of high-value acquisitions, including that of Playfish by EA for £300 million.

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