Ben Feder has helped build some of the biggest game companies in the world at Take-Two Interactive, the parent company for the Grand Theft Auto series, and Tencent. But now he’s focused on some of the smallest game companies as an investor at Tirta Ventures.
The fund has taken multiple positions in game startups such as Artificial Agency, which is creating new kinds of games such as dynamic games where AI can adjust the story on the fly and change the experience based on what the player wants to see happen. Feder, former CEO of Take-Two Interactive, thinks of it as a new type of innovative gameplay, much like battle royale was.
Feder believes AI will be transformative for games. He thinks of its effects like a three-stage rocket. The first stage is cost reduction. The second stage is innovative gameplay. Third stage is completely new categories of interactive entertainment.
Tirta Ventures expects to raise more funding next year so it can keep on supporting game startups. We talked about opportunities on Roblox, where Tirta Ventures has inveted in Voldex. It feels like the early days of mobile, he said.
Feder sees areas of excellence in games in regions like Turkey, Israel and Finland. He thinks places like Dubai could be up-and-commers.
Here’s an edited transcript of our interview.
GamesBeat: How are things going with the fund?
Ben Feder: Every time someone asks me that question I think, “I don’t know. Talk to me in eight years.” I think it’s going well. It’s interesting times in the video game business, as you know. The team is strong. Our portfolio is strong. We’re still looking for pockets of opportunity. I think we’ll be off raising funds at the beginning of next year, too.
GamesBeat: How many years apart would that be, the funding?
Feder: A little over three years. It’s fairly slow for a fund of our ilk. For better or for worse, we invest in very early stage, but our process is much later stage. We do a lot of diligence on companies. It slows us down and it talks us out of things. We were very active in 2023 because we thought it was a moment in time, which it was. We were less active in 2024, and even less active in 2025.
GamesBeat: Being careful at a time when things look tougher seems to be a good idea.
Feder: From an investment point of view, we’re still very bullish in the long term. Short term, it’s easy to see signs of bearishness. But we’re long-term investors. The layoffs, the content failures, you pick your data point. Fortunately we haven’t been involved in any of those failures. But there’s a lot to learn from all of that. In terms of industry growth, we think AI is going to be this massive growth driver, as well as a change catalyst. Those are great opportunities to invest behind.
GamesBeat: Do you view that in terms of generations of AI gaming startups? Are we already on something like a third generation of these AI startups? I saw one, Artificial Agency. They had an interesting approach. Some of the people from DeepMind had started it in Canada.
Feder: They’re a portfolio company of ours, yeah. What were your impressions?
GamesBeat: I liked the new role they had figured out for something like a game director. This AI could bring a lot of novelty and dynamics to gameplay. It could basically do your bidding. As a player you’re saying, “What would happen if these donuts were poisoned?” The AI goes and executes that for you. I thought that was an interesting–it reminded me of the Hunger Games, the game directors throwing all these obstacles in front of the players. That kind of dynamic.
Feder: When battle royale first came out, everyone was copying everyone else. The games that were inspired by a movie that was based on a book. It’s all the Hunger Games. Not a lot of people draw that connection, but it all started with the Hunger Games. Our view on that is we’ve always felt like cost reduction is good as far as it goes with AI, but the real opportunity–we used to say the real opportunity is innovative gameplay. Our analogy was the AlphaGo competition.
Move 37, which no human had ever done before, is this completely rogue move, and it turns out to win the game. We’re looking for completely rogue gameplay.
We still believe that, but I think the further belief is that not only will that happen–cost reduction is step one. Let’s call it a three stage rocket. First stage is cost reduction. Second stage is innovative gameplay. Third stage is completely new categories of interactive entertainment. It evolves to a point where–it’s all consumer attention, because it’s interactive entertainment. But you wouldn’t recognize it as a game sitting here today. What we’ll ultimately see is new forms of interactive entertainment. A good early sign of that is these digital companions. They’re not quite games, but they’re definitely consumer. They’re definitely AI. They’re definitely sucking up attention.
GamesBeat: I liked what Krafton did with PUBG and their companion. You have an AI teammate now that won’t run off by itself and get killed a quarter mile away from you, the way humans do all the time. It’s a more loyal companion, which is what you need in something like PUBG or Warzone.
Feder: Which is great unless it hallucinates. There’s going to be a lot of fun in this. These things always take longer than–they’re shorter than you think, but longer than you hope, the time it takes to realize them.
GamesBeat: Jennifer Reingold mentioned you have some interesting views on Roblox and what that opportunity is, what it means for social gaming.
Feder: To give credit where credit’s due, it’s mostly my partner Justin. He’s been writing about it. We just think Roblox is quickly graduating from a game platform to an actual social platform. The number of MAU, the amount of communication that goes on, all of that is becoming a real social platform. And then Grow a Garden is just the most extraordinary thing. I remember watching it with someone, one of these superstar developers who I’ll leave unnamed. His daughter is playing this. He says, “What’s that number on the top of the screen?” “Oh, that’s the number of people playing right now.” He looks at this giant number. He puts all of this effort into making games, and then you have this little simple thing.
To me it’s almost like the early days of mobile. We think of a baseball analogy. What does it
cost you to go to the plate? What’s your hit rate? What’s the outcome if you connect? A very early stage platform, like mobile in the early days, and like Roblox, it costs you almost nothing to take a swing. Your hit rate is really low. But when it does connect it’s a massive home run. Think of Angry Birds. Everybody is attracted to those grand slam home runs, but they forget the probability in all of it. It’s difficult to do. Over time, the development costs rise. Fast forward to mobile today and it’s almost impossible for a new IP to break through.
We think there are lots of opportunities on Roblox. We’re invested in Voldex, which is the largest third-party developer in Roblox, but we think there’s more opportunity. For Voldex, we think the opportunities are great. Grow a Garden has driven home the point that you can develop a massive IP on this platform.
GamesBeat: Roblox is starting to make some moves to where they’re going to enable a lot of solo players to grow bigger before they’re obligated to sell out. They can stay independent for a longer time. They’ve thought about this in an interesting way. Ways to help people so they don’t have to–I’ve noticed a lot of creations become hits, and then they sell to someone, and they become even bigger hits soon after that. Like that football game that got an NFL license. They grow big as a football game, sell to someone, and then that gets them the NFL license. Why can’t it just be the solo creator getting the NFL license?
Feder: Because they need capital and expertise to do it.
GamesBeat: But Roblox might have part of a solution to that.
GamesBeat: Is there a way for your kind of company to participate in some of these almost solo developer phenomena? Balatro is one, or a little further back in time you had Stardew Valley, or Animal Well. You have award winners coming from solo entrepreneurs bursting onto the scene.
They’re grabbing the chance for innovation that the triple-A companies have surrendered.
Feder: We have a riff on that one as well. You’re saying two things. The first part, one of the things that distinguishes us in the marketplace is that among providers of capital, we’re the only ones that bring real operational value add, because of my experience. There’s capital and there’s expertise, but then there’s experience. If you’re a solo developer–you said one thing I disagree with a bit earlier, about feeling obligated to sell.
Nobody is obligated to sell. They can keep going alone. The reason you do so is either you think you’ve won, and you just want to take your money and go home, or you can’t do it by yourself anymore and you need help.We do this with all our portfolio companies. We roll up our sleeves and we help them. Most VCs might say, “We’ll be your business development department,” something like that, but we actually help people grow their businesses. Our adage that we tell entrepreneurs is that most VCs say that they’re not just money, but that they’re also value add. We say we’re not just value add, but we also have money.
That’s thing one. Thing two–our view is that the definition of scale in this business is changing. Triple-A used to be a stand-in for some combination of scale and quality. It used to be a big number, like $300 million. But now you look anywhere from what’s been plowed into platforms like Roblox and Fortnite on the one hand, or a GTA on the other hand–all of these are measured in words that begin with a B. That’s what scale is. If you’re going to spend $300 million and think that’s a lot of money, you’re mistaken.
You have scale on the one hand, and on the other hand you have innovation, just as you said, which is occurring in Roblox. It’s occurring in AI startups. It’s occurring in Fortnite. The tools are being democratized. I feel like if you’re in a corporation, building a $300 million game–one, you’re not big enough, but you probably also don’t have the flexibility, the agility, and the size to be innovative enough. You’re stuck in the middle.
I’m a big believer in established IP. Established IP is going to transcend all this. I’m not going to worry about that. But if you want to compete with an established IP, you’re probably looking at budgets that are much bigger than the budget you’re looking at today. All the cost reduction opportunities with AI notwithstanding, you really need to up your game. But you can only do it if the audience is there. I feel like there are strategic decisions to be made–this is a bit of a conundrum. You need to invest more, but if you invest more, you need to make sure you can deliver the audience. The bar is much higher for scale businesses. On the other hand, innovation–you need to figure out how you’re going to innovate in this business. It’s really tough.
GamesBeat: It was interesting that Take-Two recently announced they were raising another billion dollars.
Feder: That’s what happens when you have to delay a game.
GamesBeat: Grand Theft Auto stands alone. It has unique circumstances. I look at Microsoft, though, and some of the things they cancelled. They had some games that looked like they were in the works for a decade before they were cancelled. I don’t really have a way of understanding that.
Feder: It’s scale. Everyone is going for fewer, bigger titles. You need to achieve scale. You need to focus your firepower, focus your money. By the way, that’s on the supply side. On the demand side, as we look at the independent studios and all the high-profile missteps, we see studios–they do their homework. They get third-party evaluation before they release. They get a 9 out of 10 and say, “That’s pretty good. Let’s go.” But in this market you need a 12 out of 10.
It’s not good enough. The bar is super high. Especially because everyone is playing their
forever games. You know all this. You might be successful for a little while peeling someone away from their core game, but to retain them is much harder.
GamesBeat: What’s happening on the startup level when everyone says costs are going up? I guess the goal here is to be innovative enough to get something out that gets some real evidence, but without crossing into the numbers that companies were getting in the past.
Feder: Either you need scale or you need to be innovative. Or you need to be something that’s really differentiated. We’re big believers in low cost when it comes to games, low-cost development areas. I saw a statistic the other day. Seven out of the top 10 new IPs that were launched last year were developed in Asia. Mostly in China, where development costs could be two-thirds of the costs in Silicon Valley, especially when big tech in Silicon Valley is peeling off top-quality engineers. It’s very difficult to convince people to work on a game. It’s expensive to develop a game in California specifically, and more generally in the United States.
I feel like that’s a smaller point, because I’m a big believer in quality and in innovation. If you have a high-quality game and an innovative game–you should keep your costs as low as possible, but not so much that you’re saving your way to a crappy game. You need to develop a high-quality game at the lowest possible overhead, but the game has to come first. You can’t save your way to prosperity.
GamesBeat: What are some specifically interesting regions from your point of view, places that are emerging?
Feder: On mobile we see a lot of activity in Israel and Turkey. On PC and console, a lot of
activity in China. Some in Japan and Korea. The wild card is India. There’s some interesting
stuff happening there. A lot of it is real money gaming, sweepstakes, social casino, that kind of area. Video games is already a fairly large category that has some meaningful divisions within it. That’s the way we think about it.
GamesBeat: What about some of the areas that are starting to pay more attention in terms of incentives? There’s Saudi Arabia, Dubai, Abu Dhabi. Do you think those regions have what it takes to be competitive, or are they still missing something?
Feder: We’ve found that–on the one hand, it’s nice to have cultural centers of excellence when it comes to video games. Helsinki, Montreal, that kind of thing. On the other hand, I’m always surprised by where some of the hit games come from. There’s no special location. Mobile is so data-driven. There are some locations like Turkey and Israel. But in more narrative-driven segments like PC and console, if you can get the budget, it can come from anywhere. Roblox can come from anywhere.
If I were advising Saudi or Dubai–I have given this advice to somebody in Saudi Arabia. I
thought one of the interesting things–with geopolitics being what it is, there aren’t enough
locations in the world for digital nomads and digital refugees to go to. There are plenty of great engineers and artists and whatever else living in parts of the world that they would prefer not to live in. If you could set up a special economic zone with special rules and special taxation and special social rules and whatever it is, you could probably attract some pretty great talent. You could even supplement that with one or two acquisitions and/or one or two really senior hires.
Spend a lot of money to bring that center of excellence to some area. Provide a place for people to go where they can live and solve their problems.
GamesBeat: I admire what Dubai has done in terms of building up all kinds of industries there, but also, 90% of them are immigrants. They’re welcoming to entrepreneurs who want to set up something .
Feder: Dubai is fairly developed at this point. Other areas in the Gulf, if you’re talking about the Gulf specifically, are less developed. They can potentially attract specific sectors like this. There’s a crazy statistic about the number of Emiratis that make up the population of the UAE. It’s tiny.
GamesBeat: The UAE made an announcement earlier this year that they want to shoot for a billion-dollar industry by 2033, with 30,000 new jobs. They’re the only country I know that has a 10-year esports plan. They had a “come here, open up for business” attitude toward everyone, but it seems to be targeted more seriously at games in particular now.
Feder: I’m old enough to have been in Dubai before it was Dubai. I remember sitting in a real estate office when they told me about this giant airport they were building. The airport they had was pretty giant to begin with. All these plans–they were going to create a haven in the desert. I sort of rolled my eyes. Okay, sure. You show up 10 or 20 years later and they actually did it. It’s amazing.
I take them at their word. If they say they’re going to do it, they can do it. I think probably they’re more directed this time than the last time, because they understand that either the age of oil is not going to last forever, and/or that their economies are just too concentrated. I don’t know if it’s existential for them, but it’s certainly strategic to expand their economy. They’re using sovereign wealth to build it, to kickstart it. You can do a lot with that.
GamesBeat: You mentioned Asia. Are there parts of Asia that you think are on the rise when it comes to strong game ecosystems?
Feder: Shockingly, I wasn’t really focused on it, but I just heard of two or three video game
outsourcing shops in Malaysia of all places. Vietnam. I don’t know about Indonesia. But in terms of up and coming, that’s what I think about. Vietnam, Malaysia, Indonesia. Again, the big wild card is India. It’s a giant market. Everyone is mobile-first. They’re gaining experience in playing games. It’s more a disposable income problem than anything else. That’s going to improve.
You probably know this number. The number of gamers in the world, people who play games. Around 3 billion? World population is 7 billion. If you lop off everyone under the age of five or over the age of 75, it’s probably an even bigger percentage of the world population. It’s insane.
It’s like saying you eat. I get asked all the time about whether I think video games are recession-proof. Certainly in the hardcore video game market there is a fairly sizable portion of that market that would sooner forego food than forego their games.
GamesBeat: That’s what offers the hope that the game industry has an inexorable pattern of growth ahead of it.
Feder: There are a few tail winds for growth. AI is the biggest one. But there’s also this knock-on effect of AI. What happens when people have a lot more leisure time? Where are they going to spend it? The answer seems pretty straightforward to me.
GamesBeat: Solving the jobs question is going to be interesting. If AI takes away a bunch of jobs, maybe a lot of people will conclude that they don’t have to work. If there’s something to support them, then they can entertain themselves. Maybe they’ll be paid to play games.
Feder: I’m coming around to the idea–I can’t quite articulate it. But I’m coming around to the idea–it used to be that some kid could tell their mom, “No, I get paid because I’m a competitive gamer. People pay me to do this.” But the number of categories like that seems to be increasing. “I get paid because I’m an influencer. I get paid because I’m a competitive gamer.”
I’m coming around to the idea that these are legitimate jobs.
GamesBeat: The competitive gamers are creating their own games now.
Feder: These are legitimate jobs. If you look at me, someone just on the cusp of Gen X, who might even be a boomer, and then you look at Gen Alpha and Gen Z, it’s taken me a while to come to terms with the fact that you might be better off playing games than being a doctor. Not that I believe it so much that I’m trying to talk my daughter out of going to med school. I’m happy she’s going to med school. But still.
GamesBeat: You mentioned the social aspect of Roblox. One thing I thought was interesting was Netflix opening up their hub on Roblox. They also greenlit a game about Cobra Kai, where this company Barrier Four made a game that reproduced a fight scene in an episode. Inside Roblox you could watch the episode and then play that fight scene. It was a good way to bring that brand to people in Roblox who might have never heard of the show.
Feder: If you’re Netflix, for sure, that’s what you want to do. You want to tie the IP together. I don’t know that Netflix has a ton of IP that lends itself to video games. But they probably have a few. As an extension of an experience, it works. It used to be the case–probably it’s no longer the case, because it’s so data-driven. But it used to be that filmed entertainment was a hit-based business. Video games were a hit-based business. If you tried to combine the two of them together, you were doubling your risk, not halving your risk. When you have a 1 in 10 chance of a hit game and a 1 in 10 chance of a hit film, if you do both of them you’re multiplying your risks. It’s not 2 in 10, it’s 1 in 100, whatever that math turns out to be.
Video games are the most exciting, most dynamic part of the entertainment business. It’s
exciting and dynamic because it changes with technology in a way that traditional media doesn’t change. It grows with technology and changes with technology. If you look at the kinds of video games that were hits even in the last two decades, a lot of that was driven by what’s happened with technology. Going from single-player to two-player to multiplayer to hundreds of people playing a game at the same time. A lot of that has to do with Moore’s Law, Metcalf’s Law, networking technology, storage technology, processing technology, GPU technology. Films, sometimes the distribution of it changes with technology, slowly. But the actual product itself is the same as it’s always been.
GamesBeat: Were there particular attractions about Artificial Agency that led you to invest?
Feder: Very early on we identified intelligent NPCs as one of the earliest ways in which AI can affect video games. We actually have two investments in the area. One is Artificial Agency. The other is Bitpart. Very different focuses with respect to the technology layer, as well as the ultimate implementation. But broadly speaking, intelligent NPCs within video games is an early area. We have lots of investments in AI in video games. I think our fund, more than other funds, is focused on that intersection where AI meets video games. Even our content investments, a lot of them are AI-oriented.
GamesBeat: Part of the pitch that was interesting to me–they said that they had seen a lot of the very early AI startup pitches when it came to games. A lot of it was very similar. They felt like a second or third generation of ideas around AI and games was what they were shooting for. This role of the game director was something they had not heard about from those earliest companies. Everyone talked about AI NPCs, but nobody was thinking farther ahead than that.
This has moved so fast, though, that that idea got exhausted, and then they’re on to other things already.
Feder: That’s exactly the point. To succeed with any of these startups you need to move at the speed of AI. Otherwise you start out thinking you’re disrupting something and nine months later you’re being disrupted, because the technology has moved so quickly. When we make an investment, the first screening test for AI is, imagine the foundational models are 100 times more powerful than they are today. Imagine that happens tomorrow. Is this opportunity benefited by that, or hurt by that? If it’s hurt by that, we stop in our tracks. You know it’s going to get so much more powerful so much more quickly.
GamesBeat: When Nvidia announced the DLSS 4 for the latest graphics cards was improving the performance by eight times, I did a double take. Graphics cards aren’t supposed to grow at that rate.
Feder: Think of all the innovation, and frankly the wealth, that has been created on the back of Moore’s Law. Just doubling every two years. I got this from Mustafa Suleyman. For the last 10 years, the number of parameters on these large language models has increased by a factor of 10 every year. Think about what that curve looks like. Imagine the opportunity. This compounds, right?
GamesBeat: Even as you apply that to areas where people thought they were exhausted
already, like graphics. We thought graphics got solved 10 years ago.
Feder: The point my partner Justin likes to make is that so many unicorns of past technological shifts started as video game companies, or servicing the video game industry. It’s the spark before the fire. Nvidia did video games. Although if you listen to Jensen Huang speak about the origins of the company, he was just looking around. He was looking out for an opportunity. But video games is often the starting point. Slack, Discord, they started as video game companies.
GamesBeat: Do you wonder whether video games get passed by other things? As you said, in Silicon Valley it’s hard to hang on to an engineer. They’re getting robbed by the AI companies now. It’s hard to get someone to work on gaming AI. Does games still look attractive as an investment category compared to some of the others that are out there?
Feder: Do you mean if I were an engineer, or if I were an investor? The truth of the matter is that the headlines about Meta paying $100 million for a top researcher–everything in Silicon Valley follows the power law. Yes, it’s true that one or two people will make $100 million. The vast majority will make vastly less. It’s not 80-20. It’s like 98-2. I’m less worried about that. When it comes to engineers frankly I think there are more engineers than there are jobs at the moment. I’m not terribly worried about it. If anything, people are worried about the opposite. Yeah, one guy is going to get $100 million, and everyone else will get zero.
I actually don’t think that’s happening. I listened to an interview with the CEO of Cursor, who made the point that yes, the Cursor editing function is really powerful, but it’s so far away from replacing human engineers. It’s really not there yet. It’s much more powerful than a Word editor, but it’s still just an editor.
GamesBeat: When it comes to the structure of game companies, with smaller projects being favored, I notice that companies like Keywords have grown so large now. They’re 13,000 employees doing external development. There’s 4,000 at Virtuos. You could still have these 50-person teams that are trying to do something triple-A, and when it comes time for full production they hand off a lot of work to the external development companies. Do you think that structure works better than what we’ve had before, where everyone works inside one big company?
Feder: I haven’t thought about it much. I don’t know. I will say that I’ve always thought that
outsourcing and automation go hand in hand, in the sense that anything that can be outsourced or automated will be. At least in the era of peak globalization. We seem to be retreating from that, so I don’t know how that changes things. Things are going to become less efficient.
GamesBeat: It’s less efficient to have a second company you have to communicate with.
Feder: There are transfer costs, switching costs, whatever. There are costs associated with allnof that. So far software doesn’t seem to be too affected by it, but who knows? I have an
entertainment background, not an engineering background. The video game industry, I’ve
always thought, was akin to the way Hollywood was organized in the 1950s. Everybody works for the studio. The director, the musicians, they all work for the studio. It wasn’t really until the rise of the agents and CAA and all that where top talent, and eventually all talent, became free agents. To pull a project together you picked the right director and the right actors and the right writer for that particular project, and that’s how Hollywood is organized today. It’s all packaged, mostly through the agents.
It really doesn’t work that way in the video game business. I’ve had conversations with
Hollywood people who have taken a while to learn that lesson. They apply the Hollywood model to video games and it doesn’t work. Even if you could do it, you’re negatively selecting for talent, because the best talent, the creative talent, works at studios. They’re not in a low-cost location.
But it’s possible. I don’t think agents have tried to do this. A lot of it has to do, I think, with video game development being not only very team-oriented, but the teams have become so large, especially for the large games, that it requires real management, real management skill.
Anything above 150 people requires a process. It’s completely unnatural for more than 150 people to work together. A lot of the big games have thousands of people. You need real management expertise, management processes. It’s impossible to freelance the way Hollywood freelances.
GamesBeat: It was interesting to see the result of the SAG-AFTRA negotiations with the game companies. They agreed with the voice actors that they should be compensated for the use of their AI voice, but also that game companies should have the right to do that instead of calling in an actor for a second or third round of recording.
Feder: You’re well beyond a second or third round. You can speak three sentences to me, I can record it, and I can feed that to an AI and have an entire script read by Dean Takahashi. Now imagine you’re Brad Pitt.
GamesBeat: How much does Brad Pitt get for that?
Feder: It’s for greater minds than mine to figure out. It’s like they say. You don’t get what you deserve. You get what you negotiate.