Video Games & Music: How the Game is Changing

Video Games & Music: How the Game is Changing:  And how the right working capital can lead to high scoring productions

“At one point, video games became pop culture,” explained Raymond Herrera as he cruised north along the California coast from Los Angeles. Herrera is well connected to Fundamental Financial as a referral source and industry expert. His personal journey from hit recording artist to pioneering video game soundtrack producer is a perfect illustration of how the two industries converged creatively. It’s thanks to unmatched insights from entrepreneurs like Herrera that Fundamental can offer innovative working capital solutions across the entertainment and media industry. 

Today, the video game market is worth nearly $100 billion globally- $25 billion in the US alone, with an average of two gamers in every American household. That kind of market share, along with new opportunities for collaboration and creative freedom, motivates big name artists like Trent Reznor, Beck, Skrillex, Amon Tobin, and Deadmau5 to make music for new games. But game studios look to both established and lesser-known artists to keep things sounding fresh as they compete for the attention (and dollars) of the America’s 155 million regular gamers (and nearly 1.8 billion worldwide). 

But when independent producers and emerging artist want to collaborate in the ultra hot realm of video game soundtracks, things get tricky.  Traditional forms of financing and working capital are increasingly difficult to access for indie productions. This funding gap makes it riskier and more difficult for enterprising producers to do quality work with cutting-edge talent. And that’s where Fundamental Financial helps to change the game.

For producers without incredibly deep pockets, the real challenge is finding a way to bankroll studio time while compensating artists and technicians. That’s because most deals are work-for-hire contracts where payments from game studios come mainly after songs are recorded. “With artists and technicians requiring payment within 30 days of providing their services and studios taking 60-75 days to pay,” Herrera explained, “even successful producers can be left twisting in the wind waiting for payments.” 

Despite the industry’s massive and growing value, clear paths to working capital for soundtrack productions are still few and far between. And that’s a problem when a team of music professionals sets aside time to for a project and expects a paycheck. “Here, pipeline money, or working capital financing, would be very helpful,” Herrera said. Like any business endeavor, a lack of capital means “game over”.

And Herrera should know. He’s a true groundbreaker in the game soundtrack space, creating and producing music for over 50 games. Herrera began his career as the founding drummer of the hugely popular heavy metal band Fear Factory, which went on to sell over a million albums. In the nineties, his love for video games and a keen business sense led him to the E3 Expo (still among the industry’s premier trade shows) where he met the heads of all the major game studios. Finding that many game developers were metal fans, Herrera discovered a welcome market for his brand of industrial metal in fast-paced games. At that time, the popularity of video games was skyrocketing as they became more technologically detailed and immersive. In early video games, music was an afterthought. But beginning in early nineties, it became a definitive component. 

When Koji Kondo, a Japanese fan of progressive rock and jazz, created the iconic score for Super Mario Bros for Nintendo, video game music really started to matter. According to a New Yorker article, How Video Games Changed Popular Music, Kondo wanted to think about sound in a more experiential way. He built moments of tension and catharsis into Super Mario. Soon, major game companies were hiring young musicians seeking a different outlet for their work. Soichi Terada, a house DJ and producer was hired by Sega in the late eighties to score multiple games titles, the New Yorker noted. Video games, like movie soundtracks before them, became a space for musical experimentation, explained the New Yorker. 

For artists and producers navigating a music industry whose revenue streams are as uncertain as ever, games offer incredible financial opportunities. But, “it’s not all about the money”, as Jonathan Coulton, who wrote songs for the Portal game series explained to MTV, “it’s also about the opportunity to be on the cutting edge and do something new with how people experience music.”

At Fundamental, we believe innovative entrepreneurship is the lifeblood of the American economy. And we believe that games are an undeniably dynamic industry. With a few not-so-secret game fanatics on staff, we also believe games will continue to make profound contributions to popular culture and technology. So we’re proud to offer growth capital solutions to the innovators bringing forward-looking music to the future of games, and to innovators across the new media spectrum.

How can Fundamental help you or your clients find new frontiers in media and beyond?