Is crowdfunding about to turn into ‘crowd-publishing’?
For any game developer with a brilliant idea, only one question matters.
How do I fund it?
Of course, if you are already successful, you can do this yourself. Ploughing back the profits from your last game into your next one is ideal. You keep control of your IP. And you make more money.
If you have the Calldorado SDK installed, you should be making good ad revenues. Indeed, our metrics suggest you could be making 15x more than with conventional in-app advertising.
But what if you don’t feel you have sufficient revenues yet to re-invest? Or what if this is your first app project?
Well, this is where crowd funding can prove useful.
Crowdfunding tackles many of the big problems with conventional publishing.
* It gives the power to ‘greenlight’ game to fans, rather than small secretive groups of executives
* It gives developers instant feedback on the commercial potential of their idea
* It generates buzz
Yet recent stats suggest crowdfunding has stalled. Fans may have been deterred by negative headlines about delayed projects or developers that actually want publicity (not funds) or have undisclosed private backers.
Whatever, last year’s pledges on Kickstarter for video game projects ($16.2m) was down 61 per cent from 2015.
So, is this the end? According to Justin Bailey, it’s the beginning.
He believes crowdfunding is giving way to ‘crowd-publishing’. Which is why he launched a new kind of platform called Fig.
Bailey says that most existing crowdfunding is rewards-based. Fans pledge a small amount to get a copy of the game early – and maybe a free gift. He thinks this is unsustainable as most ‘ordinary’ players only have so much of their own money.
Instead, he wants to encourage investment. Here, fans can share in the profits of a game they support. This will keep them coming back, and also attract genuine investors as well as fans.
There is a drawback here though. Investment platforms already exist, and most involve developers giving away equity.
Fig has a different offer. It sells ‘game shares’, which give investors revenues from a chosen game.
It still offers a rewards structure for those who want it. But it found that in 2016, ‘rewards’ pledges averaged $133.71 per project, while investors put in $2,800 via game shares.
Bailey believes this shows how crowd-publishing can maintain all the positives of crowd funding, but make it sustainable too.
He says: “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.”
Ultimately, this should mean more games are funded – especially those edgy titles that risk-averse executives would have rejected. And Fig is a global platform, which runs campaigns for developers from all over the world. It also welcomes international investors.
Of course, one could argue that Fig execs are the new gatekeepers. After all, they decide which titles are available on the platform. However, since they are not funding them personally, they contend they are far less risk-averse.
The numbers are quite persuasive. Fig hosted four of the top 10 biggest crowdfunded video games of 2016.