I am not so sure about that.

In 2012 Crytek aims to make all its game FTP

2013 Crytek plans to go FTP fully.

2014 Crytek don't have enough money to pay its staff

2015 Crytek sold it Cry engine license to Amazon to avoid bankruptcy

Zynga, which is famous for its Free to Play games are bleeding money

Not sure if FTP is where the money is, because ultimately it is gamers who would pay for the games and if gamers don't like it, there will be no money.

FTP will still be a dominating force in the market, especially the mobile, but money is not going to be so easy and people wisen up.

Another problem may be marketing.
It is not EA / Blizzard / Ubisoft / Sony that have tons of money for marketing. Just that a game is FTP does not means that gamers will jump on it, FTP just means barrier to entry is very low, but does not mean gamers will enter.
Traditional games if good have players generating word of mouth and positive reviews to entice more players.
A FTP Always Online DRM Micro transaction game?

Then there is the time the game need to turn to a profit. While traditional games would earn most of its profit in 3 months to 1 year, how long FTP games will turn to a profit? Players do not pay upfront, but dribble their payment in a span of time. And while traditional games just need bug fixes post support and can forgot about it, FTP games need more investment in creating new content to retain interest and keep players playing.
If the revenue is going back to the game to generate content, how long the investors need to wait before reaping the profits?

A crowd is basically just a type of mob that isn't yet angry and wielding torches.

I know it's a bit of a stretch being on the other side of the angry mob, but they can be rather useful. That wouldn't work with KS, you'd have to do that separately.

But, it's a bit like starting a bar and selling stakes in the establishment in exchange for money up front. You give them X amount of money and they give you Y amount of the proceeds.

You could probably do it as an investment club, but you'd need an attorney to write up the contract and evaluating what the idea is worth is the hard part. I wouldn't personally do it as it's incredibly risky. I'm no longer giving money for crowdfunded games just because it's not worth the risk any more.

KS did cancel the Skarp project for violating it's prototype requirement, but there's so many other projects that are allowed to go with low probability of properly fulfilling the promises.

When I was talking about money in F2P games I was focusing in the pc market, and thinking about pvp/pve online games, which is what I actually thought Anchors In The Drift was. It's a risky and competitive genre, but it is where you can make more profit. Valve and Blizzard are proof of that. But a PC single player game I can't even see it for investors.

Noticed their usage of the word equity?

Despite you not really considering what you are planning as a form of ownership, it is legally indeed a form of shared ownership, pretty much similar to stocks. Heck, if you thought about it - I'd even guess you assumed a form of limited liability, as in, if they don't actually profit and even lose money you wouldn't be obliged to fund them proportionally to your share. :)

Now, in an extreme view one could say do whatever you want and assume the risk of being defrauded, but due to all kinds of historical experiences share owning and associated equity distribution is heavily regulated. A simple and relatively harmless (not costly) regulation is mandatory disclosure of financial statements so the stock managers can't hide profits instead of distribute them. Of course then you get into details about how you're supposed to disclose, blah blah... regulation on top of regulation.

Kickstarter would be in all kinds of trouble to allow this, in fact they have moved in the opposite direction by becoming some kind of public good type organization recently. And even if you contact the guys directly, unless they are experienced and well prepared for the numerous legalities involved, you might be getting them into trouble as unlicensed stocks or some such.

This is just one of those things many people conveniently forget when they say finance and banking are under regulated... I'm glad the Kickstarter model gained enough popularity that it might help folks gain knowledge about such. Given how everyone's pensions rely on stock markets, many folks consider investment as a means to manage their capital, and how entrepeneurs almost always need capital funding from third parties - this is the kind of stuff that should be taught in schools IMO. Well, baby steps... baby steps...

I don't know enough of the PC FTP market, I am skeptical that gamers will choose to spend on Anchors FTP rather than Valve / Blizzard or other established FTP.

And they don't have Valve / Blizzard marketing budget, And the slow return of FTP still stands.

Still, if you think you can profit from it, go ahead.

I'm not a business savvy guy but I wouldn't invest my money into video games. The risk for failure is just too high and I would probably rather lose lots of money than earn anything.

But then I know that you are into video gaming business anyway, so if you think you can identify promising projects better than others and you know more about the devs than us customers and what is realistic and you have some spare money you cannot invest in your own projects, than why not. You can become a venture capitalist, business angel for small video game makers.

But then probably $3k won't make much of a difference for a game. One would probably need to finance much bigger amounts to make an impact.

Also the fact that the project failed its goal kind of suggests that people don't like it so much that they are willing to back it with more money than was necessary. This might be a hint that the game idea may not be as good.

So I would not do it and I can only advice for other mortals to not do it, but if an expert in this field with some free money does it, it actually might work and gives a profit.
I think this is bullshit.

Creators cannot offer such things officially through KS but that doesn't mean you cannot have an extra agreement directly with the creators.

For example: They make an option for a large pledge of say $3000 without any reward but also make a contract with you that in case that you (and only you) go for that option you get a certain cut. No way, KS can forbid this.

So, simply everything is possible. Just because it is not possible through KS doesn't mean it's not possible.

But to be sure one has to visit lawyers of course.

I agree that the main problem here isn't doing it but rather whether it's a good investment at all.

As a rule, KS game projects go over budget. Do you really want to put your money into this sick bed, especially for a game that can't get enough pledges to reach a low goal? Do you really want the 'Hey, you gave us $3000, how about you give us another $3000, and another $3000, ... We're willing to give you back all the money from the bundle which will make most of our sales where the game will be on the $1 tier.'

I actually work at a crowdfunding website, and we looked into the option of offering equity back at the planning stage. Turns out, the legal requirements for it where a giant pain in the ass, so we took the option down.

The situation you bring up could be problematic because while the off-site equity agreement would be perfectly fine, it would not technically count towards the crowdfunding campaign goal. And if you do add it to the site, then it could be considered as self funding after the agreement. Chances are nobody would look that deep and complain, but KS is basically covering their asses just in case IMO.

This said, I don't speak legalise, I'm just a dev. But I can see that as a potential problem, and big sites tend to avoid potential edge cases since they already have a secure core business.

Thanks. That sounds reasonable. So it basically is an edge case.

I could make the case even more edgy.

- jefequeso could just give them a certain sum (say $20k) for getting a cut
- and afterwards as if by chance he also gives the missing $3k as a normal backer without any special reward
- he pays for the $3k he lost from the profit he will make by investing the $20k

Surprise, surprise. Not. Thanks from the comments from experience.


Now over to the meta level I go...

The so called shared economy exemplified by crowdsourcing as well things like AirBnB or Uber is a great example of ideological currents at play in globalized society.

On one hand, what is objectively happening is the facilitation of capitalism. Making it easier for creators to raise capital funding, making it easy for asset owners to generate capital from their property (vehicles, real estate - can it be more democratic?). Lowering barriers to entry in all sorts of markets.

On the other hand the profit motives are hidden behind such brilliant (likely unconscious) rhetoric as "sharing" economy. What exactly is being shared I wonder? And the legal barriers to capitalism are brought into some contrast and made more visible - but fear not, I'm sure governments are about to interfere with the "sharing economy" and make it ever slightly harder to take part in, for whatever well intentioned reasons.

For example just today I read about San Francisco and attempts to regulate (well, tax into compliance rather) AirBnB like services in the hope to reduce rental prices by forcing folks to rent to workers rather than to tourists. The topics around taxi unions and outlawing Uber are all over the place.

Another topic would be 3D printing. But we all know what is really important around that: gun control! Not at all revolutionizing manufacturing by potentially reducing the scale at which economies of scale become effective and competitive :)

Or jefe could back them with 3k, and then "coincidentally" be hired as some a consultant for an equity share. They could even claim that it was the 3k support what got jefe in their radar in the first place.

There's many ways to go around the system, but the point remains that it's all outside kickstarter so they would not be able to publicize a reward tier with equity in it.

How much % would you be thinking of, and what would you expect to get in return? To quote their Kickstarter: Doesn't sound that there's much of a good investment with good returns to make there. You may overestimate the sales potential for such a low-budget labour of love game (not that it couldn't be a good game, it just doesn't mean that it will be automatically a commercial success, too), but I'm not in the games industry so I may be wrong.

Also, there are 7 devs listed and they ask for 18.500 CAD$. Should be obvious that this cannot be the total development budget. It might be really difficult to measure the amount of their own money and free time they've poured into their product in order to determine how much 3000 CAD$ would entitle you to in %. It may be a ridiculously small number.

As a developer, I would want to avoid people getting percentages in return for their money. As soon as some backers become investors, some of them may want tighter control over the production similar to a publisher. Five "investors" with contradicting ideas fighting over what your game should be like in order to maximize their return, and devs may come to the conclusion it might just be better to have a single big publisher.

If you don't give the "investors" this control and they get only a few bucks back because the game didn't sell too well when they were expecting some $10000s, some of them will blame the devs that the game mechanics could have been better if only they had listened to them, would have boosted their sales if only they would have put it on store X, should have made the price $5 lower, had bought the front page of the NY Times for a full-page ad .......

That's why I wouldn't ever make such an offer if I would be kickstarting a video game.

That's a consideration, sure. The idea would be to only invest money that I can genuinely afford to lose (so this probably wouldn't be something I'd do very often, and probably not at this particular moment), and figure on earning it back over time. Or, maybe not making a profit or even earning it back at all, but at least helping out a game I think has potential.

Maybe investing in videogame development isn't the best way to invest money, but it's something I'm passionate about and it would be nice to help other devs out (again, when/if I'm ever at a point where I have money I can afford to risk) while having the possibility of earning some money over time.