Seattle Game Developers and Startups Go Social and Mobile, As Industry Shifts

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since its birth in 1998, may be in good shape, thanks to its diverse strategy of letting some users pay, while others play for free and are supported by advertising—and the company has had some success as of late in distributing games and acting as an ad network for other games. (See the interview I did with founder Alex St. John here.)

There are two main opportunities for startups in all of this, says Early, who is leading the Founder Institute in Seattle, a mentorship program for entrepreneurs. One is pure game development. It has become easier than before to create a game and distribute it through existing social and mobile channels. “If you make a great game, it could take off and go,” he says.

The other opportunity is in game infrastructure and services—the technological plumbing that allows games to be developed, played, and shared across different platforms and devices. One example in Seattle is Z2Live, which has developed a free, multiplayer platform for social and casual games on mobile devices like the iPhone, and has raised $4 million from Madrona Venture Group.)

But lately I haven’t seen much investment in gaming from locally-based venture capitalists, with the exception of Madrona and Vulcan Capital, which has funded Bellevue, WA-based Smith & Tinker. Early suggests that may be changing. “There is interest from investors,” he says. “I have to explain myself a lot less these days. Familiarity breeds desire and investments.”

“The quick, easy-to-play games are one of the things that will pull the game development market and industry out of the economic crisis quicker than anything else,” Early says. “You can get in and get active with a small group of people, host it on virtual servers, and have a better-than-average shot at making a great business.”

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