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Is crowdfunding still a viable funding option for indie game developers?

Crowdfunding, once hailed as the knight in shining armor for indie game developers seeking financial support, has undergone significant evolution over the years. Anya Combs, former Director of Games at Kickstarter, delves into this transformation, questioning whether crowdfunding remains a viable option amidst the many funding models available today.

The inception of crowdfunding traces back to the late 20th century, with pioneering endeavors like the British band Marillion’s online donation-funded reunion tour in 1997. The subsequent emergence of dedicated platforms such as ArtistShare in 2001 and Indiegogo in 2007 marked pivotal milestones, democratizing funding avenues for creative ventures.

However, the landscape of crowdfunding experienced seismic shifts with the advent of Kickstarter in 2009. Combs accentuates the watershed moment in 2012 when President Obama signed the Jobs Act. “Also known as the crowdfunding bill, which legalizes equity crowdfunding. This really aimed to lessen the regulation burdens on small businesses, and it legalized the concept of equity crowdfunding.” This legislative breakthrough catalyzed a paradigm shift in financing dynamics, fostering a fertile ground for entrepreneurial innovation.

Equity crowdfunding

Nowadays there are several crowdfunding options available. Combs highlights the unique value propositions of industry stalwarts like Indiegogo, Kickstarter, Backerkit, and Gamefound. From flexible funding models to post-campaign pre-order mechanisms, each platform offers a nuanced approach tailored to diverse creator needs. She also delves into the performance metrics of crowdfunding, shedding light on the success rates and funding trajectories observed across various platforms. “Making games takes a long time. So, if you use crowdfunding for funding and not as a marketing tool, it takes about three to four years from the moment of funding to delivering the game.”

Anya Combs gave this talk at the IndieGameBusiness Sessions.

Crucially, Combs underscores the importance of diversity in funding options, advocating for the continued exploration of different options like equity crowdfunding. While acknowledging the inherent risks, she posits equity crowdfunding as a potentially potent instrument for innovation and inclusivity within the gaming ecosystem. “If we’re looking at crowdfunding as a whole, having different options is important and equity crowdfunding probably at some point will be necessary.”

25% success rate

Now, let’s delve into the realm of crowdfunding success rates and how they shape our understanding of this funding model’s viability. Crowdfunding, across various platforms and industries, boasts an overall success rate of approximately 43%.”But looking at the video game success rate, specifically on Kickstarter, it’s less than 25%. While the tabletop games success rate is less than 80%!” Understanding the nuances of crowdfunding success rates unveils intriguing patterns.

That brings Combs to the central question of her talk: Is crowdfunding still a viable option? “The days of raising millions upon millions of dollars don’t really exist anymore. There’s a lot of different reasons as to why that is. One specifically for video games, the landscape of video games has changed exponentially”, she says. Factors like shifting market dynamics and evolving publisher-creator relationships underscore this transformation.

Scams and mismanagement

In navigating the crowdfunding landscape, collaboration with publishers emerges as a strategic imperative. “There’s an ever-growing number of publishers that are looking for different ways to help creators. Part of that is thanks to Kickstarter. I know for a fact, a lot of publishers look at Kickstarter pretty religiously to kind of see what’s going on and offer developers the help they need.” 

In examining funding dynamics, most video game projects on Kickstarter secure sums ranging between $50,000 and $100,000. “It’s a lot of work for a little return”, warns Combs. “You need to have 50% of your game done before even considering crowdfunding. You’d have 30 seconds of gameplay that’s gonna be as close to the final project as possible.” 

Intriguing patterns

Ultimately, the viability of crowdfunding hinges on myriad factors, from platform selection to project genre and community engagement. Aspiring creators must meticulously weigh these considerations before embarking on their crowdfunding journey. By embracing the evolving nature of crowdfunding and adopting a strategic approach, they can navigate this dynamic landscape with confidence and clarity.

Watch the full talk of Anya Combs at the IndieGameBusiness Sessions. 

Eric Bartelson
Eric Bartelson
Editor-in-Chief of PreMortem.Games. Veteran game journalist for over 20 years. Started out in 1999 for game magazines (yes the ones made of paper) such as PC Zone Benelux, PlayNation and GameQuest, before co-founding Dutch industry paper Control Magazine.

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