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Report: Game Startup Funding Down 36 Per Cent

Gavin Ogden's picture

By Gavin Ogden

December 22, 2009

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Game startups continued to pull in investments throughout 2009, but the overall amount of money raised this year has fallen compared to 2008, reports a VentureBeat study.

The site’s analysis shows that 97 game startup firms raised $600.5 million in 2009, which is down 36 per cent from a year ago. Last year it was reported that around 112 companies raised more than $936.8 million.

“This year was looking pretty weak until Zynga scored $180 million in a deal with Russia’s Digital Sky Technologies,” says the report. “ Zynga has more than 232 million monthly active users playing games such as FarmVille and it makes money on its free games through the sale of virtual goods. Zynga’s funding actually beat out the biggest funding of last year: China’s 9You, which raised $100 million in the spring of 2008, long before the financial crisis hit in the fall of last year.”

The report says that were it not for Zynga’s deal, this year would have been “abysmal”, down 55 percent from a year ago.