Does crowdfunding have a future?

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Kickstarter may no longer be the lucrative funding platform it once was, but inXile CEO Brian Fargo believes that there is still a bright future for community-driven game creation

In 2012 Kickstarter changed the way in which videogames are pitched, funded and created. That was the year the platform went from niche interest to global phenomenon, successfully aiding in the resurrection of ageing game genres, giving established studios a new lease on life and helping support an independent revolution. Now, just four years later, it looks as if the crowdfunding bubble has deflated; the number of projects being successfully backed is in decline, as too is the average dollar raised for the lucky few that continue to buck the trend.

Does crowdfunding have a future?

One such developer is Brian Fargo, CEO of inXile entertainment. Fargo has been behind some of the most successful crowdfunding campaigns in the scene, with Wasteland 2, Torment: Tides of Numenera, The Bard’s Tale IV and Wasteland 3 all made a reality through Kickstarter and Fig.

Fargo is hesitant to suggest that crowdfunding is in decline (for obvious reasons) though he does believe that expectations have shifted significantly in the past four years – potentially making it more difficult for newer developers and studios to make a splash in the saturated scene.

“I would say that expectations are quite different now. If you look at our campaign for Wasteland 2 [2012], I didn’t really show anything of the game; it was just me doing a comedy gig and just talking, you could do that back then. But then you contrast that with Wasteland 3, to launch that campaign cost us six figures – to put all those assets together. It cost that to be able to say, ‘forget me telling you about this vision and let me show you a little bit more’. I think the expectations are much higher now for making people see the vision of what you intend to do.”

It’s difficult to pinpoint the exact reason as to why developers need to work harder to earn the trust of backers, but looking at the number of disappointments (Ouya, Mighty No. 9) and high-profile products that never saw release (Allison Road, Yogventures), it’s perhaps no surprise that prospective investors are more hesitant to put their money down on a good idea and blind faith alone.

Does crowdfunding have a future?

One such sticking point is the shifting of release dates. More often than not, games that have been brought into life through crowdfunding have missed their intended window, that’s a state of affairs that tends to anger the community – time to properly make a game be damned, if a release date slips the digital pitchforks come out. There isn’t much of a remedy to this – as making games is a creative nightmare of shifting parts – though Fargo believes that being generous with development time is certainly one way enterprising new studios should approach campaigns.

“I’m trying to think about what people usually complain about but date expectation is always the biggest one. I mean just look at Wasteland 3,” says Fargo, noting how he set a release date of 2018 on the project when the crowdfunding effort launched in 2016. “I moved the date on that one way out there, to the point where I’m hoping that I can beat it and become a superstar.”

As you might be aware, Kickstarter is no longer the only platform for crowdfunding videogames. The biggest alternative is Fig – which boasts Fargo, Feargus Urquhart of Obsidian Entertainment, and Tim Schafer of Double Fine Productions on the advisory board – an equity platform where your money (when you put in enough) isn’t a glorified pre-order, but an investment where you will see monetary returns on the final product. For the bigger, more successful independent studios, it seems to be the natural environment to launch a game.

“Reward-based crowdfunding [Kickstarter] has certainly been great for us, but it becomes more difficult every year to generate the excitement [and] to get meaningful numbers than it was in 2012 and 2013… unless you’re in the board game business, apparently,” he says, laughing. “But if we can ship a game and we can make everybody a profit, well, then I could do that for the rest of my life. If we can ship Wasteland 3 and everybody makes a 45 per cent return, how easy is Wasteland 4 going to be?” he says, laughing once again. “If we get three million dollars with Wasteland 2, those are just pre-sales. If we get three million dollars with Wasteland 3, we’ve got to pay it back plus interest; it’s not as profitable but it’s more sustainable.”

Does crowdfunding have a future?

That isn’t to say that reward-based backing doesn’t still have its positives. Fargo believes that smaller projects and studios are still better off minimising the risk of crowdfunding and heading to Kickstarter. “I don’t think one will replace the other. There are definitely different dynamics that will apply to each one [and] it all depends on how much you need the money too. Things will change and set in place as more experimentation is done, but we may find out that the average Fig campaign is higher because people have made good returns.

“One of the guys who is on the advisory board is part of the Indie Fund and what excited me when he talked about the investments they made – and they tended to be smaller projects, $25,000 to a $100,000 or so – he told me they made money on every single one, they were all profitable,” says Fargo, noting that while this is compelling information it’s still early days for Fig, especially as the platform still isn’t in a position where it can reveal its average returns.

“But I think that when that starts happening we might find out that, okay, if you go to Kickstarter as an unknown developer your average is X, but with Fig your average is X + Y but you have got to give the money back [to investors] and so people could start to make an analysis of what model they prefer.”

Fargo is clearly a huge supporter of crowdfunding. It has allowed him and a number of other studios to create freely without publisher interference. It has given them the scope to create niche games that audiences had been crying out for. It has also allowed studios to drop any hesitation about sharing ideas and helping each other out even if their games would appear to be competitors.

Does crowdfunding have a future?

“A huge part of this crowdfunding atmosphere is that it has brought developers all together, closer than we have ever been before. I work with everybody, whether it’s Obsidian or Harebrained Schemes, Larian Studios or ArtCraft Entertainment, you name it, we are cross-promoting each other across our social media feeds, through our campaigns, we back each other’s projects significantly. We will be $10,000 backers, $100,000 backers. We don’t see each other as the competition; the real competition is the big guys, it’s Bethesda and Activision, those are the guys that have real market share – we are rounding errors compared to those guys.”

The future of crowdfunding is unclear, but so long as a studio has a good idea and the means to bring it to life in a timely fashion, there’s no reason why it won’t continue long through the current generation cycle. For now, the likes of Kickstarter and Fig continue to fill the void that they always have, they bring games to life that the bigger publishers are too afraid to touch, and the worth of that is simply unquantifiable.