Iconic AI, a London-based games startup specialising in AI-driven video game development, has closed a $4m (£3m) pre-seed round.
Founded in 2023, Iconic AI aims to change how high-budget games are developed, produced, and distributed. CEO and founder John Lusty, a former Snapchat employee, said that he wants his startup to use AI to expedite game development – the cost and scale of which have increased over the years.
While the global gaming industry generates revenues four times more than the film and music industries combined and is expected to be worth £13.2bn this year in the UK, many studios have been closing or downsizing.
Earlier this year, Microsoft and Bethesda announced that they would be closing multiple game development studios under their umbrella. These included Alpha Dog Games, maker of Mighty Doom, and Arkane Austin, developer of the disastrous Redfall, among others.
However, Lusty believes Iconic AI – backed by its pre-seed funding – can “prove we can redefine game development and challenge the misconception that AI is here to replace, rather than enhance, human creativity”.
The former Snapchat engineering director added: “Our goal is to push the boundaries of interaction and immersion for our players while making work more interesting and secure for developers.
“We believe our approach will create more jobs while elevating each individual on a team to have more impact and influence on the game they are making. Our belief is that by harnessing AI, smaller teams can become as efficient as, if not more efficient than, the largest video game developers, allowing them to create dozens of games. We are 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 scout funds from Sequoia and Atomico. Angel investors included former senior executives at DeepMind, OpenAI, Disney, Tencent, and Microsoft.