Unique new funding model for VIS' State of Emergency 2

Scottish developer VIS Entertainment has revealed details of its new funding vehicle for forthcoming title State of Emergency 2, which it says will enable it to complete the project and negotiate good terms with a publisher.

The company has created a special function company to provide project finance for the game, with the backing for the new company coming from a number of existing shareholders in VIS Entertainment.

In effect, the new company will act as the project backer for State of Emergency 2, allowing VIS to develop the game without having to find a publishing deal until late in the project - a move which will give it a strong negotiating position with third party publishers.

The unique deal, believed to be the first of its kind in the games industry, will undoubtedly be watched carefully by many within the industry, as it could represent an entirely new way of funding development, by allowing investors to place stakes in individual projects rather than in development studios - a system which is similar to the one used by the film industry for its projects.

"This special arrangement is a demonstration of the faith which our investors have in VIS," according to VIS president and CEO Chris van der Kuyl. "Now we will concentrate on bringing State of Emergency 2 to market while negotiating with publishers from a position of strength."

The original State of Emergency received a fairly lukewarm critical reception, but it topped charts in the UK and USA at launch and went on to sell over a million copies in total, not least thanks to brand association encouraged by publisher Rockstar with that other Scots-developed megahit, Grand Theft Auto 3.

VIS has had its troubles since then, and although the success of State of Emergency boosted its financial results last year massively, the company has recently been forced to shut down its development studios in London and the Isle of Wight.

"This has been a trying time for the company," admitted VIS chairman Ken Lewandowski, but he is upbeat about future prospects for the group. "VIS is working on some other incredibly exciting projects with major publishers for release in 2004 and 2005⦠All our projects are on track with our publishing partners," he commented.