Why We Invested in Iconic Games

In previous articles, we have written extensively about why AI is disrupting gaming, and the industry’s ongoing evolution continues to amaze us.

So far we’ve invested in companies like Ambient, who are building an AI first game engine; Scenario, who allow any game studio to leverage generative AI to create style consistent game assets; and Move.ai who leverage computer vision to allow for markerless motion capture allowing anyone to recreate human motion for use in any game engine.

There is no doubt in our minds that AI is changing gaming forever.

From entirely new categories of games to empowering any player to be a game creator.

However, despite rapid advancements, the classic AAA game studio model is unlikely to entirely disappear. These studios have established expertise, resources, and brand recognition that allow them to distribute high-quality games at scale.

Our latest bet in the category though, is that AAA gaming could look very different in the future.

This belief is reflected in our ‘day zero’ investment into Iconic Games alongside Hodlco.

We also participated in a $4M pre-seed round led by Hodlco, with participation from Interface Capital, Deepwater Asset Management, and scout funds from Sequoia and Atomico. We’re equally thrilled to invest alongside current and former senior executives at DeepMind, OpenAI, Disney, Tencent, and Microsoft.

Solving the problem of the AAA model.

We all know that games is a huge market - bigger than Hollywood and the music industry combined.

While AAA games like Red Dead Redemption, Cyberpunk and Elden Ring consistently gross higher than blockbuster films, as revenues and player expectations grow, so do the budgets and complexity of each new project.

Despite this growth in all directions, the incumbent studios, whilst successful, haven’t fundamentally changed their processes for decades. As a result, games can cost hundreds of millions of dollars taking multiple years to produce.

The promise of generative AI is to not only decrease the cost, but entirely redefine workflows in every department — from asset creation to game design, animation to lighting, testing and translation. The incumbent’s are all paying attention to this, but it will be much harder for them to truly leverage the benefits.

A classic case of innovator’s dilemma.

With the right talent - and the right culture - a new generation of studios like Iconic can not only benefit from decreasing costs and faster iteration times but they also have a blank slate to experiment with entirely new forms of gameplay that are afforded by generative AI.

Founded in 2023 by John Lusty and Junaid Hussain, Iconic AI positions itself as an AI-first studio, bringing together a seasoned team with backgrounds in game development, creative production, and deep tech R&D from industry giants such as DeepMind, Rockstar, Pixar, and Sony. Their mission is to pioneer advanced AI applications in game development and gameplay, promising innovative and cost-effective gaming experiences.

Iconic AI’s innovative approach aims to democratise game development efficiency, enabling smaller teams to compete on par with industry giants, fostering job creation and empowering creative autonomy.

For us, the Iconic team was the perfect pairing of prior AAA games experience (with talent from Rockstar, Pixar, Square Enix, CD Projekt, Ubisoft etc) and technical experience (with talent from DeepMind, Microsoft, Meta, Oculus, FiveAI etc).

Having already seen some early tech demos, we’re super excited. Watch this space for more! And read more about the funding announcement here.