Crowd­funded, Inc.

A Crowd­fund­ing Plat­form For More than Just Profit Prof­its

Industry Leaders - - Content Features -

In Fe­bru­ary this year, Pil­lars of Eter­nity 2: Dead­fire be­came the most-funded video game on any crowd­fund­ing plat­form since 2015. Ob­sid­ian En­ter­tain­ment’s crowd­fund­ing cam­paign for Pil­lars of Eter­nity 2 ended up rak­ing $4.4 mil­lion in pledges from over 33,000 back­ers. It’s said to be the big­gest suc­cess in the crowd­fund­ing his­tory. To be fair, the crowd­fund­ing cam­paign’s orig­i­nal goal was to close $1.1 mil­lion.

The video game is a di­rect se­quel to the first ti­tle in the se­ries, Pil­lars of Eter­nity, which was re­leased way back in 2015. If you’re won­der­ing what this game is all about, then al­low us to ex­plain: It’s a game

in which play­ers are in­vited into the world of Eora, on the hunt for a 700-foot tall statue pos­sessed by a re­born god.

The first ti­tle in the se­ries earned nearly $3.98 mil­lion in 2012. To this day, it re­mains to be one of the most-funded projects on Kick­starter. In 2015, Ob­sid­ian En­ter­tain­ment an­nounced plans to take a seat on the ad­vi­sory board at Fig, a new crowd­fund­ing plat­form that re­wards back­ers with eq­uity in­vest­ment. Pil­lars of Eter­nity 2 is the plat­form’s first ever project, and also the most suc­cess­ful one.

Crowd­fund­ing on Kick­starter hit an all-time low for the first time around last year. As a mat­ter of fact, the games cat­e­gory was down by 60 per­cent. The plat­form tasted sweet suc­cess back in 2015, when Shen­mue 3 made more than $6.3 mil­lion

and Blood­stained earned $5.5 mil­lion. The suc­cess of Pil­lars of Eter­nity 2 on Fig speaks vol­umes about the trends in the world of crowd­fund­ing.

The de­cline of the video game cat­e­gory is ringing alarm bells. For the first time since its found­ing in 2009, Kick­starter has made less money, roughly 5.8 per­cent less than in 2016.

So, what’s hap­pen­ing? Is this the on­set of the fail­ure of video game cat­e­gory on crowd­fund­ing plat­forms?

Ac­cord­ing to a mar­ket re­search done by Poly­gon, Kick­starter is no longer the leader in the crowd­fund­ing mar­ket. Back in 2015, suc­cess­ful video game Kick­starters earned $41.5 mil­lion. The de­cline, how­ever, was in 2016, when suc­cess­ful cam­paigns earned only $17 mil­lion. This is a 60 per­cent de­cline in rev­enue for the video game cat­e­gory. This is in spite that the num­ber of suc­cess­ful cam­paigns in 2016 was the same as in 2015.

Ad­di­tion­ally, table­top games earned twice as much money as video games in 2015. In the year 2016, table­top games earned nearly six times more. This par­tic­u­lar trend has been un­cov­ered by ICO part­ners.

In 2016, table­top cat­e­gory grew by 20 per­cent, gen­er­at­ing rev­enue from $84 mil­lion to al­most $102 mil­lion. The num­ber of suc­cess­ful cam­paigns also rose by 24 per­cent.

In mid­dle of the chaos, Fig has turned out to be a su­per suc­cess­ful plat­form for eq­uity in­vest­ment. Thanks to its lu­cra­tive of­fer­ing, it has pulled ma­jor play­ers from the Kick­starter plat­form. Un­der its kitty is now Dou­ble­fine and Inx­ile, as two of the most suc­cess­ful multi-mil­lion dol­lar cam­paigns from Kick­starter. Even though the com­pany is un­der im­mense scru­tiny by the U.S. Se­cu­ri­ties and Ex­change Com­mis­sion, the case has been drag­ging for months. Not so long ago, Fig helped Dou­ble­fine’s cam­paign for Psy­cho­nauts 2 earn #4 mil­lion, while Inx­ile’s Waste­land earned $3 mil­lion.

For a plat­form com­pet­ing against

an al­ready es­tab­lished one, it’s quite a show of power. At this point, we should also keep into ac­count some of the smaller, but suc­cess­ful cam­paigns that took place on Fig. In its first full year, Fig raised $7.8 mil­lion from sev­eral small scale projects. This num­ber is half of what Kick­starter did in its first year.

So, where did all the money go from Kick­starter? One can­not sim­ply as­sume that a novice plat­form such as Fig swooped in and scur­ried away with a huge chunk of back­ers. It might be true that Kick­starter has seen an over­all de­cline in the video game cat­e­gory in 2016. But it is quite dif­fi­cult to say where all the money went. What are the pos­si­bil­i­ties? Cer­tainly, there must be some ex­pla­na­tion we could pro­duce to jus­tify the as­tound­ing de­cline.

For starters, it seems con­sumers have lost their ap­petite for the crowd­fund­ing video games en­tirely. Also, some high­pro­file projects have failed to de­liver on their lofty prom­ises. This, in gen­eral, may have soured them in the eyes of the crowd­fund­ing back­ers.

Se­condly, it’s quite hard to ig­nore the in­du­bi­ta­ble growth of table­top games. Lat­est fig­ures sug­gest table­tops could even be steal­ing a ma­jor chunk of rev­enue from the video games cat­e­gory.

While peo­ple do en­joy play­ing games on their com­put­ers, it’s hard not to re­frain one­self from spend­ing a good amount on board games.

It’s an ex­cit­ing time in the crowd­fund­ing in­dus­try. From wasted money to un­de­liv­ered games, the in­dus­try is not short of con­tro­ver­sies. It’s a com­pli­cated mat­ter, how­ever, Fig seems to have learned how to nav­i­gate with­out fall­ing into some of the most com­mon pit­falls. Per­haps, video games could lead the way in the rise of crowd­fund­ing plat­forms such as Fig, and lure back scorned in­vestors with the prospect of eq­uity and more.

One ma­jor hur­dle is that Fig is await­ing SEC ap­proval. Once ap­proved, it might be­come a vi­able force in the world of gam­ing. It’s hard to imag­ine the plat­form open­ing up its doors for me­dia, film or other en­ter­tain­ment prod­ucts. But it’s cer­tainly not to be ig­nored. Fig may have spent a lot of time in the spot­light over the SEC con­tro­versy but it’s paving the way when it comes to giv­ing the con­sumer more than what they want.

What­ever the case it, it seems eq­uity crowd­fund­ing plat­forms are here to stay. It will be in­ter­est­ing to see how in­de­pen­dent devel­op­ers are able to juice the plat­form.

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