Double Fine Productions changed the way that indie developers look at funding themselves when they raised $3.3 million via Kickstarter. The company isn’t stopping there in creative ways to raise money while preserving itself as an independent entity.
“We’re making a switch from console work-for-hire and going to direct to consumer and free-to-play projects,” said Justin Bailey, the vice president of business development at Double Fine. “That process has taken place over the last 18 months.”
Kickstarter could be used as an initial round of funding for some titles before Double Fine switches to more formal means of funding. The hope is long term this results in more projects and more platforms for Double Fine products.
“We try to be as creative with our business development as we are with our games,” said Double Fine CEO Tim Schafer. “We are always on the lookout for ways to break the traditional mold for game funding. So when we see new opportunities come up — like Kickstarter, angel investment, or other alternative funding models — even though they might seem new and risky at the time, they are also very attractive to us. Because, let’s face it, anything beats the traditional game funding model. It’s like a loan with a really horrible interest rate. No revenue usually until you’ve not just paid back the development cost, but paid it back many times over. Plus, lots of entanglements with intellectual property usually.”
One example of angel funding that Double Fine received was from Xe.com founder Steve Dengler, who gave the company a million dollars. “I’m a fan with money,” said Dengler. “That pretty much sums it up. I’ve been a fan of Double Fine for years, and now I get to help them make new games on their own terms. Traditionally, a developer needed a publisher to get their work made and out to the fans. And traditionally, that relationship was pretty one-sided. But together, we are changing that.”
“What I do want to do is help them make great games for their fans because I am one of those fans,”said Dengler. “And so far it’s working wonderfully. It’s tremendously satisfying.”
“Steve is great because he is literally an angel investor — he came out of the clear blue sky, has mysterious powers, and he only uses them for good,” Schafer added. “Oh, and he can fly, too… in his Cessna. He loves games, he likes Double Fine, and he wants to remove the money obstacle from our path and help us achieve our creative ambitions. The best thing about a partner like Dracogen is the creative freedom. There’s no bureaucratic overhead like time-wasting green-light committees and milestone acceptance tests. We get to focus on making the game good because we have his trust, and in exchange for that, we offer him complete transparency into the product. Mutual trust and mutual respect is critical in this kind of relationship.”
Double Fine wants to eventually publish titles on its own site and stay independent. Creative financing means their 60 employees are working on five different projects right now.
“It is complicated to keep straight, but we have crowdfunding, self-publishing, the mobile studio, and some legacy business,” said Bailey. “We are now majority-funded by crowdfunding or outside investment. By next year, hopefully that transition will be complete [with almost no traditional publishers or work-for-hire deals funding the games.]”