I get asked about funding game development projects quite a bit. Funding, after all, is kind of my job. I'm the founder and Studio Director at Graphite Lab in sunny St. Louis, MO. We've been around since 2009 in various forms and have grown our payroll to include over 10 full time developers (along with a few part-timers.) This still classifies us as a "small developer" in most conversations. However, no matter your team size it seems that securing funding is always a big deal.
I wasn't always the "business guy" on the team. I'm a 3D artist, turned Art Director who evolved into a Operations Manager before reaching my final form: "Studio Owner & Business Guy!" I’ve had a role in developing over 70 video games dating back to the early days of the Game Boy Advance. Today, I find myself in full-on "business guy" mode as I count the hours before we launch our very first original game called Hive Jump and pray we've done everything possible to make it a financial success. It's been a long 3 years of development and when it comes to funding it, we've been through it all. Moonlighting, crowdfunding, publisher negotiation, salary cuts, equity division, bank loans, family investments - it's all gone into Hive Jump. I'm sharing our story with hope that it gives you a new technique to try when you feel you've exhausted them all or that that it may inspire you to set out anew on your own gamedev-funding-adventure!
We did some moonlighting to kick off Hive Jump development in late 2013 and early 2014. Even though we were all getting paid as contract-developers by day, we spent some nights and weekends working on Hive Jump to get the idea off the ground. Affectionately known as “Hive Jump Saturdays” we would work the normal work week, and then tack on a Saturday (as often as we could spare them) to just focus on Hive Jump. The “Hive Jump Saturday” continued off and on throughout the development, but for several weeks leading up to our first Kickstarter it provided the hours needed to get the campaign ready.
You may hear that successfully crowdfunding video games is harder now, than ever. I believe that is true. However, I also believe bringing your passion project to Kickstarter or Indiegogo or any of the other websites devoted to raising capital should still be considered as an option for aspiring developers. It was certainly part of our solution for funding Hive Jump. Be warned: just because a campaign is usually 30 days long, doesn’t mean it’s only 30 days of work. Be prepared to work your butt off to be successful with a crowdfunding campaign. We spent over 500 hours on our first campaign for Hive Jump...and we didn’t even meet our goal. In fact, we realized that even after 500 hours of work we weren’t ready for Kickstarter after all. We cancelled our campaign two weeks in. Being the optimists that we are, we didn’t give up and instead returned stronger in August of the same year, ready to rock out a more successful campaign! We were fortunate enough to meet our goal in our second campaign and earned over $60,000 from a Kickstarter and Paypal donation combination. It was a good day. We wrote about what we learned on our blog.
We have a phrase at Graphite Lab to describe this funding method: “Fuel for Fire”. Simply put, if we want to work on our own ideas which we are passionate about (like, ON FIRE passionate) then we need fuel to keep that “fire” going. Most of my game development career has been spent developing video games as part of a 3rd party development team. Even now, our team at Graphite Lab has the great fortune of working on some incredible brands as part of our work for hire business. I love this method because we get to share the craft of game development with our clients while constantly learning and honing our skills. It’s a win-win. The downside is that a work for hire method takes time to develop and maintain. It isn’t a method you can start quickly or something you can benefit from immediately. It’s truly a full-time job to build development relationships with publishers who hire 3rd party developers.
While working on Hive Jump, we developed and released over 20 apps for the app store as a contract developer. In doing so, we earned revenue for our team, helped great companies get great apps on the store and we learned a lot about different tools.
What?! 20 Apps while working on Hive Jump, too?! Are you mad?!! How’d you do it?
We used a process we called “2-2-1” for about 3 months while prepped our second Kickstarter and launched 3 apps for the app store during that time. 221 also happened to be the number of backers in our first campaign before we pulled it. I’m a sucker for trivia, so I thought I would share. Anyway, a 2-2-1 method goes like this: in a 5-day work week, spend 2 days working on client work, then spend 2 days on your passion project and use the remaining day to apply to whichever needs the attention. Don't blend them by working on both in the same day. The focus you find by assigning "fuel" and "fire" to separate days will improve productivity and reduce the costs of “juggling” between so many things. We saw some great traction at first, but then the requirements of the contract work grew and not every member of our team could afford to put even 2 days to Hive Jump each week. Our pace began to slow and we weren’t able to maintain this method for more than a few months. We were losing time.
To get back on schedule, we knew we would need more man-hours on the project each day. The 2-2-1 wasn’t cutting it anymore. We also wanted to stay as close to our Kickstarter-proposed August 2015 release window from our campaign. Our contract work was paying the bills but it left little time for our team to work on Hive Jump as a group. We sought out partnerships with publishers to secure more funding. We had plenty of friends in the publishing business from our years doing contract work, so we prepped outlines and estimates detailing the funds needed and started making phone calls. It took months to present the designs, share financial proposals and forecasts, consider deals and discuss terms. None of the offers were adding up. In the end, we realized that we were spending valuable time on selling the game to publishers and not getting anywhere. We should simply put that energy into the development itself.
Once it was clear that we would not be securing external publisher funds, I decided to look internally for help. In our financial planning, we’d reserved a percentage of the future sales revenue for a publisher. Without a publisher, that earmarked portion would instead reward sweat equity of the team. We worked out a formula that would apply equity to each member of our team who worked additional hours toward getting the project to the next milestone: Steam Early Access. We reached that milestone in July and I decided to keep the agreement in place as it was clear we would need every available hour and effort from the team to get the game out before the end of 2016.
We released on Early Access
Early access is a GREAT service and process for improving your game. That’s how we used it. It should not be counted on as a funding method because they are not afforded the same benefits of visibility and reach that full release titles are. I’m including it in this article because it DID generate revenue for us. In fact, it supported a team of three developers for nearly 3 months which isn’t to be overlooked! Hive Jump designer Matt Donatelli wrote an article about How to do Early Access the Right Way.
We took in some outside capital while we invested personal dollars.
Taking on a loan is a risky proposition. There is a lot of paperwork involved as well as an approval process, and most banks don’t have a lot of “indie devs” in their loan portfolio. So its an uphill battle, for sure. I knew we were going to need the capital to get to the finish line so I used personal assets to guarantee the loans along with some support from a business partner who had strong ties to financial institutions in town. We pulled in some favors from some family who could afford to help out, I put the breaks on my personal salary and I threw some more “logs on the fire” of my own by investing further in the development.
Toward the end of a 3 year cycle you can get tired of lookin at the same game over and over. We wanted some reinforcements to bolster our troops who could see the wirk with fresh eyes and allow our core team to breathe a little easier in the final months. We tapped some buddies of ours to help out in closing some important features. They were fresh, excited, and energized. They each helped us move our final launch features forward MUCH faster than we could have by ourselves.
Here we are at the tail end of our Hive Jump funding adventure. At the time of this article's submission, we’re less than 24 hours from launch. Will we see our many methods of funding yeild a return worthy of the effort? Time will tell.