Denmu is a new investment firm with $50 million to play with. The organisation was founded in 2025 by general partners Ryan You and Michael Fan, who act as the firm’s CEO and creative director, respectively. Both coming from an investment background, including some shared time at VC firm Galaxy Interactive, they felt that the financial options available to developers weren’t right for every project.
“A lot of the model is right, but games are pretty simple compared to other very capital-intensive industries,” You explains. “It’s basically equity from investors and advances from publishers. We tried to see if there was a way to provide a more scaled and efficient way to bring capital to video games and support the games we want. While equity and publisher advance work well for certain kinds of games, it doesn’t work for a lot of other titles.”
Denmu – which means ‘electric dreams’ in Japanese – is taking a longer-term view of its partnerships with developers, saying it wants to prioritise creative vision. To this end, the investment house says it wants to back ‘auteurs’, a concept that Fan takes a very broad view of, tracing etymologies to both French (an initiator) and Latin (someone who grows), as well as how it came to be known in entertainment, thanks to French filmmakers in Hollywood.
“They wanted to disassociate themselves with the past generation,” Fan explains. “The idea back then was, why should they make movies based on what the corporate studios want? Why should they make movies by checking boxes from the marketing guys? The movie should be a reflection of the artist, of the people who made it. This is what some video games should be – a reflection of the human.”
At a point in the not-so-distant past, there was a small but significant group of auteurs within game development: names like Hideo Kojima, Peter Molyneux and David Cage. Of those early-2000s AAA titans, though, only Kojima persists, and the mantle of the auteur has been picked up by the indie scene.
“Every word and concept, when it’s taken to the extreme, you lose what it initially meant,” Fan says. “It becomes perverted. That’s a perversion that we’ve also seen in the French movie scene, where the ego takes over everything. For me, an auteur doesn’t mean celebrity. It doesn’t even mean one person. Actually, in many cases – especially in video games – you see a lot of art that’s being co-authored.” Fan cites one of Denmu’s first major partnerships, with Too Kyo Games on The Hundred Line. That was a studio founded by veterans of Japanese developer Spike Chunsoft, including the creator of Danganronpa, Kazutaka Kodaka.
“A lot of people will think of Kodaka because he’s shiny, he’s flamboyant, he’s lovely, he’s a really good friend,” Fan continues. “But if you truly want to understand this game, you have to understand who [Zero Escape creator] Kotaro Uchikoshi is. If you don’t understand who that is, you don’t understand why there are 100 different endings or why the game turned out like this. At the same time, the music, the characters, and the design are also being made by all the different individuals on the team. Too Kyo Games isn’t just Kodaka. There are four or five founders. This is important. When we say we want to put the artist at the centre and look for the auteur, it clearly doesn’t mean looking for some celebrity and making them a mascot or something. It’s way beyond that.”
“When we say we want to look for the auteur, it doesn’t mean looking for some celebrity and making them a mascot or something. It’s way beyond that.”
At the moment, Denmu has $50 million in funding to distribute to suitable creatives. The company says that the average investment is between $1 million and $5 million, though there are some projects that might require closer to $10 million.
A lot of the investment that Denmu makes is co-financing, meaning it is one of a few companies chipping in for a project. That’s also how the organisation has managed to end up with a AAA game in its stable, though the team isn’t able to share any details aside that the project as a “big IP holder”.
“That’s in the $50m-to-$100m range,” You explains. “But they don’t need all the money to come from us. We rarely fund the entire budget of a game. We don’t think that’s the right way. In films, you often have a lot of different parties financing a movie. That’s probably good for the industry, since it’s not relying on one entity to do it.
“That also means we probably aren’t going to fund every AAA game, especially if it is from scratch and they need a lot of money. We see more people doing what we are doing, but a little bit differently. I am pretty optimistic.”
In addition to being able to stump up cash to help fund projects, Denmu’s founders believe the company’s biggest value-add is what it calls an East-West bridge, giving access to both games ecosystems. Both You and Fan were born in China, with Fan growing up in France, and both have spent most of their working years in the United States.
“We do a lot of regional partnerships and marketing for all the games we do,” You says. “Back to The Hundred Line – probably the first video that the studio put out about the game before launch, has our logo on it because we helped them produce that and partnered with the platforms in China and the West to help them to get it out. We had those resources. That’s the value-add we provide, in addition to our money.”
“We do a lot of Chinese partnerships and marketing for all the games we do”
At the moment, most of the games that Denmu has in its portfolio are from Asia, but among them are games that have Asian styling but are made by Western developers. In fact, Fan and You say that their biggest investments are with Western studios, but they are unable to talk about them yet.
Asked what the company would like the future balance of their portfolio to be, Fan says that Denmu has a ‘glocal’ approach to video games, with You saying that the firm doesn’t think about its portfolio having a “particular region fit”.
“It’s not global, it’s not local, it’s glocal,” Fan says. “That’s a global understanding of local nuances. That is what games are going to be. Video games are the biggest vehicle for culture for this and future generations. It has to be understood within a cultural context. Culture is never local and is never global; it’s always in between. When you say [the bridge] looks more East-to-West, I’d argue that’s not 100% true. Even the Japanese games we grew up playing were influenced by the West. We wouldn’t have the JRPG without American RPGs. What we are going to see is that interesting mix of different cultures.”
China is an area of particular interest is. Fan believes that the massive changes the country has seen in the last few decades is going to yield a huge wave of creative energy.
“”We’re not excited about China for the cost, or the speed or whatever. It’s because of culture. We are going to see creators from the generation that grew up in the fastest-growing society in modern history.”
“We’re not excited about China for the cost, or the speed or whatever,” he says. “It’s actually because of culture. We are going to see creators from the generation that grew up in the fastest-growing society in modern history. We are talking about a generation that grew up with bicycles everywhere, and now you have EVs everywhere. Beijing was one of the most polluted cities ever and now you have blue sky. That’s happened within 20-to-30 years. What does it do to creators and their brains? My question is, what games are they going to make that are going to be so wild and original that we have never seen them before?”
So far, Denmu has had a hand in projects including The Hundred Line: Last Defense Academy, Blue Protocol: Star Resonance, Bleach: Soul Resonance, Labyrinth of the Demon King, MotorSlice and Silly Polybeast. The company won’t comment on how well its investments have performed commercially or financially. But You does say that Denmu has already had limited partner investors “doubling down” on Denmu based on its performance to date.
“That might give you an indication,” he says. “We are very happy with that.”
The organisation is also viewing this $50 million pot as just the first step in a much larger and more ambitious plan.
“Our goal is to provide an alternative link between capital and the games industry, which is very much needed”
“$50m is not going to change the industry. This is just a prototype,” You says. “Our goal down the road is to provide an alternative link between capital and the games industry, which is very much needed. There are a lot of capital sources that are interested in games. They grew up playing video games and it’s hard for them to deploy capital if they are not in the industry. A lot of VCs left. We want to provide an alternative way for them to deploy capital to the industry, and the industry can benefit from that.”
Five years from now, You says that Denmu would like to have a “larger capital pool” to give to developers, but the firm’s ambitions go beyond simply giving out more money.
“We’d love to have customised solutions for every game,” he says. “At whatever stage you are in, whatever kind of money you need, as long as you are an auteur and are making an interesting game, we have a way to help you. We pass on a lot of deals not because we don’t like them, it just doesn’t fit with our narrow model because we have limited capital. The future plan is to develop a different model solution to meet different needs and basically become a one-stop shop for people in the games industry looking to raise capital.”
For Fan, on the more creative side of things, his aim for the company is to turn “dreams into memories”.
“The thing that makes me the happiest is going to a game jam or an event, and we’ll start talking about games, and sometimes they’ll mention games that we helped to make,” he says.
“That means the world to me. I’m already super happy and super grateful. In five years, if we can keep doing this, I’ll be super happy.”
