Our design team is currently working on a budget and schedule, and i was wondering how teams go about getting funding for a game demo to present to a publisher for further funding for the game? Is this common? Or do teams usually self fund demos? If it is, where do they get the funding for the demo? Thanks, Darkan

You can get funding for just about anything if you can make a compelling enough case. Were I to do this, I would seek funding for the demo as a overall part of the business plan for the entire game development, as the investor is going to want to see ROI for the demo, and the ROI is usually based on the notion the finished game will be selling in the market.

Also, a lot of ppl I have spoken to tend to see the demo as something that you go looking for the rest of the money with, and do on your own time and resources. The reasons, I think, are that a demo is not a whole ton of work for a small crew, demonstrates the ability to produce competitive product that can make money in the market, and the produced demo indicates a lot of the investment factors publishers or funders want to see and evaluate in order to consider putting money in for the whole deal, or whatever part of the whole budget you can obtain or they are willing to give.

As an aside, I have also heard how you design the demo is critical, and there is a whole other post in that.

HTH,
Adventuredesign

Demos are most often self funded using FFS - friends, family or savings.

In some very, very rare cases you might find a buisiness start-up grant or a media related grant that could be used to fund this but you usually need to have proven industry experience and experience running a company in order to qualify. However, most of these are in the form of match funding so they just match the amount that you invest (meaning you need the FFS money to get the grant).

If you don't have FFS and you don't have the experience to qualify for a grant then you would likely have to get a bank loan (they would probably require security such as your home or first born child).

Of course all the above is a waste of time if you don't have proven industry experience developing games because game publishers won't fund your game. Many won't work with start-ups even if the do have industry experience. None will fund development if the team doesn't have proven industry experience.

Quote: Original post by adventuredesign
You can get funding for just about anything if you can make a compelling enough case. Were I to do this, I would seek funding for the demo as a overall part of the business plan for the entire game development, as the investor is going to want to see ROI for the demo, and the ROI is usually based on the notion the finished game will be selling in the market.

I would have to disagree with this. If it was true then the majority of commercial game developers would already be doing this as it would be better than the dreadful publisher funded business model the game industry is currently stuck with. They aren't doing it because it is virtually impossible to get investment for game dev unless you are someone like id or 3DRealms (who don't need it).

The reason for this is that the game dev business simply doesn't suit the ROI model for investors. "Selling in the market" nowhere near meets the ROI requirements for most investors.
1. Investors don't want to invest in a single game they want to invest into a company.
2. They don't want to just fund operations (making a game) they want to fund company growth. - That means you have to demonstrate how fast your company will grow without the investment and how much faster it will grow with the investment. - If you can't make the game without the investment then your initial growth figure is zero and you aren't of interest.
3. Even if you make the game it might still be a failure and they lose everything. Investors want a business plan that can survive failure. That is why they will invest into publishers because they have multiple products and the failure of one won't kill the company.
4. They normally want a 300-500% return in 5 years and an exit. Most games don't make that much and most developers don't reach any sizeable value within that time frame.

Quote: Original post by Obscure

Quote: Original post by adventuredesign
You can get funding for just about anything if you can make a compelling enough case. Were I to do this, I would seek funding for the demo as a overall part of the business plan for the entire game development, as the investor is going to want to see ROI for the demo, and the ROI is usually based on the notion the finished game will be selling in the market.

I would have to disagree with this. If it was true then the majority of commercial game developers would already be doing this as it would be better than the dreadful publisher funded business model the game industry is currently stuck with. They aren't doing it because it is virtually impossible to get investment for game dev unless you are someone like id or 3DRealms (who don't need it).

The reason for this is that the game dev business simply doesn't suit the ROI model for investors. "Selling in the market" nowhere near meets the ROI requirements for most investors.
1. Investors don't want to invest in a single game they want to invest into a company.
2. They don't want to just fund operations (making a game) they want to fund company growth. - That means you have to demonstrate how fast your company will grow without the investment and how much faster it will grow with the investment. - If you can't make the game without the investment then your initial growth figure is zero and you aren't of interest.
3. Even if you make the game it might still be a failure and they lose everything. Investors want a business plan that can survive failure. That is why they will invest into publishers because they have multiple products and the failure of one won't kill the company.
4. They normally want a 300-500% return in 5 years and an exit. Most games don't make that much and most developers don't reach any sizeable value within that time frame.

Damn shame, isn't it...

-IV

...it certainly is, but it is an extremely risky business.