New Production Venture to Invest in Games

Two former Microsoft Corp. executives announced they have formed a production company for independent game developers.

Capital Entertainment Group operates much like a venture capital firm, funding game projects and linking the developers with publishers who agree to shoulder the marketing and distribution costs of the games in exchange for a 60% share of the sales.

The Seattle company, which is in the process of raising $40 million, will fund games deemed too risky by large publishers, said Kevin Bachus, a CEG co-founder who worked as director of developer relations at Microsoft’s Xbox group.

The company also will produce games for foreign publishers who want to develop games for the U.S. market.