Cheat Code In Video Game Funding

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There’s no question about it: making a video game is expensive. For independent developers, this fact can feel like a roadblock. Every stage of development costs money, including your title’s hopeful launch. Without the proper funding, you may not be able to secure a return on your personal time investment.

With the right focus, however, you can pursue a number of — or even a combination of — alternative funding options to help you develop, market, and monetize your hard work.

Public and private grants/program/contests/prizes

For typically no-strings-attached funding, grants might be your gateway to finishing your game. Access to these grants will depend largely on what kind of game you’re making and where you’re developing and releasing your game, so it’s important to carefully review the submission criteria. They also don’t necessarily promise as much money as you may be able to get from other investment sources. For these reasons and more, you may want to consider grants a starting point on your funding journey, depending on how much money you need.

Contests can also provide you with some measure of funding, or even a publishing deal. Unlike grants, entering contests and winning prizes may come with more stipulations. Be sure to read and understand any contest terms before submitting your hard work.

Venture capital firms/investment syndicates

If you want cash without having to potentially compromise some level of creative control, venture capital firms may be a strong option for securing larger amounts of funding. These firms can be less concerned with the nitty-gritty of your vision and more concerned with successful returns in the form of royalty sharing or — if you’ve set up a business around your game — stake in your company. Venture capital isn’t always the most widely available resource to indie developers, but it remains an option worth exploring if you think you might qualify.

A more readily-available alternative to a venture capital firm is an investment syndicate. In an investment syndicate, each investor chooses whether they participate, and how much to invest if they do. Like most funding partners, these syndicates can have various kinds of repayment and revenue sharing terms built into their agreements. For the biggest chance of success, it’s worth looking into syndicates that either specialize in gaming or have worked with developers in the past.

Angel investors

Dubbed, “Angel Investors,” for their ability to connect recipients with heavenly amounts of their own cash, these high-net-worth individuals invest early in hope of high returns down the line. They can be more open to risk than traditional investors or investment groups, so they’re more ready for rewards. These individuals aren’t necessarily as easy to vet as more traditional investors, so take as much care to review their credibility as they will reviewing your game’s monetization potential.

Angel investors are not to be confused with crossroads demons, supernatural creatures who grant wishes with darkly ironic twists in exchange for human souls.

Crowdfunding/Patronage

Kickstarter. Indiegogo. Fig.co. Ulule. These sites and others have become more or less ubiquitous in the global video game fundraising conversation. Since their popularization took hold some years ago, these platforms have effectively become a standard piece of some developers’ overall funding, branding, marketing, release, and community-building strategies.

Though each service’s terms vary, the principle behind most crowdfunding platforms is that backers can directly support a game by paying for various related goods or services in advance of their completion – in public. Yes, anyone with an internet connection can see your game’s pitch. They can see how much you think you’ll need to spend to make your game a reality. And they can see how much money backers have promised you.

Crowdfunding platforms are typically templatized and require project approval to use, giving you less customization options than a custom landing page. They also typically require a cut of a successful project’s funding, and cannot necessarily force backers to make good on their payments. All that publicly-viewable money you may be backed by will only be real until it’s not, so you’ll want to plan for fees and lapsed payments.

It’s a good idea to be as far along in production as possible before taking the crowdfunding plunge. Having a vertical slice or other minimum viable product to show players before creating crowdfunding assets will help ensure that your campaign is intellectually honest and your expected release date is reasonable. If you break your promises your backers will not be happy, and unhappy backers have long memories.

Patronage on sites like Patreon or Ko-fi can also yield steady funding while allowing developers to curate less conventional and more amorphous rewards.

Pre-orders / Founders Packs

If you can fund your game through the bulk of its development, selling pre-orders and founders packs can help you begin monetizing closer to launch.

To do this, your game needs an online home where players can interact with it, and potentially other players. Unless you have a publisher with its own sales platforms, you’ll most likely need to sell your pre-orders, and founders packs directly to players through a dedicated website. With the right tools, your site should be relatively simple to build, manage, and generate revenue through.

But, as with most things in life and commerce, timing is everything. An optimal pre-order window is usually 3-6 months before launch, depending on your ability to successfully promote your game.

Publisher

Once considered the holy grail of funding, publishers remain a theoretical comprehensive solution to getting your game funded from development through to marketing and release. A publisher can also maximize a game’s global sales (and merchandising and multimedia) potential through its distribution, licensing, and localization powers.

With the right mix of resources and abilities, though, you may have the potential to handle all of the above in-house, which could mean more money in your pocket in the long term. In exchange for a publisher’s many powers, you’ll be dealing with the terms of a financial — and in some cases, creative — partnership.

Agencies / Funding Club

While not strictly a direct line to funding, an agency or funding club can connect you to interested parties like investors or even publishers who can set you up with the money and other resources you need to succeed. The matchmaking portion may or may not cost you anything, although there could be associated fees or revenue sharing terms if you move forward with a matching investor. The main benefit here is that you can focus on creating your game while a connected party does the legwork of helping you secure funding on a global stage.

The Xsolla Funding Club is one such resource. You can learn more about what it takes to join as either a developer or investor, here.

Family and friends

Asking family and friends to support your work is, in a way, the original crowdfunding. Not only can the people close to you have the collective financial resources to help, but they also tend to be the ones who will believe in you and your game.

As long as your personal relationships are mutually healthy and trusting, family and friends may provide you with some of the advantageous official or unofficial terms of any funding agreement. Some may even support your work with no strings attached. Just be sure to uphold your end of any bargains you may strike — these people know where you live.

Incubators / Accelerators

If you’ve set up an early-stage business around the development of your game, incubators and accelerators may be able to provide tools and resources for your company. This help isn’t necessarily free or cheap, though, as they will typically charge a fee or take an equity stake. If you think your game might be destined for further financial partnerships, be ready to do the necessary math to ensure you’re not spreading your cut of any future profits too thin.


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