Independent Game Thoughts

Twitter’s #gamedesign is going to be the death of me.  Thread after thread is inspiring blog posts because I have related experience.  The latest is comments made by Gabe Newell on Gamasutra concerning crowdfunding a game.  I share some of the optimism but have also explored the pitfalls of crowdfunding a game.  To say that I haven’t ventured into the crowdfunding arena should indicate where I fall on this topic.  Let me outline what’s involved because the idea sounds wonderful at face value.

Ages of Athiria needs mountains of cash to become a reality.  I’ve been searching for it in various ways for the past seven years.  Crowdfunding looked like a real win for us.  We could leverage the tens of thousands of accounts registered on our web site to generate funding. 

Back a couple of years ago, EPI was making a pitch to buy the abandoned assets of the game WISH.  We had a few investors in, showed them the technology and one of them looked me straight on and asked if we could tap the community to fund the game.  I immediately and without hesitation told him that users wouldn’t pay for an unfinished game and that tapping our users for startup equity was not possible.  I drew the analogy of paying for a movie before it was published.  This was all before crowdfunding became a reality and I find it somewhat ironic that I’m discussing that very topic two years later.

So what does it take to crowdfund a game?  First off, you need a plan.  Crowdfunding without a finished product relies on hype and continuously needs lots of it generated over the duration of the crowdfunding attempt.  Those with something to show, don’t need nearly the amount of hype, which leads to needing a demo.  Funny how it doesn’t really matter if your pitching to your players or if your pitching a studio, a demo is pretty much universally required.  Anyway, the plan I am talking about is not a plan on how to build the game, though you need that too.  You need a marketing plan for nothing more than raising capital.

Part of that marketing plan is a proposition.  When I toyed around with the idea, I thought about something like this:

Of course, we’d then have to make Platinum and Gold donor statuses worth something, but that’s the gist of what we came up with in our first draft of the investment proposition.  Notice that there is no mention of any return of profits.  That’s because you’ll run amok of all sorts of federal and state securities laws if you do this without applying for the license/filing the paperwork first.  Know that you’re treading on thin, unchartered ice with the SEC if you try to do all the paperwork required.  Obama had some of this stuff written into campaign finance law but the same does not really exist for privately held for profit companies.  It’s possible but our lawyers tell us we can easily get in trouble trying it.

At this point, you’ve told the customer what he’ll get for his cash but you haven’t told them anything about how you’ll deliver what you’re promising.  This is where I got off the ship.  It’s not because I think our plan won’t work; that’s simply not the case.  I’m still looking for funding after so many years so I have to think the plan will work.  It’s because in order to convince you that it will work, I would have to divulge too much private information about the design, our finances and our operations to do so. There’s nothing in place to protect those ideas from being incorporated into other games/companies before we can come to market first with a product.  The gestation period for these games is simply too long to give your competition that much information.  All that together, added up to too much to give up for the odd chance that we could raise $20M+ in cash.

Do I think a game could be crowdfunded?  Sure if it’s relatively far along in development such that the risks outlined above are minimized.  I also think that there is a cap on the amount of funding possible without turning the proposal into a full blown investment offering.  The problem with that is that you have to register and spend the money to be an investment before you make the first announcement so there’s a large upfront cost that should be considered if your game is “that good”.  Then again, if it was “that good”, you would have a publisher beating down your door to do a deal so in the end there’s a cap.  I think that cap is somewhere around $500K based on the estimates for the movie Artemis Eternal and A Swarm of Angels (site currently down).  If your game fits into that narrow margin, then I think crowdfunding might be something you can look into.  Ours didn’t and we agreed with our legal team that crowdfunding our game was not really a viable option.  Maybe this can change in the future.  I certainly didn’t think it was possible back when I was pitching to buy the game WISH and look where crowdfunding is today.