Tales of the Rampant Coyote

Adventures in Indie Gaming!

The Crowdsourcing Revolution?

Posted by Rampant Coyote on April 13, 2012

It seems that with DoubleFine’s big adventure (to the tune of over $3.3 million), the floodgates were opened for another source of funding for “niche” games. The old-school style Wasteland 2 has now been funded to over $2.4 million (More, if you include out-of-band pledges) with three more days to go.  And there’s more. MUCH more. This month, it feels like a new RPG or adventure game is going up on Kickstarter daily. Actually, there probably is more than that, but I’m only counting the ones that are “interesting.” By interesting, I mean that have either a team with a track record, or a known license. Or both. Jane Jensen is doing it. Dead State is doing it. The Banner Saga – done by some ex-Bioware folks – is doing it.

It’s becoming a venue for frustrated developers who are tired of johnny-one-note publishers refusing anything that isn’t likely to sell 2 million+, or for aspiring indies who may never understand why they don’t get funded.

So is this a fad or a trend?

A little of both, maybe. This seems to me to be just an evolution of sponsorships or commissions, a funding method that has existed as long as written history.  And with the U.S. Congress having passed a bill to allow small investors to actually contribute to crowd-funded businesses for profit (actual investment purposes), things may get even more interesting.

I think the sudden ‘craze’ may die down a bit, but probably not before it becomes even bigger. Eventually, this will probably settle into just another of many sources of funding for smaller developers. While I won’t deny it’s a Big Deal, it ain’t as big as some of the other developments over the last decade or so.

Should publishers be worried? Short version: Yes. Long version: Yes, and if I were them I’d be scrambling to redefine myself in the new paradigm.

Longer version:  In my mind, publishers provide three (or more) distinct roles.

First, they provide funding. Much of the time that I’ve been in the business, this has often equated to little more than the publisher contracting out to developers on a work-for-hire basis. But funding independent projects still happens. But when it does, the publisher typically takes ownership of the project in every sense of the word. It’s not like a hands-off investor relationship.

Secondly, they provide distribution. In the old days, this ruled all. A developer couldn’t afford to mass-produce cartridges for the Nintendo, and they weren’t going to get into the retailers without a publisher. And retail was king. Even Doom, the big “shareware” sensation that really (in my mind) heralded the true start of the digital distribution revolution, sold far better at retail.  But that’s all changing, especially for PC games.  I’m a little concerned about the near monopoly Steam is acquiring, but that’s a whole ‘nother story.  Maybe one day Steam will demand that all games they sell require a publisher, because they are tired of evaluating individual games.  If so, that’ll change things again.

Thirdly, publishers provide marketing for games. Newbie indies are frequently astonished how they can build it, but nobody will come.  Ever. I still have problems not regarding marketing as a dirty word, but it’s seriously critical. And for bigger titles, it usually requires deep pockets that individual developers simply don’t possess.

Another, lesser role that publishers provide is consultation. As much as we love to give ’em grief, at least within their mass-market domain, (successful) publishers really do generally know what they are doing. They know what it takes to get a game out, and they kinda-sorta know what sells, in their herd-mentality kinda way. They can be invaluable resources to a development studio in helping make the game better and better-selling.  They can provide testing, leadership, design help, etc.

Okay, so here’s the thing: In the past, all of these roles had some level of interdependency which made a ‘one-stop shop’ make a lot of sense. That also gave them an incredible amount of power and leverage in any deal, making them gatekeepers and middlemen capable of demanding the lion’s share of revenues.

That’s becoming less of the case now. Publishers can still dominate on the mass-market front… that’s what they are built for. But these other aspects of their business, especially on smaller scales, are no longer so easy to dominate.

Distribution is obviously the big one. While that leg is not completely kicked out of the way yet, it’s definitely getting wobbly. And if I may mix my metaphors a little bit, this was the keystone of the rest of the business. It’s why the music studios have been screaming doom and gloom for a decade.

Funding is probably the second biggest aspect of their dominance. You have to have money to make money, as the saying goes. It’s generally true. But alternative sources of funding have always existed, from small business loans to friends-and-family investment, to the development team taking out second mortgages and working night jobs and selling merchandise to help fund their activities. And now crowdfunding is just one more alternative – and an increasingly attractive one.

Then you have things like the indie fund, and other successful indies (like Notch) offering funding for projects as kind of proto-publishers… but without taking on the traditional publisher role. Yet. Maybe never. We’ll see. But again

What’s next? Marketing? That’s a long-established business in other fields, and fledgling services for indies and the games biz have been around for years. It hasn’t really caught fire yet, but I see it coming. Ditto for consulting services. As more and more small to mid-sized studios exert their independence, this sector will grow.

I see all this as sort of a critical mass that’s about to explode. The era of the indie is here, folks, and Kickstarter, 8-Bit Funding, and other forms of crowdsourcing are just more logs on the fire. Holy crap, I’m really mixing my metaphors, aren’t I? Right now, it’s not big enough to really challenge the big publishers on the AAA front. Yet. I suspect that’s coming, however, and publishers should be preparing for that day. And in the meantime, they have to decide — do they concede the ground on mid-tier games, or do they start redefining themselves now to make themselves an attractive partner for smaller developers?

To me, this looks a little like a new golden age for niche and mid-tier titles. It’s been happening for a while. Crowdsourcing is just the latest of many great opportunities opening up for game developers. It’s a good time to be a game developer.

And it’s an even better time to be a gamer.



Filed Under: Biz - Comments: 6 Comments to Read

  • Andy_Panthro said,

    I’ve backed a few things on Kickstarter now, and no doubt will do so again. A little odd to be paying it all up front with nothing to show for it until perhaps a couple of years or so later!

    As for mid-tier/niche titles, I’d like to single out Paradox, both as a publisher and a developer. Over the past few years they’ve really grown a lot, thanks to a number of great niche games and the way they used digital distribution.

    Also, I saw this article in Wired (via @ShamusYoung): http://www.wired.com/gamelife/2012/04/opinion-kohler-video-expensive/

    It highlights ever-increasing game development budgets as a major problem for the big publishers. That big-budget excess generally leads to games with broad appeal and great looks, but rarely gives us those niche gaming experiences that some of us crave.

    Kickstarter may have shown an alternative, but the sorts of budgets that has produced so far are really quite low by the big publishers standards. I’m not sure they feel worried yet.

    Things are generally good though, especially for a PC gamer. I’m already looking forward to so many games, and have so many others yet to play!

  • jwmeep said,

    So what does this mean for guys like you Jay? Not really concerned with all the indie RPGs popping up on there (they seem to be proving the fact you need to be an established name, or have a pretty low goal, or something really amazing to show in order Kickstarter to work), but the bigger ones from medium sized developers. Specifically Wasteland 2, Shadowrun, and I’m sure there will be more. For years indie devs like Jeff Vogel and Basilisk Games have marketed their stuff as being the old school RPG experience that the big companies that refused to make. Now you are going to have some big(er) companies making old school RPGs with million dollar budget behind them. That’s some pretty stiff competition.

    Plus it’s got to be pretty frustrating with people throwing 2 million bucks at a guy who in recent years has only done Iphone games, and who’s company has been spewing a lot of hateful comments towards old school RPGs, just for the promise of an old school experience. You have gotten a favorable review on RPG Watch, mostly favorable impressions on RPG Codex, tons of coverage from both sites during development, a favorable Game Banshee review, a handful of awards, coverage from everything like Rock Paper Shotgun to Gamepro online, and you still have failed reach the niche crowd of RPG fans you are targeting. Yet they pull in thousands of people, from the same niche you can’t seem to find. I do realize this comes down to name recognition. And Notch tweeting them helped too. Also Brian Fargo seems have a nack for PR, or is just one hell of a con man. He loves saying all the right things. (Not to disparage Wasteland 2 or Shadowrun, I pledged to both.)

    But pessimism and frustration out of the way. this is a great time to be a PC Gamer, and an RPG fan.

    One final test will be how well things like the Doublefine adventure, and these other products sell once they hit. What happens in a worst case scenario? Let’s say no one buys the game, since everyone interested already donated through kickstarter. They only break even. What happens then?

  • Rampant Coyote said,

    One word: “Minecraft.”

    While it’s definitely an outlier, the fact is that it has outsold (and WAY WAY out-ROI’ed) several AAA games. All before it even got to console. We’ll see what happens when it hits the X-Box.

    Anyway, what this means is that while they are still in a whole different league from all these indie and crowdsourced projects, they are also painfully aware that the big budgets are no guarantee of success, or being able to beat these other games in the market. And they don’t have to strain their eyesight looking over their shoulder to see what may be coming up from behind.

  • Rampant Coyote said,

    @jmweep – Lots of great questions there, and I really don’t know the answers. On the final question – so they just ‘break even’ – that’s actually exactly what happens to developers 99% of the time right now. Their advance towards royalties is supposed to cover the costs, and while some padding does take place, that’s pretty much where it’s at. Period. Very few developers see any significant royalties on the back-end. The deals are structured by the publisher that way very deliberately.

    As far as where I’m standing, there’s two ways of looking at it. I can say, “OH! Well-funded competition! I am sooooo screwed!” And there’d be some truth to that. Or I can also say, “Hey, wow, old-school style RPGs are making a comeback and bringing a wider audience back with it! This means a bigger pie for all of us!” And there’s truth to that one, too.

    The big key, I think, is to avoid making a generic RPG. That was very much part of my thinking with Frayed Knights – why I took the approach I did. I figured I could stamp it with my own personality and a unique approach to the genre, so that it can NOT be completely replaced by someone else who is better funded than me. But if I was making a game that was really “just a Wasteland clone” right now, then yeah, I’d have cause to be more worried.

  • jwmeep said,

    Good point.

  • Charles said,

    Another thing to consider: RPGs take 2 yrs to develop, one month to play (give or take). If W2 or Grimrock revive a lasting appetite it is good news for other indies. If they provide that last fix people will only want once… Then it was all doomed from the start.