Saturday, June 2, 2012

Getting Funding

As you may know, I am a huge fan of Extra Credits. They recently announced that they are looking to help fund a game title with their indie publisher. This got me thinking, if I was a game studio looking for funding, how should I go about doing it? In the Extra Credits video they announced that they are looking for groups that already have a demo and are at conferences showcasing their demo. Is that all there is to it?

Margret Wallace is the CEO of the game company Playmatics. Playmatics is a venture funded company that is based in New York City. Margret has led many negotiations with investors to back different companies she has led and different games. In a presentation on titled "Funding Your Game Company: The Good, The Bad and The Ugly", she immediately asks the question to the viewer of which funding route is your company going?

This question is something that most people do not think about when trying to sell their game. However, it is one that needs to be asked. She asks, paraphrasing from slides, is your company going to be self funded, funded by friends and family, by an angel investor or by a venture capitalist? (What is the difference between an angel and a venture capitalist?) 

The answer to this question will also determine how your game will make money as well. Is it the Free-2-Play or Freemium model where you offer the game for free while selling in game items? Is the game going to follow the standard purchase model? At what price? Why? 

Tim Berry is the founder and president of Palo Alto Software and is a featured writer on and He points out in his article "Securing Angel Investors" that you should have a business plan finished for two main reasons, "to help you estimate how much money you need, and to communicate with your investors." 

Knowing how much money your game/company will need is something key to getting a game published. You can not go into a business meeting and say "Well, I think this game will need 3.5 million dollars." The first question will be "Why do you need this money?". You need to have a clear understanding of the breakdown of the cost. Yes, you are estimating, but having an estimation is better than having nothing at all.

Hopefully this helps put you onto the right path of getting your game closer to release.

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