Recently saw the news of Hsieh Meng-kung and Mango PI establishing "Hsiao Nan Capital".



As a player and someone who has been researching the gaming industry for a long time, I feel particularly strong about this matter.

Taiwan has almost no venture capital specifically investing in games, and even fewer like Xiao Nan Capital, which did not start from market reports or financial models, but because of a game - "The Legend of the Living Hero."

1. From "The Adventures of the Hero" to Capital Action
I can fully understand Hsieh Meng-kung's "digital impotence"—that kind of fatigue where you love playing games yet can't muster the energy. It isn't until you encounter a work that makes you forget to sleep and eat that you remember the charm of gaming.

He did not hold a meeting to evaluate ROI, nor did he conduct due diligence, but instead directly messaged the team for funding. It is very romantic for players, but quite rare for the industry.

2. The Long-term Value of the Evergreen Fund
Xiao Nan Capital adopts the Evergreen Fund model, which does not have the 7-10 year exit pressure, allowing it to run long-term with the team.

As a player, I know this is the structure most needed in the gaming industry—many excellent works take 4-6 years to complete, and short-term returns only pressure teams to launch early or cut content.

3. The Funding Dilemma of Taiwanese Games
The data from the National Development Council is very direct: 88% of independent games operate on their own funds, with less than 4% receiving venture capital. Behind this are three structural issues:

✅Investors do not understand the game
✅The team is not accustomed to fundraising.
✅The market does not believe in game investment

This has forced many capable teams to compromise or even give up due to funding gaps.

4. Why now
I agree with Hsieh Meng-kung's statement that "I smell the scent of takeoff."
AI tools have already been able to reduce development costs in art, level design, narrative, etc., lowering the survival line for small and medium-sized teams.
If capital enters at this moment to help the team fully develop the game, rather than cutting half of the content just to survive, this is an opportunity for a structural turnaround.

5. Investment Strategies and Challenges
The first step is to find Taiwanese single-player game teams on Steam, as this indicates the potential to enter the global market.

The challenges are also very clear: the market is small, the targets are scarce, and making the wrong choice will waste resources.

6. Comparative Case: Yujun Aoding and Dayu Technology Migration
If we put Xiaonan Capital into the context of game development in Taiwan, we can see another side.

In the past, "Yu Jun Ao Ding" relied on agency and market operations to quickly advance overseas issuance, but this model is essentially capital-driven + issuance-oriented, with limited support for the research and development side.

Although "Dayou" was once a representative of Taiwan's self-developed strength, it has faced the outflow of technology and R&D talent over the past decade, with some core R&D even moving to the other side or being outsourced, resulting in the IP still existing, but local technology gradually being lost.

These two cases reflect two long-standing issues in Taiwan's gaming industry:
The gap between capital and R&D - when there is capital, it is mostly used for agency, issuance, or short-term projects, with very few long-term bets on the R&D side.

Technology outflow - the lack of stable investment and industry support has led to the talent being attracted to markets with more resources, resulting in technology moving out as well.

If Xiao Nan Capital can persist in the long run and focus on research and development, it may be able to break the vicious cycle of "agents making quick money while R&D cannot sustain itself," and there is also a chance to reduce the pace of technology outflow.

7. My Point of View
I don't think Xiao Nan Capital will immediately invest in the next 3A blockbuster, but it might establish a cycle:

Local capital is willing to trust local teams for the long term → The team supports entering the global market → More capital comes in → The industry's confidence becomes stronger.

For me, this is not just news about "a new venture capital company", but a signal for the gaming industry in Taiwan:

Romance is romance, but as long as this romance has discipline, selection, and patience, it has the potential to become a turning point for the industry—repairing the structural problems left by Yu Jun, Ao Ding, and Da Yu from the "R&D end."
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