Fan Funding

Consumers are no longer just the end user for video games – rather, they are increasingly becoming crucial parts of the development process.

Some independent developers, such as Minecraft designer Markus "Notch" Perssons, are leveraging gamers directly by using paid betas to fund their game's creation, while others are connecting with consumer investors through websites such as Kickstarter.com and 8BitFunding.com. This gives indies with tight budgets more options for developing their games. Rather than relying on publishers or loans for support, these companies can turn to their fans to help gather the resources necessary to produce their games

"We turned down numerous offers [from publishers]" explained Chris Hazard, president and founder of Hazardous Software, which is using a crowd-sourced funding approach for its latest game, Achron.

"[Publishers] would have taken away risks of failure, but also taken away the potential benefits if Achron were to succeed... Fan-based funding was our best option; those investing in the game truly cared about it and wanted to see it succeed without big strings attached."

The negotiations stopped when it became clear to us that we needed to hand over all of our IP and make a lousy revenue share deal.

Kenneth Andersen, Zero Point Software

For other independent studios, maintaining ownership of their intellectual properties plays a big role in the decision to tap the end consumer for financial support. Zero Point Software, an independent studio based out of Denmark, was in negotiations with several different publishers to produce its first-person shooter, Interstellar Marines. Once ZPS realised that signing a deal with a publisher meant signing over the rights to the company's game, it dropped out of any publishing discussions.

"The negotiations stopped when it became clear to us that we needed to hand over all of our IP and... make a lousy revenue share deal [on top of that]," Kenneth Andersen, producer and lead sound designer of Interstellar Marines, recounted.

"So it was time to make a new strategy. We came up with this crazy idea that our community should be able to pre-order the game years before it was finished and we haven't regretted this decision since."

And for some developers, the reason for going consumer-funded is even more straightforward: fans simply wanted to support the studios behind the games they love. This was the case for Crate Entertainment, the company behind the upcoming action-RPG Grim Dawn, which is using a combination of fan-generated funds and internal revenue to create the game.

Crate Entertainment is comprised largely of staff from the now-defunct Iron Lore, which is best known for its 2006 release Titan Quest. The game was popular with consumers, but publisher THQ maintained possession of the IP which prevented Iron Lore from producing a sequel. Without its flagship franchise, Iron Lore failed to find funding for a new project, which led to its closure.

Shortly after Crate Entertainment was formed, fans quickly began writing in to ask if they could contribute to the development of the studio's new game.

"We would have never thought up the possibility of fan-funding on our own because it seemed too improbable," admits Arthur Bruno, manager and lead designer at Crate Entertainment. "We sort of stumbled into fan-funding as a result of [the] many emails we received from fans of Titan Quest asking how they could contribute to Grim Dawn and wishing there was a way to donate. After numerous emails we finally figured 'Hey, we could really use some extra money for computers, software and outsourcing,' so if people want to contribute, why not let them?"