Video gaming is increasingly becoming popular globally as more people invest in this industry. Statistics show that the revenue from the worldwide PC gaming market in 2020 was estimated at almost $37 billion, while the mobile gaming market generated more than $77 billion.
If you plan to develop a video game, you’ll have to budget for every aspect of the creation process. You need money to create the game, staff wages, marketing, game testing, a game studio, and distribution. Failure to raise the funding needed can be the biggest obstacle for your video game.
Whether you are a newbie or a veteran in the video game business, it can be challenging to get investors to put money into your project. Fortunately, there are alternative ways to fund a game, such as crowdfunding.
This article will show you how to get funding for your next video game. Let’s dive in.
Contents
Key Takeaways
- You need a pre-funding checklist before you get started.
- Crowdfunding via Kickstarter will ensure that your campaign is successful.
- Use accelerator programs to get potential investors to fund your video game.
- To secure funding, you must make an appealing pitch deck that provides all details about your company.
Pre-Funding Checklist Before You Start
So, what do you need before you start looking for funding? Here’s what to consider.
Consider Video Game-Specific Accelerator Programs
Accelerator programs are important for a video game company because they help you fast-track the project. These programs are important because they can help you find business partners, potential financiers, publishers, and distributors that you need for your video game.
However, you need to know that an accelerator program only gives you a head start. You’ll still need to develop a pitch to present to your potential investors or business partners. The advantage of this program is that it helps you identify the investors that could serve your business.
The other thing to consider is that apart from the financing, these accelerators should have a network of key people in the video gaming industry. If you choose an accelerator, you need to select one that aligns with your needs.
Start With a Prototype or Initial Demo
You also need a functional prototype with all the features you claim your product will have in your marketing. A functional prototype is important because you can use it to prove that your video game can work the way you say it will.
For instance, if you are still deciding whether to use Kickstarter or Indiegogo to launch your crowdfunding campaign, you need to know whether you need a functional prototype.
With Indiegogo, you won’t need a functional prototype to launch the video game; however, you must clearly indicate that your video game is in the “concept” phase. On the other hand, if you use Kickstarter, you must have a functional prototype and show it working on your campaign page.
Consider Partnering With a Co-founder With An Investor Network
Not all video developers have the business skill to push the project. Therefore, worry not if you lack the right business skills. You can partner with a co-founder with a background in business management to handle these aspects of the company.
While you build the game, you need someone else to handle the marketing, financial documents, filing taxes, and pitching for new investors. When choosing this partner, you should consider whether they have the right connections with potential investors that can help your business. Additionally, a business-oriented co-founder might appeal more to investors, especially if you don’t have the right experience.
5 Ways to Fund Your Video Game
Let’s take a closer look at the different ways to fund your video game.
Crowdfunding
Crowdfunding for video game development is growing in popularity. Anyone can set up a crowdfunding platform like Kickstarter. Kickstarter has made its brand synonymous with crowdfunding which is evident in its statistics. For instance, gaming is among the top 3 categories for funding at $1.13B.
Therefore, if you are launching a game, Kickstarter is your best bet; the community is huge., Here are some advantages of crowdfunding your game.
Pros
- Centralized communication that allows you to talk to all the backers in one place.
- Little financial risk because you can test the market using a prototype.
- Crowdfunding allows you to keep your equity.
- You have a platform to build a community of supporters.
Cons
- The crowdfunding platforms take a percentage of your funds.
- There’s a chance of failure
- A successful crowdfunding campaign requires a lot of resources
- There’s a saturation of similar products and projects
Where to Get Started
If you are new to crowdfunding, you can talk to experts at LaunchBoom to get started. They can help you every step of the way as you launch your crowdfunding campaign on Kickstarter.
Bootstrapping
A lot of indie game founders fund their projects from their pockets. Self-funding can come from earnings from employment, savings, or personal assets. To finance your game from bootstrapping, you must build the fund for a few months. You can start developing your game while working on a separate job until you are fully ready to launch.
Pros
- You won’t dilute the ownership of the company.
- It allows you to build the funding gradually over several months.
- You can pivot more easily without pressure from investors.
- As a first-time entrepreneur, it gives you more focus on the growth of the business,
Cons
- It’s risky because it can turn into debt funding if you have to borrow loans.
- You have less time to devote to the video game business
- A lack of investor support can hamper the growth of the business.
Where to Get Started
To get started, you can start by saving your current income from your salary. The next step is using the money from your customers to reinvest in the business. To expand the business, you can consider a loan.
Grants for Video Game Development
The other alternative is grants that you can apply for game development. Several organizations offer grants to indie studios that are working on game development. Some of them include:
- Indie Fund
- UK Games Fund
- Cry Engine
- Unreal Dev Grants
- Creative England
Keep in mind that these grants are competitive; therefore, you need to present a good proposal.
Pros
- You don’t need to repay grants
- There’s a lot of information on where to get the grants
- Getting one grant boosts credibility.
Cons
- They are very competitive
- It takes a lot of time and effort to apply for a grant
- Grants have plenty of restrictions
Where to Get Started
To apply for a grant, research the different sites that offer these types of funding to your industry.
Project Funding
A game publisher will pay for the development of the game. After the game is out in the market, the publisher will recoup their costs and take a share of the revenue. This is important if it’s your first time launching a video game.
Pros
- The publisher will add value to the video game development
- You can market the game to more people.
Cons
- The publisher takes a share of the game’s earnings
- The publisher may ask for rights to the game
Where to Get Started
There are multiple publishers with the potential to pitch your game. You should look for publishers that offer games in the same genre and style as yours and narrow them down to find one that works well for your video game business.
VC Funding
Venture capital (VC) funding is popular in the gaming sector. This provides an opportunity for corporate development companies to offer seed funding to businesses.
Pros
- VC funders have tons of business expertise
- A VC firm can provide additional services like tax and legal
- They are also well-connected in the industry.
Cons
- You’ll have minority ownership of the company
- Loss of control over your video gaming business.
Where to Get Started
The first step in reaching out to VCs is research. You’ll have to identify VCs that invest in games and approach them to set up meetings when you have a target list. You can connect through an intro from someone in your network or via a cold email to a VC partner.
How To Secure Funding for Your Indie Game
Here are some tips to get you started.
Make an Appealing Presentation Pitch Deck
For your indie game to appeal to investors, you need to prepare a comprehensive pitch deck. It should be attractive and visual to hook your potential financiers. Here is a guide on how to write the perfect pitch.
Be Specific About Who You’re Targeting
When presenting a pitch deck, you should clearly define which niche of gamers you are targeting; young gamers, casual gamers, etc. When you have a target market, choosing influencers to help you get the word out about your video game becomes easier.
Scour Other Companies’ Pitch Deck for Resources
As a first-time entrepreneur, you might not have the necessary information about what to include in a deck. You can check other successful companies for sample key documents, such as publishing agreements, to help you get a better idea of what the ideal deck looks like.
Highlight the Game and Its Features
What is the game about? Your pitch deck must highlight the key game features, genre, and plot that make it unique. Include a slide that shows the market details, company information such as team members, and any other critical details about your video game.
Include the Financials of Your Project and the Equity
Your presentation should include your financial projections, costs, and if you’re going the investment route, the equity you are offering. This allows the backers to assess your chances of success and make a decision much faster.
List Your Qualifications
As you present the game, don’t forget to sell yourself. You should indicate your level of experience even if this is the first indie video game. This will show your backers what you have to offer.
3 Challenges in Video Game Funding & How LaunchBoom Can Help
Struggling to Secure Funding
Securing funding is an obstacle for most video game developers. Many developers struggle to get enough cash to finance the operations from development to distribution, which can cause the business to fail.
Not Sure How to Attract & Find Backers
Some video game developers may also have a challenge attracting financial backers. Backers need to see a clear picture of how the business will earn them revenue; therefore, if you can’t show this clearly, getting funded becomes a problem.
Finding Your Target Audience
Once you get funding for your video game, you must find the right target audience to make sales. If you market the game to the wrong audience, you might not make the money that your investors are expecting.
Getting Started with LaunchBoom
While getting funding for your video game can be challenging, LaunchBoom can help you succeed without having to go the traditional route of courting investors and selling a stake in your project. Our proven system can test and validate your video game and help build a community of buyers on Kickstarter. Our team of experts would love to hear from you and see how we might be able to help.
