Welcome to State of Play, a new editorial column from Pixelated Geek. In State of Play, we’ll be dealing with major issues in the gaming community and reaching out for feedback and interaction. Our goal with State of Play is to create a respectful, professional, and insightful dialogue within a group of serious interested parties. Games are a serious business. They’re not just the largest moving part of the entertainment economy, they’re a form of expression where emotionally impactful stories are told throughout communities that grow and bond, as well as an important educational tool. We take games seriously, and the goal of this article is to seriously analyze the serious business of games.
Crowd-funding is a means of gaining capital to fund a project by directly tapping into the consumer as an alternative to publishers. In the interactive entertainment industry, crowd-funding has come to represent a brave new world for developers, with new freedoms in the realm of creativity, workload, and release timing. It also means that consumers have some very important choices to make about where and when we place our money into the system. It is an interesting progression in an industry that has seen little in the way of evolution over the last thirty years, but is it the silver bullet that is seems to be? We take a look at Crowd-funding on this week’s State of Play. This new process naturally raises a number of important questions. What does Crowd-Funding say about the state of the industry? What are its advantages and disadvantages, and what does the advent of this new process mean to the gaming public?
This last month, Obsidian announced that their newest work, Project: Eternity had exceeded it’s crowd-funding goal of $1,100,000 by a whopping $2,885,000. Similarly, Torment: Tides of Numenera developer inXhile crushed their goal of $900,000 by over $3,288,000, and finally, Roberts Space Industries has raised over $8,500,00 for its up-coming space flight-sim Star Citizen.
That is basically a LOT of money, and that money is indicative of a public that wants what it wants, and is willing to pay to get what it wants. In an industry where the three biggest publishers rank incredibly low on both Employee and Customer satisfaction polls, this new process seems to be an ideal way for smaller developers to get a foot-hold in the market in a way that avoids some of the pressures that result from association with a large publishing house.
If you’ve had your ear to the ground in this realm of entertainment, you know that there have been no shortage of conflicts in the world of developer/publisher relationships. The debacle surrounding the closing of 38 Studios, it’s subsequent acquisition by Epic, and Epic’s acquisition by Tencent Holdings thus closing 38 Studios for the second time is a perfect example of the worst case scenario for a talented development team. This is a highly profit-oriented industry, one that is as risky as it is lucrative. Publishers, much like production houses in film industry, or their namesake in the business of books, take a bet on a development house and their product, providing services like disc-printing, distribution of product, and advertising in exchange for a percentage of profit. The publisher takes a massive risk in the provision of capital for production, and is often understandably concerned with the content, release date, and marketability of the end result. We often view publishers as giant evil-empire entities, and while they occasionally exemplify these qualities, they have a very compelling reason to do so: the almighty dollar. Nothing gets done without money, and they provide it, and expect in return a reasonable return on investment. As this is a law of free-market economy, it stands as a time-tested system, and isn’t questioned… until now.
The advent of Kickstarter has provided many interesting projects with funding that would have required a loan or a venture capitalist. It’s popularity and media visibility resulted in the first wave of crowd-funded projects in the interactive entertainment industry, such as Wasteland 2 and the Ouya console. It’s important to note that the early projects involving this sort of funding process either haven’t released (Wasteland 2, Star Citizen, Project: Eternity, Torment) or failed miserably (The Ouya, Chris Taylor’s Wildman).
However, this doesn’t seem to be the end result for most projects. FTL was an absolute darling of the industry, winning several Game of the Year awards and setting records for sales of a crowd-funded title, and it is frankly as well known as any indie title barring the ubiquitous Minecraft. In a similar vein, Lab Zero Games, developer of the indie hit Skullgirls utilized indiegogo.com to the tune of $825,000.
It’s interesting to note that even the most successful of developers don’t feel a deep-seated affinity to crowd-funding in opposition to any other option. Subset Games’ Justin Ma, responsible for the brilliant rogue-like FTL has stated that he was wary of utilizing crowd-funding for their subsequent products, as the transparency necessary for that form of funding “adds a whole new layer of stress.”
So it seems safe to assume that Crowd-Funding as a means of capital generation is every bit as viable as any other option (though not without its drawbacks), and given the aforementioned successes, it won’t be going anywhere. So what does this mean for the actual business, as well as the gaming public?
It represents a new and interesting ability to choose. A pre-order at a major retailer (or e-tailer for that matter) commits us to purchasing that title through a middleman, an increasingly archaic concept. It also means that a reduced sum of our purchase reaches those responsible for the actual title itself, and it casts a vote to distributors and marketeers. All of these are factors of importance in an age of constant monitoring of process and demographic, and it shapes the future of the industry.
But deciding to instead put that money into a crowd-sourced effort casts a different vote entirely. Instead of giving a portion of your dollar to a middleman, you are contributing directly to the developer, giving them an asset to use today, to use towards the product you receive, instead of money that will be used to pay off a loan, or go straight towards the publisher. You also send a message of what you want to be made, and how. Crowd-Funding requires an element of transparency: this is where we are in production, this is what we’ll be giving to you, etc. This is something that not only results in a more customized, more democratic process, but also empowers the consumer. You are an investor, and you are allowed to have a say. And in an industry that has long been about the lowest common denominator, this is a breath of fresh air.
Check any forum or media comment and you’ll see some audience criticism of any number of titles. Now think about a world where those people get to say that ahead of time, directly influencing what they want. That’s crowd-funding. That’s the future.
Thanks for reading State of Play. We encourage the ideals of discussion, and would love to hear your feedback on this article.