Column: L.A.'s Video Game Industry Becomes a Safe Haven in Times of Uncertainty

Xinjie Ma
Xinjie Ma is a co-founder of rct studio, a next-generation interactive entertainment company harnessing the latest in AI to offer immersive VR experiences. She jointly founded rct studio with other former members of the Raven Tech team, which was acquired by Baidu in 2017. While at Baidu, Ma headed marketing for the company’s hardware division. Specifically, she assisted with bringing Baidu’s smart speaker to market and achieving best-seller status. Prior to her role at Raven Tech, she served as a brand designer at Studio Output, a digital-first design agency in London. Ms. Ma holds a Bachelor's degree from the University of Arts London. For her work designing consumer technology user interfaces and marketing, she was recognized among the 2020 Forbes 30 Under 30 for both Asia and China.
Column: L.A.'s Video Game Industry Becomes a Safe Haven in Times of Uncertainty

It's hard to believe that residents across vast areas of the U.S. are about to enter their third month of quarantine as a result of COVID-19. With millions of businesses forced into complete shutdown during these unprecedented times, there have been few, if any, positive outlooks for any industry.

But hidden amongst dispirited stories across hospitality, real estate, retail and many other markets, there are glimmers of hope for industries that this crisis may actually be a catalyst for. Gaming is undoubtedly one of the markets seeing an uplift during the pandemic.


Xinjie Ma is a co-founder of rct studio.

According to Verizon, video game internet traffic is up 75%, while 95% of the country shelters at home. Meanwhile, Activision Blizzard, one of the gaming industry's largest holding companies, has seen its stock go up around 10% so far in 2020, while the S&P 500 has dropped around 15%.

Well over half of Americans are gamers and during this crisis, which is taking as much of a mental toll as a physical one, there is no better medium for escaping our current reality. However, the amount of time on consumers' hands is increasing their desire for experiences that extend beyond the status quo.

A rct studio survey of 1,000 U.S. consumers found that right around 1-in-3 people are bored of the same entertainment options during the quarantine and are searching out new virtual experiences as they shelter at home. In this sense, gaming will likely be the gateway during this crisis to new VR experiences. In doing so, it may finally bring VR mainstream. Here's three reasons why I think that will happen.

Today's Needs Are Immersing Consumers in VR for the First Time

While the percentage of VR gamers continues to only hover in single-digit percentages, the crisis has shifted the use of VR technology from a nice-to-try to a need-to-have. Can't access your favorite gym? No worries, you can access a better workout with your Oculus Quest.

With movie theatres shuttered, theme parks closed and concert halls muted, it turns out VR is one of the few technologies that can keep the entertainment industry relevant in these trying times. Our own research shows that the use of AR and VR is up 49% during the pandemic. Additionally, the latest Steam data shows over one million active VR users in March alone.

Through their headsets, consumers can embark on exhilarating journeys that may not even be possible in post-COVID-19 times. Whether it's taking in the sites at Machu Picchu or diving into the action-packed survival horror game Half-Life, the relief experienced through VR right now from societal anxieties is enormous.

And for developers of VR headsets, supply is buckling under this unprecedented demand. Devices like the Oculus Quest — which retails between $399.99 and $499.99 — have become virtually impossible to buy without paying a huge markup. These prices will likely continue to rise the further the quarantine is extended and consumers' appetite for novel forms of entertainment grows.

If interacting with our physical communities continues to be a challenge as we respond to COVID-19, we shouldn't expect any of these VR gaming needs or demands to dwindle. More than 7 in 10 online gamers in the UK and U.S. have noted they feel part of a gaming community. Never has this community been as critical as consumers seek out some connection amid lockdown and separation.

New virtual landscapes will offer even more opportunities for connection that feels human. Next-generation VR environments are already being built with new ways for players to communicate and collectively alter storylines in real-time while they explore virtual worlds.

Technology is Finally Here to Build Lifelike Environments At Scale

The VR industry has already had numerous false starts. Many of these problems can be singularly traced back to not combining proper hardware with engaging content. Getting one right has proved difficult, succeeding with both has been impossible. Furthermore, the promise of immersive VR experiences is limitless choice and opportunity. A new world to escape within.

The problem with the first few generations of VR has been the restraints caused by the sloppy intersection of hardware and software. In a VR environment not too long ago, I walked into a wooden cabin during a summer afternoon in Austria. On the surface, the situation existed. However, if you stared at anything in the cabin for more than 10 seconds, you would start to feel its loss of reality. Not so different than slowly shaking out of a dream. Everything in the room, even the room itself, was modeled in such an inadequate way. The only way to accept the experience as reality was to believe that our world is now only seen in 960X1080.

Fortunately, we're at a point where artificial intelligence advancements can address these issues. Deep and reinforcement learning can lessen the budgets and lengthy timeframes needed for developing vast virtual environments, while also solving limitations of pre-mapped narrative paths that existed in first-generation VR. We can even render these environments in real-time without needing to rewrite any code. Just a few lines of text will do.

While gaming and VR companies have utilized AI in the past to improve gaming, we're just getting to a point where we can train machine learning models to make a sequence of decisions that result in narrative-driven AI. Imagine a not-too-distant VR world where there is no need to script every alternative for each scene in advance. Once the main storylines, character descriptions, motivations, and parameters are mapped, AI can create a seemingly endless number of experiences. And unlike the gaming environments today, every non-player character is powered by its own AI model. VR players can essentially enter into their own Westworld.

Microsoft has been gaining ground with Hololens and AR for the business world.upload.wikimedia.org


FAANG Shows An Increasing Appetite for VR & AR

As they do in almost all aspects of the technology sector, Facebook, Amazon, Apple, Netflix and Google have veto power when it comes to allowing VR to go mainstream given their chokehold on distribution. For much of the past decade, Apple and Google have been resistant to adopting usages of this technology.

Meanwhile Facebook and Microsoft, if we add the sixth biggest player in technology into the mix, have shown the most interest in becoming leaders in the fledgling market. Facebook, of course, is through its efforts with Oculus. Microsoft, on the other hand, has made the most ground with Hololens and AR for the business world.

However, the two perceived leaders in big tech are beginning to see company in VR and that is likely to increase as the crisis spotlights consumer desire for VR experiences. In April, amidst the growing pandemic, Apple has been rumored to be finalizing a deal to acquire NextVR, a virtual-reality video-streaming service for around $100M. Prior to that, details leaked in March, of a controller for an AR/VR headset that Apple may have in the works.

Netflix, the global leader in streaming content into the homes of Americans, has also started to pick up its interest in VR. Its app on the Oculus store, which allows Netflix users to watch certain content in VR. Likewise, Amazon has made VR content available for its Prime Video users with apps available for Oculus and Samsung's Gear VR.

So while Facebook has been carrying the baton for VR over the last few years it has begun to wake up the rest of the major players to virtual possibilities. While the current market downturn may force some of these companies to refocus on core businesses for the short-term, there's little doubt that these leaders also see the opportunity for VR in the new normal that awaits us on the other side of the crisis. If they all jump in the water, the VR floodgates will open.

Xinjie Ma is a co-founder of rct studio, a next-generation interactive entertainment company harnessing the latest in AI to offer immersive VR experiences. She jointly founded rct studio with other former members of the Raven Tech team, which was acquired by Baidu in 2017.

VC Giants Back LA Defense Tech Startup

🔦 Spotlight

Hello Los Angeles, and happy Friday!

Memorial Day Weekend is finally here, and it seems even PCH got the memo, just in time for those coastal drives to kick off summer, traffic jams included. Speaking of navigation, El Segundo based startup CX2 has charted its own impressive course this week, securing $31 million in a Series A round led by Point72 Ventures, with participation from Andreessen Horowitz, 8VC, and Pax Ventures, to boost its mission in electronic warfare.

Electronic warfare (EW), for those of us who aren't regulars at the Pentagon, involves the tactical use of electromagnetic energy to control the spectrum, essentially jamming or confusing enemy communications and radar systems. CX2 was founded by a diverse and experienced group: Nathan Mintz, who brings deep expertise in defense technology from previous ventures such as Epirus and Spartan; Mark Trefgarne, a software entrepreneur known for a successful acquisition by Meta; Lee Thompson, an expert RF engineer previously with SpaceX; and Porter Smith, whose practical insights stem from his background as a U.S. Army helicopter pilot and subsequent experience as an investor.

The new funds will help CX2 scale its team and accelerate the development of advanced tools, including autonomous drones and specialized signals-intelligence systems. These innovations promise precision interference without collateral disruptions, addressing critical defense capability gaps identified by industry experts.

With tensions escalating globally, there's big demand for next-gen defense solutions, and CX2’s technology positions them as a major player in shaping future electronic battlespaces.

Dive deeper into the details and check out this week's roundup of LA’s venture deals and acquisitions below.

Here's to a weekend filled with sunshine, clear roads (fingers crossed), and tech that keeps pushing boundaries!

🤝 Venture Deals

LA Companies

  • Axle Health, founded by former Uber execs, raised $10M in Gaa Series A round led by F-Prime Capital to expand its AI-powered logistics platform for home healthcare. The software streamlines scheduling, routing, and patient engagement, and is now used by major health systems and agencies across all 50 states. The company has seen 10x revenue growth over the past year. - learn more
  • Promise, a generative AI studio based in Venice, California, has secured a strategic investment from Google's AI Futures Fund, alongside contributions from The North Road Company, and others. This funding will support Promise's integration of advanced AI technologies into its proprietary production platform, MUSE, and facilitate collaborations with Google's DeepMind researchers to push the boundaries of AI-driven storytelling. The studio plans to commence production on its first feature-length film this year, marking a significant step in its mission to blend human creativity with cutting-edge AI tools in filmmaking. - learn more
  • Final Boss Sour, a Los Angeles-based snack brand blending gaming nostalgia with sour fruit treats, raised $4M in a Seed 2 round. The funds will go toward expanding distribution, product innovation, and creator partnerships. The company also launched a new tropical sampler box featuring real fruit flavors like mango, pineapple, and kiwi. - learn more
  • VUZ, a UAE-based immersive media platform, raised $12M in a pre-Series C round led by the International Finance Corporation with participation from CrossWork.us, among others, to fuel global expansion and enhance its AI-powered streaming experiences. The funding brings its total raised to over $35M and will support growth across the U.S., Africa, Asia, and the Middle East. VUZ, now EBITDA positive, hosts 30,000+ hours of immersive content and has exclusive deals with leagues like LaLiga and Serie A. - learn more

      LA Venture Funds

      • B Capital co-led Data Sutram's $9M Series A funding round, supporting the company's expansion of its AI-driven fraud detection platform into sectors like cryptocurrency, gaming, and insurance. The investment will also aid in strengthening Data Sutram's AI capabilities and facilitating its international growth into markets such as the Middle East and Southeast Asia. - learn more
      • Upfront Ventures led Clair's $23.2M Series B funding round, reinforcing its commitment to the fintech startup it initially backed during the seed stage. Clair provides embedded earned wage access (EWA) solutions, allowing employees to access their earnings instantly through integrations with payroll and workforce management platforms like Gusto and TriNet. The new funding will support Clair's expansion across more than 29,000 business locations and enhance its partnerships with additional HR and payroll providers. - learn more
      • Rebel Fund participated in Keep's recent C$108M funding round, supporting the Toronto-based fintech's mission to modernize small business banking in Canada. Keep offers an all-in-one financial platform tailored to Canadian small businesses, addressing challenges like outdated systems and limited access to credit. The funding will help Keep expand its services, which include business credit cards, expense tracking, and multi-currency accounts, to more entrepreneurs across the country. - learn more
      • MarcyPen Capital Partners participated in SparkCharge's $30.5M funding round, supporting the expansion of its mobile, off-grid EV charging services across North America. This investment will help SparkCharge scale its Charging-as-a-Service model, enabling fleets to adopt electric vehicles without the need for permanent infrastructure. - learn more
      • Matter Venture Partners participated in Biostate AI's $12M Series A funding round, supporting the Houston-based startup's mission to revolutionize molecular diagnostics through affordable RNA sequencing and generative AI. Biostate AI aims to build a comprehensive RNA sequencing dataset to train AI models capable of predicting disease progression and treatment responses, thereby advancing precision medicine. - learn more
      • Prototype Capital participated in Sensmore's €6.5M funding round, supporting the German robotics startup's mission to retrofit heavy machinery with AI-driven automation. Sensmore's technology enables real-time automation of complex tasks in industries like construction and mining. The investment will help expand Sensmore's Physical AI platform, enhancing productivity and safety in industrial operations. - learn more

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            Forget Traffic: Air Taxis Are Coming to LA28

            🔦 Spotlight

            Hello Los Angeles,

            The future just got a flight plan, and it includes skipping traffic for the 2028 Olympics.

            Image Source: Archer

            This week, Santa Clara-based Archer Aviation made headlines (and history) by being named the official air taxi provider for the LA28 Olympic and Paralympic Games and Team USA. Yes, that means electric vertical takeoff and landing (eVTOL) aircraft will be soaring above the gridlocked freeways, whisking athletes, officials, and perhaps a few lucky spectators through LA’s famously congested skies.

            This isn’t just a flashy PR stunt (although, let’s be honest, it is peak LA). It’s a strategic move to redefine how we move around the city, especially during one of the largest global events ever to hit Southern California. In partnership with the LA28 Organizing Committee, Archer plans to deploy its Midnight aircraft, an all-electric air taxi that promises ultra-quiet, zero-emission rides from point A to point OMG-I’m-not-in-traffic.

            While Archer is headquartered in Santa Clara, it has deep ties to the LA tech ecosystem. United Airlines, one of its major partners, has previously announced plans to establish eVTOL routes between downtown and LAX. Pair that with this new Olympic milestone and we’re looking at LA as ground zero for what could become the world’s first large-scale urban air mobility network.

            Of course, there are still regulatory hurdles, infrastructure needs, and airspace coordination issues to iron out before we can book our sky ride to the Coliseum. But make no mistake, this announcement is a moonshot moment for LA tech, mobility, and the future of Olympic-scale transportation.

            We’ll be keeping our feet on the ground (for now), but we’ll definitely be watching the skies.

            Catch you next week ✈️✨

            🤝 Venture Deals

            LA Companies

            • Akido, a Los Angeles-based health tech company, has raised $60M in Series B funding led by Oak HC/FT to expand the reach of its AI-powered clinical tool, ScopeAI. The platform assists physicians by generating clinical questions, documenting patient responses, and drafting care plans in real time. The funding will help Akido scale its technology across its provider network and expand into new markets like New York City. - learn more
            • Reflect Orbital, a startup developing satellite-based sunlight delivery systems, has raised $20M in a Series A round led by Lux Capital. The company plans to use the funding to expand its team, scale operations, and prepare for its first satellite launch in Spring 2026. Reflect Orbital’s technology aims to reflect sunlight from space to Earth, enabling nighttime illumination for energy, remote operations, and civil infrastructure. - learn more
            • Rolli, an AI-powered platform designed to support fact-based journalism, has received an investment from the NYU Impact Investment Fund (NIIF). This marks NIIF's first investment in a media company, underscoring its commitment to backing ventures that enhance democratic institutions through innovation. Rolli's platform connects journalists with a diverse range of vetted experts, aiming to streamline news production and promote equitable representation in media. The funding will help Rolli expand its reach and further develop tools that empower journalists to produce accurate and impactful reporting. - learn more

              LA Venture Funds

              • CIV and Wonder Ventures participated in The Nuclear Company’s $46.3M Series A round to support its plan to develop large-scale nuclear reactor sites across the U.S. CIV co-founder Patrick Maloney also co-founded the company, which is taking a “design-once, build-many” approach to modernize nuclear construction. The funding will help meet rising energy demands from sectors like AI and data centers. - learn more
              • WndrCo participated in Cartwheel's recent $10M funding round. Cartwheel is an AI-driven 3D animation startup that enables creators to generate rigged animations from text prompts and videos. The funding will support Cartwheel's efforts to simplify and democratize 3D animation production. - learn more
              • Crosscut Ventures participated in Solestial's $17M Series A funding round, which aims to scale the company's production of radiation-hardened, self-healing silicon solar panels for space applications. Solestial plans to increase its manufacturing capacity to 1 megawatt per year, matching the combined annual output of all U.S. and EU III-V space solar companies. This investment supports the growing demand for cost-effective, high-performance power systems in the expanding space industry. - learn more
              • Upfront Ventures participated in Tern's $13M Series A funding round, adding to its earlier $4M seed investment in the travel tech startup. Tern offers an all-in-one platform for travel advisors, streamlining itinerary building, CRM, and commission tracking. The new funding will help Tern enhance its product offerings and expand support for its growing user base. - learn more
              • Dangerous Ventures participated in Verdi's $6.5M seed funding round, supporting the Vancouver-based agtech startup's mission to modernize farm irrigation systems through AI-powered automation. Verdi's technology retrofits existing infrastructure, enabling precise, row-level control of irrigation, which helps farmers reduce water usage and labor costs. The investment aligns with Dangerous Ventures' focus on climate resilience and sustainable food systems. - learn more
              • Pinegrove Capital Partners participated in Saildrone's recent $60M funding round, supporting the company's expansion of its autonomous maritime surveillance technology into Europe. The investment will aid in deploying Saildrone's uncrewed surface vehicles for enhanced maritime security and defense applications across European waters. - learn more
              • Starburst Ventures participated in a €2 million seed funding round for French defense tech startup Alta Ares, which specializes in embedded AI and MLOps solutions for military applications. Alta Ares' technologies, including the Gamma platform for real-time video analysis and the Ulixes platform for managing operational data lifecycles, operate autonomously without the need for internet or cloud connectivity. This funding will support the industrialization of these solutions and expand their deployment across European armed forces and NATO allies. - learn more
              • Nomad Ventures participated in Stackpack’s recent $6.3M seed funding round, supporting the company's mission to streamline vendor management for modern businesses. Stackpack offers an AI-driven platform that provides finance and IT teams with a centralized system to oversee third-party vendors, manage renewals, and mitigate compliance risks. The investment will enable Stackpack to expand its operations, enhance its platform, and introduce new features like the "Requests & Approvals" tool, aimed at simplifying vendor onboarding and procurement processes. - learn more
              • Tachyon Ventures participated in Stylus Medicine's $85M Series A funding round, supporting the biotech company's development of in vivo genetic medicines. Stylus aims to simplify gene editing by enabling precise, durable CAR-T therapies delivered directly inside the body, potentially transforming treatment for various diseases. - learn more
              • Up.Partners led a $28M Series A funding round for WakeCap, a construction tech startup that uses sensor-powered platforms to deliver real-time workforce visibility and site intelligence. WakeCap’s system tracks labor hours, safety, and productivity across large-scale projects, with over 150 million labor hours already monitored. The new funding will help the company expand globally, enhance product features, and grow its engineering and customer success teams. - learn more


                LA Exits

                • MediaPlatform, a leading provider of enterprise video solutions, has been acquired by Brandlive, a company renowned for bringing the magic of television to business communications. This strategic acquisition aims to enhance Brandlive's capabilities in delivering high-scale, reliable CEO town halls and global corporate broadcasts. By integrating MediaPlatform's robust infrastructure with Brandlive's creative video tools and production services, the combined entity seeks to offer more engaging and authentic internal content experiences for enterprise clients. - learn more
                • RHQ Creative, a studio renowned for its competitive Fortnite training maps, has been acquired by JOGO, the game development company founded by popular creator Typical Gamer (Andre Rebelo). This acquisition aims to bolster JOGO's expansion into the competitive gaming arena by integrating RHQ's expertise in skill-building and training map design. RHQ Creative, co-founded by Fortnite pro Quinn Gannon (RichHomieQuinn) and Sean Lugo, has achieved over 20 million map visits and 200 million hours of playtime. The deal includes full ownership of RHQ's map catalog and the addition of its team to JOGO, enhancing the company's capabilities in developing high-quality, competitive gaming experiences. - learn more

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                    This LA Startup Wants to Make It Rain and Just Raised $25M to Do It

                    🔦 Spotlight

                    Hello LA!

                    While most tech headlines are busy chasing AI chatbots and flying taxis, one startup in El Segundo is aiming a little higher. Literally.

                    Rainmaker just secured$25 million in Series A funding to expand its cloud-seeding drone technology. The round was led by Lowercarbon Capital, with participation from Starship Ventures, 1517 Fund, Long Journey Ventures, Naval Ravikant, and others.

                    Their idea is simple but urgent. Instead of relying on old-school aircraft to spray rain-making particles across the sky, Rainmaker uses AI-powered drones that find and seed clouds with pinpoint accuracy. It is faster, more affordable, and could reshape how regions fight back against droughts.

                    California's ongoing water struggles have made it clear that simply "saving" water is not enough. Cities and entire economies need new tools to create it. Rainmaker plans to use the funding to grow its fleet, invest in atmospheric science, and expand commercial partnerships with utilities and governments searching for solutions.

                    Bigger picture, Rainmaker is part of a growing shift in LA's tech ecosystem. While software remains dominant, more investors and founders are quietly betting on "hard tech" that addresses real-world problems like water, energy, and infrastructure.

                    It is not just about apps anymore. It is about survival tech.

                    With the skies getting hotter and the reservoirs getting lower, the next great tech export out of LA might not be entertainment or social media. It could be rain.

                    Stay tuned…

                    🤝 Venture Deals

                    LA Companies

                      • SimpleClosure, a Santa Monica-based startup that automates the business shutdown process, has raised a $15M Series A funding round led by TTV Capital. The company, which launched publicly in late 2023, helps startups and businesses navigate legal, regulatory, and compliance hurdles when closing down, using AI to streamline paperwork and communications. The new funding will support SimpleClosure’s platform growth and product expansion, as rising economic pressures create heightened demand for efficient dissolution solutions. - learn more

                        LA Venture Funds

                        • Alexandria Venture Investments participated in Haya Therapeutics’ $65M Series A funding round. Haya Therapeutics, which is developing precision RNA-guided medicines for chronic and age-related diseases, will use the capital to advance its lead therapeutic programs targeting heart failure and fibrosis. The company plans to expand its pipeline, invest in its discovery platform, and grow its team to accelerate clinical development. - learn more
                        • Griffin Gaming Partners led a $7M funding round for Fuse Games, a gaming studio focused on developing new original IP. Fuse Games, founded by industry veterans with experience at major gaming companies, plans to use the funds to accelerate production of its first title and expand its team as it builds ambitious new gaming experiences. - learn more
                        • Shamrock Capital has made a strategic growth investment in Neocol, a leading consulting platform that specializes in sales and AI-driven software solutions for subscription businesses. Neocol, which helps companies optimize revenue operations and digital transformations, plans to use the investment to accelerate its growth, expand its services, and further strengthen its leadership position in the Salesforce ecosystem. - learn more
                        • Trust Fund participated in a $7.2M seed funding round for Agree.com, an all-in-one platform that combines e-signature and integrated payments, aiming to streamline and speed up service agreements. The company plans to use the new capital to grow its engineering team, expand integrations, and enhance payment capabilities to help service providers close deals faster. - learn more
                        • Hyperlink Ventures participated in Orca AI’s $72.5M funding round. Orca AI, headquartered in London, develops AI-based navigation and collision-avoidance solutions to improve safety and efficiency for commercial shipping fleets. The funding will help Orca AI scale its autonomous shipping technologies, expand its team, and support global growth efforts. - learn more


                        LA Exits

                        • StoryFire, a social storytelling and video platform with over 2.5M users, has been acquired by Flashy Finance to launch a new platform called Flashy Social. The move aims to merge content creation with blockchain-powered financial tools, allowing creators to monetize through token incentives, streaming features, and community engagement. This acquisition supports Flashy Finance’s broader vision of building a cultural, creator-led financial ecosystem. - learn more
                        • Jaanuu, Inc., a Los Angeles-based medical apparel brand known for its stylish and functional scrubs, has been acquired in an asset sale by VentureOn Management, LLC. The acquisition includes substantially all of Jaanuu's assets, encompassing its intellectual property, inventory, and customer relationships. VentureOn Management plans to continue Jaanuu's operations, focusing on delivering high-quality medical apparel to healthcare professionals. - learn more
                        • Skechers has agreed to be acquired by 3G Capital in a deal valued at approximately $9.4 billion. Shareholders will receive either $63 per share in cash or $57 plus an equity unit in a new private parent company. Following the acquisition, Skechers will become privately held, maintain its Manhattan Beach headquarters, and continue to be led by its current management team. - learn more

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