Thursday, 4 August 2016

Is Crowdfunding Right for Your Game ? Analyzing Xydonia

First of all : Crowdfunding is a form of alternative finance, which has emerged outside of the traditional financial system.
Excluding debt funding there are two main types of crowdfunding platforms:

1. Gifting crowdfunding sites such as www.kickstarter.com or www.indiegogo.com where no equity is involved. The “donations” can be as small as €10 and can involve rewards such as tee-shirts, invites to launch parties and products that have been produced post-funding. Often this type of platform suits creative industries and social enterprise.

2. Equity crowdfunding, such as www.crowdcube.com and www.seedrs.com where, in return for cash, a person can play Dragons Den and take a tiny stake in a company that potentially could produce a healthy return on investment. The individual investor or crowd will have no say in the company but often there can be several other fringe benefits to being an investor, similar to the gifting sites above.

With both types of crowdfunding you upload your pitch and then have typically 60 days to secure the full amount of capital you require. If you fall short of the target funding, all the capital raised gets returned. The costs are usually 5-7% of capital raised.

We can analyze one of the latest game on Kickstarter, posted also on indiexpo : Xydonia.
Result :
728 backers pledged € 25,925 (the Goal was € 20,000)  to help bring this project to life.




So why was Xydonia so successful?

Let's take a look at five critical factors for Xydonia's success when raising crowd funding:

1. Xydonia already had an active and responsive database of gamers, built up over two years, that had already played their game or seen gameplays on youtube. Although many crowdfunding sites have over ten thousand registered investors, if they do not know you it will take a lot of convincing to get them to buy into what you are doing. The team of game developers that secure crowdfunding usually already have a good following before they even ask for the money.

2. Not only is it important to have your own database, but you need a strong pre-launch campaign delivered through email, face-to-face and social media for at least two weeks before you release the deal on a crowdfunding site. I discovered their game at the Svilupparty 2016.


3. Their pitch was outstanding in its clarity of vision and its description of the past, present and future. People could buy into the compelling narrative emotionally and wanted to be a part of it. The business plan is less important than the emotional impact you can make through video, images and graphics. Invest most of your preparation time on your one-two minute elevator pitch; without an excellent pitch you will never gain enough interest to get your deal funded.

4. They demonstrated a clear work,  through credible visuals and a free demo to try. "XYDONIA is an old school arcade horizontal shoot 'em up, inspired by the Japanese milestones of the genre, such as R-Type, Gradius and Darius".
With a comparison (Gradius and Darius) the users immediately associates in their head a very precise and clear idea of the game.

People need to be able to understand your big game within 10 seconds, and then be able to tell other people about your game with ease. If your gameplay or design has a high degree of complexity it may not be for the crowd but for more specialist investors.

5. The budget is not impossibile. You can see several campaigns on Kickstarter where the developers looking for huge goals. Watch your game and watch on kickstarter what's the budget requiered for a game like yours. It can help you.

Is it right for your game?

Crowdfunding will continue to gather hype in the months ahead.
This is good news for developers, as it means high valuations, a much quicker route to capital, and access to a large base of enthusiastic investors spreading the word about your business.

Should this option not suit your business however, it's important to remember that crowdfunding is just one of many alternative routes to funding.

But how do you know whether equity crowdfunding is right for you? If you can tick off all the five points above for your game – then go for it!

P.s. If you're looking for a good campaign on Kickstarter using indiexpo, read also this post.

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