Different Sources of Funding for your Game Launch

Publishers and investors are primarily looking for exciting new companies and games for new chances to help and diversify their businesses. This is why game developers and studios need to present their fundraising as an opportunity. For this to be successful, the project you are working on must be planned and presented as a real chance for growth and development. This usually means the game has a great commercial potential – and is, of course, fantastic, amazing, creative, and enjoyable to boot. Also, having a game ready (or the idea) is not enough. You must plan it carefully, just as it is in your interest to research well in advance the type of financial partners and investors that suit you best.

It is good to note that publishers might not be your only source of money. Crowdfunding your video game could be a great opportunity to consider. Also, depending on your location, your government may seek to facilitate economic growth with grants that a video game studio or an individual developer could obtain.

Publisher

Game publishers are an important category of potential investors for your studio. Generally, as you can imagine, it is the most used and effective option by game studios. 

In addition to bringing the capital needed to launch and market the game, they are experts in the industry and can bring their knowledge to help you in different functions of your business, such as marketing.

The market is full of publishers and they all have their own way to do business. Some are recognized as being rather generalist, while others will specialize in specific types of games. The criteria for investments and partnerships can vary greatly from one publisher to another. This is why it is important to reach many of them and have several choices ideally in order to choose the one that will best meet the needs of your studio, both financially and in terms of expertise (marketing, operational, distribution/merch, etc.)

A standard way to go about this is to make a list of between 20-50 indie games similar to yours, then write down each publisher so you can contact them soon. Next, it will be necessary to create a pitch that will introduce you and your game.

Further reading: Publishing Deal for Indie Video Game: how to research, find, negotiate and secure your partnership with a publisher.

Crowdfunding

Kickstarter, Republic (formerly Fig), Indiegogo and other crowdfunding platforms have had a major impact on the success of many indie games since the 2010s.

We are going to be honest and tell you immediately that, currently, it is much more difficult to finance your game through these platforms for several reasons that we explain in our Kickstarter guide for indie games. In summary, it’s not just about creating a beautiful Kickstarter page that will magically lead to a crazy success of your fundraising campaign. More is required. Backers are now more skeptical. You have to convince them and manage a community on a daily basis.

Ideally, you should start marketing and creating your audience/community many months before the launch of your crowdfunding campaign.

That being said, these platforms remain a wonderful way to finance your project if planned seriously. It will also allow you to preserve your studio’s IP and stakes, unlike other sources of funding.

Government Grants and Other Subsidies

Grants and subsidies may be available to your studio from government bodies. Various government initiatives can be included in your country’s website.

Grant applications may be challenging. In order to win an award, there may be a lot of competition. For most grants, a portion of the money that is given to you must be paid back, and this amount varies greatly from granters. For example, you may only be required to cover 40% of the entire cost if you receive a game development project grant.

In most cases, you will need to provide:

• A thorough breakdown of the game development project.
• A description of the advantages of your proposal.
• A comprehensive budget and schedule for the game development project.
• Information on important executives’ relevant experience and background.
• Filled up application form as required by granter.

Most assessors will use the main criteria to evaluate your proposal:

• Significance of the video game project.
• Approach of the video game project.
• Innovation of the video game project.
• A look at how well you know your stuff.
• The need for the grant of the video game project.

It’s common for applicants to run across difficulties in the following areas:

• The game development project is not good.
• Low numbers of potential gamers (buyers) of the game.
• The relevance of ideas is not conveyed clearly by game developers.
• The logic offered in support of the video game project is weak.
• A lack of concentration is evident in the study strategy.
• There’s an absurd amount of work to be done for the video game project.
• There is a lack of matching funds in the video game project.

Study case of Ritual of the Moon

Kara Stone founded the Ritual of the Moon in 2014. The founder applied for a Canadian arts grant in 2015 and only received $10,000.00 CA. In an interview with The Verge, she shared that “ [she] started working on Ritual of the Moon in 2014, and she applied for a Canadian arts grant in 2015 receiving $10,000 CA. With such small funding, people are just getting honorariums for their work. None of us are getting paid what our time is worth, so I wouldn’t expect anyone to be working on it close to full time or even part time. ” 

In Combination with other Sources of Financing

We shared this example above, because we want to demonstrate that government loans may not be enough. Keep in mind that this type of financing, most of the time, is better when combined with other sources of funds if you are thinking to raise more than $10,000.

How to Get Your Game Development Funded

Every video game studio should be able to answer these three questions in the best possible way regardless of how it raises money:

Why this game: There is a belief in your heart that your game will transform the world. Why, then? What makes it special? Who is going to purchase it? Is there a large enough pool of potential gamers to warrant profitability? Who are the rivals and alternatives that have the same desire for market share?

Why now:  There are several reasons why this is the best time for your video game studio. The worldwide trend has changed, right? The introduction of new technologies may have necessitated your game. Could a lower-cost or higher-quality option currently be found?

Why us: The majority of the time, investors put their money into a team. Is your team well-versed in the gaming field? What’s in it for the investors? Are you a proven game developer or entrepreneur? How well-rounded is the team’s background?

To be fully prepared and to be taken seriously, you will need to:

• Assess the aforementioned sources of funding.
• Create a winning pitch deck that addresses the aforementioned three Why’s.
• Create an outstanding demo/MVP (minimal viable product) for your game development
• Never be scared to seek help or asked to be introduced to someone.

On one hand, you should be able to quickly secure more and more meetings with the proper publishers, but on the other hand, you’ll have to deal with rejection on a regular basis. Even if you find a perfect match, circumstances with a particular publisher may not be good, since these are often completely booked. See refusals as a chance to get feedback on your pitch or your game and improve yourself if necessary.

Create your business plan and tailor your business strategy

All of the aforementioned should be included in your business plan. Conciseness, specificity, and accuracy are all required in your company project plan. It’s your vision, your studio and your entrepreneurial “journey”, so it can be beneficial to write it yourself. You should also prepare to re-work your idea multiple times before you come up with a final version. If you need help, don’t be scared to ask for it. Consider bringing it into the attention of professionals like accountants and attorneys, as well as other successful business owners.

You should write down everything you need to think about in the short and medium term, especially if you expect quick expansion. You should look at all of your options, such as acquiring or leasing equipment, software, and other necessary things, to assist you manage that expansion. Instead of handling human resources in-house, you may want to look into outsourcing some of these functions to an outside company.

You’ll have to think about growth elements including long term goals, development of the game, human resources, funding, and technical requirements in the future. 

The main elements (or sections) that should be in your business plan are:

• Your studio overview
• Market Analysis (based on your next game)
• Execution (how will you develop it?)
• Marketing Plan (describe your audience and explain how will you reach it)
• Financial Plan (including funds you would like to raise)

We provide many examples and a template in our article In-Depth Guide to Create a Business Plan for Video Game Studio.

Get to know your target market

You want to target a market that is both youthful and rapidly expanding when launching a new and exciting game. A competitive edge, such as exciting contents or trendy gaming styles, user support excellence, and the correct pricing point, is needed to distinguish oneself in more established gaming industries.

By yourself, or with the help of a consultant, you must be able to answer the following questions through the marketing plan:

• Who is your target market? Not all gamers, but the really specific portion you’ll be targeting.
• How will you reach them? How will they discover your game?
• On which platforms should you distribute and why?
• Who are your competitors?
• How big is the market?
• What should be the sale price of the game?
• And many other sections explained in our article (Indie) Game Marketing Plan – Stand Out in a Crowded Marketplace.

It is a prerequisite for investors that you inform them about these aspects and the detailed plan to commercialize your game. Otherwise, the risk of investing in your studio could increase significantly.

Choose your team wisely

Your project team should be made up of people with complementary talents and skills.  The finest leaders make it a priority to hire only the most qualified personnel in every department. You shouldn’t be frightened to work with people who are more knowledgeable than you are in their respective expertise.

In the same vein, it can be excellent to mention certain experts, suppliers and even your mentors who complement your strengths.

As an alternative to a board of directors, a strategy committee can serve as a sounding board for your company’s business choices if you don’t have the means to put one up. 

Make sure your finances are in order

Talk to business consultancy firms/platforms about your studio finance requirements. Those organizations with a great potential for development can take advantage of tailored solutions.

Ask for the services of an experienced accountant in order to set up your ledgers in advance and plan your cash inflow (from fundraising). Otherwise, it could be expensive in taxes.

If you feel confident to tackle this aspect on your own, or at the very least understand it better, the financial forecasts section of our sample business plan could be very useful to you.

Use your time wisely

Since most gaming studios require time to establish themselves, sluggish times are to be expected. That down time can be used for networking, for example. Depending on your position, the following are three networking tactics that you should try:

• Exhibiting or participating in gaming events.
• Taking part in a competition aimed at budding other game developers.
• Joining a gaming association is a great way to become involved in the gaming community.

Register your studio

There are several rules, some of which are quite technical, that must be adhered to in order for your indie game to survive. To name a few, you must decide on the legal structure of your organization, establish an accounting system, and other necessary things to have a profitable and successful indie game project.

You can start an indie game project under your own name in business and gaming industry. Registered partnerships and corporations have various regulations, privileges, and obligations for groups to follow.

Check with your government website or a local lawyer about how your best options to register your studio – or pursuing a business as an individual.

Your Next Concrete Steps

Your next steps in financing your video game studio might look like the following roadmap:

• Set goals for the launch of your studio and your games, ideally with SMART goals: Specific, Measurable, Achievable, Relevant, and Time-bound.
• Create a business plan (see the resources section below)
• Create a marketing plan
• Create financial forecasts
• Create a pitch deck
• Create or adjust your game development plan accordingly
• Research investors, publishers and funding sources that might work with your studio and its goals. (choose one or some of the nine ways explained earlier)
• Launch your fundraising campaign

Don’t worry with this long list and approach it one by one. The  resources section below should give you everything needed for you to grasp all subjects and complete every step.

Resources and articles

• In-Depth Guide to Create a Business Plan for Video Game Studio
• (Indie) Game Marketing Plan – Stand Out in a Crowded Marketplace
• Publishing Deal for Indie Video Game: how to research, find, negotiate and secure your partnership with a publisher.
• Kickstarter for Indie Games: A Comprehensive How-to Guide with Examples, Tips and Templates
• Planning the Process of Developing a Video Game: Seven Stages
• Our blog and other articles

Empowered.gg can also provide you with personalized help. We manage a consulting service specializing in video game studios. Whatever type of game you are developing and want to fund and then bring to market, we can help and bring our expertise. Our strategy is based on extensive research and analysis of the indie game landscape. If you would like personalized advice or feedback for your plans and their execution, or if you simply need more information to get started, feel free to message us below.