GREEN MAN ON A MISSION


Gaming Investors Should Be Ready


By Paul Sulyok, Founder & CEO, Green Man Gaming


notice. Few of them realise that our industry is now roughly double the size of the UK’s music industry [source: The Digital Entertainment and Retail Association]. Britain’s gaming sector is globally important, and produces cash flows the financial world would envy. For smart investors scanning the tech landscape, our sector represents a rare combination of scale, durability, and predictable long-term value. From April 2025 until April 2026, the index of “Magnificent 7” tech stocks grew by c. 60%, which is reflective of the hype around AI. Capital is set to continue to chase tech valuations that, in many cases, bear little relation to economic reality. This is classic speculative exuberance. Drawing on lessons from the past; the AI hype-cycle can be broken down into three strands.


T 1. OVERHEATING


This occurs while investment flows are abundant and undisciplined. Many companies continue to raise capital because they mention AI, and not always because they have credible commercial applications for it. Investors treat AI as a universal growth solvent, sprinkled across pitch decks. AI tools are said to be indispensable to the


future of tech and content creation. Yet for all the clever demonstrations, the cashflow projections often belong more to fantasy than finance. The investment community, as ever, moves in a pack.


he UK sits on a treasure of extraordinary video gaming companies, but investors generally do not seem to


2. RECKONING When markets correct, withdrawals can be indiscriminate. Companies with marginal business cases might vanish, and valuations built on AI flavour can tumble. The eventual wreckage would primarily affect companies that build their fundraising narratives around AI potential. However, within the wider tech landscape, gaming companies with demonstrable profit and business cases stand out.


The psychological effect on capital allocators is then obvious. Many investment committees rarely distinguish between one misadventure, and a sector. A fund that loses millions on an AI tool used in gaming may simply swear off the games industry entirely. For a period, moods will turn from cautious to cold.


3. OPPORTUNITY Capital will retreat, not because underlying assets lack value, but because investors will be too bruised to look closely. This is precisely when the most attractive opportunities, which have not built their recent excitement around AI buzz, will shine even brighter.


WHAT MATTERS MORE


The long-term value in gaming does not reside in speculative AI tooling, but in businesses that have built B2B client and B2C customer relationships that cannot be replicated overnight by employing AI. These businesses have evergreen models, well known game franchises, loyal communities, and/or long revenue tails.


THE CONTRARIAN ADVANTAGE When the AI bubble decisively bursts, the real question is: who will be prepared for what comes after? Most investors will step back, but a smaller, steadier cohort who understand that the most valuable assets in technology are often the least fashionable, will step in.


May/June 2026 MCV/DEVELOP | 11


Further characteristics that are present, and which institutional investors prize, are cash-generating profiles, international reach, and durability. Many solid examples do not come from the entertainment behemoths but from small and mid-sized companies dotted around the UK, with modest cost bases and strong profit engines. Before or during droughts of capital, investors who resist the herd instinct will find themselves looking at a market where the most robust companies are even more clearly visible. Those focused on long-term valuation accumulation rather than short- term fads will spot the champions of the UK’s excellent gaming sector. Some countries have already positioned themselves shrewdly. Australia, for example, is attracting gaming work through targeted incentives, understanding that games are an export business that can anchor local economies. The UK, with a wider talent network and a more established sector, could reclaim its lead if investors distinguish between transient enthusiasm, and the durable value that lies before them.


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