I created a functional SW prototype intended for Xbox or PlayStation. It is based on very simple idea, which once presented can be simply stolen.
How can I protect my idea (prototype)? Will be due diligence sufficient?
Any suggestions about appropriate investor (probably from video game industry)? Turn to angel investor or one of mentioned companies?
There are a few strategies you can use that don't cost a ton of money:
1.) If the concept or software process can be patented, then file a provisional patent. NOLO has a Patent It Yourself book that you can probably find in a large regional library, or you can buy a copy. The book does a reasonable job of explaining what can be patented and the process for doing it. Even if you end up using a lawyer, it makes you a far more intelligent consumer of their services. The important point is that a provisional patent is not the full monte, but just gets all of the information about what you're going to file in the patent down so that you've nailed the "first to file" requirement for having an eventual patent filed. All this really does is prevent someone else from patenting it and blocking you from using it, but it can also be useful for "marking your territory" for follow-up IP. Filing a provisional is cheap, but be sure you get all the essentials in your filing because follow-up patents that use the original provisional cannot expand the area of coverage without resetting the effective date for protection.
2.) Wrap your idea / concept in some copyright and trademark protection. Is there some core to your concept that can only be implemented in certain ways? You could copyright the core code that performs that function.
3.) Quietly raise enough capital from family and friends to be able to launch on a strategic platform (like the suggestion above) and then be aggressive in out-innovating competitors. Sometimes the best defense is to simply be a moving target that is always ahead of the copycats.
Informally speaking (and I am not a lawyer), ideas without execution or not worth a lot and while they can certainly get stolen, there is a good chance that there is someone out there right now doing the same thing.