Quote: Original post by Red Rush-In
I guess the only options are to acquire a bank loan or negotiate a preliminary deal with the engines licensor. Both are hard to do as a start up.

I don't know what your level of industry experience is so this may or may not apply.

1. If you are taking out a loan you need to be damn sure you can pay it back. In fact many banks wont loan you money if they know that it wont get you to a position where you can start earning money. Buying a license for an engine wont get you to that position. It will allow you to make a demo but once you have done that you then have to go through the additional process of pitching publishers (which costs more) and living for months while you do it. Many banks know how slim the chances are that a demo will get signed up so they know there is a big possibility you wont be able to pay back the loan.
The chance of getting funded by a publisher reduces to zero if you/your team have no proven industry experience.

2. You can get deals from Middleware companies but again it depends on your level of experience. I have negotiated several free "eval" licenses for clients, which were used to create prototypes. The middleware companies do this because they want people to be using their software. However they only do it for people they see as "real" developers. That means a properly set up company staffed by people with a proven games industry track record.

If you/your team don't have proven experience then go the Torque route. Start small and build up from there.

I know a bank loan isn't really an option for my position. My partner and I have extensive software development experience but none in the gaming industry. From what I have seen, the Torque engine does offer the best scenario of developing a demo prior to any type of funding.

Quote: Original post by Obscure
The chance of getting funded by a publisher reduces to zero if you/your team have no proven industry experience.

Ouch! Is that as a rule? That is the first time I have heard it put so bleakly. Is the only option to fund your first release?

Quote: Original post by Red Rush-In
Ouch! Is that as a rule? That is the first time I have heard it put so bleakly. Is the only option to fund your first release?

The short answer is "yes".

Back when I joined the industry it wasn't even an industry and all the developers were noobs. (Of course games were a lot smaller then). For the first five years almost all the developers starting up had zero previous experience and still managed to get funding.

During years six-ten it tightened up. Games became larger and more complex and failures became a lot more expensive. Publishers began to think more carefully about who they paid money too but there were still a few new (inexperienced) companies starting up - at the same time publishers started buying each other out. The number of publishers started to reduce.

Years 10-16 (since I joined the industry) and the number of publishers has reduced dramatically, the number of developers is still high and it's a buyers market. The publishers now how risky it is to invest in inexperienced developers so they don't do it. I spend a lot of my time keeping track of publishers & developers and I have not seen a single (inexperienced) start-up get publisher funding in the last five years. All the new studios fall into one of the following categories:

i. Non-publisher funded (VC money or already rich) -
Examples
Valve Software (Gabe was a Microsoft Millionaire from his stocks),
Emogence, LLC gamasutra.com article.
ii. Unfunded - Did first game in spare time then when that is successful turned pro -
Examples:
Splash Damage,
The Counterstrike team,
any other successful MOD team.
iii. Publisher funded - The founders have years of proven industry experience and good publisher contacts. -
Examples
Flagship studios gamasutra.com article,
Wideload games gamasutra.com article,
Ready At Dawn Studios gamasutra.com article,
Team Bondi gamasutra.com article.

I have not seen a new start up without experience get a publisher funded deal for at least five years.

Game development is an art but it becomes a business as soon as you decide you want to be paid for it. The two most common causes of business failure are lack of experience and lack of initial funding. Publishers know this which is why they wont touch people who don't have experience and don't have the funding to get their own company started.

Currently the two best ways of getting started as a studio (if you don't have industry experience) is to create a mod or try to create a good budget game (not a downloadable puzzle game).

Hey Dan, what are your thoughts on http://www.fund4games.com/ ?

Quote: Original post by Anonymous Poster
Hey Dan, what are your thoughts on http://www.fund4games.com/ ?

I think it is great, provided you don't need it. ;)

As with much of the investment that is out there it is restricted to those who don't need it. Specifically you need to already have a publishing deal signed up before F4G will consider you. In other words they aren't looking to fund start-ups or risky teams.

This "publisher required" thing is ok if the publisher in question is poor but if a publisher has the money to fund your game and they like your game enough to sign it, then many of them won't want F4Gs money. - Publishers only sign games they believe in. Why would they share the profits of such a game with F4G?

Scott Miller mentiond this investment Catch 22 in one of his articles (http://dukenukem.typepad.com/game_matters/). An investor called offering to put money into 3DR (who certainly don't need it). Scott declined and said he could put her in touch with teams that needed the money. She wasn't interested :(

[Edited by - Obscure on August 5, 2004 5:30:09 PM]