Mel Croucher goes Back to the Future

SHOW ME THE MONEY!

I have a friend who runs a very successful games software company. The amazing views from his glass-walled offices never fail to thrill me when I wander round to drink his coffee and observe his silent legions of young designers and coders. This friend of mine recently invested 150 man-years in a computer game. And after making such an investment, it was decided that the game was not commercially viable, and so it was quietly suffocated with the electronic pillow of abandoned hope. 150 man-years! That’s longer than it takes to get served at my local Co-op on Double Rollover Night.

In the heyday of Automata, we would think up a game in the morning, and have it finished by closing time at the pub. Seeing as we paid ourselves £25 a week and worked out of a room above Dorothy’s Wool Shop, our overheads were modest. Seeing as how it took less than a week to create the artwork, the soundtrack, the advertising and the time to buy some jiffy bags and a sheet of stamps, I’d say that the total development cost of an average early game was around £150. We sold our games mail-order with no intermediaries and direct to our lovely players at computer fairs, all for about a fiver. As our American cousins would say, go figure.

I never heeded anyone’s advice in this business, and I don’t expect anyone to heed any advice from me. Furthermore, I hate to dampen the enthusiasm of the new generation of games-makers, and I know that self-delusion can be a great motivator. But hey guys, and the vast majority of you are guys, you can’t eat pixels, and you can’t pay the rent with them. Last year, of all the hundreds of thousands of commercial video games and gaming apps that made it to market, each one taking weeks and often months to produce, the average revenue generated was less than £200. The National Minimum Wage rate for a twenty-year old is £4.98 an hour. Go figure.

And when you have gone and figured, I invite you to forget the past and embrace the future, because everything has changed once again. And for the better. The financial crash of 2008 not only brought traditional banks into disrepute, it knackered the chances of speculative investment for a generation. And it also gave rise to an online alternative that bypasses traditional financing altogether. It is now possible to discover if a game is liable to be a commercial success before it is even written, by inviting potential players to back a concept themselves via the amazing phenomenon of crowd-funding. And the world leader in crowd-funding is called Kickstarter.

GET YOUR KICKS

Kickstarter is already having a major impact on the future of how video games are brought to market. It does this by getting as many potential players as possible to invest in a game’s chances of success at the concept stage. And it may surprise you to learn that raising the money is not even the most important thing.

The most important thing is the ability to conduct market testing in the real world with real players. If there is not enough interest in the game, and it fails to achieve its target funding, then not a penny of any pledged funding gets handed over from the potential player to the potential games creator. This is a very crude form of market-testing, but it’s certainly effective, and has already killed off a number of games no one wanted before any significant time and effort were wasted – if only a similar process could be enacted for dud legislation.

Crowd-funding, cutting out the banks

On the other hand, several recent titles have exceeded their targets and been overfunded by Kickstarter enthusiasts several times over. These committed gaming investors become ambassadors for success, networking with other potential funders and encouraging them to join in the fun and become stakeholders as well.

This is usually achieved by good old-fashioned bribery, where the games creator offers funders and stakeholders various incentives. These are mostly low-cost inducements such as free copies of the game, access to unpublished material, tacky merchandise and even a say in how the game is eventually put together. And it goes without saying that potential funders must be satisfied that the people behind the proposed game are credible, have a good track record, a great concept and as much chess, dice, ping-pong and bunkum as necessary.

And just as modern funding has undergone a revolution, so has the latest sales process, all thanks to the ease and speed of downloading. But today’s games players are being spoon-fed their pleasures on the basis of instant gratification for zero upfront cost. The future of making money from video games will not be from selling the damn things, but by giving them away, reeling the player in like a fictional drug-peddler.

The drug-peddler, allegedly, gives away free samples at the school gate, safe in the knowledge that once hooked then his victims will pay for a continual stream of self-gratification in the future. This is how the “free-to-play” model works for video games. You give away the basic fix, and then charge for future pleasures time after time in the form of in-game purchases for additional levels, extra resources, virtual currency, cheats, and so on, as well as transmedia delights in the form of books, music and merchandise.