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Crowdfunding Is Big Business

Originally posted in 
The Economist

AS STARSHIPS go, it’s cheap. For $180 you can buy a Constellation Taurus, a 59-metre, 80-tonne freighter that is perfect for anyone looking to break into interstellar trading. Or at least it will be. Would-be space truckers who pay up now will have to wait until 2016, when “Star Citizen”, a video game being developed by Cloud Imperium Games (CIG), is ready for lift-off.

Crowdfunding—in which artists, authors and designers raise money directly from their fans—has been good to the makers of video games. Since the launch in 2009 of Kickstarter, the best-known crowdfunding website, dozens of designers have been able to short-circuit the big publishing firms. The most successful have raised several million dollars each.

But “Star Citizen” stands above all the others. Its initial crowdfunding push, run simultaneously in 2012 on Kickstarter and CIG’s website, raised about $6m. But the donations kept coming. So far the game has accumulated $72m; another few million dollars rains down every month. That makes it the biggest crowdfunded project, of any sort, yet seen. Its nearest competition is Ethereum, a Bitcoin-inspired publishing platform, which raised $18m.

Every cent has come from roughly 750,000 ordinary fans. In return for pledges—ranging from $36 to $18,000—they get virtual spacecraft to use in the game, early access to unfinished versions, T-shirts and so on. What they do not get is equity in the business or a cut of any profits. As with other “reward crowdfunding” campaigns, these modern-day patrons of the arts are willing to pay because they like the idea of “Star Citizen” and want to see it produced. Video-game budgets are hard to pin down, but $72m puts it in the top flight, alongside blockbuster franchises such as “Halo” and “Grand Theft Auto”.

Bigger, more conventionally financed games-makers try to appeal to as broad an audience as possible. However, there is a chunk of the audience that “doesn’t want those compromises,” says CIG’s owner, Chris Roberts. “Crowdfunding allows you to reach them directly.” His reputation has made it easier to get them to part with their cash: he made his name in the 1990s with a popular game called “Wing Commander”.

Even so, some fans fear Mr Roberts is taking on a bigger, more complex project than he can handle. In response, he notes that one advantage of games is that they can be released in stages to reassure backers. CIG has already sent some of them a module that lets them take a tour of their new spacecraft, and another that lets them stage dogfights with other craft. Their feedback will be used to improve the game.

Mr Roberts, who has also worked in Hollywood, thinks crowdfunding could work for big-budget films and television, two other risky sorts of production that can inspire rabid devotion in fans. They would have to find ways to involve fans in the production process without giving away the plot. “But if Joss Whedon [a producer of cult science-fiction shows] wanted to do another series of ‘Firefly’, I bet he could raise a hell of a lot of cash.”

#Business #Crowdfunding #Fun #Interest

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