[Music]
well this sure turned into a thing
here's something we've got to talk about
because this may end up changing
everything this is exciting times guys
through sites like rocket hub and
Kickstarter just in the last few months
we've seen projects like the Banner Saga
Double Fine adventure code hero and
several others find the capital they
need to come to life for the first time
since the 80s games with bigger budgets
are being made without publisher funding
now some of you may be wondering what
about this is so significant what does
this really mean for the industry well
it means that consumers can finally have
a real say in what gets released all
those genres that people have been
declaring dead all those games that were
deemed too small or unpopular to be
worth the time of a larger publisher
suddenly all of those games have an
outlet so let's talk a bit about how
this works and contrast it with the
traditional models of getting funding
for those of you who have been hiding
under a particularly soundproof rock
let's lay out the crowdfunding model
first
so most crowdfunding sites basically
work like a PBS funding drive the game
studio looking to raise money sets a
goal establishes an amount of time to
raise enough funding to hit that goal
and then tries to do everything they can
to get people involved in putting money
toward the cause one of the tools
fundraisers often use to get people
involved is to offer rewards for
different tiers of participation so for
example for putting in ten dollars a
person might get a pre-release copy of
the game whereas if they put in a
thousand dollars they might get a statue
of themselves incorporated into the game
for all to see so once a developer
manages to raise their money the
crowdfunding service takes their cut
usually somewhere between four and eight
percent and the studio is ready to begin
working on their project so that's the
basic crowdfunding model so what happens
in the traditional models well there are
really only two other ways to fund the
game unless you finance it on your own
time the first is via a publisher in
this model the group creates a prototype
for their game idea and starts shopping
it around to publishers this can be a
difficult span of time especially if
your studio isn't already a hot
commodity with some big titles on your
resume plenty of publishers will seem to
be interested in your project at first
because hey it doesn't cost them
anything to look but once it comes time
to buckle down and seriously make money
change hands small Studios sometimes end
up seeing a lot of that interest vanish
in fact the publishers kind of
incentivize to let this shopping process
drag out as long as possible you see
while all the negotiations and the talks
are happening the teams still going to
be working on the game and if the
publisher can string things along for
- that's one or two months less of
development that they're gonna have to
pay for and since the developer is gonna
have to keep scraping by on their own
funds during that time their operating
budgets gonna start dwindling so they're
gonna start getting more and more
desperate giving the publisher a serious
upper hand at the negotiation table now
I'm not trying to make publishers sound
evil here and things don't always play
out that way but it is how the incentive
system is set up so it does tend to
happen a lot so let's say a developer
does land themselves a publisher for
their game they get an agreement to be
given money at regular intervals so long
as they meet development milestones
decided upon by the publisher of course
the developer usually has to give up all
the rights to the intellectual property
of their game and a lion's share of the
post release revenue in exchange they're
often also given some guarantees about
publishing distribution and marketing
although that can be a little bit of a
double-edged sword as this can mean that
the publisher has the right to ask for
things marketing wise that may not be
the best for the game anyway once things
go into development the publisher
usually has regular review sessions and
can send someone down to the developer
to check on progress when necessary and
sometimes that can be a very beneficial
thing for less experienced developers
but again double edged sword if the
developer doesn't meet their milestones
the publisher usually has the right to
pull the remaining funding without
returning control of the intellectual
property to the developer and again
that's not the publisher being evil
that's just a necessary measure to
protect themselves from having people
take their money and not deliver a
product suffice it to say though when
those milestones aren't hid and funding
gets pulled no one leaves happy
but enough about publishers they're not
the only route you can always take money
from investors instead so how does that
work well investors get stuck which
means they get a say in how your company
is run any major investments will
usually come with the demand of a seat
on your board of directors so even if
they don't have full control over things
by having a majority stake in your
company they do have a fair say in the
overall company planning which might be
fine but there's one other tricky thing
about taking money from investors
you see investors don't get their money
back the same way a publisher does
publishers get their cut from the game
sales investors only see money if the
company itself is sold or if it makes a
public offering appears on the stock
exchange this means that as a developer
your goals and the goals of your
investors may not sync up very often you
want to create an awesome game they want
to create a sellable company sometimes
those goals overlap often they don't you
remember a few years back when we saw
all those companies springing up trying
to build multiple MMOs at once companies
who had never launched the title before
this is why see a successful game
release is all well and good but in
multiple games
a full-blown MMO platform that creates a
brand a company that can constantly
deliver investors love the sound of that
and as we saw it doesn't always work out
but now suddenly a third option appears
publishers investors and now
crowdfunding that changes everything
of course I'm not saying this model
doesn't have its own problems at some
point we're going to see one of these
big crowd funded projects fail some
developers Reach is going to exceed its
grasp and the whole thing is going to
fall apart with nothing to show for it
and no one to hold accountable and it'll
be pretty disappointing for everybody
involved
but despite the reality of that risk
consider the benefits of the three
funding methods I've listed crowdfunding
is the only one that simply asks the
developer to make the best game they can
no conflicting investor goals no getting
worked over by a publisher just take
this money we raised and make it into
something awesome and without the
obligations that the current funding
source is put on them developers will be
able to pursue projects that would be
deemed as madness by publishers and
investors crowdfunding will allow us to
break the cycle of sequels and safe
releases more than that it creates a
strange new dynamic developers working
with crowd funding sources are no longer
bound by the profit motive if all you
really care about is just creating games
getting to try different things and
explore new ideas then all you've got to
do is raise the funds to create your
game that's it
you don't have to concern yourself with
maximizing profits at the expense of
play or any of that nonsense you just
make your game and when it's done you
crowd raise funds for your next project
you may never end up becoming a
millionaire going this route but you'll
be able to create high quality work
without ever being forced to compromise
that quality for the sake of mass appeal
you can finally appeal to niche
audiences so long as those audiences are
willing to pay a little bit more for
their experiences by giving to your
crowdfunding drive you can actually work
on dead genres again adventure games
baldur's gate style RPGs anything you
can think of you can make a game with a
prohibitive level of depth or difficulty
and not worry that doing so will keep
some people from playing your game
something the triple-a world has been
increasingly loathe to do but most
importantly thanks to all of you guys
who are out there putting money into
these things
we can make better games for the first
time since ever consumers can have
direct say about what gets created you
can go around the publishers you no
longer have to beg to see something
released in your region sit there
frustrated watching millions of dollars
get wasted on terrible games while the
unpopular or less accessible games you
would or get passed over this really
could change everything all of the
things we've been arguing
on this show everything you've written
to us about every letter we ever
received asking what can I do is
answered here by letting the consumer
truly pick what you want to see produced
we our consumer and our currency
megaphone just got a whole lot louder
the future is looking pretty awesome
right now we'll see you next week
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