Kongregate Now the Best Opportunity for Bootstrapping a Game Company
Gamasutra recently interviewed Jim Greer about the news of Kongregate getting $5 million in funding. Kongregate plans to spend most of that on Funding the Flash Renaissance, as Gamasutra put it. The games Kongregate will be funding will be "premium games" - those that are a step above most of the current games on the Kongregate website. Staying true to the heart of Kongregate, part of the game will still be free, but part will also be purchasable through microtransactions. This could include paying for levels as stated, purchasing items for characters, or any number of different things.
This just adds more to the cake that is independent game development right now. In fact, based on the numbers Kongregate has released, we think they are now offering the best deal for bootstrapping a game company.
When we decided we wanted to start Intuition, we looked at all of the options out there for bootstrapping a game company with no games in its portfolio. One of the easiest ways to look at game development is to break it down into platforms, which I see as a "horizontal slice":
TV Console
Pros: High sales, high exposure/glory
Cons: High barrier to entry, sparse up-front funding, lose IP with funding?, royalties only likely in download space, harder development
Handheld Console
Pros: High sales(DS especially), medium exposure/glory, low-medium cost
Cons: Medium barrier to entry, sparse up-front funding, lose IP with funding?, no download space yet
PC
Pros: Low barrier to entry, low cost, cult indie glory, some up-front funding, easier development
Cons: Lower sales
If platforms are horizontal, then distribution channel is vertical:
Retail
Pros: High sales, high exposure/glory, well-established
Cons: High barrier to entry, sparse up-front funding, (probably) lose IP with funding, royalties extremely unlikely
Download
Pros: Low-medium barrier to entry, low-medium cost, some up-front funding, royalties likely
Cons: Variable sales, no handhelds yet
Web Browser
Pros: Low barrier to entry, low cost, some up-front funding, easier development, royalties probable
Cons: Variable sales, not well-established, only Wii for consoles
When you put these two together, you form a Game Development Bootstrapping Opportunity Matrix.
Based on these, we thought that the cell at PC and Web Browser was the best option for bootstrapping, because it's relatively easy to develop for, the cost is low, and the barrier to entry is low. The only downside is that it's risky; who knows what the sales will be, and it's not a well-established way to make a living. Aside from the couple grand you can get by being sponsored, there's not much living in it at all...until we stumbled upon two options a few months ago that looked promising: Adult Swim and Kongregate.
As we've mentioned before, Adult Swim has been commissioning games for their website. Someday I'd love to devote a post to why I think that is, but for now let's just say they are. Here's their deal:
Funding roughly $15k - 120k
No royalties
Single player game (for now)
Adult Swim owns IP
At the time we found out, all we knew was that Kongregate was sponsoring games. Now, everyone can be sure that funding is available. Check out these recently-announced stats:
Funding roughly $20-100k
70% royalties
Game must support a community
Period of exclusivity (1 year?)
Developer owns IP
So if you agree with the matrix above, getting funding from Kongregate for a premium game is a no-brainer. We've decided to give that avenue a shot; we'll give an update soon on how that's going; suffice to say for now, it's going well. However, Adult Swim is still a good option for getting started. You're getting paid to make a game, after all!