This month, we’re spotlighting our new investment in Good Start Labs, a company building games that generate high-quality data for AI labs. We also share our insights on Electronic Arts’ $55B take-private and what it means for the future of the gaming industry.
🌉 About: Good Start Labs is a platform that designs games specifically to generate targeted, high-quality data for AI labs. Currently, foundational model companies are spending billions training models but achieving only incremental improvements, largely due to a bottleneck in quality training data. AI companies are expected to spend over $10 billion on training data by 2026, yet current datasets are limited and increasingly exhausted. Good Start Labs addresses this gap by creating tailored data to overcome specific model weaknesses.
👑 Team: Good Start Labs’ CEO, Alex Duffy, has spent eight years in AI with a background in synthetic data generation. He previously served as VP of AI at Salt AI, a development platform for integrating AI into existing workflows. The company’s CTO, Tyler Marques, has seven years of experience in applied AI/ML DevOps, with a background in full-stack engineering and infrastructure operations.
🙈 Status: The company recently closed its seed round co-led by Inovia and General Catalyst, with TIRTA participating as a follow-on investor. Prior to the fundraise, the team launched AI Diplomacy, a complex strategy game that pits large language models against each other to benchmark and evaluate how they behave in competitive, high-stakes social environments requiring negotiation, trust, and deception. The game was live-streamed on Twitch, generating over 450,000 minutes watched.
🌉 About: Cartwheel is a powerful new way to animate characters for videos, 3D projects, games, films, ads, and social media. The company is solving real-time animation by replacing pre-baked animations with fully emergent, context-driven motion generated dynamically from the surrounding environment.
👑 Team: Cartwheel’s Co-founder and Chief Scientist was previously a Research Fellow at OpenAI and later served as a Senior Applied Research Scientist at Gretel.AI, a synthetic data company. The company’s CEO was formerly a Creative Director at Google, where he oversaw brand identity and logo systems, and later served as a Director at Hawkfish, a data technology company that supported the 2020 U.S. election.
🙈 Status: Last week, Cartwheel introduced Character Posing, a new feature that allows users to set a character’s exact pose and render a fully designed image from a simple description. Character Posing lets creators define precisely how a character stands, sits, or moves, offering greater creative control where it matters most.
Electronic Arts’s $55 billion take-private is monumental, and not for the reasons that make the front pages of The Wall Street Journal or Financial Times. Beyond the massive transaction value, this deal marks a deeper shift in how creative industries balance capital, risk, and innovation.
Freed from the short-term demands of quarterly earnings, EA can now orient around longer-term strategy, operational efficiency, and AI-driven transformation. But private ownership comes with its own constraints. Heavy leverage and return discipline will inevitably narrow the company’s creative aperture. We expect to see fewer high-risk AAA bets and more investment in live-service expansion, automation, and monetization systems that extend existing franchises. Innovation inside EA will become more about process than possibility. Genuine creative experimentation will likely migrate to independent studios and startups.
For venture investors, this deal opens multiple lanes of opportunity. As major publishers move towards predictability, they leave open space for creative risk-taking and technical innovation. That vacuum is fertile ground for new companies, from AI-powered content and distribution tools to next-generation studios redefining player agency and storytelling. For us at TIRTA, the opportunity isn’t simply to back the next great game; it’s to finance the new infrastructure of interactive entertainment, namely, the software, systems, and platforms that will shape how games are made, distributed, and experienced in the decade ahead.
The buyers of EA paid a rich price, roughly seven times sales and twenty times EBITDA. We believe that these valuations will force consolidators to seek earnings growth through acquisitions, creating natural exit paths for venture-backed studios, infrastructure, and AI-tool companies. When firms like EA face limited options for organic growth they will have to turn to bolt-on M&A to make their private equity math work. So small, high-growth startups with proven traction in development efficiency, community engagement, or monetization technology naturally become prime targets. The ripple effect is clear: as capital concentrates at the top, it must eventually flow downward to fuel innovation, and that flow creates opportunities for early investors positioned in the right parts of the value chain.
At the same time, as EA and its peers double down on stability, we’ll see a new generation of creative founders spin out to build leaner, AI-native studios. These are exactly the kind of teams that drive venture returns. History shows that every wave of consolidation sparks a wave of creation. The constraints of corporate ownership often inspire rebellion and reinvention, and these smaller, nimbler studios will use generative and procedural AI to build faster, cheaper, and more imaginatively. For early-stage investors, that’s the sweet spot: Small teams with scalable tech can now do what once required hundreds of developers with an established publisher.
The EA deal also underscores gaming’s institutional maturity. That’s a good thing for the industry. Sovereign and private-equity investors now view interactive entertainment as enduring infrastructure, one that is less a hit-driven business than a set of global, recurring-revenue ecosystems. The entry of long-duration capital from pension funds, sovereign wealth, and large buyout firms marks gaming’s graduation into a durable asset class alongside enterprise software and media IP. For venture investors, that validates the downstream demand for innovation and establishes a clear line from startup creation to institutional-scale outcomes.
With one fewer pure-play public publisher, we expect the public-market appetite for interactive entertainment to rise. EA’s exit from the public markets limits both retail and institutional access to the category, creating scarcity value. Over time, that gap will likely draw investors toward the next generation of IPOs, which we see as companies operating at the intersection of gaming, AI, and the creator economy. For TIRTA, that improves our outlook: as capital consolidates at the top, the market’s hunger for fresh, growth-oriented companies like those we invest in only grows stronger.
PIF, Silver Lake and Affinity’s massive bet on EA also reinforces our confidence in the future of the gaming industry. Despite recent headlines over studios downsizing, we believe that growth (and profitability) will only accelerate in the coming years as the industry embraces a leaner, more productive way of creating games. More importantly, we are seeing early signs of category expansion - from AI NPCs and companions to generative, playable movies - new ways of delighting consumers that’s made possible with the advent of artificial intelligence.
EA’s take-private isn’t the end of an era; it’s a rebalancing. This is how gaming evolves: consolidation at the top, experimentation at the edges. And it’s at those edges where the most original ideas will emerge, where new studios will be born, and where TIRTA is fully focused.
Below, our perspective:
Creative flexibility with financial pressure
Going private gives EA more creative flexibility. Without the constant noise of quarterly earnings and the pressure to hit short-term metrics at the expense of long-term success, the company can shift toward a longer-term strategy while investing in new technology. Private equity and sovereign investors bring their own form of discipline, with a fierce focus on returns.
The EA deal includes about $20B of debt, meaning EA must maintain steady operating cash flow for years to stay within comfortable leverage ratios. This shifts pressure from hitting quarterly revenue targets to ensuring predictable profitability and payback windows. This shouldn’t kill innovation, but it will redirect it. Instead of funding five-to-eight year, large-budget AAA bets, EA may focus on innovations that expand existing franchises more efficiently through AI-assisted content generation, smarter personalization, live-ops expansion and automation, and monetization systems that boost player LTV.
From a venture standpoint, this creates new opportunities. As large studios operate more like leveraged tech platforms, we expect that demand for infrastructure such as AI content tools, analytics layers, and creator pipelines will grow, creating a demand for innovation from the games themselves toward the broader ecosystem.
A portfolio built for consistency, not chaos
EA’s portfolio is already built around stability. FIFA, Madden, Apex, and Sims aren’t one-off releases; they’re live-service juggernauts that evolve over years through constant updates, events, and player-driven content and marketing.
Under private ownership, the focus on predictable ecosystems will only intensify. We’ll likely see EA build a more connected ecosystem between franchises. This could look similar to what Blizzard has rolled out across World of Warcraft, Call of Duty: Warzone, and Overwatch. EA will likely take less creative risks and accelerate the trend among large publishers to release fewer, larger, well-established franchises, leaving the door open for more innovative and creative games from nimble new entrants.
We also expect EA to double down on AI R&D, including procedural environments, AI-driven animation, player behavior modeling, and more. These aren’t flashy games but can improve development efficiency and scale.
We believe that innovation at incumbents will become operational, not experimental. The creative risk-taking that once happened inside EA is now happening outside it, in startups, new studios, and independent creators who can afford to be bold.
High multiples at the top create pressure — and opportunity — further down the stack
At 7x sales and roughly 20x EBITDA, it’s difficult for private equity math to pencil out without assuming a steady stream of bolt-on acquisitions and aggressive operational synergies. Those multiples leave little room for multiple expansion or leverage-driven returns, forcing buyers to rely on inorganic growth, cost reduction, and cross-portfolio integration to achieve target IRRs. That dynamic, in turn, creates fertile exit opportunities for early-stage investors like TIRTA. As consolidators hunt for growth through acquisition, they’ll increasingly look to venture-backed studios, tools, and infrastructure companies to fill strategic gaps. High entry valuations at the top of the stack often cascade into healthy liquidity events further down it.
The ripple effect: more room for new creators
Almost every major consolidation in gaming history sparks a creative exodus. When large publishers reorganize or tighten portfolios, top developers leave to start something new. This is how studios such as Respawn, Moon Studios, and Larian came to exist. The same pattern may very well follow here.
As EA prioritizes its core franchises, we’ll see senior developers spin out, taking their teams and experience with them. They will form smaller, more agile studios that build faster, leaner, and more daring games, using the latest technologies. Many will adopt AI-native workflows to prototype worlds, characters, and narratives at a fraction of the traditional cost while improving overall quality.
For VCs investing in gaming-related startups, this represents a potential pocket of opportunity. The “AAA-lite” and midcore studios forming today aren’t trying to compete head-on with EA, they’re building new types of experiences for a generation of players who value creativity, interaction, and community more than brand legacy and dated gameplay.
In that sense, EA’s take-private might unintentionally accelerate innovation across the broader industry. As big companies optimize for stability, small teams rediscover what it means to be creative and prioritize the consumer, the player.
A new phase for gaming capital
There’s a bigger financial story here – one that validates our core thesis: The fact that sovereign and global private equity are willing to deploy more than $50B into a single gaming company (the largest-ever private equity buyout) shows just how much the sector has matured. Interactive entertainment is no longer treated like a volatile consumer business – it’s viewed as long-term infrastructure.
That shift has ripple effects. More institutional capital means new liquidity paths for gaming companies – not just IPOs and strategic acquisitions, but also sponsor-led take-privates and recapitalizations. For venture investors, that expands the exit landscape. For LPs, it signals gaming’s arrival as a durable growth category, not a cyclical one. With EA going private, one of the last major pure-play public publishers disappears, leaving retail investors with fewer ways to gain exposure to interactive entertainment. That scarcity increases long-term demand for future IPOs — particularly for companies that define new categories in gaming, creator tools, and AI-driven content. For venture funds like TIRTA, that dynamic strengthens the eventual exit path as the public markets look to rebuild exposure to the sector. This deal also reinforces how important strategic capital has become for gaming. Sovereign funds, private equity, and global tech investors are now driving the biggest moves in the space. For early-stage investors and founders, this means the capital flow in gaming is deepening and becoming more specialized. There’s now real continuity between seed-stage innovation and institutional-scale outcomes - a very healthy sign for the industry’s maturity.
