Hiro Advisory turns The Chinese Room and Bulkhead independence into a VC-to-advisor blueprint
Summary
Hiro Capital launched Hiro Advisory 18 months ago to structure studio spin-offs from large corporates during the industry's consolidation-to-fragmentation shift
The division engineered two management buyouts: The Chinese Room from Sumo Group and Bulkhead Interactive from Tencent
Both returned British studios to independent British control using the same playbook: identify a deprioritized asset, intervene, negotiate exit
"It's an opportune time for us as advisors"
01
Hiro Advisory repurposes VC deal infrastructure for studio exits
Founded 18 months ago by Spike Laurie (Hiro Capital partner) and Mike McGarvey (ex-Eidos president/CEO/COO, 30+ year career)
The division converts Hiro Capital's VC relationships into advisory mandates rather than deploying its own capital
Market thesis: consolidation has given way to fragmentation, surfacing stranded studios misaligned within large owners
"We're starting to see a bunch of great talent starting to leave these larger corporations and form new studios"
02
Two spin-offs, different triggers, shared structure
The Chinese Room was mid-sale to an unnamed buyer when an industry contact flagged the deal to Laurie as troubled
Hiro Advisory redirected the outcome toward full independence from Sumo Group
"We could see what a really good outcome for The Chinese Room would look like - that's working with management, Ed Daly, and the team there, and saying that we should get them out of Sumo and they should be an independent business again"
Bulkhead lost focus inside Tencent's portfolio after the post-COVID spending spree left it undersized next to Splash Damage
"That shifting strategy with Tencent particularly provided some opportunities for us to come in and ask how we can help both them and Bulkhead create a new structure that works"
Shared pattern: large owner deprioritizes a smaller studio, creating a negotiated exit window for an informed advisor
03
Europe attracts concentrated deal flow as US shuts out Asian capital
Hiro's founding thesis since 2019: European studios generate world-class IP, but ownership migrates to US or Chinese acquirers
"What happens is American or Chinese companies come along, acquire a company, publish their game and take the rights? Wouldn't it be great if that IP could grow to a much bigger scale in the UK or Europe, where the talent is?"
US restrictions on Chinese investment now funnel Asian gaming M&A exclusively toward Europe
"Europe is the only market they have to access for M&A and investment now in the games space, outside of Asia"
Lower costs versus North America further concentrate inbound interest where Hiro Advisory operates
04
Deal structures have tightened into a buyer's market
Laurie describes the current environment plainly: "It's a buyer's market now"
Large upfront dev checks are disappearing in favor of phased prototyping agreements demanding earlier execution proof
"The days of securing $25 million and then hoping to hit the milestones are something in the past"
Studios must now demonstrate unique genre expertise, proprietary IP, or technology to attract capital
Early audience validation is now prerequisite: "What can developers show about what they want to create that really demonstrates that the audience is there" - Spike Laurie, partner, Hiro Advisory
05
PE-backed aggregators are forming as a new buyer class
McGarvey identifies veteran-led companies backed by private equity forming now with mandates to aggregate mid-market IP and studios
"We will see a new wave of companies that haven't been in the market enter with a plan to aggregate IP and studios, and leverage the management expertise that private equity firms partner with to create a mid-market publishing business"
Publishers are returning to fund games after years of retreat, per Laurie
Hiro Advisory is optimistic about the next 12 months, but only for studios demonstrating unique assets and early validation
Events
Companies
Games
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Locations
Europe
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