The Three Main Methods of Game Funding

When it comes to raising money for games, you generally have three major ways of raising it.

Bootstrapping – Getting money from friends, crowd funding, getting grants, etc. Anything that allows you to get capital without giving up control. You generally will not be able to raise an awful lot of money in this fashion, unless you happen to know some very generous benefactors.

Angel Investors and Venture Capital – If you need access to larger amounts of funds generally you’ll need to approach accredited investors or institutional investors. In all cases, the capital comes with a cost in equity.

Publishers – Going with a publisher USED to be how it’s done. Now a days, especially in the mobile space, the benefits that a publisher brings is almost not worth the incredibly one sided deals that devs have to put up with for the capital. Having said that, publishers can become valuable partners after a dev has managed to become a fully fledged business of it’s own right. Publishers tend to have a better capacity to handle the risk profile that many devs have compared to PE/VCs. In general Publishers are better for long term partners.

Which approach you take really will depend upon a number of factors:

• Are you a content maker or do you plug into the gaming industry in some other fashion?

• Are you primarily looking to build the game you want, or make money?

In almost all of these examples, Publishers are probably the worst option to pursue financially speaking. (Though, publishers can provide valuable know how, and tend to have more appetite for continued involvement even in the face of great uncertainty) The most pertinent question out of all of this is the second one, as raising money through investors changes the priority of the company from making a game to making money. (After all, that is why they invested)

The first question is less a question about priorities as it is about viability. Investors generally do not like companies that are hit driven as it is incredibly hard to predict and rely on. Investors generally like companies that have stable revenue in flow, so as to give the company sufficient ability to grow as a viable business. Pure content producers tend not to be able to do this, and as such, really work best with different funding models.