Troy Video Game Studio Gets $7 Million Infusion
Larry Rulison, timesunion.com
Velan Studios, the startup video game studio launched last fall in downtown Troy by the Bala brothers, is receiving $7 million in venture capital funding.
Although the money is being provided in part by Velan Ventures, the investment firm that the Bala brothers themselves launched last year, the $7 million investment is one of the largest early stage investments ever in the Capital Region.
It is also believed to be one of the largest ever in the gaming sector for a studio that is involved in experimental, yet-to-be-developed products, what Guha Bala calls "finding the magic."
Guha Bala and his brother Karthik founded Vicarious Visions, the Menands-based video game studio. The brothers sold their company to video game publishing giant Activision in 2005 and left the company in 2016 to break out on their own again with Velan Ventures, their investment firm, and Velan Studios, their in-house gaming studio.
Since November, the Balas have hired 20 people for Velan Studios, located at 225 River St. in Troy. And they are actively hiring more to put that $7 million to work discovering the next big thing in gaming and emerging entertainment technologies.
That will mean killing ideas that don't work out and spending the time needed to develop the best ideas in both gaming hardware and software.
At Vicarious Visions, the Balas helped to merge both hardware and software for various gaming platforms for games like Guitar Hero and Skylanders that became mainstream pop culture phenomenons outside of the hardcore gaming community. The Balas say their next success may not even look like a video game and may utilize augmented reality technologies and robotics.
"The capital really allows us the flexibility to do that," Guha Bala said. "We're dedicated to finding the magic."
One of the other large investors in the $7 million commitment is Charles Huang, the co-creator of Guitar Hero. The Balas know Huang well, and they can relate to him. Huang also got into the video game business with his brother, and his video game studio company, Red Octane, was acquired by Activision in 2006.
Huang is CEO of an entertainment investment company called Indigo 7, which is not unlike Velan Ventures. Huang has also joined the board of directors of Velan Studios as part of the $7 million "Series A" investment.
There were other investors as well, although the Bala brothers declined to identify them by name, saying only that they are sophisticated investors who have made similar investments in the past.
But the $7 million can only go so far, the brothers say.
The Balas are also pushing for state legislation that would provide video game production tax credits to gaming studios, similar to tax breaks given to movie studios that do film production in the state.
The Balas say there are currently about 300 local gaming programmers in the region, but that could grow to 3,000 with carefully crafted tax and workforce investment policies. The Balas want Gov. Andrew Cuomo to champion the tax credits at his next state budget address, and they believe it will help Troy and other New York cities grow gaming clusters that also thrive in places like Quebec, Texas and British Columbia.
"We want to grow those jobs right here," Guha Bala said.