Institutional venture capital funds are investing in games again, just like seed investors who deal with smaller game startup investments.

We talked about this trend involving larger funds on a panel at GamesBeat Summit 2019 that included Gregory Milken, managing director of March Capital Partners; Ethan Kurzweil, partner at Bessemer Venture Partners; and Scott Rupp founding partner of Bitkraft Ventures.

Moderator Eric Goldberg, managing director of Crossover Technologies, said 17 different venture capital funds are making investments in games. He noted that the last time that VCs invested heavily in games was around 2011 and 2012, during the rush to make social, mobile games, and massively multiplayer online games.

Rupp said he believes that 17 funds investing in games is very low for a $150 billion industry.

“That’s 35 investments, or low hundreds of millions of dollars, going into a massive sector that is under-funded from a VC perspective,” Rupp said. “The knowledge base is totally different than it is now. And tools like Amazon Web Services are a huge simplifier of the puzzle of making games. Unity was just getting started back then. Unreal is incredibly powerful now. The enabling tech is much better now. We are starting to see changes on the distribution side where you can de-risk the games investments in a way you could not before. And, the final big difference is there wasn’t this ecosystem of games-focused seed funds. It was a lot of generalist funds making quite big bets as opposed to small million-dollar bets.”

There are also new forces that are helping with the game ecosystem. Big companies like Tencent, Facebook, Google, Amazon, and NetEase are being aggressive at investing in or acquiring game companies, Milken said. IPO markets are opening up in the Nordic countries, Rupp said. Consolidation is happening mobile games as Jam City, Scopely, and Zynga scoop up successful developers.

“I don’t disagree with anything you said, but my meta view is that is the same cycle repeating itself all over again,” Kurzweil said. “When I first became a VC, (in 2008), there was all this excitement over the iPhone and social gaming. And you had enabling technologies on the web.”

Those led to big successes and flameouts. The accelerants today are real, but Kurzweil thinks there will be both smart, lucky, and dumb money that will go through another cycle and get washed out again. The most recent cycles are in virtual reality and esports, and the thing you have to look for is what level of the exits happen, Goldberg said.

Please check out the video of the full panel.