Hiro Advisory game funding: the spin-out playbook reshaping UK and EU studio ownership
Summary
Hiro Capital launched Hiro Advisory 18 months ago to guide studios through corporate divestitures across the UK and EU
The division facilitated two exits: The Chinese Room from Sumo Group and Bulkhead Interactive from Tencent
Both returned British-founded studios to independent, UK-controlled ownership
US regulatory restrictions on Asian investment are funneling Chinese M&A capital exclusively into Europe
"Europe is the only market they have to access for M&A and investment now in the games space, outside of Asia"
01
Two spin-outs reveal Hiro Advisory's deal structure
The Chinese Room was mid-sale to an unnamed buyer when Laurie was told the studio was "in a bit of a pickle and needed some help"
Laurie redirected toward full independence, working with studio director Ed Daly to extract the studio from Sumo Group
Bulkhead's exit had a different trigger: Tencent's post-COVID portfolio consolidation left smaller studios under-resourced
Bulkhead sat beneath Splash Damage in Tencent's structure, starved of focus against larger stablemates
"All of a sudden, they're not getting enough focus, support, and all the other things that they need as a smaller developer"
In both cases, the advisory role was to build "a new structure that works" for parent and departing studio alike
02
IP repatriation is the strategic thesis, not just financial restructuring
Hiro's 2019 founding premise: UK and EU studios generate world-class IP but cede ownership before it scales
"Wouldn't it be great if that IP could grow to a much bigger scale in the UK or Europe, where the talent is?"
Both deals were framed explicitly as British-founded studios returning to British control
Europe's lower costs versus North America and deep creative-technical talent make it the preferred inbound destination
03
US restrictions are concentrating Asian capital into European games M&A
Regulatory barriers have effectively removed North America as an M&A destination for Asian buyers in games
This structural redirection creates concentrated inbound demand in Europe that did not previously exist
Hiro Advisory is positioning to intermediate these cross-border transactions
A parallel wave of PE-backed aggregators is forming to target mid-market IP and studio roll-ups
"There are a few new companies that have been set up over the last 12 months, or are being set up, that have some industry veterans backed by private equity"
04
Funding terms have structurally shifted to a buyer's market
"It's a buyer's market now"
Milestone-gated, phased deals are replacing lump-sum commitments from the COVID era
"The days of securing $25 million and then hoping to hit the milestones are something in the past"
Studios must now show differentiated genre expertise, proprietary IP, or distinctive technology to attract capital
Early audience validation is becoming a prerequisite, not a post-funding milestone
Hiro Advisory helps studios reposition, including potential pivots, to maximize fundability before approaching capital
Events
Companies
Games
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Locations
Europe
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