Analysis
Nex, maker of the motion-based home gaming console Nex Playground, raised more than $150 million in Series E debt and equity funding co-led by Baillie Gifford and BAI Capital, with NBA Investments, Logitech, Medici Capital Partners and the Raine Group also participating, alongside a new credit facility with JPMorgan, according to Variety and GamesBeat. The round lands as Nex Playground hardware sales cross 1 million units.
Nex was founded in 2017 by David Lee, Reggie Chan and Tony Sung, with Lee serving as CEO. The company's most recently disclosed prior round was a Series B in 2021. As part of the raise, Nex hired Niantic veteran Jeff Shouger as chief financial officer and added Shouger and gaming-industry veteran Bing Gordon to its board of directors.
Growth Metrics Beyond Unit Sales
Nex's active subscriber base is up sevenfold over the past 18 months to near 1 million subscribers, running alongside the 1 million-plus consoles sold. The company plans a "Connected Play" feature enabling cross-household multiplayer, and is using the new capital to expand internationally -- Germany later in 2026, followed by Japan and South Korea in 2027 -- alongside broadening retail distribution and its content partnerships.
Reviving A Category Kinect Left For Dead
Camera-based, motion-controlled home gaming was pioneered by the Nintendo Wii and Microsoft's Kinect, the latter discontinued in 2017 -- the same year Nex was founded. Nex's pitch is that modern computer vision and a subscription content model, neither of which Kinect had, can succeed where that earlier generation of hardware faded after its launch-year novelty wore off. One early proof point: Freefall Racers, a game originally built for Xbox Kinect and revamped for Nex Playground by its original developer, Smoking Gun Interactive, reached more than 150,000 families in its first month and became, according to the company, the fastest externally developed game on the platform to surpass an hour of average playtime.
The Numbers In Context
$150 million is a large late-stage round for consumer hardware, a category most 2026 venture dollars have avoided in favor of AI software and infrastructure. Baillie Gifford and BAI Capital are both growth-stage generalist investors without a specific consumer-hardware focus, making their decision to co-lead a notable bet that this particular hardware-plus-subscription model can scale globally.
What the funding headline misses: consumer hardware has a rough track record, including Kinect's own 2017 discontinuation and a long list of motion-gaming products that didn't sustain engagement past their first year. One million units sold does not by itself establish durable repeat engagement, and the near-1-million active-subscriber figure needs to be read against total units sold to judge Nex's actual attach and retention rate rather than taken as proof the category has been solved. International expansion into three new markets over the next 18 months adds localization, retail and regional content-licensing costs before the company has fully proven US retention at scale.
The test ahead is whether the international rollout sustains the subscriber growth rate Nex has posted domestically, and whether Connected Play becomes the retention mechanic that the original Kinect never had.
A Different Kind Of AI Bet
Nex's underlying computer-vision system still counts as an AI product -- it's tracking full-body movement in real time to power its games -- but it's a rare instance this year of that technology showing up in a physical consumer good sold at retail rather than a subscription software interface. That puts it in a similar bucket to Watney's data-center robots and Vantora's manufacturing-focused ventures: capital this week flowed into AI applied to the physical world, not just chat interfaces and coding agents, even as the biggest single checks still went to compute infrastructure.