Crowded House

Fri 10 Feb 2012 8:00am GMT / 3:00am EST / 12:00am PST
Development

Crowdfunding may seem like a curiosity now - but it's a glimpse at the future of creative industries

A little over ten years ago, the team running SETI - the Search for Extra-Terrestrial Intelligence - found a groundbreaking solution to an enormous problem. The team's efforts to secure data feeds from radio telescopes had been immensely successful - too successful, in fact, to the extent that SETI was inundated with vast amounts of radio data which it had no way to analyse. The organisation was running on a minimal budget, and the kind of computing power required to search that much data for potential signals would have been too expensive even for a much better funded effort.

The solution reached by the SETI team at the University of California, Berkeley, was SETI@home - a distributed computing effort which sent out packets of radio data over the Internet to volunteers who gave up the unused power of their home computers to the processing efforts. The result was that SETI was able to tap into hundreds of teraFLOPS of processing power (stop sniggering, that's how it's measured) at minimal cost - buying a supercomputer capable of that would have bankrupted the organisation.

SETI@home wasn't the first distributed computing effort of this type, nor is it the most successful, but it was the first to really capture the imagination of Internet users. As such, it's not a bad place to stick a flag in the dirt and say, "here was born the crowdsourcing idea".

Crowdsourcing has come a long way since then, and the concept is still difficult for many people. It's easy to understand how the computing power of tens of thousands of normal PCs can be combined to outperform a supercomputer using some clever software. What's not quite so easy to understand is the sheer power which can be brought to bear on an enormous range of problems by applying the same principles of distribution not to computers, but to the people sitting at them.

"Two pairs of eyes are better than one, people will say when they're offered help in searching for something - but what about 100,000 pairs of eyes?"

Two pairs of eyes are better than one, people will say when they're offered help in searching for something - but what about 100,000 pairs of eyes? The reCAPTCHA service asks web users logging into websites to identify two words taken from scanned documents, which computers have failed to recognise. The input of thousands of users generates startlingly accurate results. When Wikileaks released thousands of documents last year, the Guardian engaged internet volunteers in combing the documents for crucial information - a task that would have taken the paper's journalists months if not years, and was completely beyond the comprehension of even the most advanced computer software, but could be accomplished through crowdsourcing in hours.

These are simple examples. The extent to which crowdsourcing has impacted the world we live in is extraordinary, and growing. Each of us in the developed world walks around with an Internet connection, a surplus of computer power and a high resolution camera in our pockets. The leveraging of that power using the paradigms created for distributed computing has the potential to overturn entire industries - perhaps even to topple governments.

What I want to talk about more specifically, though, isn't toppling governments - but it might be something even more profound. It's a logical progression from crowdsourcing which, somehow, almost nobody seems to have foreseen - and whose eventual impact, I'd argue, still isn't fully understood.

Earlier this week, veteran developer Tim Schafer announced that his company, Double Fine, wanted to make an adventure game - a genre often lamented as being dead before its time - but that it wanted to secure funding for the game through unconventional means. Schafer launched an effort on Kickstarter, a funding site, aiming to raise $400,000 from the company's fans to fund development. At the time of writing, the effort has far exceeded that figure. Double Fine has the money to make its game, extracted entirely from the company's own fanbase without the slightest bit of involvement from traditional funding sources like publishers or venture capitalists.

This is crowdfunding - the logical evolution of crowdsourcing. What began as an effort to aggregate the spare computing power of volunteers and expanded into the aggregation of their spare brain power has posed a new question - can we aggregate the spare money in their bank accounts? The answer, it would seem, is yes.

Crowdfunding poses absolutely enormous questions not just for videogames, but for the entire structure of our economy - particularly our creative industries. Of course, Schafer's success is a fringe case, and it's worth noting that another equally ambitious crowdfunding effort, which hoped to raise $300,000 for the development of a sequel to the Nexus space combat game, recently failed to hit its targets by quite a significant margin. It's not time for game developers to burn their bridges with publishers and VCs just yet - but all the same, there's a seismic shift in the landscape occurring here which is important to consider.

"Crowdfunding asks the Internet audience to put their money where their mouth is and pay for the development of something they'd like to enjoy."

Publishers - and to a certain extent VCs - have different functions depending on which perspective you view them from. Financially, they are investors, picking projects which are likely to succeed and throwing backing (financial and otherwise) behind them in the hope of making a return from the project. Creatively, though, they are gatekeepers. They are, for better or worse, in the business of finding things which they believe they will be successful and permitting those things to be made - and thus, by act of omission, preventing other things from being made. In this, publishers rely on their own instincts and market research; no mechanism has existed up until now to effectively test what the market will actually pay for.

Crowdfunding approaches that from a novel perspective. Rather than putting a group of people into a room with some free biscuits and asking them if they'd theoretically spend some theoretical money on a theoretical game at some theoretical point in future, a scenario from which the only reliable data that can be extracted is related to the group's preference in free biscuits, crowdfunding asks the Internet audience to put their money where their mouth is and pay for the development of something they'd like to enjoy.

There are multiple ways to approach this. Kickstarter is the most popular at present, and simply says, "invest, and you'll get a copy of the finished product; invest a bit more and we'll give you some goodies as well". Capitalists have criticised this on the basis that the investors don't get any return on their investment - if the product does stunningly well, the people who funded it don't get anything back. (Crowdfunders would probably respond that capitalists might enjoy their lives more if they didn't measure every damned thing in coins, and observe that most of the history of human creativity has been funded by patrons using their wealth to pay for artists to create things for them, not by suited executives shepherding creative talent into building marketable "product".)

That's where the second crowdfunding model comes in - essentially crowd micro-funding, in which the crowd donates little or large amounts, with a view to taking home a share in any eventual profits from the venture. If this sounds like it's the stock market being reinvented, then that's because, in essence, it is - it's the emergence of a grass-roots stock market in creative projects, growing up in the shadow of the completely bastardised and arguably unfit for purpose stock market in corporate shares upon which our economy rests (and often, slips off).

Needless to say the latter model creates all manner of legal problems, because the laws governing funding and finance have been created to enshrine stock markets as the beating hearts of national economies, and it's going to take a long time for governments to twist their heads around the idea that individual people might want to take that power into their own hands on some scale. The legal problems, however, may not matter - people are going to do it anyway, and the law will have to sort itself out in the wake of progress, as usual.

What does this mean for game development? It means doors are opening. Few of those doors will be remotely as large and wide as the one through which Tim Schafer and his crew sailed this week, but the model which he has used is hugely illuminating - especially once you start to consider what else might legitimately be considered crowdfunding. Minecraft, for instance, started out selling 10 Euro copies of a very unpolished alpha to loyal fans in order to fund further development - if that's not crowdfunding, what is? If that's not a radical new business model (build something rough and see if people love it enough to pay for you to build a better version), then what is?

"What does this mean for game development? It means doors are opening."

Sure, Tim Schafer is famous and has a huge following - but Markus "Notch" Persson wasn't. Besides, not every developer needs to make $400,000 to build their game. Not every developer needs to raise funds before doing the groundwork for their game. Variations of this model can work for smaller amounts of money, for games at various stages of development (right up to being finished - lots of projects on Kickstarter have successfully sought money for physical publication of completed digital products), and with various incentives for investors, from the warm fuzzy feeling of being a patron of the creative arts up to the potential for a genuine financial return.

Think this is a flash in the pan? Think again. Consider the foundation of nation states - the world's most powerful entities in spending terms, built on the simple economic principle that if a whole lot of averagely wealthy people contribute a little bit, they can outspend the most wealthy elites without breaking a sweat. Now consider that principle applied to the free market economics which exist in the creative industries - and while you're at it, remember one more thing.

The success of effectively crowdfunded efforts like Minecraft and Double Fine's new game comes at a time when the world is in the throes of one of the toughest recessions in decades, when disposable income is at a premium for many. Consider a future, five years down the line, where the economy is growing again, disposable income levels are rising - and crowdfunding is well established and trusted as a way to patronise and influence the arts. In the long run, perhaps the 20th century will come to be seen as a difficult transition period for the arts - when for just a moment, the cold hand of capitalism had to be grasped, in the gap between the patronage of the wealthy and the patronage of the crowd.