If you still think that a loan from a bank officer is the only method to fund your project, then it’s time to become aware of an alternative one – crowdfunding or soliciting the funding directly from the public, mostly from people whom you don’t know. For instance, you may raise $30,000 from 1000 people instead of taking the same amount of money from a bank. Sounds lucrative, doesn’t it?
Since firstly applied by Joseph Pulitzer in far 1885 for the Statue of Liberty’s pedestal, crowdfunding has been widely used for different matters. But first rewards-based crowdfunding campaigns started when two main driving forces Indigogo (2008) and Kickstater (2009) were launched. And that was a boom which still makes developers hope to amass a community around their crowdfunding campaign. Does it still work as later? That’s what this article aims to fully clarify.
When you are involved in game dev and want to be visible on the market, promoting your game development studio might become a real struggle as it means writing piles of emails, networking, pitching and so on, and so forth. You might already feel fear creeping up on you. Calm down as pitching may seem a baby fear to compare with accruing enough donations from backers.
Unfortunately, crowdfunding nowadays is becoming tougher than it was in 2009 when Kickstarter first started. Romanos, who last year ran a successful Kickstarter campaign for a Rocky Horror Show mobile game, says that crowdfunding is the single hardest way to raise money that she’s ever seen.
Kickstarter doesn’t show enormous potential it used to do. People don’t take everything at face value, and there is more content to choose from. They won't pledge unless you are able to show something that makes them do this. Backers wait for clear concepts, roadmaps, gameplay footage and even more. Those who came to Kickstarter in 2017 had spent half a year on preparation.
Sharing company’s experience, Romanos continues that despite success with raising money for their Rocky Horror Show mobile game they’ve had some high-profile failures during their campaign on Kickstarter. One of the things Romanos learned is that Kickstarter has formed a very established community. If you go to the platform with a project that doesn't resonate with that core community, you have to work hard to bring people to it. She also adds that things changed a bit and they don't have a huge success on Kickstarter now - particularly in games. They decided to go further.
After fundraising campaigns gained popularity with businesses, funding has become to transform. The models which exist on Kickstarter and Indiegogo make way for the equity model presented on Fig. The platform which mixes traditional rewards-based crowdfunding with equity investment already showed the result in 100% return on investment with an ambitious project Kingdoms and Castles.
Moreover, it differs from similar platforms in the way it treats investors. There’s no need to be accredited so anyone is able to invest in games, even in far-reaching titles such as Wasteland 3, Psychonauts 2 and Phoenix Point.
Two more ways of funding are initial coin offerings and the use of cryptocurrency might become even more prosperous sources of investment for developers but like crowdfunding, they require time to show results. These are the most controversial tools ever used for funding projects, but as all freshly baked it attracts developers and makes them take risks.
ICO (Initial coin offering) is regarded as a bubble at the moment though the outcomes some ongoing projects have reached are evident. No one knows for sure which downsides it hides but everyone understands that it’s high time to act if you are ready to have a try.
Romanos’ recently presented project Reality Clash, an AR combat game for mobile devices that is expected in 2018 and is said to raise more than $3.5m with its initial coin offering, shows that this scheme has potential.
Investment is a sufficient part of any project. Meanwhile, some spheres, among which game dev is number one, require continuous renewal of already probed methods to achieve the best result and raise required funds. A useful tip here is to investigate beforehand what the chosen crowdfunding platform may offer you and what your future investors would like to see.
Crowdfunding will stay. The developers need to take advantage of it - if only because it might highlight to governments that there is a growing demand for it.