The concept of crowdfunding is not new; fundraisers have been using it for years to get the money they need to support their causes. In recent years, however, the online arena has provided a venue for expansion, allowing fund-seekers to reach a vast audience of potential “investors”. The model has been used for all manner of exploits, with charitable organizations gaining funds for disaster relief, political campaigns reaching out for donations, and artists of every breed obtaining the patronage they need to continue creating paintings, web comics, and dubstep (just for example). But it now seems that the concept has gained some traction in the video game community, with small-time developers seeking help in raising the funds they need to get their game concepts to market.
Crowdfunding super-site Kickstart recently made headlines when they brought in over a million dollars during one of their campaigns. They teamed up with Double Fine Productions, based in San Francisco, to help them raise money for their game Double Fine Adventure. While the company was seeking $400,000 in funding to complete the game, they hit their benchmark within hours of the campaign launch, breaking the $1 million dollar mark within 24 hours and winding up with an astonishing $3.3 million by the close of their investment foray. Thanks to nearly 90,000 “investors” this game will now get made, and with more than eight times the amount of funding required.
This trend is set to become the new wave in game development, providing a democratic system that allows potential gamers to vote for the concepts that they would like to see come to market. Whether the interested parties are teenage kids, college students, or heads of successful game developers themselves, they can use their dollars to vote for the products they are actually interested in playing, virtually guaranteeing a market for finished games. And in most cases, all they get in return for their investment is a copy of the completed game (or perhaps a lunch with the developer). But it looks like at least one company is ready to take this concept to the next level.
Gambitious seeks to encourage public funding by granting equity. The incentive to invest will come not from the joy of seeing a desirable product completed and brought to market, but from sharing in the eventual profits, making the process more like an actual investment than a donation (or a virtual presale of the game). Likely this will attract a whole different crowd of potential investors, but it shouldn’t change the way these indie games are made. For most companies, investors bring the money but require some amount of control over how it is used. This is not the case with crowdfunding, where the developer retains full control of the process and product throughout. For this reason, industry analysts speculate that Gambitious may be a tough sell, especially since the people who contribute to donation-style sites like Kickstart, PeerBackers, and Indiegogo are more interested in supporting specific game concepts rather than earning money from a business investment.
It remains to be seen whether this form of funding will truly become the standard for indie game developers, many of whom dream only of selling off their products to a big-name developer for a huge profit (like Zynga’s recent $180 million acquisition of “Draw Something” creator OMGPOP). All it would take is one big hit with a game like Halo, Need for Speed, or Prison Tycoon (along with subsequent hits all the way up to Prison Tycoon 4) to make this model a huge success. But until then, developers can dream of major funding for their original IP, consumers can vote with their dollars, and at least a few decent games will continue to come from the independent marketplace.