The wisdom of the crowd

The wisdom of the crowd

By Tim Heaton

March 5th 2013 at 10:05AM

The Creative Assembly's Tim Heaton delves into the risks of crowdfunding

Yes, I know, it’s really hard to find enough money to make a game. Whatever the size of your ambitions it’s difficult.

It scales from just you and your cat, living off some savings and eating Sheba – and the cat has to go through the bins, through venture capital backed start-ups who may leave you high and dry at any point, up to scary mega-sums invested by mega-publishers.

All of those require your heart and soul – usually as payment for your right to make the game. But in any relationship that includes investment the lender will do due diligence and will audit progress. It’s their money after all, and they’re only investing to make more. It’s hard work every step of the way.

Or, you could just look to crowdfunding. That’s where people just give you money, for nothing better than a promise and an overvalued place in the credits.

Okay, so maybe that’s a little unfair, but crowdfunding for video games is in a precarious place at the moment. It could easily drop out of favour, and it’s hard to see how it will fix itself.

WHAT’S IN A NAME?

Firstly, its audience is core fanboy gamers, and not your average game buyer. They love all the game developers with history and character – Peter Molyneux, Tim Schaffer, Chris Roberts, etcetera. And so do I. But that’s a pretty restricted bunch of people, and arguably not the most deserving of crowdfunding.

Without a name or track record, it’s really hard to get your idea across. Ideally, you need a prototype, and to create that you need money. Very few people ‘borrowing’ money in the traditional way can convince publishers to spend money without a prototype, although in some lucky cases, and in the case of internal studios, that prototype is paid for. So, unless you were famous in the 90s you’re going to struggle to get visibility for your brilliant idea.

Secondly, brilliant ideas rarely make hit games. It’s 95 per cent about the implementation. And that’s down to the team, how they work together, how they make decisions, and so on.

That’s how successful publishers decide a winner – they watch how a team develops a game, and make hard decisions at critical milestones during its development. Crowdfunding often doesn’t allow any visibility, and you’ve fully ‘invested’ at that point anyhow.

Thirdly, the amount of money being raised may not match the amount needed. For people outside of the industry, the cost of making games is just astonishingly high.

When I say some of the sums involved out loud I’m shocked – and I mostly know where the money goes. I think pitching a PC game for £500,000 to people outside of the industry makes it sound like a major production, something that can compete with boxed games, or successful free-to-play games.

£500,000 is about 15-to-20 people for six months. With no marketing. It’s not impossible to conceive of a successful game made in that time, but it’s certainly not typical by today’s standards.

So what happens if you need an extra two months of development? Back to crowdfunding? Ask the same people who are already invested, but now feel they have to put more money in to get the game?

Sure, maybe they only put in a small sum to get what is in effect a pre-order, but maybe they haven’t. Maybe they really believed and made a relatively significant commitment.

They’re feeling the publisher's dilemma, wherein traditionally funding a project has cost so much money there’s no going back, and it’s easier to pay more than write-off what’s been spent. Sure, the developer can offer more incentives, and sometimes these are nice, and exclusive, and fun, but there are only so many of these. And, by definition, they have to be ‘cheap’, because that’s not what the money is for.

ALL’S WELL THAT ENDS WELL

Finally, if the game gets finished, you get your goods. That’s an interesting business arrangement. The developer has asked you to believe in their idea, and to invest in what is inherently a risky venture.

You get, at best, your money back in the form of a game and some other peripheral stuff that you want. And the developer takes none of the risk. The worst case is they burn all your money and give up. In many ways, they haven’t lost a thing by doing that. In the best case they make a lot of money, and have to give none back. You can imagine why they’re keen on this business model.

Now, I know I’m being the Grinch here, and that crowdfunding is about altruism and support for good things. It also spreads risk so no individual is particularly exposed. I’m also not suggesting there is anything other than freedom and community spirit driving developers who choose this funding method.

But there will be significant failures in the very young market that is crowdfunding. My advice is to understand there’s significant risk involved and pick the project you support because of your love for it, and nothing more.