Iconic AI, a London-based gaming startup specializing in AI-driven video game development, has closed a $4m (£3m) pre-seed round of funding.
Founded in 2023, Iconic AI aims to change the way high-budget games are developed, produced and distributed. Former Snapchat employee and CEO and founder John Lusty said the startup wants to use AI to speed up game development, which has become increasingly costly and large every year.
The global games industry generates four times the revenue of the film and music industries combined and is expected to be worth £13.2 billion in the UK this year, but many studios are closing or downsizing.
Earlier this year, Microsoft and Bethesda announced they were closing several game development studios, including Alpha Dog Games, developer of Mighty Doom, and Arkane Austin, developer of the flop Redfall.
But Lusty believes that Iconic AI, backed by pre-seed funding, can “prove it can redefine game development and challenge the misconception that AI is there to replace human creativity, rather than augment it.”
The former Snapchat engineering director added: “Our goal is to push the boundaries of player interaction and immersion while making our developers' work more fun and safer.”
“We believe our approach will create more jobs while giving each member of our team more influence and impact on the games they're making. We believe that by leveraging AI, small teams can become as efficient, or even more efficient, than the largest video game developers and produce dozens of games. We're excited to continue this journey with the support of our new partners.”
The round was led by HodlCo, with participation from FOV Ventures, Interface Capital, Deepwater Asset Management, and the Sequoia and Atomico scout funds, and angel investors included former senior executives from DeepMind, OpenAI, Disney, Tencent, and Microsoft.
