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Talking Crowdfunding with Mark Jacobs

Richard Aihoshi Posted:
Columns The Free Zone 0

For anyone who pays even a modicum of attention to how the game development industry is growing and evolving, it has been impossible to miss the steep upward spike in visibility that crowdfunding in general and Kickstarter in particular have shown this year. A few endeavors have raised significant amounts of money via the latter. As of last week, Project Eternity, a party-based RPG from Obsidian Entertainment, stood atop the list with almost $4 million pledged. Cloud Imperium Games, which has cast a wider net, reports nearly $7.1 million for its persistent universe space offering, Star Citizen.

Not surprisingly, speculation has arisen relating to how viable this method of funding might be for a “true” MMOG. Just last week, for example, this site's Garrett Fuller wondered why no one seems to have gone this route yet with a hardcore, fantasy-themed MMORPG. Coincidentally, the subject of crowdfunding had come up a few days prior during a talk with Mark Jacobs, the former head of Mythic Entertainment. Now leading an indie team, City State Entertainment, that recently released its first title, an iOS tower / road defender called March on Oz, he had agreed at that time to share some of his thoughts and insights.

It's clear that Mark is intrigued by the phenomenon and its potential within the game publishing landscape. “I think Kickstarter has had an interesting effect on the whole VC <-> publisher <-> distributor <-> developer relationship,” he states. “It is still very, very early in the whole crowdfunding movement, but as Project Eternity and Star Citizen have shown, it can take the place of publishers for certain types of games.”

He expands on this by noting two key strengths of this model for developers. One is the ability to make your product your way. The other is keeping your IP. Regarding the latter, he volunteers that he isn't keen on the increasing trend toward deals wherein publishers and sometimes distributors get partial or even full ownership of an IP. This can have a, huge delayed effect if it lowers the valuation of the studio in question.

Somewhat ironically, Jacobs feels one of the major hazards is “that you get to develop your product, your way.” We're all familiar with stories, albeit unverifiable, of how publishers have negatively impacted projects by imposing their own agendas - demanding additions and changes, interfering with the development process, even slowing it down in order to get more favorable terms when they're asked to put in additional money. That said, he knows it's not completely one-sided, recognizing that “many developers have also burned through their money too quickly through wasteful behavior. There is no doubt that sometimes, publishers can provide some very useful financial oversight and fiscal sanity.”

It follows naturally that he believes crowdfunding is best suited to experienced, disciplined teams, especially ones that have worked together for a while. Such studios are, he feels, “less likely to spend money wildly on things like expensive build out, over-staffing, unnecessary PR and marketing, fancy new offices, retinal scanners for security - I kid you not; I know at least one team that seriously looked into it quite a while ago - etc.” He also cites the desire to create a more niche and/or risky game. This seems intuitively sensible considering publishers are often regarded as primarily interested in “safe” projects, one aspect of which involves the potential to appeal to relatively broad audiences.

Since we've yet to see a game bring in the kind of money often associated with developing an MMOG, I asked Mark if he thinks crowdfunding one is viable. As expected, he says it depends on the project:

“Way back when dinosaurs ruled the earth, my former studio, Mythic Entertainment, made and deployed Dark Age of Camelot for about $2.5 million plus a few 'sign your life away for equipment' leases, so it is possible to make a successful one for less than a gazillion dollars. Given how things have changed in the industry, it would be hard, but not impossible, to repeat that feat, IMHO.”

When I wondered about the scale of project that might be feasible, such as a full-fledged MMORPG, he reiterated that it depends. “If you want to create the 'next WoW', you might as well just light that money on fire. On the other hand, if you consider a full-fledged MMORPG as a game that meets the expectations of its target market, which isn't the WoW crowd, I think it's doable. I would look to such indie successes as Minecraft as the model for a smaller, crowdfunded MMOG.”

The last aspect I asked Mark Jacobs to comment on was what he feels people should look for and think about before deciding to pledge their money, either to a crowdfunded game in general or an MMOG in particular. Relevant experience was at the top of his list. As an example, he noted that Project Eternity is right in Obsidian's wheelhouse. Next, he brought up how feasible a project's timeline and cost appear relative to its scale. He said he'd be pretty skeptical about an attempt to make the aforementioned next WoW in only a couple of years - and the smaller the budget, the more doubtful he'd be.  He'd also consider the developer's track record in terms of releasing games on time and within budget, or at least reasonably close.

Finally, he suggests being fully aware quite a few MMOGs don't make it to launch, and that when this happens, its backers usually have no recourse, no way to get any of their money back. This degree of risk is part of funding endeavors like games and movies, but it's not “normal” to those whose investments are limited to term deposits or even mutual funds. “If the MMOG is released, then you can celebrate,” Jacobs says, “but if you aren’t prepared to kiss that money goodbye and/or losing it would have a real negative impact on your life, you probably shouldn’t back it.” 


Richard Aihoshi

Richard Aihoshi / Richard Aihoshi has been writing about the MMOG industry since the mid-1990s, always with a global perspective. He has observed the emergence and growth of the free to play business model from its early days in both hemispheres.