Kickstarter has changed the game industry with its crowdfunding platform this year, but it isn’t focused solely on games. Gambitious is launching today to fill what it perceives to be a gap, focusing solely on game crowdfunding projects where both fans and investors can participate.
The Amsterdam-based company describes it as “crowdfunding going pro.” In the hybrid model, fans can donate money to any game project, as they can with Kickstarter. But outside the U.S., investors can also contribute money in exchange for an equity stake in the project. That could allow game companies to raise hefty sums.
And in the next year or two, thanks to the Jobs Act passed by Congress, investors in the U.S. should be able to participate more fully, as soon as the Securities & Exchange Commission lays down its rules. Until then, Americans can contribute via fan donations.
As previewed earlier this year, Gambitious is starting out with seven new projects that indie developers are trying to raise money for. Mike Wilson, a co-founder, said in an interview with GamesBeat that the Gambitious system is tailored for the needs of the game industry, since indie game developers have a bigger chance than ever to take control of their creative and financial destiny.
“We’ve made sure that everything is completely ready,” Wilson said. “We have put in place controls for vetting projects.”
The framework lets indie game developers and publishers secure funds for the development of a new or existing game project, and gamers and investors can fund projects with a chance for financial return.
“Crowdfunding is causing a great seismic shift in how projects get funded; however, there are risks of crash-and-burn due to unfulfilled projects and unfinished games,” said Gambitious CEO Paul Hanraets. “Unlike other crowdfunding platforms, Gambitious is designed specifically for the video game industry and ups the ante of developer credibility, investor engagement, and development cycle understanding.”
Gambitious offers the opportunity to invest and/or support promising ideas that have a real chance for commercial viability. The Gambitious platform includes a formal qualification process requiring all developers to submit a detailed business and marketing plan, and in all cases, the developer keeps their intellectual property. If the game reaches its investment goal and turns a profit, the investors will receive dividends based on their initial investments.
The projects available for funding include:
· Candy Kids by Abstraction Games, The Netherlands
· Cosmic DJ by Gl33k, USA
· Mushroom Men by Red Fly Studio, USA
· Piratoons by Fishing Cactus, Belgium
· Super Micro Heroes by Mutant Games, Spain
· Tink by Mimimi Productions, Germany
· Train Fever by Urban Games, Switzerland
And upcoming projects include:
· Chariot Wars by Candella Software Ltd., England
· Earth No More by 3D Realms, USA
· Pantzer Pets by Gamundo, The Netherlands
· Stronghold Crusaders 2 by Firefly Studios, England
“Crowdfunding is a perfect option for this Mushroom Men game as it’s not an IP many publishing suits are likely to get, although we think gamers will,” said Kris Taylor, co-founder and lead artist, RedFly Studio. “It’s cool to be part of the first wave of games on Gambitious. Unlike other platforms, Gambitious is run by people who totally get game development and publishing, which makes it a good long term play for us and for the people putting money in.”
Wilson says that crowdfunding is the best thing to happen to indies since shareware emerged in the 1990s. Gambitious is backed by Symbid, the first equity-based crowdfunding platform. For donations, the money has to be raised within 90 days. For investments, the period for raising funds will be a year.
Wilson said game companies can raise money from venture capitalists, but they will then be subject to artificial pressures, such as the need for the venture fund to cash out at the end of its term.
“The pressure on the developer is not there if you don’t have a single big investor,” Wilson said. “The environment out there is pretty rough for raising money. Our partners believe that if something like this doesn’t exist, then crowdfunding as an opportunity will melt away.”
“It is time to move from the wild, wild, west of crowdfunding to a more professional model,” said Gambitious co-founder Mike Wilson. “Gambitious is a transformational way of funding the video game market – legitimizing, protecting, and maximizing the opportunity for all that want a stake in the game.”
The Gambitious team includes the founders of Gathering of Developers, the head of Mastertronic, and a Dutch equity-based crowdfunding platform. It also includes Hanraets, Andy Payne (the CEO of Mastertronic). Gambitious’ founders include Wilson and Harry Miller, co-founders of Gathering of Developers, a 1990s firm that tried to stir up the industry by treating game developers as rock stars.
When game studios register a project at Gambitious, they can indicate how much capital is required to fund a project all the way through commercial release and the amount of equity, or points, in the project they will offer in return. Potential investors can browse the platform for promising projects, investing as little as 20 euros per share until the studio hits its funding target.
Game developers can also raise funds via a hybrid of both fan donations and an equity offering, and the equity offering can be adjusted if the fan donations are better than expected. That way, teams don’t have to give up more equity than necessary.
The individual investments are converted into a single legal entity, a co-op, designed for the purposes of making the project investment. Each investor owns a stake in this new legal entity (the investment vehicle) in proportion to their investment, and if the project is successful they will be paid dividends accordingly.
Additionally, investors will be able to trade their shares in one Gambitious project for shares in others once the funding target has been reached.