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Fund4Games - A new funding model for development?

The launch of Acclaim's Urban Freestyle Soccer on PS2 and Xbox last week was not, at first glance, much of a milestone for the games industry. The game itself has received unspectacular scores from reviewers and a relatively low-key marketing campaign from its publisher; but looking beyond this, the fact is that Urban Freestyle Soccer is potentially a very important title, because it's a game which probably would not exist at all if it weren't for the involvement of an innovative new company with a unique approach to the funding of game development.

F4G Software Plc, a part of the Fund4Games programme initiated by UK-based investment bank Noble Group, chose Urban Freestyle Soccer as one of its first projects and struck an agreement with both publisher and developer which saw the company providing both funding for the development of the game and experienced management to ensure that the development went smoothly.

Folded Neatly

The developer in question was Silicon Dreams - part of the Kaboom Group of development studios which went bust last autumn. At the point when Silicon Dreams folded, Urban Freestyle Soccer was still some time away from completion, and it's probably fair to say that in most circumstances, the project would have foundered at this stage - leading to an expensive development write-off for Acclaim. However, the funding and management model put in place by Fund4Games meant that work continued on the title practically without interruption and without intervention from Acclaim, and despite the collapse of the developer, Urban Freestyle Soccer made it to retail shelves last Friday.

It's not, perhaps, how Fund4Games would have wanted its first project to go, since the closure of a development studio is never good news, but it's a dramatic example of how robust the funding model which the company is proposing actually is, with Acclaim being the first publisher to benefit from the de-risking of the development process which F4G Software believes that it can offer - while the staff working on the project remained in employment for some time after the closure of Silicon Dreams as a result of the same de-risking.

Fund4Games has two further projects in operation with UK developers at the moment, which will be released before the end of the year, and has launched a public offering which it hopes will raise around £5,000,000 ('7.4m) in order to allow it to fund up to ten development projects, all of which will be developed in the UK.

Just Capital

The financing and management model which is used by F4G Software might seem familiar at first look, but according to F4G chief executive Tim Gatland, comparisons with companies such as Capital Entertainment Group, the now-defunct development funding company which was set up by Xbox creators Seamus Blackley and Kevin Bachus, reveal more differences than similarities.

For a start, F4G isn't interested in providing funding for projects which don't have a publishing deal in place, unlike CEG's model which saw the company funding products in development and then attempting to place them with publishers later on. "We're very happy to talk to developers who don't have publishing deals, but we're fairly conservative," explains Gatland. "It's not high risk reward, it's medium risk reward, so we don't actually provide funding until a publishing deal is in place."

"We're not trying to be an arbiter of taste, and we are not agents - we provide a management service which, from a publisher's point of view, largely de-risks the development side of things, but what we are not trying to do is to de-risk the publisher's job itself - picking out these products and knowing the marketplace."

To this end, Gatland sees the F4G model being applied in three different circumstances - with developers approaching the company as they close in on a publishing deal, publishers presenting a portfolio of games and deciding which ones are most suitable for the F4G system ("higher risk developers, perhaps," he comments) and finally, IP holders approaching Fund4Games directly to enable their properties to be used in games. In all of these cases, however, Fund4Games will not provide funding or make a final decision until the "final triple" of developer, publisher and product come together.

Management Structure

The funding aspect of the company's work is obviously of key importance to both developer and publisher - with developers confident of working with a financially stable investment bank, and publishers given the luxury of not having to pay out until such time as the product is actually finished - but perhaps even more important is the management structure that Fund4Games puts in place on each project.

"The people that we put working on projects come from a small network of project managers that we have retained," according to Gatland. "We put on a project manager who is appropriate to the game - we try to get someone who understands the genre and has previously worked on it, and can really help out the developer."

"We're looking at ongoing financial stability, and we're looking at milestones to make sure they're delivered; on a more regular basis there is a lot of contact between our project manager and the team both at the developer and at the publisher. Very often our producer can sit aside and see where exactly the problem lies in any given situation, because it's a very different relationship to that between the developer and publisher."

"What he's not doing," emphasises Gatland, "is moulding the content - that is between the publisher and developer. We don't try and stand between them - the publisher simply relies on us to worry and production, scheduling and delivery issues."

Funding the Future?

The model which F4G proposes is quite different, then, from the efforts of Capital Entertainment, and also differs significantly from the much more technically-focused consultancy being offered to development studios by middleware provider, and now management and technical consultants, Criterion. As such, it also differs from the film industry production model which was espoused by the founders of Capital Entertainment, and which they continue to maintain will be adopted by the games industry in the future.

"Lots of people say, 'let's do it the way films do it', but software and games are different," contends Gatland. "There are lessons to be learned form how films work, but they are different activities and you have to be careful about borrowing things wholesale."

If Fund4Games is successful in its public offering, the company hopes to manage around ten development projects in the UK, and will gradually grow beyond that. Although at the moment the focus of the programme is purely on the UK development industry, Gatland acknowledges that there is potential for the F4G model to be applied abroad as well. "The industry is growing - there is money being made in this industry and we feel very optimistic about it," he enthuses.

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