Crowdfunding in indie games

Crowdfunding in Computer Games

What crowdfunding is

Crowdfunding beschreibt eine Finazierungsform (engl. funding) bei der sich eine Menschenmenge (engl. Crowd) an innovativen Ideen, Projekten etc. meist in Form von Eigenkapital beteiligt. Die Crowd-Investoren (Crowdfunder) beteiligen sich dabei mit verhältnismäßig kleinen Geldmengen an größeren Investitionsprojekten. Die Investoren sind dabei Internet User, die über Internetplattformen zur Beteiligung “animiert” werden. Dadurch kann ein gewisses Risikokapital bereits in einer frühen Entwicklungsphase eines Projektes bereitgestellt werden, wie in Abb.1 dargestellt wird.

Abb.1 zeitliche Zuordnung von Crowdfunding in Abhängigkeit zur ges. Investitionssumme Quelle: https://www.wko.at/

Die dadurch finanzierten Unternehmungen werden als eine “Aktion” beschrieben. Für eine Aktion wird eine Mindestkapitalmenge vordefiniert, die durch die Crowdfunder fremd-finanziert wird. Für diese Beteiligung erhalten die Crowdfunder im Gegenzug unterschiedlichste Formen von Gegenleistungen seien diese Geld, Rechte, Sachleistungen etc., darüber hinaus können diese Gegenleistungen auch ideellen Wert besitzen.

Für Crowdfounding werden derzeit 4 unterschiedliche Modelle unterschieden:

Geld für eine gute Tat ( engl. Donation based Crowdfunding)

Für Projekte mit kulturellen, kreativen oder künstlerischen Hintergrund. Gekennzeichnet durch geringe Beteiligungen der Crowdfunder und keine Gegenleistung.

Geld für Anerkennung (engl. Reward based Crowdfunding)

Gegenleistung in Form von materieller oder ideeller Anerkennung

Geld für Zinsen (engl. Lending based Crowdfunding)

Crowdfunder verleiht sein Geld an eine Person oder ein Unternehmen weiter. Gegenleistung in Form von einer Verzinsung des Geldbetrages.

Geld für Beteiligung (engl. Equity based Crowdfunding)

Für die Finanzierung von Projekten (Startups, Innovationsprojekte…). Beteiligung mittels Genussscheinen. Risikokapital wird meist auf mehrere Projekte verteilt - dadurch kann das Investitionsrisiko minimiert werden.

Crowdfunding process of video games.

The crowdfunding of video games became popular after the huge success of the video game “Broken Age” (shortlink) in 2012.The video gaming industry is an important sector in crowdfunding. It successfully raises, with 370 Million Dollars, the biggest amount of money (21.2%) on the crowdfunding platform kickstarter. More and more smaller collectives arise, due to the opportunity being able to afford the development of indie games. Meanwhile bigger gaming concerns also use the crowdfunding platform to fund money on developing, which usually is used to afford special elements concerning the game atmosphere. Recently crowdfunding platforms are used to demonstrate or to learn about the demand for the product. Often these projects already have potential investors so it will be co-funded by the backers.

There are three types of motivation for backing a crowdfunding campaign for a video game, to buy the game or to support or influence the game development. Usually the campaigns use the rewarding system to make the consumer wanting to back their project. In this case the backers get the product or some form of it for a smaller amount of money. If they are willing to spend more, they get additional benefits, such as early access, extension packs or fan products, or might even be credited or meet the developers in person. Some campaigns also provide the opportunity to participate in the decisionmaking on the game development to the players. In the crowdfunding process of “Star Citizen” the developers gave updates on the game development weekly and made the backers decide on the appearance of game elements. This helps spending more time in developing the the parts of the game users are actually interested in. Crowdfunding revolutionized the game industry by focussing on the actual needs of the players as well as allowing the production of independent games. This way it also generates more diversity in the gaming market.

The role of platforms in crowdfunding for videogames

Setting up a discourse

By focusing this compact mode of research on the closer investigation of two distinct kinds of platforms used in the funding of videogames it shall be shown by comparison what basic concepts there exist. The two platforms to be examined are Kickstarter on the one hand, and Gambitious on the other. The chosen setting tries to confront two contrasting strategies of crowdfunding platforms, each of them briefly overviewed in the following.

Kickstarter

“We built Kickstarter to help bring creative projects to life. We measure our success as a company by how well we achieve that mission, not by the size of our profits. That’s why, in 2015, we became a Benefit Corporation. Benefit Corporations are for-profit companies that are obligated to consider the impact of their decisions on society, not only shareholders. Radically, positive impact on society becomes part of a Benefit Corporation’s legally defined goals. When we became a Benefit Corporation, we amended our corporate charter to lay out specific goals and commitments to arts and culture, making our values core to our operations, fighting inequality, and helping creative projects come to life. You can read our commitments in full below.“ Kickstarter mission statement, 2015

Kickstarter’s major target group can probably be described as the so called neigungsgruppe art, architecture and design, whereby under art one can subsume a whole set of media, ranging e.g. from comics to theater. As an assumption one can perceive the distribution of crowdfunding activities as shown in the statistics of Kickstarter as kind of a mirroring of how the contemporary creative industry is laying out its priorities in the production of content.

In the overall amount of money acquired the category of Games (422.86 M$) is leading the field in front of Technology (371.58 M$) and Design (361.41 M$). Interestingly, in the ranking of successfully funded projects the ranking is lead by Music (21,431 out of 42,612), followed by Film & Video (19,060 out of 51,408) and Art (8,233 out of 20,176). The category of Games features 6,576 successfully funded projects out of a total number of 20,649 launched ones, which makes a success rate 32,88% which is slightly below the platforms overall rate of success, being it 36,69%.

Kickstarter functions in a self described mode of all-or-nothing, saying that when a project to be funded does not reach the sum of money previously set as a goal to be met in a certain frame of time, the project’s backers will not be charged at all. The funder has the possibility of attracting his backers by his own initiative in stretching sales strategies up to the points of special rewards for those spending a certain amount of capital, thereby a system of differentiation among the backers is created. The incentive as a manipulator in setting up a desideratum. A clear line between funder and backer is constituted in the question of ownership; the backers’ purpose is merely to step in when it comes to make projects come to life, everything beyond is in the sole hand of the creators. The financial income of the platform itself is realized in the fact that out of every successfully project 5% of the sum funded goes directly to Kickstarter.

Gambitious

“Gambitious Digital Entertainment is a publishing label created as a key component of an ongoing effort to offer artist-friendly digital content production and publishing (inspired by Devolver Digital) to an ever-growing number of developers around the world, utilizing an evolving set of creative crowd finance tools and techniques to get more great games funded, produced, and successfully released.” about. Gambitious, 2015

The equity crowdfunding based platform Gambitious exclusively tries to attract (indie)game-developers. As a branch of Symbid, a dutch-based funding platform having been one of the first equity crowdfunding networks worldwide, Gambitious positions itself as kind of a gamechanger in shifting the rather passive role of the donator into a more active one. By giving the project developers the chance of sharing stakes with their investors the bonds between funder and crowd are tightened beyond the moment of having the game-project successfully funded. The amount of money invested in a project can differ from € 20 up to € 2,500,000. What appears crucial for the structure of Gambitious are two tendentially contradictory features; firstly the platform argues that the independence of a project’s publishers has to be kept up by no means in the sense of artistic integrity or an indie-ethos, while secondly we are made aware, that in fact the funder’s good will alone will certainly be not enough to bring his project to life, as a solid base of supporters is genealogically linked to the idea of crowdfunding. Hereby Gambitious wants to step as the ideal environment to host a chosen number of projects to be brought into position in the best possible way. A closer examination is deemed necessary in order to understand how the relation between platform and funder is organised. The linkage of artistic production and economical interests by the platform appears as a kind of collaboration blurring traditional lines of equity based crowdfunding models.

Vorteile / Nachteile

The whole concept of crowdfunding reached the gaming world with all its advantages and disatvanteges. One major reason for a lot of developer to fund their projects over crowdfunding websites is that they can be their own boss. This means not being dependend on big publisher companies, which in most cases would give the developer the direction in which the game should go, in order to gain more money. A lot of developer donn't want that and thats why they finance their projects over crowdfunding. On the one hand this freedom is a big advantage, but can also be the biggest problem that you can face while developing. A lot of programer do have the problem with presenting and advertising their idea to a big crowd, which you have to do in order to gain the money you want. In many cases developer may be the best programmer but have no idea about getting the attantion of the crowd especially when you are a underdog. In this case the publisher have a major advantage because in many cases they have a name which everybody knows and also the money to afford people whose function is only to make the public relations and the advertising run. That leads me to the next point, you will have a really hard time on crwodfundingwebsites with advertising your product if you are a noname to the scene. Most people who had really big succes could only succeed because they were famous among scene. Loads of projects have to try three or more times till they get the amount of money they want. In the case of so called indie games, the major advantage of crowdfunding becommes relevant.The main reason is the fact that famouse publiisher most of the time ignor indie games because the amount of work to put in would be too much for the amount of money they would get out of it. Most of the time indie games are directed at a small crowd or really fans of the scene. Another problem is that the publisher can't deal with the idealism of many indie game developers. Through crowdfunding it became possible for indie game developer to publish their projects in a much easier way than it was possible before crowdfunding. One phenomenon over the last few years was that there were a lot of unfinished games thrown on the market with the promise that if the crowd keeps spending money, there will be updates on a regular bases. But in many cases it turned out to be a never ending story, loads of games stayed unfinished and updates didn't came as promised which caused distrust among the crowd and many people say that they don't want to spend their money on unfinished games because of that fact. It becomes harder and harder to see the difference between games which are really evolving and developing with a major goal and those who are in the end a kind of a fraud as I would call it. In the end you can say the world of the pc games became a lot richer of small produced indie games through the crowdfunding platforms. As a developer you should defenitly consider to get your idea crowdfunded, as long as you keep in mind that it will be hard work to convince a crowd of your idea.

Indie Game: the Movie as an example"

The canadian documentation is published 2012 by James Swirsky and Lisanne Pajot. It shows the process of the independent game “super meat boy” by Edmund McMillen, “Fez” by Phil Fish and “Braid” by Jonathan Blow. In this documentation, the creators shows the world and the view of the developers who don’t work for big enterprises. These “underdogs” of the video game scene which are illuminated sacrifice money, health and mind in order to realize her dream and to share it with the world . The film differs here specially from other documentation , by relying on the creative process from sketch to finished game , the publication and the pressure that goes along with it.

Trailer:

The film was financed through kickstarter.com : Only after two successfully completing rounds of financing Swirsky and Pajot began interviews with prominent developers in the Indie Game scene. After hundreds of hours of recordings and interviews, Swirsky and Pajot decided to focus on the four above-mentioned game developers.

We basically started with the Kickstarter campaign in May 2010, and we just had one piece, and we put out that slice of the film, and we made our goal in 48 hours. We asked for $15,000 and we ended up with $23,000.

"As we continued making the film, we just kept building the audience. We’d put out lots of videos while we were shooting — which might be ill-advised. We put out 80 minutes of content while we were shooting, separate pieces and things like that. It was really helpful creatively to help us figure out what we were doing, and show people, and get a response. People would pass around those videos, and that would lead us to new stories, and to gaming sites, and it just kind of grew from there.

As this was happening, we just kept finding out that this doesn’t just apply to people who are interested in indie gaming or making indie games themselves, but to general gaming people, or people that just want to make something themselves."

Their second Kickstarter campaign, which raised more than $71,000 of a $35,000 goal, included a digital copy of the film for people donating $15 or more. For $35 or more, the donors gets a DVD of the film, but for $75 or more, a special-edition DVD, which Swirsky says makes use of the volume of video they shot in the process. Swirsky said,

"The neat upside is this: We have two movies, really enough footage for three movies, really. So what we’re going to do is make this special-edition version of the film, which will have that original movie and that original intent kind of deconstructed into a series of 10 or 12 three-to-five-minute pieces. The stuff we shot of everybody else that that didn’t make it into the film is really good stuff. But in order to do justice to the dramatic arcs that really excited us, it needed more time in the film. We wanted to keep the thing under 90 minutes."

Filmmakers usually guard their material carefully. Pajot and Swirsky raised close to $100,000 in donations by being transparent, flouting conventions of filmmaking.

This is a film about creative people, who often works on video games for years without large budget, but with great passion. It's a film about people who devote their lives so much to the games that the games are going to become their lives. "Fez is my identity," says Phil Fish in the documentary, which initially sounds pretty pathetic. But the more the viewer learns about Fish, his perfectionism on the erection of various levels, the reflected or comprehensible affects the statement. Because every single detail what players like about "Fez" or learn to hate, they will associate with the developer. After releasing the game, it became his business card. Now many people try this too: to create a virtual monument by a single hit. Not only the self-realization, but also the financial outlook is a motivation in this sector of the gaming industry, which had evolved from a shareware niche beginning to leave his footprint. It has never been easier to market a game itself. Online platforms like Steam or XBox Games Marketplace are good options to see how fast a certain community can be achieved. That's why in the mass of new releases to get noticed, it needs a certain quality. Consistently solid concepts like the back coils of the time in "Braid" and creating good games trailers plus good marketing are one way to assure success.