Fig Blog

Crowdfunding and Investing

Justin Bailey

Video Games’ Creative Cul de Sac and How to Get Out of It

I first fell in love with video games when I was 8. That was when my dad brought home an Apple IIe. I loved the fact that I could write a program, and this story would come out the other side. It was a landscape of endless possibility—at least it felt that way to me when I was in third-grade.

The first game I ever programmed was “Snow Wars.” To learn how role playing games worked, I hacked into games like “Ultima,” “The Bard’s Tale,” and “King’s Quest.” Whenever a new title came out, it was like Christmas, the Fourth of July and New Year’s Eve all rolled into one for me.

After graduating from college, I took my dad’s advice to find a “real” job as a programmer at a software company. I still remember, and deeply regret, the day I took all my game discs and tossed them into a dumpster as a declaration of my adulthood.

But then something strange and magical happened. Just after my first daughter was born, I heard a musician, Jonathan Coulton, tell the story of how he switched careers to become a composer because he didn’t want to end up being a “sad dad with unfulfilled dreams.” Inspired by this, I quit my job as a management consultant and knocked on the door of every game company I could find.

I was super fortunate to land a gig at Bandai Namco as part of their “greenlight” team. For two glorious years, I had the job I’d always dreamed of. I would listen to developers pitch thousands of game ideas. After greenlighting a game, I got to shepherd developers through the publishing process, making sure they met milestones, providing them with marketing support and getting their games made and shipped to stores.

As consoles and computers became more powerful, so did the size and scope of games. At first, we all went gaga over the luscious graphics, smarter-than-hell AI, and awesome physics engines.

But then budgets started to balloon. Marketing spends spiralled into the tens of millions for AAA titles. With so much at stake, publishers everywhere reined in risk. Everyone pulled back on the number of new IPs they were willing to back. Instead, most doubled down on franchises that performed well in the past, pumping out sequel after sequel. Electronic Arts Inc., for example, published 60 games in 2008. This year, they’re publishing 8. Thus, games ended up in a creative cul de sac.

In 2008, Facebook Games came along, promising a new era of social games that would shake the console world from its stupor, followed by the iOS App Store and Google Play for Android. Like circus clowns, we all crowded into the app store minivan and hoped that it would be a better ride. For a tiny fraction of us, it was. The rest of us not named SuperCell or King didn’t win the app store lottery. Instead, we got neck cramps from trying to get players to “discover” our games from the bajillion other apps sitting alongside the 31 flavors of solitaire.

Don’t get me wrong. I love franchises like Final Fantasy (now in its 15th incarnation) as much as anyone. And I’m not proposing that we all return to our batcaves and huddle with our NES’s (the one from 1985)—as much fun as it would be to have a batcave.

But each time games migrate to each new platform, they’ve also ended up in the same loop of sequels. Behold on iOS! We have Modern Combat: Sandstorm, Modern Combat 2, Modern Combat 3, Modern Combat 4, Modern Combat 5, and (coming soon) Modern Combat Versus! There may be loads of new IPs coming to mobile app stores, but they’re buried by games with better user acquisition tactics.

The latest vehicle for funding independent game development is crowdfunding. As the Chief Operating Officer of Double Fine Productions Inc., I hopped on this particular bandwagon with gusto. We, along with 2 Player Productions, turned to Kickstarter in 2012 to raise money for an adventure game that ultimately became Broken Age. We raised $3.3 million, making it the biggest project on Kickstarter at the time in both amount pledged and number of backers. In 2013, we raised $1.2 million on Kickstarter for Massive Chalice.

Through this, I got to see the ins and outs of rewards-based crowdfunding. I’d like to share some of the things I learned from this.

First, the good parts.

Crowdfunding opens up the greenlight process to the people who really matter—gamers. Instead of pitching to a closed room of stuffy publishing executives, developers are pitching in front of people who will ultimately be playing their games. As someone who was once one of those stuffy executives, I can say that while we did our best to find and fund great games, we weren’t always right and we probably missed a few gems out there. These days, traditional game publishers are even less inclined to hear pitches for new IP, preferring to stick to sequels and spinoffs. Crowdfunding platforms give independent developers a chance to vet their ideas in the open, where the wisdom of the crowd also has a say.

Crowdfunding is a great way to see if your game is commercially viable. You can’t ask for a better way to market test a game idea than to see how many people are willing to put down cash money to get a copy. In some cases, the crowd will tell you that your concept needs more work. That happened with Blackroom, John Romero’s holographic first-person shooter. It’s great feedback, because it comes early in the process, before developers have spent four years of their lives on the project.

You can get some really interesting data from a campaign. For example, you can use the total number of backers as a rough guide to set your game budget (more on this in an upcoming post).

Crowdfunding campaigns generate buzz and build an early fan base. Like a good movie trailer, crowdfunding campaigns help to generate awareness and build excitement around titles. It also helps to galvanize your existing fans (assuming you’ve published other games) around a new project.

Now, for the not so good parts.

Until recently, crowdfunding has been primarily rewards-based. The money people contribute to campaigns are essentially one-time expressions of support, with the organizers promising a reward at the end. Many contributors to crowdfunding campaigns aren’t invested in your financial success (though most would be genuinely glad to see you succeed). In fact, if you’re perceived as too financially successful, it can backfire.

You can easily run out of goodwill. Publishers are noting that it’s becoming harder to raise money on rewards-based crowdfunding platforms. There are signs of fatigue from donors.

Mainstream crowdfunding platforms aren’t geared for interactive entertainment. They’re better suited for board games or projects where there is a physical product that can be shipped within months. Asking people to wait years for their payoff looks out of place alongside projects that promise a physical reward in a much shorter timeframe than those required for video games, which can take years to develop.

They don’t give fans a stake in the game’s financial success. I see this as the biggest drawback of rewards-based crowdfunding. Fans donate money to projects, and in return they get rewards. If the project is wildly successful and your game sells millions of copies, fans still just get the rewards. The end.

That said, I still think crowdfunding has tremendous potential to fix some of the problems traditional publishing, namely the lack of transparency and the pathological aversion to creative risk-taking.

So how do we adapt crowdfunding to work for interactive entertainment? How do we take the best parts of crowdfunding and make it so fans feel more invested in the game’s success? How do we structure the relationship between developer and fan so that it’s based on more than just a one-time transaction? Is it possible to build a community that can sustain creative game development for the long-term and help us break out of our cycle of sequels?

Those are the questions I’ve been grappling with for some time. As a lifelong gamer and as CEO of, I have a vested interest in finding the answer. The games business has grown a lot since I bought my first copy of A Bard’s Tale. For one thing, it’s now a massive $99.6 billion global industry. But its future depends on our ability to bring about the right environment for the next generation of creative ideas.

To do that, I think it’s necessary to rethink how we’ve been funding game development. Giving fans a seat at the table and a financial stake in the outcome solves two problems. First, it lets developers have a direct conversation with players, taking out the middleman working for a risk-averse publisher. That increases the odds that a crazy, but totally innovative game gets made.

This isn’t just wishful thinking. A study published this year California Management Review found that crowds tended to back more “artistically daring” projects that established professionals shied away from, according to the study, entitled “Democratizing Innovation and Capital Access.” The authors (Ethan Mollick at the University of Pennsylvania and Alicia Robb at U.C. Berkeley) noted that while those projects were slightly more likely to fail, some achieved great success, including winning awards. That means crowdfunders took on more creative risk, and in some cases, were rewarded for it.

Secondly, community publishing in particular solves one of the major drawbacks of rewards-based crowdfunding, namely the vulnerability to donor fatigue. With community publishing, fans can choose which games they want to back, much like a traditional publisher, and get a financial return based on how well a game sells. Through recent changes in federal regulations, non-accredited investors (read: average people) are now allowed to buy equity in startups that raise money under certain provisions of the 2012 JOBS Act.

Fans who buy shares under these new regulations don’t just show up for a one-time gesture of goodwill—they invest in a project’s ongoing success. This makes the dynamics of crowdfunding less like a novelty and more like a self-sustaining mechanism to fund independent games.

Announcing The Fig Finishing Fund

A new way to support developers with final polish, localization, marketing and fees for platforms like Steam Direct

At Fig, we’re continually looking for opportunities to remove the barriers to entry for developers to unleash their creativity through games. That’s why we’re psyched to announce the Fig Finishing Funds!

As of today, and through the end of the year, Fig is committing up to $500,000 to help developers overcome two hurdles in crossing the finish line to a successful game launch — including fees to access publishing platforms such as Steam Direct and building fan awareness through paid marketing.

Here’s how the Fig Finishing Fund works: for each developer who attracts 1,000 or more backers for a campaign that succeeds on Fig, we will guarantee at least $20,000 of Fig Funds from the investment side of the campaign – sourced from our network of investors or Fig itself. Developers will be able to use these funds to finish their games, support more languages, and defray the costs of distribution — such as the fees that will be charged by Valve’s new Steam Direct program (set to come online this Spring). Valve hasn’t yet determined how much it will charge developers, but it has estimated that fees will range from $100 to as much as $5,000. Investments from the Fig Finishing Fund are intended to help developers cover these costs so they can spend their money on completing their games.

The remainder of the Fig Finishing Fund investment can be used to tackle a second challenge familiar to most independent developers: getting the word out. As digital marketplaces become ever more crowded, it gets harder for game launches to overcome the noise and be discovered. That’s where the Fig Finishing Fund comes in. By giving developers resources they can apply to marketing their titles, developers are free to dedicate more fan-raised money to making their games. As always, developers funding their game through Fig will also be able to take advantage of Fig’s co-publishing services to further help market those games.

At Fig, we don’t make money by running crowdfunding campaigns, but are instead aligned with developers and investors, in that our upside is based on the ultimate commercial performance of the games we help publish – we make money only when games funded through Fig sell well.

This program further aligns us and our community of investors, developers and fans. Investors benefit because this increases the chance that titles they’ve invested in come to market successfully and reach their intended audiences. Fans also benefit when their favorite titles get a better shot at being published.

We believe strongly in the need for titles not only to be offered on major publishing platforms such as Steam Direct, but also to have funds to conduct the marketing that can be crucial to the success of those games.

If you are a developer and are interested in learning more, drop us a line at We’d love to talk with you.

— Justin Bailey  


Thank You for an Incredible Year!

Thanks to you and thousands of other game fans throughout the world, we were able to cap off a truly amazing 2016. hosted four of the top 10 biggest crowdfunded video games of 2016. Those four titles accounted for nearly two-thirds of the total amount of the year’s top 10 crowdfunded games.

Our community propelled’s campaign success rate into a lofty 78%. That’s over four times the normal success rate for video game campaigns according to ICO Partners and two times the success rate of all the projects for a leading crowdfunding platform, according to Statista. But while most well-known crowdfunding platforms are strictly for rewards-based campaigns, last year became a unique place where game fans could choose to get rewards or equity related to a game project—or both! Many of you chose both, pledging a combined $8.7 million to support and invest in securities related to titles such as Psychonauts 2, Wasteland 3, Jay and Silent Bob: Chronic Blunt Punch, Consortium: The Tower, Kingdoms and Castles, Make Sail and Trackless. For more fun-filled facts, check out our infographic below, chocked full of tasty data we’ve gathered from 2016.

In 2016, we learned a lot about our community. More than 3,700 of you backed more than one game through rewards crowdfunding, pledging an average of $133.71 per project. That in itself is great, but what’s truly astounding is the average amount our community invested in support of games—$2,800.

Why is this so significant? Because it tells us that there are thousands of fans like you who value independent games so much, you’re willing to invest 21 times more money for an equity stake in support of titles you believe in. You’ve shown that there is a vibrant, engaged community willing to step up and play a critical role in an ecosystem that funds a new generation of games.

In short, you helped us achieve the goal we set out to accomplish a year ago—to create an ecosystem where studios can stay independent, new talent can be discovered and revenue can be shared with the fans and investors who’ve helped them along the way.

Looking back at 2016, we are deeply grateful to you—our community. Looking forward to 2017, we can’t wait to introduce our investors and backers to even more high-quality game projects that set a new bar for innovation and creativity.

— Justin Bailey and the Fig Team


We’re Increasing the Minimum Dividend Rate for Fig Game Shares—PSY2 to 70%

Today, we’re announcing an increase in the minimum dividend rate of Fig Game Shares—PSY2 from 30% to 70%. The details are laid out in a supplement to our offering circular for Fig Game Shares—PSY2, filed earlier today with the Securities and Exchange Commission, which can be found here.

This may seem like a big change, but from our viewpoint, it’s actually not. And here’s why: since founding Fig, we have envisioned that equity crowdfunding should do two things — create a new way for independent developers to put their games into the hands of players, and give fans a way to financially participate in the success of the games they love. Fig exists primarily to facilitate these goals.

The way we’ve decided to apportion sales for Psychonauts 2 reflects this vision. The lion’s share of the game’s revenue will rightly go to the developer and investors, with Fig taking out our service fee and participating in a smaller way in revenue share.

The chart below, which is also included in the supplement, shows the potential dividends with the 70% dividend rate:


The table above makes assumptions, and is presented for illustrative purposes only. Although we believe the assumptions represent fair estimates, there can be no assurance that any one or more of these assumptions will in fact apply. The supplement lays out in more detail the assumptions that we make.

So, how did we go from a 30% minimum investor dividend to a 70% minimum? The short answer is that now we can.

Here’s a slightly longer answer with a little more background, in case you’re curious. We’ve always regarded the 30% as the rock-bottom of the range for what we want to pay out to investors. The figure was meant to be a floor, so that no matter what unforeseen circumstances occurred with the business, investors could rely on it.

In our offering circular for Fig Game Shares—PSY2 , we deliberately left the door open for increasing the investor dividend by saying that we would pay more than the minimum if business conditions permit. Now that Fig Game Shares—PSY2 have been in the market for several weeks, we have sufficient market data to issue a supplement and declare an increase the minimum dividend rate to 70%. In short, the market saw the 30% as a cap, rather than a minimum. To clarify our intent, we are moving the floor up to remove any confusion about our ultimate goals.

Our philosophy has always been to reward investor fans with as much of the revenue share that our business permits. Today, that means ramping up our minimum investor revenue share for Fig Game Shares—PSY2  to 70% (again, the 70% is still not a cap — it’s a minimum). We can go even higher, and we expect to do so if and when business conditions allow us to. Our model seeks to reward investors, because that’s how we can get people to invest and help us build a thriving ecosystem for independent games.

Of course, there’s no guarantee — for Fig or its investors. As with all investments, there are still risks, and we encourage you to read the risk factors in our offering circular for Fig Game Shares—PSY2.

We want to thank our investors for sticking with us through this process as we travel through some uncharted terrain. It’s been a thrilling experience, and we are grateful you are here with us for the journey.

If you have any questions about our dividend policy, or investing in Fig Game Shares in general, feel free to shoot me a message at



IMPORTANT MESSAGE: An offering statement relating to Fig Publishing, Inc.’s Fig Game Shares—PSY2 has been filed with the U.S. Securities and Exchange Commission and has been qualified. Prior to any investment in Fig Game Shares—PSY2, you should review a copy of the offering circular included in such offering statement, and a copy of the new supplement to that offering circular, or by requesting copies by phone at 415-689-5605 or by writing to Fig at 599 Third St., Suite 211, San Francisco, CA 94107. No offer to sell any securities, and no solicitation of an offer to buy any securities, is being made in any jurisdiction in which such offer, sale or solicitation would not be permitted by applicable law.

We’re SEC Qualified: Let the Games Begin!

I am excited to share with you that Fig Publishing Inc. has just been qualified by the U.S. Securities and Exchange Commission (SEC) to sell Fig Game Shares—PSY2 for Psychonauts 2.  

What does being qualified mean? Two things. First, it means that nonaccredited fans who reserved equity shares related to Double Fine’s Psychonauts 2 will now be able to complete their purchase of Fig Game Shares—PSY2. (We’ll reach out to those of you who placed reservations next week with instructions.)

Second, it means that as of now, Fig is the only crowdfunding publishing platform where non-accredited investors can earn a return based on a game’s sales.

This is a first for our industry. But with Fig Game Shares being the only investment of its type to pass through the SEC process under Title IV of the JOBS Act, it also has the potential to evolve publishing for all of entertainment and fundamentally change the narrative of crowdfunding. Until now, equity crowdfunding for games in the U.S. had been publicly available only to wealthy, accredited investors. Additionally, investors could only purchase equity that offered a return based on the financial performance of a company—not based on  the financial performance of a single game. No longer.

This qualification opens the door for Fig Game Shares, a brand new type of security, one that lets everyone invest in Fig, support the development and publishing of games, and financially benefit from the sales of their favorite games. With Fig Game Shares—PSY2 as a blueprint, we plan to create and qualify with the SEC new series of Fig Game Shares that pay returns based on the sales of additional games..

This week’s SEC qualification is a long-awaited milestone—both for our company and for our industry. It has taken us several months to get here. Part of the reason it has taken us so long is due to the ambitious nature and far reaching implications of our approach. Because Fig Game Shares are innovative in tying returns to a single game’s sales, we needed to work closely with the SEC to answer their questions and to make sure we considered all the ramifications, both to protect investors and facilitate the free flow of capital. After all, it’s not every day that a new type of security is born!

What makes me most excited about this announcement is that we can now move full steam ahead with our initial goal when we launched Fig — to create a community of fans, investors and independent developers, with Fig as publisher, to work together to bring about new, innovative games. We’re especially grateful to our community and to the amazing fans who participated in our campaign for Psychonauts 2.
Now, let’s go make some great games!

IMPORTANT MESSAGE: An offering statement relating to Fig Publishing, Inc.’s Fig Game Shares – PSY2 has been filed with the U.S. Securities and Exchange Commission and has been qualified. Prior to any investment in Fig Game Shares – PSY2, you should review a copy of the offering circular included in such offering statement by clicking on the following link:, or by requesting a copy by phone at 415-689-5789 or by writing to Fig at 599 Third St., Suite 211, San Francisco, CA 94107. No offer to sell any securities, and no solicitation of an offer to buy any securities, is being made in any jurisdiction in which such offer, sale or solicitation would not be permitted by applicable law.