Indie developer John Kane worked 3-4 hours a day after work in a month-long game jam to create his first Steam game, Killing Time At Light Speed. He says he will never quit his day job as a web developer because 1) he loves it, and 2) he makes more money at it than as a game developer.
Clarity: An adult’s attention span is only 8 seconds, so ensure your pitch is clear and concise. And clarity ALWAYS trumps persuasion. Simplicity: Imagine pitching to an 8-year-old. Cut out all the jargon and speak their language. (Focus on being understood). Passion: Will ensure your pitch is memorable, unique and engaging. Don’t be afraid to show your enthusiasm. Practice: Practice makes perfect. Whether that’s in your head, in front of a mirror or with a group of friends.
Venture capitalists and angel investors are pitched to every day. Capture their attention with something unique and compelling. Problem: Make your audience aware that a problem exists. Let them feel some pain and yet eagerly seek out a remedy. Unique Solution: Investors aren’t interested in “me too” ideas. Capture their desire with something new, differentiate yourself by your unique value. What can your company offer that no one else can? Team: VCs invest with people, so you and your team are an essential part of the deal breaker. Every single investor is sold on perceived capability. Build credibility by displaying positive examples of your determination and ability to get the job done. Traction: How engaging is your product within the market? If you’ve built enough traction, VC’s will be jumping in line to invest in what you offer. Groupon achieved multimillion dollar investment despite the hundreds of copyrcat companies that already existed in that market through solid traction. Close: Ask for a business card, or ask for a chance to meet with the investor individually.
LAFS Marketing and Monetization Lecture 3: Game Funding
Marketing and Monetization
The Los Angeles Film School
Game Development Budget
Team Hourly Rate x Hours Dedicated To Project
Game Development Budget
Set your budget (and accept that limit)
Divide that budget into expenses
Expected Price x Unit Sales Projections
8% to 15% of total revenues
Note: This is typically used for larger
organizations, and you shouldn’t necessarily
spend this limit
Mini Financial Model
Anticipated Game Revenues Recommend
Low, Medium, High scenarios
- Subtract Development Budget
- Subtract Marketing Budget Recommend
Low, Medium, High scenarios
= Projected Profit/Loss
If you are willing to take a loss be clear on the
acceptable loss you can absorb before you get into
your market-budget planning.
Earn money from “real work”, but do game
development at night and on weekends.
Paying for the business yourself, whether it’s through
savings or credit card debt.
Keep your equity and IP
Greater flexibility to maneuver
Less dilution down the road
Personal financial risks
Invest no more than you can afford to lose.
Don’t do it if you can’t handle stress well.
Invest in a business, not a product.
It’s best to use other people’s money.
Bank credits or other forms of private loans.
Very dangerous in the risky world of game development.
Banks want collateral, so this isn’t much different from self-
If you’ve formed an LLC or Corporation, you may be able to
get the loan in the company’s name.
Unless your company has a track record, you’ll probably
have to personally guarantee the loan and use your personal
credit worthiness to get it.
In the absence of other sources, though, this may be the way
to go, at least for that initial capital.
Friends, Family & Fools
Receiving funding from people who personally
They may be more understanding than banks
if the project fails.
You may lose Aunt Edna’s retirement nest egg.
Friends, Family & Fools
You can receive money as a loan or an
As a loan, there is no expectation of profit
apart from interest, so you can avoid any
securities law issues.
As an investment, they can be made aware
that there is a very high failure risk and they
may not get their money returned.
Developing games for another company as well
as your own.
Sources: Textbook publishers, healthcare
companies, advertising firms
RFP: Request For Proposal
Usually work-for-hire, but sometimes you can
get royalties or other fees
Best when contract work and your own games
Great way bootstrap a startup as well as to stay fed and
keep a roof over your head.
Can give steady income, but lasts only as long as the
Margins on contract work are very low.
Contractors may be upset if you are making enough money
off of them to make a game.
VC’s may be reluctant to work with you.
Work on your own game will suffer!
Funding Project B with continuous income from
If Project A is your only source of income, this
is the same as self-investing.
Consider setting up different companies if
these are two dissimilar projects.
Don’t do this if you’re not good at multi-
Private funds, like Indie Fund and Sony’s Pub Fund,
help content creators, technology pioneers or
Some give a non-refundable lump sum of money
and some provide low or zero interest on loans
that you pay back if you become financially
Others want royalties once game is released.
Most want to see a prototype before taking part its
Getting a portion of your costs back from the government.
More of a cost-cutting option than a source of funding.
Sources: non-profit foundations, governmental
agencies, even game development or media funds.
Hire someone with expertise in writing grant proposals.
Some grants are awarded only to non-profits and so a
game developer can partner with a university, think
tank, or museum.
Grants can come also come with strings attached, such
a requirement to make a version of the game free to
Development Grants: Outside the United
States there are various programs to
underwrite games in small amounts from
$50K up to $1M.
Research Grants: Most commonly
awarded grants for game development, but
funding is in the name of accomplishing the
research objective and not creating a
National Endowment for the Arts (NEA)
Added games to their list of eligible
projects in 2011
Interested in developing work that has a
broad public impact, can reach a lot of
people, and is accessible
Grants are awarded by a panel of experts –
including a “layperson”
NEA Grant Winner
Games for Change's Half the Sky
NEA Grant Winner
City of Sacramento Art Project
NEA Grant Winner
USC Experimental Game Division's Walden
National Institute of Health (NIH)
Largest funder of health focused research in
the United States.
Ro1s: Large multi-year grants which can be in
R34s: Offer smaller amounts of funds
(perhaps $1M over a few years) but act as
stepping stones to higher-end grants.
Health & Human Services and Center for
Disease Control also offer grants
National Science Foundation (NSF)
Major funder of game-oriented work
Focused on discovering how to improve
learning outcomes, as well as artificial
intelligence, crowdsourcing, and much more.
Majority of their grants are multi-year efforts
with good-sized funding that must move
through major research universities and
established non-profit research labs and
Department of Defense (DOD)
Longtime commitment to simulation and
Funds game-based work in a variety of ways
either through direct competitive contracts or
SBIR/STTR grant programs.
America’s Army: First-person shooter franchise
designed as both a recruitment and a training
Small Business Innovation Research (SBIR) and
Small Business Technology Transfer Program
Used by a number of government agencies to
Open to businesses with <500 employees
Awards $2B/year for research
Developer retains full rights
Agency will list challenges under its domain
Developer will respond with ideas for proposals
Reviewers will score submissions
Submissions that score well may be funded
Funding begins as soon as contract is negotiated
1. Feasibility test (<=$150K)
2. Prototype (<=$2M)
3. Commercialization (not funded)
Developer retains full rights
Public and private foundations like Robert Wood
Johnson Foundation or MacArthur Foundation to
improve areas like education and healthcare.
Mix of open-invitation call for proposals and
private invitations to submit ideas
Rarely don’t accept unsolicited submissions
Program managers at these foundations act like
Study their sites and understand their submission
Cultivate partnerships with groups that can submit grants
Build useful core technologies
Attend events and meetings
Understand applied games and challenges
Understand how funding generally works
Plan and write well
Don’t depend on grants for the majority of your income
Don’t use a square peg as a round hole solution
Don’t turn away consulting or testing opportunities
Read papers, news Web sites, science magazines, and play
An affluent individual who provides seed (or front) money for a
business start-up, usually in exchange for convertible debt or
Usually offer some seed money and consulting for the start-up.
Prefer to be near you to offer their business know-how and network
easily while also keeping you under radar.
Find an Angel willing to stay in for more than a year and has game
Best to approach with your concept and use their money to make a
This type of investment does invoke securities laws, so the counsel
of an attorney is strongly recommended.
Support startups until they produce something marketable or at
least get an investment for a longer period of development.
Access to mentors, seed money, office space and investors.
Most offer a support for a limited amount of time (usually
varies between 6 months to 1 year).
Quality of the center depends on mentors and the investor
Some require an equity around 3-20% and provide seed
money, some require a smaller equity 1-5% in return of
mentorship and office space without making any cash
Provided by firms or funds to small emerging
firms that are deemed to have high growth
Rarely fund companies in initial stages
Interested in huge profits, so they look for
Approach with high risk – high profit proposal
Be aware that relevant pitch decks, doing
forecasts, revenue reports will take away from
your development time.
To attract interest:
An experienced team of developers and business
Helps to have a management team experienced in
Data showing real users are addicted to your
Plans for leveraging your first hit for future
Should be scalable to ramp up quickly
Product can’t be easily duplicated
Find an angel investor for the first 6 months
of your development.
Build a demo.
Apply all the available festivals.
Get noticed and start seeking a publisher.
If that doesn't happen quickly, try staying
alive with contract works.
Make some little savings from your other
Apply for a technology grant.
Develop something innovative.
Start seeking a Venture Capitalist
Start contracting art assets.
Create a concept and go seek
If successful, apply for Indie Fund.
Come up with a Funding Model for your
The practice of funding a project or venture
by raising many small amounts of money
from a large number of people, typically via
Preorders, with incentives.
How It Works
Set funding goals and time limit
Countdown clock starts
All-out social media PR blitz
Select a contribution tier
Pledge the amount stated
Become entitled for the tier reward
Top Crowdfunding Sites
Rank Site Fee Notes
1 Gofundme 5% Over $2 Billion raised for personal fundraisers.
Processing fee of 2.9 + $0.30 applies
2 Kickstarter 5% Personal fundraising not allowed. Creative only.
Processing fees between 3-5% apply.
3 Indiegogo 5% 3% processing fee. $25 for international wire.
4 Teespring 10%+ T-shirt crowdfunding site.
Fees vary based on t-shirts selected for sale.
5 Patreon 5% Must pledge an on-going amount. Creative
Additional processing fee of 4%.
Extra Credits, Season 4, Episode 10 – Crowdfunding (7:29)
Pros and Cons
Keep your equity and IP
Money is used for development
Focus on project
Less flexibility to change direction
Funding project, not company
Specific projects get funding
Kickstarter Games Funded
Only about 38% of all Kickstarter campaigns get funded!
Crowdfunding Is NOT “Free Money”
Kickstarter is like
having a full-time,
unpaid, difficult job
for 3 or more
Do Your Research
Look at other, similar Kickstarters
How did they raise?
Where did they raise it?
Ask developers about their success and
This type of fundraising is not considered an
investment and avoids any securities law
BUT.. You are entering into a contractual
agreement with your backers to deliver the
promised rewards. Because of this, you need
to get your project planning together before
entering into this type of relationship.
Form A Business Entity Before
Avoids the personal income hit a tax time
Protects you from personal liability
Forces team to sort out ownership issues
A local university business clinic may help
you avoid higher legal fees.
Think hard about what it’s really going to cost
to develop your game. (e.g., $300K)
Then think hard about the minimum you need
to make your game. ($130K)
Now cut that in half ($65K), because there’s
bonuses to hitting your goal in the first week.
Remember that the Ask should be inclusive of
Kickstarter fees (~10%), federal taxes
(~20%+) and rewards (~10%).
Build An Audience Before Launching
Build a Twitter following
Build an email list
It has to look good. It has to appear
professional and eye-catching.
But no one is going to read it.
The body copy is your store window, so
But don’t expect people to do a deep dive and
read every single thing. Communicate as
much as you can visually.
Motion! Excitement! A static page is for a static
project and your project is EXCITING. Be
Watch the character limit!
Your video is a commercial for the rest of the
page. If it’s a bad commercial, potential backers
‘change the channel’.
Take time to do it right.
Keep it short: less than 3 minutes. 2 if you can
Get to your gameplay footage fast. (Secret:
Most gameplay footage is faked)
No talking heads. Your game is more
interesting than you are.
They have to be cool enough that people want them
BUT they have be cheap enough that you can fulfill &
Find items that are valuable to your audience, not
Get quotes on EVERYTHING. Call up multiple
print shops or shirt printers.
SHIPPING! Take your hypothetical package to the
post office website and see how much it’s going to
cost you to send.
Physical or digital rewards
given to backers based on
Each reward tier usually
includes rewards from
Additional info: Estimated
delivery date, shipping
$5 Exclusive digital wallpaper
$15 Digital copy delivered on Steam
$25 Elite version of the Grappling Hook
$30 Name in credits under “backer”
$35 Digital Art Book
$50 Closed Beta Access
$65 Elite Avatar Skin
$75 High resolution digital map
$100 Printed art book
$125 Signed printed art book
The first 48 hours are critical for collecting money.
Launch on Monday-Wednesday.
Don’t launch on a holiday or the same day as any
big events or game releases.
Projects seem to fund more often in the summer,
not so often in the winter
Tweet and email mailing list as soon as the
You’ll know in the first 3 days whether your
campaign will be successful.
Running a campaign is a full-time job!
Answer e-mails, questions on Kickstarter,
Twitter and Facebook.
Get in touch with the press, bloggers and
Warning: The community will take a sense of
ownership in your game. Be careful about
posting your *ideas* for game features
because they will take it as gospel, and if you
don’t implement them, they will come after
features to will
money is raised
$50K Goal Reached
$60K Artbook upgrades to hardcover
$70K 2nd Playable Character
$80K Nightmare Difficulty Mode
$85K Voice Acting: David Hayter
$100K Cheat Codes
$125K Local Co-op
$150K New Boss
$175K Speed Run Mode
$200K Boss Rush Mode
Stretch Goal Objectives
Get new backers to pledge to your
Get current backers to pledge more about
Get your backers to talk about your
Get the media to talk about your campaign
Stretch Goal Types
Straight Additional Stretch Goal
Adds value to all backers
Extra levels, better music
Motivates backers to spread the word
Segmented Additional Stretch Goal
Adds value to only a subsection of backers
Port to a new platform, additional language
May bring in some new backers
Incremental Rewards Stretch Goal
Adds value to backers who increase their pledge
Additional content added to a new reward level
Stretch Goal Rewards
Extended Content (Straight Additional Goal): More levels in a
platformer, more campaigns in an RTS, an extra character in
a fighting game
Exclusive Content (Incremental Reward Goal): Variations of
existing content that can easily be produced.
Improved Content (Straight Additional Goal): Taking existing
content and making it better.
Port To A New Platform (Segmented Additional Goal):
Consoles, Mac, Linux, Mobile
New Language (Segmented Additional Goal): Spanish,
Chinese, Arabic, Klingon
Physical Content (Incremental Reward Goal): Game box, art
Stretch Goal Scenarios
Don’t announce your stretch goals at the start of the campaign!
Scenario 1: Your campaign barely makes it.
You don’t need any stretch goals (or maybe just one at the end).
Scenario 2: Your campaign is funded mid-way.
Have relatively small stretch goals, and maybe an ambitious one at
Scenario 3: Your campaign is funded in a few hours.
Have some small ones you can meet right away, and then space
out ones of different financial sizes.
Stretch Goal Tips
Treat stretch goals like mini-campaigns in
Focus on what the community wants
Think through how would-be backers
interested in them will hear about their
Marketing, Not Just Money
Crowdsourcing is generally thought of as a way
to procure a budget for your game, but it's also a
great way to create awareness.
Forces you to create a product description and
Can get your website hits
Open communications with a lot of other
A lot of other journalists keep up with new
Not delivering what was promised
Underestimating the effort involved in
keeping a community happy.
Create Kickstarter pledge rewards and
stretch goals for your game.