Video game development has typically been funded by large publishing companies or are alternatively paid for mostly by the developers themselves as independent titles. Other funding may come from government incentives or from private funding.
Crowdfunding, where the players of the video games pay to back the development efforts of a game, has become a popular means of finding alternate investment routes. As a way of game monetization, the use of crowdfunding in video games has had a history for several years prior to 2012, but was not seen as viable and limited to small-scale games. The crowdfunding mechanism for video games received significant attention in February 2012 due to the success of Double Fine Adventure (later renamed as Broken Age ), a point-and-click adventure game which raised more than $3 million through the Kickstarter service, greatly exceeding the initial $400,000 request and becoming the highest funded project through Kickstarter at that time. A further boost to the model was seen in July 2012 when the Ouya, a low-cost video game console to be built on the open Android system and designed to take advantage of the mobile video game trend, surpassed $8 million in funding. By mid-2016, more than $186 million has been pledged to video game-related projects through Kickstarter alone.
Less than half of video game crowd-funded projects successfully raise their target funds.[ citation needed ]
Crowdfunding is a means to raise money for a project by eliciting funds from potential users of the completed project. [1] While no third party is required for crowdfunding to occur, web sites like Kickstarter have been created to act as an intermediate in the process: they create space for project creators to share their project, provide ways for users to pledge their funds, and then supply the pledged funds to the creators for those projects that are successfully funded.
Projects using the Kickstarter model generally create multiple tiers of support. A minimum pledge assures that the funder will get the product in some form, but higher pledges will include additional benefits. In the case of video game-related works, this commonly can include being credited in the final work, receiving promotional items like T-shirts, obtaining early access to the game, or meeting the developers in person.
The earliest game to have utilized crowdfunding may have been Mount & Blade . As the developers had trouble finding backing from traditional publishers, they instead chose to ask for funding directly from interested individuals. [2] Mount & Blade was funded, developed and released before the popularization of purpose-built online crowdfunding platforms.
Prior to 2012, small independent video game developers had used Kickstarter and other crowdfunding services to generate capital for developing games. [3] However, most of these were funded at small levels, typically no more than $10,000; the largest prior to 2012 was Brandon Boyer's Venus Patrol in October 2011 which gained over $100,000 in funds. Shortly before the announcement of Double Fine Adventure, another game, Code Hero, was able to secure more than $100,000 in funding through a last-minute push by word-of-mouth. [4]
2 Player Productions, a film documentary company, approached the studio Double Fine Productions with the prospect of making a film covering the development of a game within the studio. At the time, the studio's other development projects were backed from publisher funding, which would likely have put restrictions on what could be documented. Instead, the developers opted to create a new game from scratch, deciding to use Kickstarter to obtain funding for both the game and the documentary. The studio opted to create an adventure game, a game genre that has been languishing for more than a decade, though one that Double Fine's president Tim Schafer has had an influential history in. The project was tentatively titled Double Fine Adventure, though has since been officially named Broken Age . Schafer has noted that he has tried to convince publishers to fund adventure games since the decline of the genre, but was always turned away.
The two groups set a goal of $400,000 for the combined effort, considering $300,000 for the video game development and the rest for the documentary. Within the day of its announcement, the project surpassed the goal, and by the end of the month-long effort, had raised more than $3 million; Schafer noted that this amount surpassed the total budgets that his previous titles at LucasArts had been developed for. With the additional funds, Double Fine committed to developing the game for a wider range of platforms, localizations, and creating fully voiced dialog for the English version.
The success of the Double Fine Adventure Kickstarter is said[ by whom? ] to be attributable to several factors. First, Schafer and Double Fine have an established reputation with video games players, specifically through Schafer's reputation for humorous adventure games, and Double Fine's previous fan-favorite title Psychonauts .
Following on the success of the Double Fine Adventure, several other small developers saw the potential of Kickstarter to launch new projects. Prior to Double Fine Adventure, Kickstarter had reported about 100 new video game-related projects started each month, a number that more than doubled after February; further, dollars pledged to these projects went from around $200,000 per month to between $4 and $10 million in the months that followed Adventure. [5]
Some of these projects were based on the revival of fan-favorite intellectual properties:
By March 2017, Kickstarter reported that 10,000 video-game related projects had been successfully funded through their site, cumulative bringing in $613 million of funding. [12]
In the limelight of the success of using Kickstarter for video game software, a company composed of video game hardware experts initiated a Kickstarter to raise money to fund the development of the Ouya video game console; the console is targeted to be a low-cost, Android-based unit with an open development structure, allowing it to take advantage of the existing games in the mobile space. The Kickstarter began on July 10, 2012, looking to raise $950,000 for turning their existing prototype into a manufactured line; within 8 hours they had cleared this number, and within a week had surpassed $4 million in funding. [13]
With numerous successful video game projects arising from Kickstarter, other crowdfunding sites have arisen with a specific focus on video games.
Gamesplanet Lab offers a framework for crowdfunding, but becomes more involved in the pre-selection of projects that qualify for its site, and provides services to help assure the quality of successful projects as delivered. [14]
Gambitious is an equity crowdfunding mechanism, where those that invest in an offered project can receive dividends for the project successfully meeting its publication goals. [15]
More recently, Kickstarter and other crowd funding services have been used by developers who have gained potential financial commitment from investors, and use the crowd funding mechanism to demonstrate the potential demand for the video game. Such examples include Bloodstained: Ritual of the Night , [16] which successfully sought at least $500,000 in crowd funding to secure 90% of the development funds from investors, and Shenmue III which also obtained the required funding through Kickstarter to gain financial and development help from Sony for publishing the game to the PlayStation 4. [17]
Brian Fargo of inXile Entertainment, Feargus Urquhart of Obsidian Entertainment, and Tim Schafer of Double Fine Productions, all whom have had significantly large crowdfunded projects as listed above, helped to found Fig in August 2015, a video game-centric crowdfunding platform that, in addition to the typical backer funding, also enables development investment so that they can earn part of the game's profit on release. [18]
Electronic Arts announced support for crowd-funded video games by offering free distribution of these games on their Origin software delivery service for personal computers. [19] Borrowing from the reward structure of the crowdfunding model, Namco Bandai has announced an incentives plan for their upcoming game, Ni no Kuni , that the rewards for those that pre-order the game will improve with the number of pre-orders that are received. [20]
In 2012, 43% of game projects (including tabletop games) on Kickstarter successfully completed their funding, which was slightly above the average success rate for all projects on the platform during that year. [21] According to Kickstarter's 2012 statistics, more than 900 of about 2,800 video game-related projects were funded during 2012. Games (including tabletop games) were Kickstarter's most popular and successful category in 2012; successful gaming projects generated over $83M in funding across 1.38M pledges. [22] Despite reports of "Kickstarter fatigue" - a sense of community apathy towards the platform, Kickstarter revealed that as of August 1, 2013, $64.7M had been pledged towards games project that year, showing growth over 2012 figures. [23] In March 2014, Kickstarter announced it had achieved over $1 billion in pledges, with more than $215 million of that dedicated for video gaming and tabletop gaming projects. [24] By mid-2016, Kickstarter reported over $186 million in video game-related pledges with over $500 million for all game-related projects. [25]
A survey conducted by a research team at the University of Cologne examined the motivations of Kickstarter backers who pledged for video game projects in 2014. [26] It found that the prime motive of a vast majority of respondents was to encourage creation of games in genres the backers perceived as under-supplied, and warned game developers against "following the bandwagon" by trying to fill the niches that have already been saturated by earlier crowdfunded projects. Beyond that, the study grouped backers into three categories, based on other motivations they displayed (from most to least numerous):
Both "supporters" and "influencers" perceived video game developers as being "strangled" by the established conventions of the industry and the mainstream market (such as video game publishers), and while most backers wanted to be kept up to date about the development and features of the games they backed, few were interested in directly influencing them. The researchers concluded that "backers are first and foremost consumers, and the main effect of reward-based crowdfunding is that it closes the information gap between the developer and the customer."
The study also examined what influenced a backer's decision to pledge more or less money to a particular project, and found that "supporters" generally tend to pledge smaller amounts of money to fewer projects than both "buyers" and "influencers". [26] It identified three factors that influenced the pledged amount:
Crowd funding also allow supporters get more valuable open source games with public domain, GPL, MIT, or Apache license, they can reuse for make new games and remixes, modifications, hacks. Since crowd pay for development, no need hide source code or have copyright against supporters.
There are risks of such crowd-funded games, including the inability to complete the funding successfully. In one example, the development of the game Alpha Colony fell short of its $50,000 goal by $28, rendering the project unfunded as per Kickstarter's regulations. [27] In other cases, the delivery of the product after a successful fundraising campaign may be left unfulfilled. A notable case is that of Code Hero , which had secured $170,000 during its Kickstarter in early 2012, had initially expected to be shown at the August 2012 PAX convention but failed to materialize. Further lack of updates through December led some of the Kickstarter backers to investigate the state of the project, finding that Primer Labs had apparently used up the funding and had yet to finish the game. Primer Labs' Alex Peake had stated that they are looking for more investments to continue developing the game and still commits to releasing the game in the future. [28] However, due to lack of communication and failure to provide any of the claimed rewards, backers are looking towards legal options to recover their funding, though are limited by some of the terms of agreements set in place by Kickstarter. [29] An update in early February 2013 included a message from Peake, breaking down the use of the Kickstarter funds and promise to provide refunds and back pay to his developers once the game was released, and took responsibility for the failure to meet the stated goals. [30] The game hasn't been released.
Another example of such risks is Godus , a god game developed by 22cans, with the genre's pioneer Peter Molyneux at the lead. The game was successfully funded in a 2012 Kickstarter campaign for about $800,000, and the team delivered a mobile version for iOS systems, and a Windows version that was developed through Steam's Early Access program. However, in early 2015, many supporters began to doubt if 22cans was going to finish the title and complete the additional Kickstarter stretch goals such as a Linux version, as Molyneux had begun talking about the next game his studio would produce. In response, Molyneux stated that they were moving on from Godus and turned over most of the development to one of the campaign's backers while Molyneux and 22cans will still provide overarching guidance. Supporters expressed concern in that they had bought into the Kickstarter based on Molyneux's creditials towards the god game genre, and as such the final game may not reflect the product they actually had expected. [31]
Timothy John Schafer is an American video game designer. He founded Double Fine Productions in July 2000, after having spent over a decade at LucasArts. Schafer is best known as the designer of critically acclaimed games Full Throttle, Grim Fandango, Psychonauts, Brütal Legend and Broken Age, co-designer of Day of the Tentacle, and assistant designer on The Secret of Monkey Island and Monkey Island 2: LeChuck's Revenge. He is well known in the video game industry for his storytelling and comedic writing style, and has been given both a Lifetime Achievement Award from the Game Developers Choice Awards, and a BAFTA Fellowship for his contributions to the industry.
Double Fine Productions, Inc. is an American first-party video game developer of Xbox Game Studios based in San Francisco, California. Founded in July 2000 by Tim Schafer shortly after his departure from LucasArts, Double Fine's first two games – Psychonauts and Brütal Legend – underperformed publishers' expectations despite critical praise. The future of the company was assured when Schafer turned to several in-house prototypes built during a two-week period known as "Amnesia Fortnight" to expand as smaller titles, all of which were licensed through publishers and met with commercial success. Schafer has since repeated these Amnesia Fortnights, using fan-voting mechanics, to help select and build smaller titles. Double Fine is also credited with driving interest in crowdfunding in video games, having been able to raise more than US$3 million for the development of Broken Age, at the time one of the largest projects funded by Kickstarter, and more than US$3 million for the development of Psychonauts 2.
Frank Brian Fargo is an American video game designer, producer, programmer and executive, and founder of Interplay Entertainment, inXile Entertainment and Robot Cache.
inXile Entertainment, Inc. is an American video game developer and a studio of Xbox Game Studios based in Tustin, California. Specializing in role-playing video games, inXile was founded in 2002 by Interplay co-founder Brian Fargo. The studio produced the fantasy games The Bard's Tale and Hunted: The Demon's Forge, along with various games for Flash and iOS such as Fantastic Contraption in its first decade of development. In 2014, inXile released the post-apocalyptic game Wasteland 2, following a successful Kickstarter campaign. Following the game's critical success, the studio went on to raise a then-record US$4 million on Kickstarter to develop Torment: Tides of Numenera, a spiritual successor to Interplay's Planescape: Torment. The studio was purchased by Microsoft and became part of Xbox Game Studios in 2018, just as they were developing Wasteland 3, which they released in 2020. The studio is currently developing Clockwork Revolution for Windows and Xbox Series X/S.
Kickstarter, PBC is an American public benefit corporation based in Brooklyn, New York, that maintains a global crowdfunding platform focused on creativity. The company's stated mission is to "help bring creative projects to life". As of February 2023, Kickstarter has received US$7 billion in pledges from 21.7 million backers to fund 233,626 projects, such as films, music, stage shows, comics, journalism, video games, board games, technology, publishing, and food-related projects.
Broken Age is a point-and-click adventure video game developed and published by Double Fine. Broken Age was game director Tim Schafer's first return to the genre since 1998's Grim Fandango, and was released for Microsoft Windows, macOS, Linux, iOS, Android, PlayStation 4, PlayStation Vita, and Xbox One platforms. The game was developed in two acts; the first was released on January 28, 2014, and the second was released on April 28, 2015. A retail version of the complete game for Windows, macOS, and Linux, published by Nordic Games, was released on April 28, 2015. A Nintendo Switch version was released on September 13, 2018.
Idle Thumbs is a video game culture website and podcast network founded in 2004.
Tesla Effect: A Tex Murphy Adventure is the sixth game in the Tex Murphy series of detective adventure games, developed by Big Finish Games and published by Atlus. Like the previous three games, it tells much of its story through live-action full-motion video sequences, and features freely explorable 3D environments during gameplay.
The Ouya, stylized as OUYA, is an Android-based microconsole developed by Ouya Inc. Julie Uhrman founded the project in 2012, bringing in designer Yves Béhar to collaborate on its design and Muffi Ghadiali as VP of Product Management to put together the engineering team. Development was funded via Kickstarter, raising US$8.5 million, becoming one of the website's highest earning projects in its history.
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Godus is a god video game developed by 22cans and published by DeNA. The company launched a Kickstarter campaign to raise funds and met their funding goal on 20 December 2012. Godus was designed by Peter Molyneux, who described it as the spiritual successor to his earlier creation, Populous. A real-time strategy, combat game spin-off, Godus Wars, was released in 2016. While the mobile versions of Godus continue to be updated, the PC editions of both games never left Steam Early Access, and are no longer available for purchase on the Steam store.
2 Player Productions, Limited is a video production company based in San Francisco, California. It was founded in 2005 by Paul Owens, Paul Levering, and Asif Siddiky. The company produces content relating to video game culture and the process of game production. They produced the documentary Reformat the Planet in 2008, and have since worked with mainstream companies including MTV and Spike.
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Fig was a crowdfunding platform for video games. It launched in August 2015. Unlike traditional crowdfunding approaches like Kickstarter, where individuals can back a project to receive rewards, Fig used a mixed model that includes individual backing and the opportunity for uncredited investors to invest as to obtain a share of future revenues for successful projects. At the end of 2017, four projects had begun generating returns, returning 245% to Fig investors.
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