Kickstarter gives game developers control over their destinies

Brian Fargo is one of the best people to speak about the power of Kickstarter. A storied veteran of game development, he turned to crowdfunding when he couldn’t get a traditional video game publisher to bite on a sequel to one of the most influential role-playing games ever made, the postapocalyptic Wasteland, what Fargo calls “the most anticipated game of his career.”

The fans responded where the publishers didn’t, funding an impressive $900,000 for the game Wasteland 2 in March.

“Kickstarter is changing the dynamic for the game industry,” said Fargo, the chief executive of InXile Entertainment. “It’s a way for every creative person to control their destiny.”

At this year’s GamesBeat in San Francisco, Fargo was joined by three fellow veterans of game development — including adventure game maestro Tim Schafer of Double Fine Productions — to discuss the benefits and drawbacks of raising funds on the platform. The panelists have all raised vast sums on Kickstarter, anywhere from $400,000 to upward of several million dollars.

According to the panelists, Fargo’s experience is a key benefit to raising funds on Kickstarter — you can seek validation directly from fans.

“Certainly, I saw the success Tim had, and I thought there was an opportunity for lightning to strike more than once,” Fargo said. Schafer (pictured on the far right) made history when he blew Kickstarter records for the most funds raised in 24 hours with his adventure game. (The Kickstarter for the Android-based Ouya console smashed this record Tuesday.)

Since Schafer’s success opened the floodgates, lightning continues to strike for game developers. Jon Kimmich, the chief executive of Software Illuminati (pictured on couch, center), likened his experience with crowdfunding to an intensive political campaign. He said it’s an in-built marketing and distribution channel. Unseasoned investors — the “population of missionaries” — will voraciously spread the word about games they desire to play.

But does Kickstarter pose a threat to angel investors and venture capitalists? For Mitch Lasky, a general partner at Benchmark Capital, it’s a positive development.

“We’re entering into the most disruptive period in the history of the video game period,” he said in a discussion on the future of game publishing. “And I’ve been doing this for almost 25 years.”

Lasky said crowdfunding is a valid alternative to angel investing. He brought up one major concern that resonated with the panelists: Will unseasoned investors funding these games need more than just early access or a T-shirt? Will they ask for an equity stake?

“In the future, if one of these Kickstarter companies turns out to be Zynga, I’m not sure I’d be happy with a T-shirt,” Lasky said.

For now, Kickstarter is proving to be a validation tool for game developers for when they approach venture capitalists for a more sizable sum. Paul Trowe, the chief executive of Replay Games (featured on the couch, left), leveraged his Kickstarter page as a proof-point for their business model. “I took a printout out of the positive comments,” he said. “Boom! Here’s our market validation.”

As crowdfunding enters a gold rush era, the panelists discussed what could go wrong. The most poignant feedback was for gamers not to underestimate the amount of work and stress it takes to produce a successful game.

“Games projects have a tendency to underperform,” Schafer cautioned. He said the abundance of games on Kickstarter means it’s no longer a news event to have raised funds on the platform.

Another piece of advice echoed by the four panelists is not to ask for anything less than is required to produce a top-notch game, even if it exceeds half a million dollars.

The panel was moderated by GamesBeat’s Sebastian Haley, himself a game developer currently raising funds on Kickstarter.