Ways to fund your indie video game development

Is it time to look to other sources of funding to finish your project?

As an indie game developer, it’s common to self-fund early-stage game development. This could be through paid employment or contract work, personal assets, or with help from friends and family. You might have enough runway to kick-off the development, but there’ll most likely be a point when you’ll have to look to other sources of funding to finish your project.

So, you’ve decided you need to look at external funding for your development, now you need to look at the options.  Before you start it’s important to have as much development completed as possible. This’ll put you in the best place to secure the funding on the best possible terms for you as the creator.

Accelerator programmes

Accelerator programmes are designed to do exactly what they say on the tin, accelerate your development by providing short term funding and support to grow your studio. They do this by providing training and mentorship to founders, helping them to bring their development to market.

Most UK accelerator programmes don’t provide funding directly but are usually free programmes which, if you are selected, can be invaluable in connecting you with key players in the gaming industry including publishers, investors, and influencers.

Although accelerator programmes won’t provide you with funding they play the valuable role of middlemen, providing access to potential funders. They also provide you with training on essential business and marketing skills.

Crowdfunding

Crowdfunding offers you the opportunity to raise money from a large pool of people, without the need to surrender any equity or future revenue. Platforms ‘Kickstarter’ and ‘Indiegogo’ are very popular, but to make a mark, you’ll need to have built up an audience before you have the product. You’ll need to put in a lot of time upfront to reach your goal.

If you are a small studio, you’ll need to ask yourself ‘is this time that would be better invested in development, rather than marketing and community interaction?’

Patreon is a different model and can be another great option, especially for those projects where you expect to build a community gradually during the development process. Your ‘Patreons’ get to follow and support your development, and pay a monthly subscription to you, in return you can offer them exclusive content, incidental to the development journey.

Publishing deal

By far the most common method of funding development; under this model a publisher will pay the development cost of your game, usually as an advance against future revenues. Once the game is released the publisher recoups these costs, along with a share of all ongoing revenue. You will (in most cases) retain the intellectual property rights to your game, allowing you to make sequels or future versions of the game and you won’t have to give up any equity in your studio.

A publisher should be one of the most important partners for your development. They will help with marketing and distribution and with exposure for your studio. They’ll also have experience of working with developers and games so can help provide valuable feedback on your game and help advise on what platforms to release on. On the flip side, they may try to influence your creative process, so it’s important to do your research first into publishers to make sure that prospective publishers are the right fit for you and your idea.

Investors

Investors are another traditional option to look at for funding. They might be smaller ‘angel’ investors or larger venture capitalists (VCs). Angel investors could include friends, family, or other people in the industry. They’ll provide you funding for the development in exchange for a percentage of your studio. VCs are similar but larger, so can offer more money but they will want a larger percentage of your company.

Investors have a pre-built network and can help put you in touch with publishers, marketing advisers and other business development support. They’ll be looking to make a return on their investment so you’ll need to plan how they will get their money back in the future, be it via a sale to a larger studio or you buying their shares back at a premium.

VGTR / R&D / Grant funding

There are other important possibilities out there which support other forms of funding, such as obtaining tax reliefs to help reduce the cost of development. If you qualify for either Video Games Tax Relief (VGTR) or R&D tax credits, these can provide you with a cash injection during the development phase, which will reduce the funding you need from other sources. Or you could apply for one of the many grants available to smaller developers. These include grants from UK Games Fund or Creative UK, or from publishers such as Epic.

There is no one right route for studios, and each situation will be different; you may even need a package of funding options. If you’d like to discuss the funding options available to you as a games developer, please contact us.

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