Tales of the Rampant Coyote

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Indie Funding – And What Comes First

Posted by Rampant Coyote on August 12, 2010

I’ve been meaning to post and comment on this for a while. Brian “Psychochild” Green has an excellent article on all the different ways you can fund indie game development. Aspiring indies, take note.

Psychochild on Indie Funding

I think it’s a pretty exhaustive list, actually, with all kinds of weird options covered within broader headings.For example:

Selling blood for money to pay your concept artist = self-investment (in a big way).

Visiting Vinnie and Luigi (not the Mario Brothers you are looking for) for money with your kneecaps as collateral = self-investment.

Begging friends and relatives for help with your game = Bootstrapping.

Begging friends and relatives for money for your game = Project Investment.

I think a small business loan would also count as self-investment, as you are still personally on the hook to repay the money.

And so forth.

The big challenge across the board – a problem more fundamental than finding funding – is being able to accurately predict the ROI – Return On Investment. For every dollar you invest in a game (be it sweat equity or real cash), how much do you expect to get out of it? What’s the likelihood of losing money, versus the likelihood of making much more? If Peter Molyneux’s theoretical mainstream developer spends $5 million on developing a killer iPhone game and it sells a million copies, great. But if it only makes $2.10 per game that it sells, it’ll be on the fast track to insolvency.

If you don’t care, and you are doing it just for personal satisfaction, good for you. But don’t expect anyone else to be willing to make those same sacrifices to realize your own personal dream.

So how do you figure it out? Well, that’s the real trick. When I first started the indie game thing, I tried to obliquely ask the same question that most newbies ask: “How much does an ‘average’ indie game sell?”  That’s very much a “How long is a piece of string,” question. And I found a great answer one day by an experienced indie (pre casual-game boom):


I guess he was rounding off to the nearest integer, or was actually picking an approximate median based on anecdotal evidence. Now this was in a different era, where games were mostly downloadable for the Windows & Mac and some cell phones, before portals and Casual Games and web-based gaming had really risen to full prominence. But while a lot has changed, the difficulty of generating ANY kind of revenue beyond pocket-change (literally!) for an indie game hasn’t.

What that means is that for a new indie on the scene – the kind that NEEDS the money to get started – there’s not a very “realistic” way to set up projections. The way to remedy this is to make and sell indie games of the style / category you intend to make and tweak your business / marketing… a Catch 22.

Or – as we’re seeing in some areas – you can get some mentoring going on. We’re kinda seeing that with how Amanda Fitch of Amaranth Games is providing some help and advice for aspiring “casual RPG” makers, or how the Indie Game Fund is investing in likely candidates making games in the style they are familiar with. I’m not positive how Hanako’s business relationship with Spiky Caterpiller went for the game Science Girls, but it seemed a reasonable partnering of a new developer with a successful veteran.  Once upon a time we had Steve Pavlina doing much the same for casual and indie games.

We need to see more of this. Indies being indies, it’s certainly not going to ever be a universal thing (nor should it be). People are always going to break the mold, do their own thing, and sometimes be wildly successful at it. But as indies are in the wonderful position of having a bigger problem of growing the market rather than fighting over it, it seems like there are some excellent business opportunities out there for new indies pairing up with the vets. It may take on various degrees of formality, and it may not solve the funding issues (many indie vets are barely treading water themselves, but that still puts them in the top five percentile), but it may be an important step in solving a more fundamental problem.

Filed Under: Biz, Indie Evangelism - Comments: 7 Comments to Read

  • Andy_Panthro said,

    At what point can you consider yourself an indie developer? Do you have to be selling your game, or do games made of the love of the medium (or perhaps remakes/homages) still count? Just curious… it does seem to be a nebulous term.

    I’ve heard from a couple of indie developers that selling a few thousand units is considered a major success. The explanation of major success being enough to pay yourself the equivalent of a reasonable (probably low by some standards) years wage after you’ve paid all your costs.

    Digital distribution and low prices help shift a lot of units of course, as I expect there are a lot of folks like me who are willing to take a chance on a $10 game in a way you wouldn’t on a $60 game.

  • Rampant Coyote said,

    At what point can you consider yourself an indie developer?

    Answer #1: If you have to ask yourself this, you aren’t one.

    Answer #2: Once you’ve released a finished indie game to the public, then you are locked in as being a developer and not just a tinkerer / wannabe, I guess.

    Answer #3: “Indie” is an inclusive term, IMO, not an exclusive one. I don’t care if you are releasing games as freeware or for $100 or for subscription or for donations – it’s all indie if you are doing it without financing or control from a significant studio / publisher. It’s just a fuzzy definition of one end of the spectrum – you have mainstream game development on one end, and then ‘indie’ as everything else.

    Answer #4: If too much time has passed since your last indie game release, they may make you turn in your card. I may be in trouble.

    selling a few thousand units is considered a major success

    You measure success however you want. Whatever it takes to justify the time / money / effort investment. If doing it for smiles and good wishes is enough, cool.

    I know that some indie games that sell over steam sell *tens of thousands* of copies. Ditto for some casual games during the boom. Those are usually on sale, and Steam takes a big cut, so those aren’t getting the full $20 / copy profit or anything like that.

    And the Humble Indie Bundle made well over a million dollars, divied up between the developers and charity.

    So yeah. It goes all across the board.

    Me? I hope Frayed Knights just doesn’t LOSE me money, like it has so far…

  • Andy_Panthro said,

    Thanks for the reply, one of the things I love about independent developers is that you’re often very willing to chat with your customers.

    Satisfies my curiosity no end!

    I take it your love for making games is what keeps you in the business? I kind of assume that from most developers, really.

    Some of the mainstream developers of the past and present started out as small groups or bedroom coders, do you think there’s the opportunity for indie developers to grow in the same way?

    I just wonder at things like the Indie Game Fund and whether you could end up with indie developers collaborating or even merging in order to take on the more mainstream developers.

  • Rampant Coyote said,

    Man, it sure as heck ain’t the money! 😉

    It goes both ways. There’s an expanding group of indies (myself included) who started as mainstream game developers who have since “gone indie” (see my article in The Escapist, “Going Rogue”). And there are several who have left indie development to work for the more steady paycheck of The Man. Though not necessarily mainstream – some have gone on to work for casual & social game development companies.

    Anyway, there are always partnerships and collaborations that can and will take place – in design, development, marketing, sales, assets, or whatever. That’s how you got things like The Humble Indie Bundle a few months ago, or even just affiliate sales like we have here. I expect to see more of that. And things like mergers and acquisitions aren’t entirely unheard of.

    But in general, indies being who they are, they do what they are doing because they like being independent and making their own games. Giving up that control and freedom might make sense at some point to form a bigger studio, but it would be a pretty big sacrifice for many gamers.

    But that doesn’t mean more cooperation & coordination & mentoring can’t take place.

  • Risto Saarelma said,

    I’m curious too, are people who aren’t selling their games considered indie developers? Are, say, Thomas Biskup or Emily Short indie developers, or just game programming hobbyists, since they give their games out for free?

  • Rampant Coyote said,

    Any hobbyist who labors to produce finished games for public consumption is an indie in my book. Their commercial success – or even attempts at monetization – have nothing to do with it.

    There’s nothing particularly magical about releasing the game to the public — but there’s definitely a difference between someone like Short, who is prolific and constantly pushing the boundaries of her chosen genre, and some guy who tinkered with some game code one afternoon while they were in high school which never went anywhere.

    But again, that’s just thrashing over semantics. Arguing over who might be “more indie” than whom just gets in the way of the important stuff.

    But those who invest their time and energies (and often, their own money) into freeware projects have limits, too. They are in the realm of self-funding, where their day job pays for their hobby.

  • The Big List Of Indie Marketing And Business Tips said,

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