This is just something that has been running around in my head for the last few weeks, please provide any input you wish, legal or just opinions. Since my project has a very limited budget, around 10,000 US, I was trying to think of a way to bring in more funds, and involve the end user as much as possible. I dont know the legal implications of this, but what if I split the 10k budget into shares, similar to a publicly owned company? End users could donate funding to the game in small quantities, and buy voting shares. They would then be given the chance to submit features or designs for voting. The actual use of the feature would then be decided based on percentage of shares. If the game is picked up by a publisher, those who purchaced these shares would be paid back in full, plus a percentage over, based on the percentage of shares they owned. In order for my studio to profit, we would have to fence in the shares to only 25% total profit from any publisher gains. So the 10k would only be a percentage of a percentage. So my studio would always profit from the venture. This would give end users the ability to formally express and submit valid concepts and designs that would not be ignored. It would also count as a form of market research, and add to the funds used to create a game. Just a vage idea, maybe something like this exsists already, but would this Intellectual Proporty Shares idea work?

Hehe, I thought about doing this in the very very early stages of my company a long time ago. Here is what I found out. It is very illegal.

1. You can't make your own stock unless you get incorporated.
2. You can't advertise or even make an offer to sell trade or anything with your stock publicly. That makes it publicly traded and the FTC (Federal Trade Commision) will fine you heavily for this.

The only way to raise money is to incorporate, then take your company to venture capitalists, or angels. Then you have to have a lawyer or several to do the trade of stock for cash. This is all privately done. This is legal.

Getting investment money for a game company is very difficult. You have to take into consideration that you are trying to get money from people that have such limited imagination that they can not even come up with ideas themselves otherwise they would invest in their own ideas in the first place. Think about it, it you have 5 million dollars, would you invest it in something you make, or give it to an investment firm ran by people that make 30-50K a year to determine where to invest your money. It is a ctach 22. These people are very difficult to get to think outside the corporate box, and the game industry is hard from them to grasp. That is why most investment is done on a per project bases, and the money comes from publishers that actually front you the money against your royalties. After they have seen a working demo, which means that the majority of the game engine is done. So it is an Oxy-moron. This is why it is so hard to get into the game industry this way. I hope this helps you out. Sorry I can't give better news, but I hope I saved you some legal issues from trying to do this :)

1. The legal problems listed above.

2. The public don't know what they want. Asking them will just result in them suggesting "X game but better" - and "better" will most likely be confined to more blood. You wont make anything original that way and you need to be original if you ever hope to be successful.

As an alternative, depending on your game model; one project I was involved with, an early graphical MUD, opened playtesting to the public at an alpha stage and offered charter memberships at different scales. The premium membership at $150 offered a carryover character, special forums on the message boards, early development info, a special in-game weapon, and a free box copy of the game when it went gold. A surprising number of people signed up for the package, which brought in a few extra thousand of capital.

It isn't much different from "deluxe" or "premium" editions of games offered post-production now - and there's no ownership, no actual investment in the company.

Of course it won't work for every game model, but if you can come up with something similar for your design it might be a viable alternative.

Well, the point was to give the end user some control over what he purchaces. Given that there is no garuntee that the game will ever be published, how can I take peoples money for vaporware?

I would have to provide some kind of custom content for this to be valid. Since the game is'nt a persistant online world. I was thinking about custom character models for the single player gameplay, but this would eat into our production time.

The major point to the need of funding is to pay for programming talent. I plan to spend around 1.5k just for the prototype scripting alone. My budget is down to 8k given the new development systems I bought for my home studio.

The end user still won't have much control over what he/she purchases in your model, unless the votes continually go their way. Forgetting the potential illegality of your business model, what happens if an investor is disgruntled because none of their ideas are being implemented? Can they withdraw their funding/sell their shares? Is there a penalty? What happens if the voted-in ideas end up detrimental to the game; do you maintain the right to eliminate the idea? That would countermand the entire concept.

And, to be honest, you're already considering taking people's money for vaporware - the game doesn't exist yet.

I would call your original model Charter/Controlling Playtester; you're not asking people to invest in your company. You're selling advance testing privilages, giving players a say in the design process of this specific project. That isn't stock, there is no SEC involvement. You can't offer profit shares since you have no game (vaporware), but you can offer free copies of the game and other incentives that are non-monetary in design.

If your only argument is that custom content would eat into your production time, answer me this - wouldn't catering to the whims of these "voting charter gamers" eat even more into your production time, while you try to figure out how to implement what they've voted on? If the end user can "formally express and submit valid concepts and designs that would not be ignored", you've just guaranteed that anything they vote on you'll implement. That's a serious corner you'll have painted yourself into there. You might be better served by tossing out specific choices for them to vote on, rather than let them submit ideas and promise them you'll program them in.

I guess I'll stick to basics. I'll just post some gameplay polls in forums and the like, and take donations. For the extreme amount donations, I'll add incentives, such as clan advertising in-game, custom models, or some kind of physical good like a tshirt or the likes.

Would selling merchandise pertaining to the game world, before the game is released do well?

I suppose I should look at my budget and be thankfull I'm willing to spend what I've set. The next issue is getting programming assistance for the prototype phase. I'm only willing to spend around 1.5k for a programmer, since the majority of the engine and technologies are finished. All they would need to do is c# scripting for gameplay elements.

Thanks for all the advise. Other opinions always shed light on things I miss.

Quote: Original post by MattCrawford
Would selling merchandise pertaining to the game world, before the game is released do well?

Very unlikely. Would you buy a T-shirt for a game that you haven't heard of and which isn't finished (and might never be)? People might buy merchandise for an unfinished game if it was Half-Life 3 but an unknown game from an unknown developer?

Unless you are going to be spending thousands (tens of thousands) of dollars marketing your game so that people know about, you will be lucky to sell 100 T-shirts. At such small numbers the cost of production will be high and the amount of profit you make will be minimal.

Matt:
10K can go a long way in indie games. What kind of game are you considering making?

What type of game is it?

Most people want to make a MMORPG because of the popularity of them and the money they bring in.

If you don't have a few hundred thousand dollars of your own money to invest in getting something 40% done than your just wasting your money.

Take your $10,000 and make some small mobile games for cell phones. They dont take that much $ to make and the return on them is much more than what you invested. Get them out in Asia. China is a huge market for mobile games.