The amount of money being invested in the video games industry by venture capital funds hit a three-year low in the three months ending September.

That's according to data from Pitchbook – reported by Bloomberg – which shows that only $700.3 million was invested into the games market during the last quarter.

That's the lowest amount since the second quarter of 2020. Perhaps unsurprisingly, due to the COVID-19 pandemic and ensuing lockdowns, the video game market boomed as people needed something to do. This attracted a large amount of investment, which continued and hit a peak in the second quarter of 2022.

Private equity groups are also not putting money into video games; these outfits pumped $20 million into the market in the third quarter of 2023, well below the average of $852 million.

“Game development is risky,” said PitchBook analyst Eric Bellomo.

“Outsize returns come from a small collection of games, but it is very hard to pick those games at an early stage.”