17 Sep The Survival Guide for Game Development Funding
In the past weeks, development of Momonga has nearly grinded to a halt. We have one artist working on it, but all programmers are scrambling to meet a “mission impossible” deadline for a client.
Welcome to the world of bootstrapping.
True to the “independent” tag we give ourselves, we are self-publishing our game. A big part of that is funding. And believe me, the way you fund your game can make or break it. It can even kill your company.
With this in mind I want to talk a bit about the different types of funding, and give you some of the survival tips that we found to be most useful.
Types of funding
So you want to self-publish your game? Then you need to think about funding. There are many types of funding, but in all cases the goal is to “extend the runway” – to buy yourself time to finish the game and take off. Hopefully into orbit.
1. Cut costs – If you are able to keep your living costs to a minimum, you are in good shape to invest your time in making your game. Funding is all about cashflow, so keep expenses low. Cutting costs can only take you so far, so you still need a source of cash.
2. Keep your day job – If you have a decent job with a solid income, you might want to consider hanging in there for a bit. Save up your money, and work on your project on the side. You could also cut down your working hours to have a bit more time available.
3. Provide services – A lot of indie studios are development shops providing development services to other companies. If you can get the projects, you will get paid better per hour than you would working for a boss. Which leaves more time for development.
4. Ask the crowd – If people are waiting for your game, you might as well ask them to pre-order. Kickstarter is the obvious choice, but you can do it yourself too. Sell the beta, or sell the idea. Then invest the money back into the development of the game.
5. Get a loan – This is a tricky one. Banks are cautious, so you will need a good plan. Aunt Irene can help you out, but asking family and friends for money can be asking for trouble. Just make sure you can repay the debt – never promise something you can’t deliver.
6. Find other sources – There are many ways of getting money in the bank. Think of sponsorships, government funding, art / cultural funds, or selling your assets. If you think creatively, there is certainly a way to get the cash you need to get started.
7. Get an investor – I saved this one for last. With an external investment, you give up some control over your business. However, it can also mean that you get freedom to pursue your goals. That is a trade-off worth considering.
How we do it
We provide game development services and keep our costs to a minimum. With a sprinkle of credit from the bank and a tiny bit of tax relief, we soften the blows and stay alive.
Doing this, we have been able to invest around €250k into the game.
The problem is that we chase two rabbits: Client projects and our own game. We need to focus on both of them, and that’s impossible. This balancing act can be stressful, because something’s got to give.
Then there’s cashflow. We need our balance to be around zero all the time. This presents a potential risk. At the very least, we become vulnerable: if one client pulls the plug, we could find ourselves in a situation where we can’t handle the losses.
As an example, we are currently working for a big client. Over 50% of this year’s service revenue comes from this client. The project turned out to be much harder than we anticipated, and we are currently facing a huge deadline.
In this situation we take the side of the client. Momonga is our pet project, but we put our clients on the #1 spot. An obvious choice, and good business practice. However, we have to face another painful delay for Momonga.
The correct response is to deal with it. Swallow your pride and work hard for your customers. It’s the right thing to do.
Cashflow survival tips
If you want to get the game done, you need to think hard about cashflow. These survival tips come from our experience and from other developers:
- Cut costs – But realize it only takes you so far. In the end you will have to earn some money somehow.
- Move abroad – Some countries are easy on your wallet. If you are free to move abroad, you could consider moving there.
- Side products – Getting smaller products out there that you can sell is a great way to get a bit of extra money.
- Start small – Keep your game simple. If you don’t need a AAA budget, your life will be easier, and you will learn faster.
- Stay sharp – You will need to make some tough decisions. Fire a client or pause development? Remember that cashflow is king.
- Build momentum – If you have a job, keeping it seems safe. The tough question is: Can you keep your day job AND finish the game? Sometimes you need to take a bit of risk.
- Persevere – Prepare for The Dip. One day you won’t see the end of the tunnel. That is the day you need to push through or drop it.
- Look ahead – Keep track of your cashflow projections. I use a simple excel sheet that projects cashflow a couple of months ahead.
- Make a plan – Think about why you want to do it. Don’t burn your cash reserves just because it’s the hip thing to do. Make a plan.
- Combine and shine – There is no perfect way to fund your development. Balance the pros and cons. Make a combination that fits your plan.
The truth is that any kind of funding is HARD. There is no simple strategy, no step-by-step plan to getting it done. Whether you are a hobbyist, service provider, or living in your parent’s basement – it is a rough ride to fund your game and get it done.
We are self-funding because we want to stay in control of our destiny. We don’t want publishers parading around with our title. We want our game to be a Paladin game. And we are willing to go the extra mile to keep it that way.
And that’s the thing: It is worth it. For us, this is the road to freedom. Freedom to choose which projects and which products we want to work on.
It feels a bit like hunting the Holy Grail, but that’s what Paladins do.
I will let you know how it works out for us. Stay tuned.
What about you? How are you funding your projects? Let us know in the comments!