A history of video game funding

Last week, Harmonix completed a Kickstarter campaign to develop a remake of the classic music and rhythm game, Amplitude for modern systems. There were close-calls, and for a while it seemed like the project wouldn't make its $775,000 goal. But a last minute push brought the game past the finish line, and funding exceeded the original amount by $69,127. It was an inspiring moment that made us think back to the lengths independent developers have had to go in order to make and sell video games. Video game creation practically dates back to the dawn of computing, when scientists first flipped the switch on room-sized vacuum tube computers and used a game similar to Pong to demonstrate their capabilities. However, it wasn't until the development of the microprocessor and the subsequent technologies that making video games for money became a reality. The past thirty-five years saw some incredible changes in the way people view video games, yet getting the resources needed to put one together has never been easy or straightforward.

The 1980s

In the 1980s, video game consoles and personal computers were still relatively new to households. Although consoles like Atari systems were doing well, people still largely went to arcades and other local hangouts to play their favorite games. However, the growing accessibility to home computers led to the rapid evolution of software development through hobbyist programming. Groups would come together and write code that either copied popular arcade games or created their own original works. Many of these scripts ended up in computer books and magazines, often without crediting the author, for players to manually copy onto their computers.

Akalabeth: World of Doom

Clearly, there needed to be a better way to distribute games. Some took to creating cottage industry, where programmers would create games from their homes, do their own marketing, and snail-mail them to customers. Ken and Roberta Williams helped pioneered this method of distribution by packaging their homemade graphical adventure games into plastic Ziploc bags. They went on to found Sierra Online. Another notable standout from this era is Akalabeth: World of Doom. It was a Dungeons and Dragons inspired game written for the Apple II by a teenager named Richard Garriott from the basement of his home. Looking to sell his game, he copied it onto floppy disks and put them in plastic Ziploc bags along with photocopied instructions and cover art drawn by his mother. Akalabeth sold less than a dozen copies, but the publisher California Pacific Computer Company happened to get one. It bought the rights to publish the game, and Garriott received $5 for every copy sold. It ended up selling 30,000 copies, making Garriott's take $150,000. He would go on to create the Ultima series, establish the development studio/publisher Origin Systems, and become the first person to coin the term massively multiplayer online role-playing game. Coincidentally, Ultima would influence both John Romero and John Carmack during their childhoods, steering them toward video game development. Romero even ended up working at Origin Systems for a time, as detailed in the book Masters of Doom by David Kushner.

The 1990s

As home computers continued to become more commonplace, connectivity between them also grew. In the 90s, shareware became the most popular means for marketing and distributing games. It was a try before you buy system, where developers made their games available for free, but players could only get to a certain level or time before they were asked to purchase the full version. Gamers could get loads of shareware games on disks packed in magazines, which could be copied or passed on. Users with modems could download them from electronic bulletin board systems (BBSs) and FTP sites. The key to this system was the fact that players were encouraged, if by nothing else than the name alone, to copy and redistribute these games. Word of mouth and the need to share became the ultimate tools.

Ultimate Doom

Wolfenstein 3D, Doom and (in its own way) Quake all began as shareware, launching Id Software into gaming history's hall of fame. Although far more people played the full version of Doom without paying, the game still managed to sell over a million copies. While shareware was a great way for games to become known, it developed its own set of problems. There are a number of reasons why the system fell out of fashion, but the main issue was that there was no standard that defined what shareware was. Was it a full program with level or time locks on it? Did it include at least half of the full game, like Doom did, or did a single level demo qualify? What about partial games with features that were completely turned off? Users soon became dissatisfied with the decreased quality, increased limitations, and all the nag screens that came with shareware and the term became stigmatized. If it hadn't happened already, shareware's final death knell came when id experimented with the distribution model using Quake. In an effort to capture extra profits, Quake was released as shareware on CD ROM. Players could pick up the CD at stores, which had the full game but only allowed players to reach a certain point. Then they could call a phone number to pay for a key that unlocked the full game. However, hackers quickly tore apart the protective limitations, and thousands of gamers unlocked the full game for free. The experiment failed, as sales from the shareware disc fell far below expectations.

The 2000s

The shareware era quietly passed as developers and publishers relied more on dedicated demos, which could show off a game without giving all away. Although the internet continued to flourish into the 2000s, and digital distribution became a reality, funding a game's development was still a tremendous challenge unless you were backed a publisher or investor. That was the one thing that remained relatively unchanged across thirty years of gaming history. If you wanted to make a game that sold to a mainstream audience, you had to deal with a publisher. Doom probably came the closest to overcoming this adage, but even its success was considered an underground phenomena until the publisher GT Interactive put it on retail shelves. Ironically, the 2000s is the best time to be start-up game developer. John Carmack once commented about how all you needed to do nowadays was pick up a cheap PC, learn coding, and get to work. The technological limitations and expensive hardware requirements from the Doom and Quake era were long gone. However, Carmack didn't consider the limitations that publishers would exert. Although publishers might have been more open to risky ideas a decade before, dealing with them in the new millennium meant making games that appealed to the largest audience. If your vision didn't seem like it would have broad reach, then it probably wasn't going to be made.

Minecraft

That's how it was until a little game called Minecraft came from out of nowhere and changed the rules. Developed as a hobby project by Markus "Notch" Persson, the block-styled sandbox game was released as an alpha in May of 2009. People were so impressed by the game that they started buying it, even though it was technically still under development and wouldn't see a final release until 2011. Still, Minecraft sold three million copies through word of mouth alone. The revenue from those sales made Notch a millionaire. This allowed him to quit his day job and found the development studio, Mojang, to work on the game full time. Tim Schaffer muses over Minecraft's success in the documentary, Minecraft: The Story of Mojang. For decades, people were used to selling a finished product, not games that were in progress. Now, that principle has changed. He also liked the idea of independent studios having more control over the projects they took on, and having no separation between the developer and paying fans. This is what inspired the plan to raise money for Double Fine Adventure (Broken Age) on Kickstarter. The project initially asked for $400,000 to fund game development and filming a documentary. It went on to break records by raising $3.45 million by the end of its Kickstarter campaign. Double Fine's overwhelming success didn't supplant the publisher-controlled way games are made, but it opened up new opportunities for developers that wanted to make games for dedicated fans. Some might say that it opened a floodgate. Renowned game designers from twenty years ago or more saw crowdfunding as a way to revive forgotten franchises or pursue all-new projects. That's where games like Moebius, Tesla Effect, Shadowrun Returns, Wasteland 2, and the upcoming Torment: Tides of Numenera come from, to name a few. Even "Lord British" Richard Garriott got into the action by bringing the Ultima successor, Shroud of the Avatar, to Kickstarter for funding.

Broken Age

Crowdfunding became the ultimate expression of democracy, with fans voting with their wallets to determine what games get made. As backers, fans could offer direct input about the game's direction during its development. The goal isn't necessarily to develop a blockbuster game that will make millions of dollars in sales, but a great one that pleases existing fans and perhaps make new ones. The idea spawned some new ways of doing business. Developers pay a registration fee for Steam Greenlight, a place where users vote for games they would like to see offered on Steam. While doing so, they can offer feedback to developers on how to improve their game. At the same time, Steam Early Access gives customers the chance to buy games and play them while they're in development, offering gameplay input while doing so. It's essentially a form of crowdfunding that doesn't rely solely on concept videos and promises. That way, backers have stronger assurances that something will come from their investment. But Valve warns that it's not a guarantee that the game will ever release. Publishers are far from removed from the picture. Some crowdfunded developers still decide to partner with publishers for distribution and/or marketing resources. As is the case with both Moebius and Tesla Effect, which matched up with Phoenix Online Publishing and Atlus respectively. Larger publishers have also taken notice... and why wouldn't they, if fans are willing to foot the development costs? Square Enix formed The Collective, where users can vote for projects they find exciting. Winners of the community voting process receive crowdfunding assistance from Square. Crowdfunding is by no means a perfect system. Plenty of projects don't reach their funding goals. While funding for some projects can be quite impressive, they don't rival the kind of money a big publisher can provide. In one sense, that's good. At least it's better than a model where a single game needs to sell six million copies to become profitable. In other ways, it can be just as challenging as pitching ideas to publishers.

Torment: Tides of Numenera

Projects that don't have a nostalgic name or franchise associated with it are at a disadvantage. Without an existing fanbase that will fund and champion their ideas, lesser known developers must struggle to get by. Instead of pitching their ideas to publishers, they have to convince everyday people that their idea is worth whatever money they can afford. Afterwards, they have to work with whatever they get. Although Young Horses managed to exceed its modest goal of $20,000 for Octodad: Dadliest Catch, the team had to essentially work for free during its 2.5 year development. The hard work paid off by selling over 90,000 PC, Mac and Linux copies in under two months, but the project was still a very risky gamble. Without a publisher to keep developers on a timeline and budget, a studio might blow through all the money it raises midway through a project. Things can also get tricky when a project is significantly overfunded. The extra money from the Broken Age campaign inspired Tim Schaffer to expand the scope of the game. Broken Age was then split into two parts, with the first half originally planned for release as a Early Access game. However, Double Fine later decided to release the first episode on Steam in January 2014 as a full game with a season pass. The hope is that sales will help fund completion of the second half. That's just the beginning.

Problems with crowdfunding can be as diverse as the games themselves. Most often, the issue lies in trying to balance the complications of game development with a community of ever-watchful fans that are also investors. Ultimately, the biggest obstacle is the fact that the crowdfunding system itself is still a work in progress. Although there are some wonderful success stories, there's no way to know whether or not this is a sustainable process. Fans may generously back a new Torment game, but that doesn't mean they'll put money towards other projects. If crowdfunding does end up growing, then new developers will have to try harder than ever to win over a limited pool of potential backers. In 35 years, video game developers went from essentially putting their ideas into bottles and throwing them out to sea; to getting people to copy them and throw bottles of their own; to finally asking potential backers to help write message. So far, some of the most successful messages are the ones that say, "Let's bring back..." Let's not overlook how the franchises and developers making a comeback once worked for some of the top publishers back in the day. So, it looks like the crowdfunding system works because the messages that got tossed out to sea years ago are continuing to be answered.