You have a more charitable view of VCs than a number of us! But cynical commentary on ruthless VCs aside, I think "stopped believing in games" is probably accur

You have a more charitable view of VCs than a number of us! But cynical commentary on ruthless VCs aside, I think "stopped believing in games" is probably accurate. Here's why. The gaming biz had largely stepped away from PC platforms in favor of consoles and decreased piracy. PC based gaming had bifurcated into two major areas: casual games (Bejeweled) and server-based games (World of Warcraft), with the original gaming market being a rather beleaguered middle ground. And various firms had tried to replicate success in these new areas. But as may be obvious, once WoW beat Everquest, nobody's been able to dethrone them. And casual games were... well, everywhere. Kongregate, MSN Games, Yahoo Games, Real Arcade, ad nauseum. No big differentiators. Easy to knock off. And not very lucrative without enormous scale. So when investors heard "new game company" their usual inclination was "nope, next". And venture capital is a business that ultimately doesn't thrive on risk but instead on as close as they can get to the sure thing, which is why you see so many clones of any business that seems to be doing it right... latest trend being Groupon. VCs are looking for a reason to say no early so they can get back to looking for other opportunities, working with their existing portfolio companies, or the other things that occupy their time (public speaking, golf, etc). There could be fabulous opportunities in a business but they are often dismissed as "in the wrong space" - regardless of the success of that firm - if that space is out of vogue.