Suggestion for an alternative way of financing (starting) developers

[Manji187]

The amazing outcome of the Extra Credits "Allison's Arm" issue has given me an idea...only it's not in the area of charity.

What if (starting) developers would raise their own funds in a similar fashion by enlisting gamers worldwide as a sort of shareholders in their projects?

Suppose a starting studio has this idea for a new type of RPG, FPS, whatever game. They could post developer interviews/ art montages on their own website/ youtube channel/ facebook page explaining what kind of game it is that they have in mind. If gamers like the idea they can "invest" a sum of money chosen by them...if 2 million people donate an average of 10 bucks...hey..that's about 20 million...what if 200 million people worldwide donate about 5 dollars each....a whoppin 1 billion dollars of funding! That would be madness though since it took "only" 10 million to make Gears of War 1 and about a 100 million to make GTA IV. No need to be THAT ambitious though

Suppose the game will be light on voice-acting and CGI cutscenes...and will have no multiplayer...and will not necessarily feature cream of the crop (Crysis 2) graphics...

I think 5-6 million should do it...so if a million people donate 5-6 bucks...the project is a go.

If the developers fail to amass enough funding in say 6-9 months...you'll get your money back.

If the game gets made and you contributed...depending on the size of your contribution you could get a discount on the final product or a free limited edition version (with artwork, dev interviews etc).



So what do you think? Can this fund raising scheme be made viable? What conditions would have to be met for it to work? What could be problematic?

 

[Nami nom noms]

The amazing outcome of the Extra Credits "Allison's Arm" issue has given me an idea...only it's not in the area of charity.

What if (starting) developers would raise their own funds in a similar fashion by enlisting gamers worldwide as a sort of shareholders in their projects?

Suppose a starting studio has this idea for a new type of RPG, FPS, whatever game. They could post developer interviews/ art montages on their own website/ youtube channel/ facebook page explaining what kind of game it is that they have in mind. If gamers like the idea they can "invest" a sum of money chosen by them...if 2 million people donate an average of 10 bucks...hey..that's about 20 million...what if 200 million people worldwide donate about 5 dollars each....a whoppin 1 billion dollars of funding! That would be madness though since it took "only" 10 million to make Gears of War 1 and about a 100 million to make GTA IV. No need to be THAT ambitious though

Suppose the game will be light on voice-acting and CGI cutscenes...and will have no multiplayer...and will not necessarily feature cream of the crop (Crysis 2) graphics...

I think 5-6 million should do it...so if a million people donate 5-6 bucks...the project is a go.

If the developers fail to amass enough funding in say 6-9 months...you'll get your money back.

If the game gets made and you contributed...depending on the size of your contribution you could get a discount on the final product or a free limited edition version (with artwork, dev interviews etc).



So what do you think? Can this fund raising scheme be made viable? What conditions would have to be met for it to work? What could be problematic?

There is a couple of problems I can see... The first is simply that in order to get 5-6 million people to donate it would take a monumental project. The majority of the most successful games in the world don't even SELL that much, so it's unlikely you'd get that much funds.

Secondly, the idea of giving all the money back is unfeasable. holding the money for 6-9 months and keeping records of each and every donation, who, where and how much from would cost a LOT in itself. Especially for such a long period. Without a cost on the people donating then the developers would be forking out a great deal of their own money for a project that is not guaranteed to be accomplished. It is possible the interest gained on holding such money could just about cover the costs of recording it, but this is unlikely unless the money donated is a great deal (and it creates even more work. more work, more costs).
Why would a developer spend all that money on such a gamble, when they could simply use that money to fund the game in the first place?

Why would anyone donate to a game that they would later have to buy? what is in it for investing party? If they have no say on the game's direction, why would they donate in the first place? What if the developers do something random that none of the investors want; such as change the game dramatically in the development process?

The idea is a nice one, but it would take a lot of refining and as a result, would grow more and more business-like, removing it's origins until it would function exactly like a publicly trading company does already.

 

[Zantos]

I think it's a good idea, I know it's popular on the music scene to get people to pledge money so you can make an album, then when you finished it everyone that pledged the money gets a free one. Maybe if the developer released a short demo on their website, then if people like it and want to see the game made they pledge a few quid and get money off or extra stuff free when it comes out, or if they donate a bit more they get a free copy. I'd be up for that.

 

[Asti]

I think you'd have serious problems finding a million people willing to fund you. Knowing the internet, if you haven't already produced the equivalent of a Yahtzee-written My Little Pony RPG designed by the Extra Credits team, it would be all: "Ur idea suuuuuuuucks!!!!!!eleven"

Sorry, internet, I love you, but that's who you are.

 

[Tav73]

Interesting idea, but I'm not entirely sold on the millions scale. These sorts of games are produced almost solely by big developers who already have the funding.
Now for indie developers, with a range of like 10k-250k, having this system in place and working would be sweet. It takes a lot of dedication to start making indie games because you can guarantee your company is not going to make a penny until a game is released. Having financial backing to create the game in the first place would make it all a lot easier for them.

 

[stealthsid]

I'm spacing on the name ATM, but there are a couple of personal loan sites geared towards the sort of model you're suggesting, they're just not designed explicitly for indie game studios.

You can either pitch a business idea or just talk about why you need a loan, and people donate as they see fit.

It seems like it'd be pretty cool to have this sort of site available with a niche focus on indie gamers. Having a dedicated site/web app to handle the donation management would mitigate some of the overhead 'nami nom noms' mentions.

 

[TheEverix]

I'm spacing on the name ATM, but there are a couple of personal loan sites geared towards the sort of model you're suggesting, they're just not designed explicitly for indie game studios.

www.kickstarter.com is a site like that. I know it because the webcomic "Least I Could Do" recently held a pledge drive to get a pilot up for a cartoon pilot. So yeah, like you said. These things exist, and aren't just for games.

OP: Millions may be in the extreme, but for people who already have a following, these things can be possible, like with the example I used above.

 

[Smooth Operator]

Really bad idea, because it's the perfect setup for a scam, even if it's only an accidental one.

Alot of these mini projects flop because the developer comes in with a huge idea and no experience, then they start with a bucket of someones cash and soon notice putting your ideas in paper is not all that easy.
So then you need extra time, extra crew, you quickly double the cost and may not even be on track to releasing anything worth wile, and even after all that you may end up with a horribly implemented game... now the money is gone and nothing good came of it.
A small percentage would make good games out of this but alot wouldn't, not to mention how quickly someone would just abuse this to get money and disappear.

I prefer if a small studio(or individual) does something cheap and new, if the thing is good they can pitch it to a bigger studio that can grow it into a fully fledged game (alot of triple A titles come into existence just this way).
And if your small game is a flop you dont owe anyone, plus you got something to put on your resume.

 

[Dexiro]

Isn't this what a lot of indie developers do? It works but not in a triple-A scale.

 

[Stavros Dimou]

I see where you are coming from,but your plan as you described it is faulted.
I will enlist you my points of disagreement,providing what I think of ideal solutions to these problems:


1) People will just not give any amount of money out of their good heart to help a developer,even if they are to get a discount or free copy out of it.
If someone is going to be a shareholder,he has to have shareholder rights.
When you buy shares of a business,you gain a part of ownership.
Buying shares is a risk.If somebody buys some shares and the game goes well,he will have to get paid according to the percentage of ownership he has.
This can mean that he might make multiple times the money he invested,or loose all of them.

2) For gamers to care enough to consider funding a developer,they have to have a saying on how this game is going to be. Nobody would like it if he pays for a game that ends up not to like.
So,I think it's a must that the developer will organize democratic votings,so the gamer-funders can vote about design decisions.
Will the game have regenerative health,or healthpacks ?
Will it have tons of blood,or not any at all ?
Will it have romance options or not ?
All these will have to be determined by votings gamer-funders will do.

 

[thenamelessloser]

I want some rich dork from some rich family who is a major fan of all the same games as me funds a studio where the dork has no personal creative impact but just funds making a KICK ASS AWESOME game with perhaps just a general direction- make an awesome nonelinear RPG for instance. Maybe have the dork's family's funds competing with another dork's family's funds.

I mean, look at the one of the most celebrated times artistically and it was Florence during the Renaissance right? And why was it awesome? Because you had a a bunch of rich noble families which were personally funding the art....

This may be completely wrong. Most of what I know from the time period is from shoddy resources but who cares.. ::runs away: