Would you each introduce your company and your role?
Snow Rui: I’m president, CFO, and general counsel of Hooded Horse, a video game publisher that I co-founded in 2019 with my husband, Tim Bender, who is CEO. Our first release was in 2022. Today, we have about 40 people distributed globally. We’ve released 30 games with several of them selling over a million copies. I wear a lot of hats because we’ve bootstrapped and kept things lean; our investors are all fans, family, and friends.
Diya Sagar: Artists, Writers, and Artisans (AWA) is an independent studio that publishes graphic novels and develops them in Hollywood for film and TV. We partner with leading creators and cultural icons to bring their work to audiences. We were founded in 2018 and have published over 60 stories so far. Our best-known property is the Ultimate OZ Universe, a continuation of L. Frank Baum’s Wizard of Oz books.
As CFO, I lead finance and operations for the company, which includes fundraising, capital allocation, and strategic planning. We’re a startup, so I’m responsible for other functions too, including HR and technology initiatives.
What’s distinctive about AWA’s approach?
Sagar: It’s difficult for a creator or a publisher to make money off a graphic novel unless it’s a huge hit. Our strategy is to target stories that have potential additional pathways beyond graphic novels. So film and TV, and consumer products for which we license the IP—things like t-shirts, hats, artwork, and trading cards. We’ve thought about gaming as well as live experiences and events. The model monetizes the creative work and engages fans in different ways.
That engagement happens when customers encounter stories that resonate, which could mean seeing people like themselves represented on the page or on the screen, or seeing themes from the popular zeitgeist reflected in a compelling way. We aim to commission stories that are bold, original, and aren’t being told elsewhere.
How about Hooded Horse? What’s distinctive about your business model?
Rui: Tim and I have been gaming for a very long time. Before we ever considered starting a company, we were huge fans. Even as outsiders, we could see the problems of the industry’s dominant business model, which is what’s called a “100% recoup” model. The way that works, the publisher funds the team designing and developing the game as well as marketing and distribution costs; then when the game is released, they recoup 100% of the money they spent before the developer sees another dollar.
When publishers get first recovery, the time value of money incentivizes them to push out games quickly. While for game developers, their cash flow cuts off the moment the game enters the world and meets players—the most sensitive point in a game’s life. However good the pre-release testing is, there will be bugs to fix. There will be feedback in the form of reviews.
If developers respond, fix bugs, and keep improving the game, it makes a huge difference. Generally, they want to make fixes, but unless a game is an immediate smash hit, they have to be fundraising for their next project, so games don’t get the support they deserve. That’s a lose-lose-lose situation—fans, developers, and publishers are all hurt by that model.
Applying good economic principles like the kind taught at Yale SOM, I saw ways to better align the incentives of publishers, game developers, and players. We decided to put theory into practice and start Hooded Horse.
How does Hooded Horse align incentives?
Rui: Hooded Horse keeps a flat percentage of profits from sales. Developers see cash flow from the day the game releases—typically the majority of the revenue. They’re in a position to support the game. Players are happy, because developers are responding and improving the game.
There’s a natural alignment of developer and player—they both love when games have a long, well-supported life. We bring ourselves into that alignment by recognizing that well-supported games have a long tail financially.
Our business is built on back catalog revenue—the long tail. The more games we add to our catalog, the more cash flow we have. It’s not exactly recurring revenue, but it looks like that from a portfolio perspective.
I won’t pretend there’s only benefit and no downside. The downside is that we’re not scaling as fast as we might otherwise. It’s a conscious sacrifice to avoid being in a position where we’re choosing between our survival and our principles. We stand to lose money if the game underperforms—whereas in the traditional recoup model the publisher is more shielded from loss. But this is precisely how aligned incentives are supposed to function so that we structurally want what is best for the game.
We’ve been very vocal about our model, and that has allowed us to sign cool games even as industry newcomers. We’re seeing a gradual shift to the model, especially among indie publishers.
Sagar: We hear many of the same things in our industry. The large players take ownership of creators’ IP and have a reputation for monetizing the work of artists and writers for corporate gain first and foremost. At AWA, creators always retain a stake in their ideas. They always share in the rewards when projects succeed or move into other channels.
Despite occasional breakout hits, for the most part, the younger generations are not showing up consistently for the Marvel and DC content that Hollywood has been churning out for decades. As they come into their purchasing power, they’re tired of the superhero content of yesteryear.
What Marvel and DC have done very well is build universes and characters that can span different stories. We want to deliver those qualities, too, but we’re building them for the audience of today.
I work to understand the dream and the creative ambition before anything else.
Diya Sagar ’19
Would you give a sense of the stories that AWA is bringing to the public?
Sagar: We work across genres: horror, action, thriller, romance, fantasy, and others. We always ask, is there a gap in the market for this particular story?
Over the past year, AWA has released a collection of six graphic novels called The Protopias Collection. They’re fictional stories that stem from real-world issues. Rather than going to the extremes of utopia or dystopia, Protopias explores the choices that create a future that is better than we have today, while being achievable in the near term. Whether we are dealing with the negatives of social media, technology, environmental crises, or conflict between peoples and cultures, there are real ways for people to come together and build better futures—that’s why I found these stories so meaningful.
What about Hooded Horse?
Rui: Our market niche is strategic and tactical games. The players of these types of games want to scratch a particular itch—maybe that’s going super deep in space combat or exploring realistic squad tactics. They crave innovative gameplay, unique systems, and a lot of depth.
The first project we ever signed, Terra Invicta, has a special place in my heart. It’s set in the near future. Aliens are approaching Earth. Some people believe the aliens are friendly, while others are sure they’re not. Some argue we should be cautious without initiating hostilities. Others just want to profit off the chaos. There’s a sandbox aspect, with the player choices mirroring real-world geopolitics, which was an incredibly daring decision that the developer made. It’s wonderfully complex.
Some industry insiders felt the project was too ambitious to be realistic, but we thought the ambition made it special. And it has done really well with players.
As a CFO, what do you do that enables good creative work?
Sagar: Creativity is entirely subjective, yet my role is to be as objective as possible. It’s challenging to make decisions when the key inputs are not factual—whether a creative vision is good or not is simply someone’s opinion. It requires a different mindset than other industries.
So, I work to understand the dream and the creative ambition before anything else. Only then do the commercial opportunities come in. If I see a path that includes both creative and commercial success, then I develop the financial firepower (and guardrails) that support both the creators and the company.
Rui: Our job is to make sure the money works with the creative process, not against it.
The head of Larian, the studio behind the extremely popular game Baldur’s Gate 3, said that for game developers, money is “the fuel they need to create new and better games.” That stuck with me. As the CFO of a game publisher, I see it as my job to provide that fuel.
The real work is designing a system that’s sustainable for everybody involved. It’s easy for well-aligned incentives to break down if money becomes a problem. From very early on, I put a cap on operational costs so that they don’t exceed our long-tail cash flow. And we look at projects realistically—asking what the market size is for a given game and what the studio’s cost will be.
How often are you running into issues of artistic merit versus commercial interest and appeal?
Sagar: Constantly. A creative business can only thrive by pursuing opportunities that have both artistic merit and commercial appeal. That’s the crux of the challenge. We navigate it by making sure the artistic side and the commercial side understand that delivering on both is how you create hits, make money, and enable future projects for everyone.
Who is making the judgment that a project has real potential both artistically and commercially?
Sagar: That’s the job of the management team. You bring all the different business and creative perspectives to the table to debate, to respectfully disagree, and eventually to reach a resolution that may not please everybody, but is workable and is the right decision for the business. And it’s only possible by bringing all those different perspectives together.
Is the commercial versus artistic dynamic an issue for Hooded Horse?
Rui: There’s less tension than you’d expect. In June, at the Summer Game Fest, the host Geoff Keighley presented that new 2026 releases that had crossed a million units sold on Steam at that point [a digital distribution platform for PC games] did include offerings from familiar franchises by large companies—Resident Evil and Forza—but the majority were either new IP or from independent studios, including one of our games.
The audience for indie games rewards creative, novel work. Often, when games blow up on the front page of Steam, it’s something so quirky you just wonder, “Who came up with that strange idea?” Yet somehow, it’s working and resonating with people globally.
Niche may be the trend in video games going forward. As barriers to entry get lower, we may see more weird, strange, creative games getting made. And that’s because niche doesn’t have to mean small. The global games market is over $300 billion. The PC market is $40 billion to $50 billion. Hits drive profit, but there’s also a lot of money outside of the blockbusters.
For us, a game that delivers mid-level performance will have several hundred thousand players. Provided we’ve aligned expectations around project size, budget, and the potential market, everyone makes money. When niche can generate revenues and profits, there’s no need to push every game to hit millions of players to build a sustainable business—even though of course that is still the upside we all swing for.
It can be hard to put creativity on a timetable. How does AWA handle deadlines?
Sagar: Creators are human beings, and they need to be given the space and the freedom to do their best work. We give them overarching deadlines that enable our company to reach our business goals. That could be a release schedule for a graphic novel; it could be a development timeline if they’re writing a film script.
With some things, there are hard deadlines, but the aim is to have enough milestones to know how things are progressing and to have an adequate buffer so that if something slips, we can adjust.
Our approach is to be constantly communicating with everyone involved, making it as transparent and clear as possible. That starts with the initial contract. I don’t think anybody should leave a negotiation feeling like they’ve lost. Both sides need to feel like they’ve got the right deal for themselves.
And the ongoing communication and collaboration is particularly important when part of these deals is bringing the stories to film or television, a process that takes years and is very dependent on movements in the market.
In a world where a lot of things are becoming shorter, simpler, and easier, it’s gratifying to have daily active user numbers showing that there’s a growing audience that wants the opposite.
Snow Rui ’18
How did you come to this work, and what makes it gratifying?
Sagar: I’ve spent my career on the finance side of the media and entertainment industry. First through investment banking covering media and tech, then leading strategy and corporate development for a TV production company. After Yale SOM, I joined Lupa Systems, a media and tech investment firm. AWA was one of the earliest investments, and I moved into an operator role when I joined AWA.
I think storytelling is one of the most important facets of being human. It’s gratifying to be part of an industry that will always matter, even as the formats through which stories are told continue to evolve. At AWA, we want to take a piece of IP and build it into a franchise that, one day, everybody in the world will know. That’s exciting.
Rui: What I love about my work is helping bring deeply ambitious, complex games into the world and enabling those games to become commercially successful.
We keep surprising people with just how successful crazy stuff can be. We’re talking games that simulate global production supply chains or combat based on actual Newtonian physics, where you have to calculate momentum and maneuvers in three dimensions. Things can get really complicated and really niche. In a world where a lot of things are becoming shorter, simpler, and easier, it’s gratifying to have daily active user numbers showing that there’s a growing audience that wants the opposite.
Do either of you have questions for the other?
Sagar: Snow, how do you measure the success of your games versus the company as a whole?
Rui: We define success with players with an objective measure: the review score. With developers, our measure of success is whether they can keep fixing and improving the game. And internally, we measure success by whether we have a positive return on investment. The vast majority of our games successfully tick all three boxes.
But we do have an express policy of sacrificing our positive return first to make sure players are happy and developers can keep working on a game. That may sound altruistic, but we live or die based on developer talent and long-term relationships with our fans. We can absorb a financial loss on one project and recover. It’s much more costly to get fans or a great designer back once they’re gone.
Rui: Gaming is a global industry: Even though we’re a small U.S. startup, we distribute around the world. What does that look like for your industry?
Sagar: The traditional comic book business in the U.S. is small, and has been getting smaller over time. And while there may be non-English language editions, many of the stories haven’t traveled very well.
So in thinking about stories that will work as live-action films and TV, we’re very much thinking about stories that will cross borders. Our first film has just completed production with Apple TV and should be streaming globally in 12 to 18 months.
Rui: It’s critical to understand the business realities and the fact that there is a range of potential ways of making a profit. AWA is looking for breakout potential with a screen adaptation, maybe even creating a franchise. That’s essential for their market and their business model. There are gaming companies built around hits, but at Hooded Horse we’ve found games that sell more modestly still allow for a sustainable and profitable business.
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