Sensible strategy for crowdfunded innovation

The computer games industry has changed dramatically since this Kat enjoyed many an hour on Sensible Soccer and Cannon Fodder.  That those titles still have a cult following two decades after their first release is testament to their originality (despite one being a football game).  

Nowadays, the Call of Duty series, currently in its ninth iteration, incurs around $250 million in development and marketing costs for each release.  That places the game in the league of Hollywood films.  The publishers know that if they get it right then the rewards are even larger, for example 'Call of Duty: Modern Warfare 3' released in November 2011 earned sales of $1 billion in 16 days beating Avatar to become the biggest entertainment launch of all time.  Things have come a long way in the forty years since Pong.

However, the largest software developers are now accused of simply churning out the same old titles, just with more bells and whistles rather than investing in innovation.  That is a natural reflection of the tendency of businesses to become more risk-averse as the investment at stake increases, but it is lamentable nonetheless.

This lack of innovation at the 'top' end of the market is unfortunately mirrored by the games published at the bottom end.  These cheaper [you mean free - Merpel] games occupy a corner of the internet where in a few short years social media, mobile gaming and universal online access have allied to disrupt computer game economics so significantly that unless a game can be monetised, it is unlikely to be produced, even if it is more fun.  That has stifled innovation and led to claims of copyright infringement by Electronic Arts against Zynga for imitation of game genres (see 1709 blogpost here).

Ironically however, it is this stagnation which has provided the catalyst for creativity.  Those games developers who are willing to be innovative not only in their game design but in their project funding have turned to crowdfunding to source finance for their projects through websites like Kickstarter.  

The kickstart must be around here somewhere.

By pitching ideas to the world, businesses can maximise their audience [rather like a digital Dragons' Den open to the public then] and ensure the financial side of things is efficient enough to accept micro-payments.  The site has been especially popular among computer games developers (as noted by The Economist).  Indeed, six of the top-ten funded projects relate to the games industry and each of them has raised over $1 million from pledges of as little as one dollar.

Zooming in for a closer look, it is good to see that the projects are for game genres which have been largely ignored in recent years but which were once popular, such as point and click adventures (think The Secret of Monkey Island).  Blind nostalgia is one thing but for the bigger publishers to take notice we need to see some commercial success.  Let's hope Kickstarter lives up to its name.

More IPKat computer games industry economics here.
Sensible strategy for crowdfunded innovation Sensible strategy for crowdfunded innovation Reviewed by Robert Cumming on Thursday, September 13, 2012 Rating: 5

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