I first fell in love with video games when I was 8. That was when my dad brought home an Apple IIe. I loved the fact that I could write a program, and this story would come out the other side. It was a landscape of endless possibility — at least it felt that way to me when I was in third-grade.
The first game I ever programmed was “Snow Wars.” To learn how role playing games worked, I hacked into games like “Ultima,” “The Bard’s Tale,” and “King’s Quest.” Whenever a new title came out, it was like Christmas, the Fourth of July and New Year’s Eve all rolled into one for me.
After graduating from college, I took my dad’s advice to find a “real” job as a programmer at a software company. I still remember, and deeply regret, the day I took all my game discs and tossed them into a dumpster as a declaration of my adulthood.
But then something strange and magical happened. Just after my first daughter was born, I heard a musician, Jonathan Coulton, tell the story of how he switched careers to become a composer because he didn’t want to end up being a “sad dad with unfulfilled dreams.” Inspired by this, I quit my job as a management consultant and knocked on the door of every game company I could find.
I was super fortunate to land a gig at Bandai Namco as part of their “greenlight” team. For two glorious years, I had the job I’d always dreamed of. I would listen to developers pitch thousands of game ideas. After greenlighting a game, I got to shepherd developers through the publishing process, making sure they met milestones, providing them with marketing support and getting their games made and shipped to stores.
As consoles and computers became more powerful, so did the size and scope of games. At first, we all went gaga over the luscious graphics, smarter-than-hell AI, and awesome physics engines.
But then budgets started to balloon. Marketing spends spiralled into the tens of millions for AAA titles. With so much at stake, publishers everywhere reined in risk. Everyone pulled back on the number of new IPs they were willing to back. Instead, most doubled down on franchises that performed well in the past, pumping out sequel after sequel. Electronic Arts Inc., for example, published 60 games in 2008. This year, they’re publishing 8. Thus, games ended up in a creative cul de sac.
In 2008, Facebook Games came along, promising a new era of social games that would shake the console world from its stupor, followed by the iOS App Store and Google Play for Android. Like circus clowns, we all crowded into the app store minivan and hoped that it would be a better ride. For a tiny fraction of us, it was. The rest of us not named SuperCell or King didn’t win the app store lottery. Instead, we got neck cramps from trying to get players to “discover” our games from the bajillion other apps sitting alongside the 31 flavors of solitaire.
Don’t get me wrong. I love franchises like Final Fantasy (now in its 15th incarnation) as much as anyone. And I’m not proposing that we all return to our batcaves and huddle with our NES’s (the one from 1985) — as much fun as it would be to have a batcave.
But each time games migrate to each new platform, they’ve also ended up in the same loop of sequels. Behold on iOS! We have Modern Combat: Sandstorm, Modern Combat 2, Modern Combat 3, Modern Combat 4, Modern Combat 5, and (coming soon) Modern Combat Versus! There may be loads of new IPs coming to mobile app stores, but they’re buried by games with better user acquisition tactics.
The latest vehicle for funding independent game development is crowdfunding. As the Chief Operating Officer of Double Fine Productions Inc., I hopped on this particular bandwagon with gusto. We, along with 2 Player Productions, turned to Kickstarter in 2012 to raise money for an adventure game that ultimately became Broken Age. We raised $3.3 million, making it the biggest project on Kickstarter at the time in both amount pledged and number of backers. In 2013, we raised $1.2 million on Kickstarter for Massive Chalice.
Through this, I got to see the ins and outs of rewards-based crowdfunding. I’d like to share some of the things I learned from this.
First, the good parts.
Crowdfunding opens up the greenlight process to the people who really matter — gamers. Instead of pitching to a closed room of stuffy publishing executives, developers are pitching in front of people who will ultimately be playing their games. As someone who was once one of those stuffy executives, I can say that while we did our best to find and fund great games, we weren’t always right and we probably missed a few gems out there. These days, traditional game publishers are even less inclined to hear pitches for new IP, preferring to stick to sequels and spinoffs. Crowdfunding platforms give independent developers a chance to vet their ideas in the open, where the wisdom of the crowd also has a say.
Crowdfunding is a great way to see if your game is commercially viable. You can’t ask for a better way to market test a game idea than to see how many people are willing to put down cash money to get a copy. In some cases, the crowd will tell you that your concept needs more work. That happened with Blackroom, John Romero’s holographic first-person shooter. It’s great feedback, because it comes early in the process, before developers have spent four years of their lives on the project.
You can get some really interesting data from a campaign. For example, you can use the total number of backers as a rough guide to set your game budget (more on this in an upcoming post).
Crowdfunding campaigns generate buzz and build an early fan base. Like a good movie trailer, crowdfunding campaigns help to generate awareness and build excitement around titles. It also helps to galvanize your existing fans (assuming you’ve published other games) around a new project.
Now, for the not so good parts.
Until recently, crowdfunding has been primarily rewards-based. The money people contribute to campaigns are essentially one-time expressions of support, with the organizers promising a reward at the end. Many contributors to crowdfunding campaigns aren’t invested in your financial success (though most would be genuinely glad to see you succeed). In fact, if you’re perceived as too financially successful, it can backfire.
Mainstream crowdfunding platforms aren’t geared for interactive entertainment. They’re better suited for board games or projects where there is a physical product that can be shipped within months. Asking people to wait years for their payoff looks out of place alongside projects that promise a physical reward in a much shorter timeframe than those required for video games, which can take years to develop.
They don’t give fans a stake in the game’s financial success. I see this as the biggest drawback of rewards-based crowdfunding. Fans donate money to projects, and in return they get rewards. If the project is wildly successful and your game sells millions of copies, fans still just get the rewards. The end.
That said, I still think crowdfunding has tremendous potential to fix some of the problems traditional publishing, namely the lack of transparency and the pathological aversion to creative risk-taking.
So how do we adapt crowdfunding to work for interactive entertainment? How do we take the best parts of crowdfunding and make it so fans feel more invested in the game’s success? How do we structure the relationship between developer and fan so that it’s based on more than just a one-time transaction? Is it possible to build a community that can sustain creative game development for the long-term and help us break out of our cycle of sequels?
Those are the questions I’ve been grappling with for some time. As a lifelong gamer and as CEO of Fig.co, I have a vested interest in finding the answer. The games business has grown a lot since I bought my first copy of A Bard’s Tale. For one thing, it’s now a massive $99.6 billion global industry. But its future depends on our ability to bring about the right environment for the next generation of creative ideas.
To do that, I think it’s necessary to rethink how we’ve been funding game development. Giving fans a seat at the table and a financial stake in the outcome solves two problems. First, it lets developers have a direct conversation with players, taking out the middleman working for a risk-averse publisher. That increases the odds that a crazy, but totally innovative game gets made.
This isn’t just wishful thinking. A study published this year California Management Review found that crowds tended to back more “artistically daring” projects that established professionals shied away from, according to the study, entitled “Democratizing Innovation and Capital Access.” The authors (Ethan Mollick at the University of Pennsylvania and Alicia Robb at U.C. Berkeley) noted that while those projects were slightly more likely to fail, some achieved great success, including winning awards. That means crowdfunders took on more creative risk, and in some cases, were rewarded for it.
Secondly, community publishing in particular solves one of the major drawbacks of rewards-based crowdfunding, namely the vulnerability to donor fatigue. With community publishing, fans can choose which games they want to back, much like a traditional publisher, and get a financial return based on how well a game sells. Through recent changes in federal regulations, non-accredited investors (read: average people) are now allowed to buy equity in startups that raise money under certain provisions of the 2012 JOBS Act.
Fans who buy shares under these new regulations don’t just show up for a one-time gesture of goodwill — they invest in a project’s ongoing success. This makes the dynamics of crowdfunding less like a novelty and more like a self-sustaining mechanism to fund independent games.