When it comes to funding a project or a studio, there are many ways to gain funding such as:
- Crowdfunding / Kickstarters
- A good example of a game from crowdfunding / kickstarter campaign is a game named Yooka-Laylee. Yooka Laylee was made by former RARE developers who seeked crowd funding to create a game that many people loved, from the foundations of Banjo-Kazooei.
- Shareholders
- Shareholders are people who own a part of the company. As an example, Newcastle United is 80% owned by the Saudi Public Investment Fund, 10% PCP Capital Partners and 10% Reuben Media. This means that most of the club is owned by PIF and most the funding will come from there HOWEVER most of the decisions will come from that percentage aswell.
- Publishers
- Publishers will offer funding at the beginning of projects and will also only pay out once deliverables are met. This means you are constrained for time to reach certain milestones.
- Parent Studios
- Parent Studios can choose to invest money into separate studios they own. Take Two Interactive who own Rockstar Games more than like fund the studio to make the game. In some senses, especially with a game like GTA5, this is risk free as the money they put in, they get back.
- Your own money
- Time is money so when it comes to using your own money, only put it in what you know you can get back. This is like a high risk / high reward scenario.
- Loans
- Loans are repayable and typically come with an interest, whilst 0% interest loans might exist, this is also a risky approach to development unless you know you can repay.
- Government Grants
- Government Grants are non-repayable and are normally offered in exchange for including something from that country’s government, whilst this isn’t normally the case, it can explain why certain things happen in some games or why some games include certain elements.
- Investors
- Planet of the Apps and Dragons Den is normally the picture you get when you think of investors. These people will want to invest in your product to make the product work and come to life. They will work closely with the developer and inject money into the project to help reach the end goal.
There are many reasons projects / studios need funding and this can be anything from software costs, hiring people, buying assets, publishing, development costs and advertising the product. Typically speaking, if the project can get a separate publisher, they might be able to invest money into the project as well as handle any of the marketing material and adverts for the studio. In some cases, the publisher may even have a development team on standby to help the studio / project advance to the next stages.
It is worth noting that funding and monetisation are not the same. Funding is usually something that happens before development has started to help get the idea off the ground whereas monetisation is something that happens after the product has been made, it is something you make money from.
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