Interested in learning what's next for the gaming industry? Join gaming executives to discuss emerging parts of the industry this October at GamesBeat Summit Next. Learn more.

Brian Fargo. Tim Schafer. Chris Roberts. Chris Taylor. These designers are responsible for a number of noteworthy video games. And all four also have another thing in common — they’ve gone to Kickstarter to fund their latest projects.

Path of Exile recently went into open beta — effectively “releasing” to the market. This online action-role-playing game (a genre that emphasizes combat, leveling up your characters and selecting skills, and acquiring treasure) from startup Grinding Gear Games began development six years ago, financed by the founders and later “wealthy friends,” said general manager Chris Wilson. As its development kicked into a higher gear, the founders paid themselves just enough to get by, leaving as many funds as possible for the rest of the development team — including Wilson and the others, this is 20 people, plus another couple of contractors — and infrastructure for this online game.

“We view ourselves as a startup,” Wilson said. “The founders have made no money yet. We are paying ourselves living costs, but others are making more than the founders. Our priority is making delivering a quality game and not monetizing it.”

The revenue model for Path of Exile deals with microtransactions, but Grinding Gear doesn’t sell items that give players advantages. It makes its money by “prettying up” your gear — in short, from its players’ desire to brag about how cool their armor, weapons, and other equipment looks.


MetaBeat 2022

MetaBeat will bring together metaverse thought leaders to give guidance on how metaverse technology will transform the way all industries communicate and do business on October 3-4 in San Francisco, CA.

Register Here

Cozying up to the crowd

But Wilson and co. needed funded. Inspired by the success Fargo found with Wasteland 2 and Schafer enjoyed with Double Fine adventure, they turned to crowdfunding. At the time, Kickstarter wasn’t an option — in April, countries outside the U.S. couldn’t use it. Grinding Gear is a New Zealand studio. But Indiegogo didn’t appeal to them either. “We knew we wanted to do something similar,” Wilson said. “We wanted to do crowdfunding for a long as we needed, not just for a burst of funding for a month. And we didn’t want people to wait months for their packages, as with Kickstarter.”

Even when Kickstarter became a viable option, Rogers said the studio avoided it. He, Wilson, and the rest of the team had seen mistakes other game developers had made, and they didn’t want to risk that or the headaches involved.

“If we set our goal for $40,000 and don’t reach it, it looks bad,” producer/lead programmer Jonathan Rogers said. “And if we’re over it — if we get $2 million — people ask why we need that much money if we asked for $40,000. It’s amazing to see companies seek $300,000 to make a [massively multiplayer online game]. We can do that to polish part of our game.”

Hopeful because of email from fans saying they’d love to give money — this added up to $90,000 — Wilson and his compatriots set up their form of crowdfunding on their site. Working with another startup, the credit-card processing company Stripe, Grinding Gear set up a way for those interested in backing Path of Exile to give to it directly on its website.

“[Stripe] had to implement a new process. We crashed their servers on the first day,” Wilson said.

“That was annoying,” Rogers said with a laugh.

‘Selling the free audience’

Slowly, Grinding Gear sold Path of Exile. Wilson said fans pledged $320,000 in April alone. But as Grinding Gear processed the numbers, Wilson said he and his cohorts noticed something interesting — while 60 percent of donors were in the $10 range, the “diamond tier,” in which someone commits to $1,000 or more, was drawing plenty of interest. “We had 183 people pledge at this level,” Wilson said.

And the perk for these four-figure financiers? Custom items, like a sword that turns monsters into stone. Granted, this happens when the monster dies — this sword wouldn’t turn the monster into stone on first contact — but instead of the corpse falling to the ground, it would become a hunk of rock. It has no effect on the gameplay. It’s all cosmetic.

“The big thing is that people are please players with our game,” Wilson said. “Ninety percent get it for free. The $10 people have gotten their money’s worth. Now it’s about making it worthwhile for those who pledged $1,000 or more.”

“[The diamond tier] people are paying to show off. We’re selling the free audience to them to show off to,” Rogers said.

What sort of items have the higher-tier players been asking for? “We’re getting requests like, ‘I will pay you to put a wolf in a certain area,’” said Rogers. “Though we were hoping people would be asking for something cooler.” Another wanted a talking sword. So Grinding Gear recorded some dialogue for the sword and gave it a history. The blade holds the soul of a whimsical but thoroughly mad wizard.

These top-notch items come with lots of embellishment and details (Path of Exile supports resolutions of 2,560-by-1,440 and sets its art for that standard). Gloves have brilliant embrodiery. Armor shines and displays contours and filigree. Some of the designs come from the same person who created the concept art for Dobby the House Elf from Harry Potter and the Prisoner of Azkaban.

“We want players to have to interact with their items. At the end of the day, the game is about the items,” Wilson said.

Big spenders are key

Like many social games, Path of Exile has its “whales” — in this case, players who have spent $5,000. “They call themselves the same thing,” Wilson said. How did they learn about this? “A university did a study on our whales. What we got was an interesting report.”

Researchers at New Zealand’s University of Waikato went into Path of Exile’s forums and talked to the “diamond” supporters. They found that some are just wealthy and like games. Others, like Minecraft developer Markus “Notch” Persson, are game developers who like what they’re doing.

The most interesting, Wilson noted, is that many aren’t rich or even well-off — “they set aside $1,000 of what they make, $25,000-$30,000 annually. They see themselves invested in the game for 10 years.”

The long play

That plan mirrors what Grinding Gear wants for Path of Exile. “People were playing Diablo II for 12-and-a-half years?” Rogers said. “Our goal is to spend five years developing and supporting the game, with another five after that maintaining the game.” And Wilson noted that since this is its main product, it will be years before the developer considers the game to be “done.”

How does this cosmetic model influence player behavior? Could guilds of players arise sporting particular colors of items or something else cosmetic? “That would be nice,” Wilson said.

What has Grinding Gear learned about crowdfunding? Well, besides that you don’t need Kickstarter or Indigogo to do it well or that people will pay lots of money for fancy-looking armor, they quickly understood something about reward tiers — especially when those rewards include signed items.

“I made a point of including signed letters,” Wilson said. “I never realized I’d spend seven hours signing my own name.”

“By offering signed things, I didn’t know we were ‘signing’ ourselves up for a big job,” Rogers said.

[Despite sharing a last name, Grinding Gear Games general manager Chris Wilson is not a relation of this writer — Ed.]

GamesBeat's creed when covering the game industry is "where passion meets business." What does this mean? We want to tell you how the news matters to you -- not just as a decision-maker at a game studio, but also as a fan of games. Whether you read our articles, listen to our podcasts, or watch our videos, GamesBeat will help you learn about the industry and enjoy engaging with it. Learn more about membership.