Valve Predicts Fan-Funded Game Development Future

Valve Software disrupted the traditional retail model with Steam. Now they plan to disrupt the traditional funding model for game development... thanks to you.

Traditionally, most developers secure funding for their projects via publishing deals. And when a publisher controls the finances, they can also control the content.

Speaking to ABC TV's Good Game, Valve boss Gabe Newell says Valve wants to let the Steam community fund future game development.

"One of the areas that I am super interested in right now is how we can do financing from the community. So right now, what typically happens is you have this budget - it needs to be huge, it has to be $10m - $30m, and it has to be all available at the beginning of the project. There’s a huge amount of risk associated with those dollars and decisions have to be incredibly conservative.

What I think would be much better would be if the community could finance the games. In other words, 'Hey, I really like this idea you have. I’ll be an early investor in that and, as a result, at a later point I may make a return on that product, but I’ll also get a copy of that game.'

So move financing from something that occurs between a publisher and a developer... Instead have it be something where funding is coming out of community for games and game concepts they really like."

Crowd-sourcing isn't new to game development. But typically it's been confined to input at the design stage.

Newell's proposal to have fans pay an amount up-front for a game's development, while also having a say in that development, is something else entirely. Yet it remains very much in line with their policy of dealing directly with the consumer.

What do you think of Newell's idea? Would you pay money to Valve right now for Half-Life 3 if it meant you were able to give feedback on the concept or design? Or would you rather leave game development to the professionals and keep vocal fans away from design decisions?

Inside Valve Software [Good Game] [Image credit]


    I'd pay.

      If a company like Valve said, "Right, pay us $30, we'll make the game and send you a copy," I think that that there is more than enough. Input into the direction of the game wouldn't necessarily need to come from us - it would be a sign of faith in a certain developer.

      In theory this sounds like it could work, but only for the really popular studios that have good standing in the industry. This would help people to trust them to deliver on a promise.

      To answer your question, I would definitely pay money to someone like Valve or Bethesda to try and implement this, if only to see what kind of game came out of it. I do wonder, though, what happens if a company doesn't raise enough money, or if the game stinks, as there would be very little room for any kind of money back policy.

        Well, you're pretty much investing in a game, so if it doesn't raise enough money or it sucks, then your out of luck. That's the point. It's a risk.

    I pay aswell, it just means average run of the mill shooters and pc games that you see every day get ignored and good games that are new (like bioshock that they thought would fail) get a chace

    'll pay for a portion of a PS3 version

    Hmmm, making decisions about the game means I'd know the ending before I played not for me.

      I don't think they would tell you how the game ends, they would be like "this is what we are about, this is what we want to do, with your help this can happen".

    Is there any incentive left to actually make a good game if production costs are already covered before development begins?

    Not saying that Valve would ever do such a thing, but seriously...

    Its pretty common knowledge that devs get bonuses based on metacritic scores, I'm not saying that metacritic is a perfect system by any means because we all know full well that it isn't, but hey at least it keeps them honest (...ish).

    Ok, in theory, yes I think I'd rather play games that have a fan community cracking the whip instead of greedy old producer types mincing in their ivory towers, however, this is going to breed a whole new problem.

    I guess it would just come down to investing wisely.

    Hot tip, don't invest in any Duke Nukem games.

      "Its pretty common knowledge that devs get bonuses based on metacritic scores"

      That isn't common practice. It was something that was experimented with by one of the major publishers, might have been Eidos but don't quote me on that, but it caused a huge stink amongst the industry and was abandoned shortly afterwards.

    I'm in. Valve is one of the smartest game companies out there, their games are the best and they are easily the most respected.
    Can we invest in the idea of investing? :D

    while i would probably pay, Ribs makes a compelling argument.

    The video game industry has become like the movie industry and the music industry.

    It is now a large, mass market industry.

    All us gamers that have longed for the days where gaming is accepted and not treated as a freakish, abnormal hobby of socially-deprived adolescents... well, we have what we wished for. Now, gaming is normal.

    However, gaming being normal does not mean that anyone can develop. Game development is still a complex task, especially developing AAA blockbuster games. PRODUCTION of games still requires large, expensive facilities.

    During the "golden age" of PC gaming, costs of development were high, but returns were relatively low. Thus, investors didn't pour their money into the sector. As a result, developers could take risks.

    Now, we are in the "gilded age" of gaming generally. Costs of development are still high, but mainstream interest in gaming is high and thus large mass-market companies are investing money in the sector!

    Large corporations that target large markets are RISK-AVERSE. They invest a lot, and they want their investment to PLEASE SHAREHOLDERS. Thus, they will invest in safe, tried-and-true, "stuff that normal people like."

    Hence, games are targeted for mass market casual gamers.

    As COSTS OF PRODUCTION GO DOWN, games will be able to target smaller markets and make profits off these smaller niche markets.

    As costs of making music have dropped, record companies have lost money (for which they blame piracy; which is only part of the answer). As costs of making spectacular movies drop, the movie industry will undergo the same process.

    High Costs Of Production + Low Consumer Base = Small producers targeting a small market

    High Costs of Production + Large Consumer Base = Large profits = Large corporate investors targeting the mass market (the movie industry and mainstream music industry are examples (the video game industry now fits here))

    Low Costs of Production + Large Consumer Base = Small profits, many small producers targeting various small market segments

    How does this relate to Valve's policy of crowd-sourcing?

    Valve's "Crowd Sourcing" model is fit for an industry where low costs of production and large consumer bases exist. Production would be targeted towards smaller consumer bases. In addition, consumers would be investors in the games they buy: there IS NO DIVISION BETWEEN CONSUMERS AND INVESTORS.

    Valve's model has a number of very interesting and attractive economic properties. It seems ahead of its time however.

    Would I be prepared to make a tentative investment in a game whose concepts I like? Hell yes.

    What stands in the way is the fact that the technology to make an absolute blockbuster game is still fiendishly expensive. Making games via crowd-sourcing will have to result in 1) last-gen technology (i.e. using the Quake 3 engine and rendering in no greater than 720p) and/or using less powerful/cheaper platforms (PC and Wii).

    So I think Valve are thinking ahead of the curve. POSSIBLY too ahead of the curve. Still its a good idea and I'd invest in the development of a game I wanted to see (assuming I got a copy plus some input).

    What if a game get axed?
    What if I want a PS3 version that Valve refused to produce?
    What if sales didn't meet expectation (at a loss)?
    What if Gabe die of heart attack?
    What is the company go bankcrupt?

    Too much uncertainty, until I they outline the contract, I won't consider

    I would definitely like to be a "micro-investor" and would happily give money to developers with proven track records like Valve, Bethesda, Blizzard, Relic, Bioware etc.

    I don't want an overcomplicated tax return however.

    @StudiodeKadent: Too long; didn't read.

      @Anonymous: tl;dr

    This is a huge win. Establishing a closer connection between developers and customers and eliminating the need for publishers would benefit the industry and community greatly, I imagine.

    Wolfire, a bunch of guys in the one apartment building working in from their bedrooms are relying on this model to develop their game Overgrowth - Using the internet as their tool for promotion posting updates and asking for community input on average every day, they keep an extremely close relationship with their customers and fans.

    Customers who have pre-ordered get access to weekly alphas, of which some have already made maps for the game and contributed work to Wolfire for use in the Overgrowth game.

    They're doing a super job and no doubt the model means producing a better product. This proves that you don't have to be a big company to make it work, you just have to use the internet wisely and maintain a close relationship with the community.

    I would invest but would not want creative input. fans should not be allowed creative input leave it to the pro's. my argument relies heavily on "Snakes on a Plane" as an example of fan input into a professional product.

    Seems like a novel idea - but honestly, if Gabe had have asked what I'd wanted in a sequel to L4D, I'd have answered "a chainsaw, new campaigns and as soon as possible" - yet the crowd went in the opposite direction to my expectation on that one.

    It's an interesting idea, and could potentially be a massive boon to the industry if Valve can work out away for it to actually work, but I can't imagine them making a signifcant amount of cash out of this. A few hundred thousand from the dedicated fans perhaps, but that's not going to keep more than a few coders working for a year.

    I'll be interested to see how they try to implement this scheme. If anyone can pull it off it's Valve but I won't hold my breath for it to ever come to fruition.

    Stop thinking of innovative ideas for game development Gabe and,
    Start thinking of innovative ideas for Episode 3

    Hmm seems like the kind of system that is heavily influenced by faith, trust and interest in a companies product. So I suppose I would be in on that for certain games but Gabe makes it sound like this system would work for everyone which it wouldn't, especially for developers who have just started, haven't made much I'm interested in in the past or worse have a track record of making bad games.

    An interesting idea but a flawed one at best.

    I think valve are already testing this out with L4D. You only need to look at L4D1 to see that. Many of the features people have talked about for L4D1 are goign in L4D2. It is an interesting idea and has some good things going for it. This would help game companies avoid a game coming out with a mode or something that players hate. I guess it would help cut down on critical design errors but there is always the too many cooks spoil the broth theory.

    It seems as though Valve has stolen the idea from a smaller Indie project which is launching in a few weeks and has been receiving press lately:

    However The Zombie Game Experiment is donating a large percentage of the donations/investment to the Michael J. Fox Foundation for Parkinsons Research.

    Good job Valve. You must be proud.

    Bigkid has a point, there are too many uncertainties regarding this model. Take for example duke nukem. What would the public do if after so many contributions the game fell into the toilet?

    I think it's a great idea. To me it's more like a high risk, low-cost (relatively) investment.

    The potential to earn a return on a video game you bought is the greatest enticement for me.

    Am not worried about developers getting slack (it's in their best interest not to, for more reasons than just the money they make - career, reputation, etc)

    Nor am I worried about potential feedback problems with the dev's, or having the ending ruined. The greatest feedback you are giving is by saying you like the concept and will invest, and trust the dev's to do their job. Having extra sway in feedback because you are an investor now is a bonus too.


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