Private Division is celebrating its fifth anniversary as a publishing label with two noteworthy announcements: first, the label has signed a deal with The Medium and Silent Hill 2 Remake developer Bloober Team. The studio is working on an unannounced survival horror game" which will now be published by Take-Two's "developer-focused" label.

Second, Private Division is putting that "developer-focused" adjective into action with the new Private Division Development Fund. This investment fund will be targeted at "smaller independent developer teams," and will provide those developers with project financing and mentorship opportunities.

The fund is primarily aimed at developers looking to self-publish their games. If you're such a developer interested in picking up that financing, Private Division's leaders have some interesting additional context you might want to know about.

Turning publishing expertise into investment strategy

Speaking to Game Developer, Take-Two chief strategy officer and Private Division boss Michael Worosz broke down some of the thinking behind the fund in a video call earlier this week. In his time with Take-Two, Worosz has seen the company take part in successful investment opportunities that brought literal and metaphorical returns.

He referenced Take-Two's initial investments in Twitch and Scopely, which not only proved to be financially successful, but guided the publisher's knowledge on big changes in the industry. Worosz noted that because of the Scopely investment, Take-Two would go on to acquire free-to-play developer Zynga.

"We took the idea of those sets of strategies...and we wanted to create a vehicle to help finance games," he said.

Private Division now has 70 employees, and is publishing games ranging from the smaller-sized After Us to the much-anticipated sequel Kerbal Space Program 2. Worosz noted that resources at the publisher are limited, and it can't take on every great project that its bizdev team uncovers.

Take-Two chief strategy officer and Private Division boss Michael Worosz

But it seems Worosz and his colleagues weren't content to let those missed games just vanish into the night. "Instead of putting the full weight of our publishing team behind [a game], but believing in ourselves that we can really pick hits and see quality, we put those two things together and that's the auspices of the Private Division Development Fund."

Private Division head of business development Blake Rochkind emphasized that the company is choosing to work with developers interested in self-publishing because this is "a method" to work with the kinds of developers they'd previously have to pass on deals with. "We have to be honest that there are plenty of developers in today's world that do have success with self-publishing," he said. "We wanted to make sure that we did not have a one-size-fits-all approach."

If you're cynically minded, you might see this as Private Division's bid to get in with games that ultimately didn't need the publisher's publishing resources, but did need its money.

But even with critical eyes, there's still something back-to-basics and optimistic about Private Division's new fund. Smaller developers can find the funds they need to make their game without giving up some of the rights that come with a publishing deal.

Though the Fund definitely comes with good intent, Worosz and Rochkind were keen to share the more coldhearted business logic sitting at the heart of the deal too.

A long-term view of small developers

After Worosz and Rochkind explained their pitch, I had to admit to them that our call to discuss a new investment project felt very different from other major money movers in the market right now. Where were the web3 buzzwords? The metaverse ambitions? The high-level acquisitions that reshape the industry?

"We don't really chase headlines or the buzzy, splashy new initiative," Worosz noted wrly. He said that the Private Division team does "a lot of diligence" on companies to evaluate the opportunity. He then made a somewhat surprising comment for a business executive, which was to explain that he's yet to see any web3 or blockchain games that have "created a compelling gameplay loop" that uses the technology well.

It's one thing to hear of a company like Private Division launch a developer fund in the red-hot games investing environment, it's another thing to hear an executive admit it prioritized that fund over the other major investing trends of the moment.

Worosz still expressed some optimism for blockchain's future in games, saying that "the best development teams in the world have not yet turned their attention to it meaningfully," but pivoted to explaining what he feels Private Division is best positioned to accomplish with its funding.

"Capital is fungible," he noted. "What matters is the expertise of the people putting in the money." He compared its teams' investing moxy with that of other venture capitalists or late-stage private equity, and said that Private Division "likes its chances" in that field.

Though the fund is built to help developers finish projects and ship games, Private Division's close relationships with the companies it funds are another key part of this project.

"If we can see the next Valheim, Fall Guys, or Rocket League—all of which would have been created in the kind of investment vehicle we're describing here—we've hopefully formed a relationship with those developers that will lead to a great publishing deal or even better, an acquisition by Take-Two, Private Division, or another part of the company," he said.

What do devs who want to pitch the Private Division Fund need to know?

Worosz and Rochkind explained that the Fund is willing to entertain different types of devs from different levels of experience. While we've heard plenty of other publishers and investors say they'd be looking for a playable prototype in their pitch, Rochkind said the fund is plenty comfortable taking paper pitches. (He noted that Private Division has made "very significant bets" on such pitches in the past).

Beyond that "nothing's written in stone," he explained. Developers who want to sell interesting game mechanics would do well to have some playable prototype ready, but if a dev is pitching a story or vibe-focused experience, there's plenty of potential in the old-fashioned presentation.

Private Division head of business development Blake Rochkind

Without publishing support, I was curious how the pair were thinking about marketing games and ensuring they could be discovered in a crowded market. Worosz said that's been top of mind for the team as it put the fund together, and noted that even Take-Two and Private Division have had to take this problem seriously with larger games. "Even with large marketing budgets where you can buy out media or pay for droves of influencers to play your game for a period time—it's still hard to get a game to stick right now in this market."

He also made the comment that he and his colleagues are "looking forward to the economy stabilizing" which will give players more disposable income to spend on games (is the market stable? unstable? I don't even know anymore).

If you're a developer who has some idea of how you'll tackle that discoverability problem—particularly in self-publishing—that would be a point in your favor in being considered for the fund. "We're looking for folks who have some sort of go-to-market sense," Rochkind said. Developers who know what game they want to make—and how they'd sell it—stand a better shot of cutting through the noise.

Worosz closed things off with some reflection on the company's last five years of business—it's worked with Obsidian Entertainment, Supergiant Games, Moon Studios, and more. He said that the last five years have "really prepared" the publisher to ship interesting games in the next 12 to 24 months.

It was another soft invitation to look at today's news as not just an immediate business decision, but one that looks toward the long term. Private Division's wins with smaller developers today may very well fuel big-budget wins tomorrow.