Open­ing The Gates

Meet Kowloon Nights, a new de­vel­op­ment fund with the fu­ture of videogames in its sights


Meet Kowloon Nights, the de­vel­op­ment fund with the fu­ture of videogames in its sights

The in­die rev­o­lu­tion is over. The gates have swung open for solo developers and small stu­dios: Steam, Nin­tendo, Sony and Mi­crosoft’s store­fronts splash their games across their front pages and pa­rade them on their con­fer­ence stages. With th­ese developers has come a new breadth of story, set­ting, style and themes, herald­ing the be­gin­ning of a new era. But with new eras come new chal­lenges.

“The game in­dus­try is in a wild state of frag­men­ta­tion,” says Teddy Dief, who lead the de­vel­op­ment of Hy­per Light Drifter. “Game makers have more and more op­tions for plat­forms, au­di­ences and tech­nol­ogy, cre­at­ing new sub­sets of our au­di­ence such as VR, streamer-tar­geted de­signs, and new ex­per­i­ments in genre and nar­ra­tive.” For Dief, that means shoul­der­ing new risk, and seek­ing out huge new cre­ative op­por­tu­ni­ties.

“We’re def­i­nitely past the golden age of ‘closed’ Steam and early Kick­starter,” says

Will Dubé, who founded Thun­der Lo­tus in 2014 to Kick­start hand-drawn Norse ac­tion game Jo­tun. “It used to be hard to pub­lish a game, but now it’s hard to cap­ture an au­di­ence. The cur­rent chal­lenge is stand­ing out in an over­sat­u­rated mar­ket.”

For Counterpoint, maker of CCGs­trat­egy game Duelyst, the lat­est chal­lenge is about find­ing the tal­ent it needs to de­velop its ideas, and for Scavengers Stu­dio, which is mak­ing free-to-play bat­tle-royale game

Dar­win Project, be­ing small and full of ideas presents all kinds of prob­lems when it comes to run­ning a live mul­ti­player game.

In short, each of th­ese small stu­dios is set­ting out to ex­pand its am­bi­tions, and each needs help. But the old era’s mod­els of crowd­fund­ing and pub­lish­ers isn’t re­ally equipped to pro­vide it. Step for­ward Kowloon Nights, which is part of a new cadre of in­vestors that’s specif­i­cally geared to­wards sup­port­ing cre­atively am­bi­tious game developers. It is fund­ing projects from each of th­ese stu­dios, along with a slate of oth­ers, in­clud­ing the next game from Fu­mito Ueda, the first game from Tookyoo, a new stu­dio founded by Dan­gan­ronpa maker Kazu­taka Ko­daka and Zero Es­cape maker Ko­taro Uchikoshi, and Scorn, a body­hor­ror FPS by Ser­bian stu­dio Ebb Soft­ware.

It’s a broad slate, com­pris­ing ex­pe­ri­enced developers and green ones, big projects and small – but ev­ery­thing is fo­cused on ex­pand­ing gen­res. “The artistry is growing at an in­cred­i­ble pace and the creators are the core of the story,” says

Alexis Gar­avaryan, a co-founder of Kowloon Nights who pre­vi­ously helped set up Mi­crosoft’s in­die pro­gramme, [email protected] “So we wanted to build Kowloon to help give them op­por­tu­ni­ties and more free­dom to cre­ate games; to eman­ci­pate them.”

Kowloon Nights’ aim is to cir­cum­vent tra­di­tional ways of get­ting games funded. Pitch­ing pro­cesses are lengthy and de­mand­ing, of­ten tak­ing six months of meet­ings and de­vel­op­ment which could be folded into ac­tual game creation, and it of­ten comes at the cost of full cre­ative con­trol. For developers the al­ter­na­tive is do­ing it them­selves, whether through crowd­fund­ing, sav­ings or sheer thrifti­ness, but none of th­ese are par­tic­u­larly con­ducive to mak­ing a good game. “Hon­estly, I spent so many years self­fund­ing my games,” says Dief. “I de­vel­oped a mind­set that the same money that feeds me is the money that feeds the game. Watch­ing the bank ac­count drain and won­der­ing how I could cut costs on food and rent and life to fund the game. If I had to give up a cut of my rev­enue for the rest of my life to save me that risk, I’d do it. Game mak­ing is stress­ful enough on its own.”

Kowloon Nights’ ap­proach is to fund games with sim­ple and fair terms, and to main­tain the stu­dio’s cre­ative con­trol. It fol­lows the ex­am­ple set by In­die Fund,


which was first an­nounced at the In­de­pen­dent Games Sum­mit at GDC in 2010 by 2D Boy co­founder Ron Carmel. In a talk ti­tled Indies And Pub­lish­ers: Fix­ing a Sys­tem That Never Worked, he ar­gued that in­die games weren’t ap­pro­pri­ate for typ­i­cal pub­lisher deals be­cause they were smallscale, the re­sult of heav­ily it­er­a­tive cre­ative pro­cesses, and were based around dig­i­tal dis­tri­bu­tion. Pub­lisher deals arose dur­ing the hey­day of boxed re­tail games, were signed against ver­ti­cal slices and de­sign doc­u­ments, and were geared to give more money than indies needed and take back more than they could af­ford.

In­die Fund, which is guided and partly banked by such in­die lu­mi­nar­ies as The

Wit­ness maker Jonathan Blow, thatgame­com­pany’s Kellee San­ti­ago and Capy­bara Games’ Nathan Vella, rewrote the sys­tem with indies in mind. And in fund­ing the likes of Hol­low Knight, Her Story,

Goro­goa and That Dragon, Can­cer, it’s done much to shape the mod­ern in­die-gam­ing land­scape, paving the way for what Kowloon Nights co­founder Jay Chi calls “the golden age of in­ter­ac­tive en­ter­tain­ment”.

“Even 10 years ago there was dis­cus­sion about the ris­ing costs of de­vel­op­ment. It was al­most im­pos­si­ble to make games within a cer­tain bud­get,” Chi says. “We’ve seen the ef­fect that had on the in­dus­try, lots of con­sol­i­da­tion. What hap­pened since that has en­abled a busi­ness like Kowloon to be vi­able to­day is the re­verse of that trend, with the freemium game en­gines and open dig­i­tal mar­ket­places and mar­ket­ing chan­nels, stream­ers and YouTube.”

Chi is some­thing of a se­rial fun­der, also be­ing in­volved in Maker Fund, which has bankrolled Sur­geon Sim­u­la­tor maker Bossa Stu­dios, and Clus­tertruck and Hello Neigh­bor pub­lisher Tiny­build. But the bulk of his ex­pe­ri­ence was the 11 years he spent at man­age­ment con­sul­tancy McK­in­sey & Com­pany, where he worked across the game in­dus­try, a role that’s given him a bird’s-eye view of its growth.

Sur­pris­ingly, that view has con­vinced Chi, along with the other founders, to have par­tic­u­lar in­ter­est in fund­ing in ‘pre­mium’ games: sin­glepur­chase, of­ten sin­gle­player, al­most tra­di­tional games, rather than free-to-play, which is where you’d ex­pect in­vestors to be sniff­ing around. But the way Kowloon’s team sees it, to­day’s free-to-play mar­ket is sat­u­rated, and the rea­son why it fo­cuses on the top end of the in­die spec­trum is the very thing that ter­ri­fies so many developers to­day: the much-her­alded in­diepoca­lypse.

“There’s still a cer­tain type of de­vel­oper that can stand out from the crowd,” says Chi. “We love small in­die teams, but it’s a well-known fact that th­ese less ex­pe­ri­enced teams are hav­ing a hard time. There’s a lot of sup­ply in the mar­ket. At the same time, there’s also a mar­ket where developers are leav­ing years of triple-A ex­pe­ri­ence and found­ing stu­dios. There are a lot of teams, but there’s a lim­ited sup­ply of them.”

And he be­lieves that in­vest­ing in such stu­dios now is a good idea be­cause there will be lots of player de­mand for their games in the near fu­ture. “We be­lieve that over the next decade there will be more peo­ple play­ing games than ever be­fore in mar­ket­places that are tra­di­tion­ally not pop­u­lar for games,” agrees Ryan Pay­ton, an­other mem­ber of the team and the founder of République de­vel­oper Cam­ou­flaj, and a pro­ducer on Metal Gear Solid 4.

The source of a great pro­por­tion of those play­ers is China. While In­die Fund is very much skewed to North Amer­ica, Kowloon Nights is in­ter­na­tional in out­look, with a par­tic­u­larly firm eye on China’s rapidly growing mid­dle classes. Pre­mium games, Chi ar­gues, might have tra­di­tion­ally been tied to Ja­pan, North Amer­ica and western


Europe be­cause that’s where play­ers have been will­ing to pay for games, while only freemium mod­els re­ally worked in China be­cause of high lev­els of piracy. That has now changed. “We’ve found that there’s an in­creas­ing eco­nomic well­be­ing of gamers in China and there’s more will­ing­ness to spend $15, $20, $30 on a game on Steam,” he says.

Af­ter all, Valve’s July Hard­ware & Soft­ware Sur­vey states that 25% of its users have Steam set to Sim­pli­fied Chi­nese, and western games are be­gin­ning to have strong suc­cesses in China, such as No Brakes Games’ Hu­man: Fall Flat. Chi, who lives in Hong Kong, says that many of them seem to put their for­tunes down to pure luck, but by lo­cal­is­ing well and tar­get­ing their mar­ket­ing, they can be much more as­sured. And that’s some­thing that Kowloon is more than happy to help its stu­dios do, in­clud­ing nav­i­gat­ing them through China’s strict cen­sor­ship laws.

“Gamers across the globe are more alike than we think,” says Gar­avaryan. “Cup­head sold well in China even though its art style doesn’t have a cul­tural ground­ing in the re­gion. We didn’t think it would ap­peal, but it did su­per well, partly be­cause of its dif­fi­culty level and be­cause it got taken up by stream­ers.”

Kowloon Nights’ name, of course, evokes an area of Hong Kong where the com­mer­cial worlds of the west and east merged; in that sense it sees it­self as a bridge be­tween the old gam­ing worlds of Ja­pan and the west and the new ones of China and be­yond. “Which is how Hong Kong has func­tioned his­tor­i­cally,” Chi says. But that also means it needs to weather shift­ing Chi­nese pol­icy and reg­u­la­tions. China is cur­rently not ap­prov­ing any games, fol­low­ing re­ported ad­min­is­tra­tional re­struc­tur­ing and in­ter­nal con­cerns about vi­o­lence, ad­dic­tion and anti-so­cial­ist val­ues. The team is re­luc­tant to com­ment, given that it sim­ply doesn’t know when the freeze will end, and it’s in the same place as ev­ery other gam­ing busi­ness in the re­gion, in­clud­ing such gi­ants as Ten­cent. But when the thaw surely comes, Kowloon is in the per­fect place, and it’s tied to the re­gion, since many of its in­vestors hail from there.

Kowloon is struc­tured to shield its developers from the ex­pec­ta­tions of its in­vestors. They don’t have in­put on the projects Kowloon funds – or even know what they are. In turn, Kowloon is adamant that its logo never ap­pears on the games it funds. “If we’re vis­i­ble as a fund, we’re afraid that peo­ple would fol­low us and not the ti­tles we re­lease,” Gar­avaryan says. And though he won’t share ex­act terms, he says developers “cap­ture a very sig­nif­i­cant pro­por­tion” of prof­its, with the idea that it breaks with the more typ­i­cal fund­ing model where developers re­ceive up-front cash and then watch as the pro­ceeds flow back to their in­vestors. The way Gar­avaryan sees it, this model means that a stu­dio doesn’t have an in­cen­tive to make good games. “In our case we have the same goals, the same in­cen­tives,” he con­tin­ues. “The stu­dio and our­selves want the game to be as good as pos­si­ble. If you know you’ll cap­ture at­ten­tion as a stu­dio when your game comes out and your rep­u­ta­tion is on the line, and also that you’ll cap­ture a sig­nif­i­cant pro­por­tion of the re­turns, that’s very mo­ti­vat­ing.”

Re­mark­ably, Kowloon’s deals are struc­tured in such a way that if a project is suc­cess­ful, the stu­dio will never need fund­ing again. That might seem to be against Kowloon’s in­ter­ests, but the way Chi sees it, he wants to fund projects from the best stu­dios, and they all want free­dom and good terms. “When they’re work­ing for their IP and for their own fu­ture, it en­cour­ages them to work ex­tra hard for the game. And we get to fund the best games, lead­ing to the best suc­cess.”


One of the jew­els in Kowloon Nights’ port­fo­lio is the next game from GenDe­sign, the stu­dio that Fu­mito Ueda founded af­ter leav­ing Sony in 2011. Back then, The Last Guardian was still in pro­duc­tion and Ueda still un­der con­tract to com­plete it. “We didn’t start GenDe­sign from noth­ing,” Ueda tells us. “We had The Last Guardian project to help get the stu­dio off the ground. From there we shifted fo­cus to the next game.”

GenDe­sign com­prises a team of ten vet­eran developers, many of whom who also helped make Ico and Shadow Of The

Colos­sus, and is based just out­side the cen­tre of Tokyo. It is not what Ueda de­scribes as a “soup-to-nuts de­vel­op­ment house”, which is re­spon­si­ble for the full pro­duc­tion of a game. In­stead, it pro­to­types con­cepts and guides core fea­tures, pro­vid­ing high­level di­rec­tion for de­sign, art and engi­neer­ing for larger pro­duc­tion teams, just as it did for The Last Guardian, on which the bulk of the work was done by Sony’s Ja­pan Stu­dio.

It’s pre­cisely GenDe­sign’s need for se­nior developers that presents Ueda with his keen­est chal­lenge as he leads the stu­dio into its next game. “One as­pect that I’m not sat­is­fied with at the mo­ment is the strug­gles we have in find­ing new tal­ent,” he says. “While we have ex­cel­lent staff that know how to work with me and help re­alise the ideas I come up with, we need to fill the ranks of the team. That’s our most im­me­di­ate need.”

This scarcity of tal­ent is the re­sult of the cur­rent state of the Ja­panese game-de­vel­op­ment scene. Much is still tied up in the mo­bile game in­dus­try, which is still bur­geon­ing, while, as Ueda says, there are fewer and fewer on­go­ing con­sole projects. “This cre­ates a dif­fi­cult cli­mate for GenDe­sign to re­cruit top tier tal­ent who want to make great games.”

On Ueda’s side, how­ever, are new op­por­tu­ni­ties to change the way he works. “In the past, it would take a week or two for an idea in my head to be re­alised in the game,” he says. “How­ever, now that we have mod­ern tools at our dis­posal, we can fully re­alise a new idea in a mat­ter of days or hours. The way we’re build­ing our next game just wasn’t con­ceiv­able years ago when we de­vel­oped

The Last Guardian and Shadow Of The Colos­sus.” He re­mem­bers the ex­tended time it used to take to sim­ply cre­ate a third­per­son char­ac­ter con­troller and cam­era sys­tem; now his team can get such fun­da­men­tals up and run­ning quickly, open­ing up GenDe­sign’s re­sources into more cre­ative ar­eas.

This new and more it­er­a­tive way of work­ing has torn up the tra­di­tional ways, in which Ueda’s team would cre­ate a huge de­sign doc­u­ment at the start of pro­duc­tion and then ex­e­cute on it. Given the ex­tent to which Ueda’s pre­vi­ous games have traded on tech­ni­cal in­no­va­tion, whether The Last Guardian’s pro­ce­dural an­i­ma­tion, graph­ics tech­niques in Shadow Of The Colos­sus or

Ico’s rad­i­cal re­moval of UI el­e­ments, it’s a process that would seem a more nat­u­ral fit. But the lack of a fixed game to pitch to pub­lish­ers and part­ners pre­sented Ueda with a new prob­lem. And that’s where Kowloon Nights has stepped in.

“I met Jay Chi while at Sony Com­puter En­ter­tain­ment many years ago, near the be­gin­ning of The Last

Guardian’s de­vel­op­ment,” Ueda says. More­over, Ryan Pay­ton helped with the de­vel­op­ment of The Last Guardian. When

The Last Guardian wrapped and Ueda started talk­ing about his next game, Pay­ton rein­tro­duced him to Chi, who told Ueda that he didn’t need to set a sched­ule and project mile­stones at the early stage the project was in.

“We’re able to ex­plore the core of our next game with a high de­gree of free­dom,” Ueda says. “As a game de­vel­oper, I want to con­cen­trate on the cre­ative as­pects and not have to field re­quests from oth­ers about what type of game to make or what genre to pur­sue. We part­nered with Kowloon Nights be­cause they met my strict con­di­tions sur­round­ing cre­ative free­dom.”

Chi’s of­fer came at a good time. Pay­ton had talked with Ueda about his ex­pe­ri­ences of crowd­fund­ing République back in 2012, which just scraped through its $500,000 tar­get with six hours to go. “While it works great for some creators, I think the re­quire­ment to give back­ers fre­quent up­dates just wouldn’t fit my way of work­ing,” he says. And as for the na­ture of the game that GenDe­sign is it­er­a­tively piec­ing to­gether, well – right now it’s ex­plor­ing sev­eral dif­fer­ent ideas, and will only set­tle on one when it’s part­nered with a pub­lisher. “Our aim is to cre­ate some­thing of a sim­i­lar scale to our pre­vi­ous ti­tles, and to con­tinue push­ing the en­ve­lope.”


Game: Scorn Lo­ca­tion: Bel­grade, Ser­bia De­vel­oper: Ebb Soft­ware

“De­vel­op­ing Scorn has been a long and dif­fi­cult jour­ney,” says stu­dio head Erik Glo­ersen, who had stu­dio direc­tor roles at 2K Czech, Peo­ple Can Fly and more. “We had to scrape to­gether fund­ing wher­ever we could find it, but we didn’t want to com­pro­mise the qual­ity of the game.” The game is Scorn, an un­com­pro­mis­ing body-hor­ror FPS, and its scope meant that Ebb was hav­ing to sep­a­rate it into two in­di­vid­ual re­leases be­fore Kowloon’s fund­ing came in. Kowloon’s ap­proach to cre­ative free­dom was im­me­di­ately at­trac­tive to Glo­ersen, and the prospect of keep­ing its IP ex­tremely valu­able. “I as­sume that Kowloon Nights shares our philo­soph­i­cal ap­proach to game de­vel­op­ment.”

Game: TBA Lo­ca­tion: Los An­ge­les, US De­vel­oper: Name TBA

Hy­per Light Drifter lead Teddy Dief is not mak­ing a VR game, a hor­ror game or a puz­zle game. That much he’ll share, but it’s early days for his new project, since he only started writ­ing (so it’s nar­ra­tive-led, then) and pro­to­typ­ing in Jan­uary, when he left his role as a cre­ative direc­tor at Square Enix. Kowloon has given him the funds he needed to pay col­lab­o­ra­tors. “Kowloon Nights is all the right things for us; they’re le­git­i­mately in­ter­ested in sup­port­ing new types of games be­cause they know it is smart busi­ness to stand out in the crowded stores.“

Game: Dar­win Project Lo­ca­tion: Mon­treal, Canada De­vel­oper: Scavengers Stu­dio

Dar­win Project, a free-to-play, ten­player bat­tle-royale game about team­work and be­trayal, was re­leased in Steam’s Early Ac­cess and Xbox Game Pre­view pro­grammes in March this year, so Kowloon’s fund­ing hasn’t been about get­ting the game de­vel­oped. In­stead, it’s been about its longterm sup­port. “Dar­win Project’s in­no­va­tive fea­tures, the Show Direc­tor, spec­ta­tor in­ter­ac­tions, and em­pha­sis on so­cial skills, don’t re­ally have prece­dents, and it was clear from our first tests that there was a lot to learn about how play­ers use those sys­tems,” says co-founder Si­mon Darveau. “To record player feed­back and reg­u­larly im­prove Dar­win Project we sought a part­ner that wasn’t afraid of tak­ing risks and let us main­tain our cre­ative au­ton­omy.”

Game: TBA Lo­ca­tion: Mon­treal, Canada De­vel­oper: Thun­der Lo­tus

Hav­ing re­leased two games, Vik­ing ac­tion-ad­ven­ture Jo­tun and Metroid­va­nia Sun­dered, Thun­der Lo­tus is some­thing of a vet­eran of the scene, but stu­dio lead Will Dubé still wanted a part­ner to share the risk for its next project. Re­tain­ing cre­ative free­dom for it was para­mount, how­ever. “Los­ing con­trol of your IP can be a huge blow and can have a neg­a­tive ef­fect on your team. Work­ing on some­thing that is 100 per cent yours is scary, but em­pow­er­ing, while tak­ing away IP own­er­ship can strip away mo­ti­va­tion.”

Game: A Place For The Un­will­ing Lo­ca­tion: Madrid, Spain De­vel­oper: AlPixel

AlPixel’s at­mo­spheric nar­ra­tive ad­ven­ture game will have play­ers ex­plor­ing a dy­ing city across 21 days of game time, at the end of which lies the city’s ruin. “Fund­ing has al­ways been our big­gest chal­lenge,” says de­signer and pro­gram­mer Luis Díaz. “Our team must be able to pay rent un­til the first rev­enue starts trick­ling in, not to men­tion the cost of mar­ket­ing, PR, QA and lo­cal­i­sa­tion that bet­ter the game’s chances at re­lease.” He’s well aware of how many other games his will be com­pet­ing with. “The good news is that we are now fund­ing and re­leas­ing projects that would have been too weird for the mar­ket­place a cou­ple of years ago.”

Game: God­fall Lo­ca­tion: Cal­i­for­nia, US De­vel­oper: Coun­ter­play Games

Keith Lee left his role at Bl­iz­zard as a pro­ducer on Di­ablo III to found Coun­ter­play and re­leaseDuelyst, which blends col­lectible card play with turn-based tac­tics. Its next game is unan­nounced, but its core as a com­bat-fo­cused ac­tion game was al­ready set when Lee first met Kowloon’s Chi. “We still needed ad­di­tional fund­ing to en­ter full pro­duc­tion to fin­ish our vast ar­ray of char­ac­ter and en­vi­ron­ment as­sets,” he says. “The job mar­ket is the tight­est we’ve seen in years, so hir­ing ex­pe­ri­enced developers con­tin­ues to be our great­est chal­lenge.”

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