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Crowdfunding and Gaming: Stride or Stumble?

Posted by on September 29, 2015.

Crowdfunding, the process of obtaining funds from wide sources, may have been in use long before the internet was ever invented, but it’s only with the new ways of staying connected and finding publicity that the web brings that crowdfunding has really flourished. Sites such as Kickstarter and Patreon are offering new ways for creators to make their livings, and crowdfunding as a whole has grown in scope and popularity, but how is it affecting the video game industry?

When it comes to video games, crowdfunding websites have opened up a new perspective on the gaming market, and it’s increasingly looking like the mainstream, AAA publishers are out of touch with what consumers want. Konami’s Castlevania series, a long-running franchise with a wide fanbase, has gone for years without a new entry in the 2D, sidescrolling platform for which it is best known. While the series itself is kept alive, the vast majority of recent releases have been spin-off 3D action titles, mobile games or even slot machines, as Konami evidently believes that there is not enough demand among gamers for more of the classic-style Castlevanias.

In 2014, the original creator of the Castlevania series, Koji Igarashi, left Konami to form his own studio. He soon started creating a new game in the same exploratory action-platformer style as the classic Castlevania games, called Bloodstained: Ritual of the Night. In an interview with prominent industry journalist Jim Sterling, Koji discussed the difficulty of getting established publishers to support his game. “As each door closes on you, fewer and fewer remain open. In the end, when I finally did find support to build most of the game, it came with conditions — I needed to first prove that there was a market for an Igavania game.”
He continued, “Some of the publishers did understand there’s a following for this type of game, and that the fans do exist – but they assumed there weren’t enough of them to support the basic budget I was asking for.”

Once Igarashi made the decision to take the game to Kickstarter – both to complete the game’s funding and fulfil the condition for proof of a market by his publisher – the game achieved more than 11 times the minimum goal of £500,000.

Igarashi isn’t alone, either. Despite the success and popularity of Banjo-Kazooie and Banjo-Tooie on the Nintendo 64, developer Rare (Now owned by Microsoft) has not done anything with the series since 2008. However, earlier this year, a group of ex-Rare employees kickstarted Yooka-Laylee, a new title in the same style as the Banjo games. If Microsoft and Rare believed there wasn’t enough demand for such 3D platformers, they were proved wrong as Yooka-Laylee met its funding goal of $270,000 within 40 minutes of being posted.

While a fully backed crowdfunding project can usually be chalked up as a success for the developer, it’s not always so for the consumer. Once these projects have achieved funding, the developers are not under obligation to a single organisation with powerful legal clout, as they would be with more traditional publishing. Games such as Godus, created by infamous long-standing game designer Peter Molyneux, have come under fire for failing to deliver on promises made in the original pitch to backers.

In an interview with TechRadar, Molyneux shed some light on the process of making these inaccurate promises. “There’s this overwhelming urge to over-promise because it’s such a harsh rule: if you’re one penny short of your target then you don’t get it.” He went on to describe the thought process leading to such over-promising: “Christ, we’ve only got 10 days to go and we’ve got to make £100,000, for f**k’s sake, lets just say anything”.
While initially promising, the outcry over some of Godus’ design decisions has left many backers feeling cheated.

And Godus is by no means the worst case. There is a whole slew of successfully-backed games that were dropped, with their respective studios going quiet, dissolving due to financial issues or just disappearing without trace. As far as the backers are concerned, the money they put into the project is simply gone. While developers are legally obligated by the terms of Kickstarter to fulfil the initial promises they made, and to return the funds if they are unable to, Kickstarter ultimately cannot guarantee this. As the website is unable to issue refunds itself, the responsibility lies wholly with the developer. When a project fails mid-development, the backers’ money has often already been spent. In spite of their legal obligation to provide refunds, no legal action was ever levied against a kickstarter project at a federal level until June 2015, despite many more failed projects before it in which backers lost their investment entirely.

For developers, the crowdfunding revolution can be either a boon or a curse. With kickstarter games, the audience often expects a more transparent development cycle, which could be an unwanted restriction for developers. It’s very common for ideas to change, content to be added and removed, and even the entire focus of gameplay to shift and evolve over the development period, but seeing this process in action can reduce confidence from consumers and harm a developer’s reputation, possibly killing interest in the final product. Of course, studios backed with crowdfunding aren’t obliged to provide such updates, but a perceived lack of activity from a developer can cause just as much mistrust from the backers as seeing a negative change.

Meanwhile, to smaller development studios who occupy the space somewhere between ‘Indie’ and AAA, the crowdfunding revolution has been a positive boon. Larian Studios, which gained a cult following for its Divinity series of fantasy role-playing and strategy games. The latest to release in the series, Divinity: Original Sin was plagued by financial strictures from the start, and was only able to raise enough funds to release thanks to a Kickstarter campaign. Thanks to being able to set their own schedule without having one imposed by a publisher, Larian was able to give their project the development time they desired, and when it finally released D:OS was a huge critical and popular success. In this case, crowdfunding had a part to play in turning what was going to be a company’s swan-song game into a turnaround success, and Larian is already working on Original Sin 2.

It’s important to remember that Kickstarter is not just a platform for game developers. All artists, creators and producers can use it to fund their projects, and video games are subject to the exact same system that handles comic books, documentaries and potato salads. The problems that game developers and their backers face are not necessarily inherent to crowdfunding in general. Recently, a new crowdfunding site called Fig has been founded, with its focus specifically on video games.

Rather than the chaotic, open marketplace of sites such as Kickstarter and Indiegogo, Fig’s projects are carefully curated, with only one game open for backing at a time. These projects will alternate between relatively unknown studios trying to get their first idea off the ground, and more well-established independent developers, dubbed ‘iii’ to set themselves apart from AAA devs. Additionally, Accredited investors can purchase equity in the games, able to buy shares in exchange for much larger pledges.

It’s too early to tell how much of a game-changer Fig will be. With only one project active at any one time, it certainly won’t replace other crowdfunding platforms for game developers. It does have the potential to ameliorate some of the problems and risks that we’ve seen with crowdfunding up until now: Curated projects will mean that the developers need to be vetted before their pitches go up, which could greatly reduce the risk of projects going dark and investors losing their money. The tighter focus will ensure that the developers get more attention, as well, and that coupled with the options for large-scale investors will increase every project’s chance of meeting its goal.

There are a few potential pitfalls for Fig as well, though. When not misused, Kickstarter’s greatest benefit is that it allows anyone to try and fund their project, whatever their background. Since Fig’s solo project is cherry-picked by Fig staff, there is a possibility of excluding other worthwhile projects in favour of personal friends of the curators, or those seen as a ‘safe bet’. While it’s not uncommon for games being pitched on Kickstarter to already have some backing from a major investor, opening the Fig projects up for equity investments could eliminate one of crowdfunding’s biggest selling points: Freedom from pandering to shareholders.

Whether this is the next evolution or simply an alternative, the crowdfunding market shows no signs of going away, and the major-league developers and publishers are taking notice. Shenmue III was recently funded on Kickstarter, despite having Sega as its publisher, which is still one of the giants of the industry with a lot of financial clout, and even having support from Sony itself. The series had lain dormant since 2001, due to the cost of developing the first two entries and doubts that there was enough demand to guarantee a return on investment. With Kickstarter, the developer Ys Net was able to make sure the idea had enough support to be profitable before development even began.

There is some controversy over whether large companies such as Sega should be using Kickstarter at all, since it could take some of the available backers’ money away from small studios who wouldn’t otherwise have the capital to make their projects. However, from the developers’ and publishers’ perspective, using the platform makes sense; it’s a far more direct and reliable means of gauging what players want than any focus group or market research could ever be.

Crowdfunding is still a young marketplace. It has its share of risks and problems, and has suffered from some severe failures already. However, the value to gaming of an alternative to traditional, AAA publishing cannot be overstated. With boxed retail games, digital distribution and crowdfunding, there are plenty of options for consumers, and a level of competitiveness will help to keep all three markets healthy. With crowdfunded games, there is a certain degree of caveat emptor, but that applies to all games, no matter the developer. The fact remains that crowdfunding was the only channel through which Bloodstained, Yooka-Laylee, Divinity: Original Sin and Shenmue III could be made, and the only means by which developers could finally be persuaded to make what fans had been clamouring for.

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Submitted in: Expert Views, Josh Townsend | Tags: , , ,