5 Key Tips for Investing in Entertainment Companies

Every investor has their own practices, their own “ritual” that helps them assess the potential of an idea in its early stages. This is especially true for the entertainment industry, particularly mobile and video games. No matter which formulas or forecasting methodologies are used, the core product remains a work of creativity that still needs to find its audience. This process is full of interesting nuances, many of which I have come to understand over the years, and I would like to share some of them today.

1. The Market Landscape

The first thing I need to understand when evaluating a company is where it sits in the market. I start by researching the basics: How big is the market? Is it growing or already saturated? What about geography — is the content globally appealing, or is it tied to a specific region?

Then I research the competition. Who are these market players — established corporations or promising niche startups? I don’t limit myself to industry reports and trend analyses, as they often provide only a broad overview.

Next, I examine the company’s brand and identity. For me, this is a critical indicator of its potential success. Does the company truly differentiate itself from competitors, or does it blend into a crowded market? This matters. 

I evaluate barriers to entry, such as intellectual property, licensing deals, or distribution partnerships as well. These factors may also pose risks if not managed properly.

Finally, I assess the company’s potential to expand into related niches, which is a key driver of long-term growth.

In summary, a great investment opportunity exists in a strong market, has a clear differentiator, and offers plenty of room to grow. 

At Utmost Games, we have a team of experienced professionals who can think globally while also understanding and scaling the ideas of our partners. The synergy in this area allows us to find solutions faster, providing a clearer and more transparent market picture, identifying promising directions, and spotting potential barriers in advance.

2. The People Behind the Product

Next, I take time to get acquainted with not just the product but the people behind it: their backgrounds, ability to attract top talent, and long-term vision.

Even the best product will fail without the right people to execute it properly. Passion alone won’t scale a business. Strong leaders have a roadmap, anticipate risks, are adaptable and able to pivot if market conditions change.

I also check their track record. Have they built something successful before? Do they have experience at major gaming, tech, or entertainment companies?

Despite the crucial role of strong leaders, I want to emphasize the importance of long-term, consistent work with people. Not every specialist can reach their full potential if they are not given the opportunity to express themselves. Not every passionate creative enthusiast is capable of firmly managing processes. These are challenges that should not always be seen as blockers. 

It’s essential to communicate with people, discuss ideas, and give them the space to articulate their thoughts. This, in particular, helps identify discrepancies between what they want to sell and what they want to create. While this is not necessarily a negative thing, it is critical for making informed decisions.

3. A Strong Concept

Unlike other industries where ROI is driven by assets or infrastructure, entertainment thrives on compelling stories, unique concepts and audience engagement. Without a winning idea, even great execution won’t save the entertainment business.

A strong idea can develop into a franchise or a streaming hit. That’s why I usually pay attention to whether a concept has development potential. For me, it’s best to invest in companies that create or own valuable intellectual property while adapting to trends.

I also believe that, for video games, it’s crucial to evoke emotions in the player. A great game captivates through its gameplay and creates a sense of thrill and immersion.

Still, many creative projects fail because they are either too niche or lack a clear path to monetization. If a company cannot clearly explain how it plans to make money, sustain growth, and scale operations, that’s a red flag.

Returning to the topic of ideas, I find it important to highlight the following: when we talk about a strong idea, we also include the possibility of its execution. Ideas by themselves are worth nothing — you can generate hundreds just by looking out the window. 

A winning idea is actually a combination of various factors: the passion of its creator, solid confidence, a calculated feasibility of execution, and a clear understanding that there is a market fit. In other words, an idea that appears in a moment of inspiration alone won’t take you far.

4. Marketing Basics

You may have the best product in the world, but if it doesn’t reach the right audience, it won’t succeed. That’s why I pay close attention to marketing in the company.

A solid entertainment startup understands its target audience inside and out. Saying, ‘We’re making a game for everyone’ or ‘Our platform is for all content creators’ isn’t enough. The best companies have detailed audience segmentation, knowing exactly who their users are, what they care about, and how to keep them engaged.

I also consider such factors as scalability. A company might find early success in a niche, but can it expand beyond its initial audience? For example, a gaming company targeting hardcore players may struggle to appeal to casual gamers if the product isn’t designed for accessibility.

A clear, tested marketing strategy for acquiring users, converting them into paying customers, and keeping them engaged is a green flag for investors.

That said, experimentation should not be entirely disregarded. In this regard, it is crucial that the team has some form of experience — successful or not — from a marketing perspective. They must be able to explain why they believe in a particular audience and justify that belief. I must admit, there is no stronger justification than one based on past mistakes.

5. The Ultimate Goal

To make the right investment choice, I need to know whether the company’s goal aligns with my personal and investment philosophy.. I ask myself: What does this company truly want to achieve — profitability, cultural impact,  industry domination or something else?

Some startups prioritize quick profitability, but this often means sacrificing quality for short-term gains — a red flag in my book. I prefer companies with a balanced, long-term growth strategy.

Others are driven by creativity and cultural impact, but I assess whether they have commercial viability. Creative vision is important, but it needs to be paired with a sustainable business model.

Finally, there are the future unicorns — startups that dream of dominating markets or revolutionizing industries. There’s nothing wrong with thinking big, but the first step on that challenging path is having a clear, executable growth strategy and the operational expertise to scale without losing its core identity.

Final Thoughts

In this industry, hype fades fast. What remains are the companies that understand their market, build meaningful connections with audiences, and have a clear, scalable path to profitability.

Successful investments are built on a deep understanding of the details — who is behind the company, what makes it different, and whether it can turn ambition into sustainable success.