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Crowdfunding and Investing

Justin Bailey

Cliff Bleszinski Invests in Fig!

Esteemed developer, industry supporter and all around great guy, Cliff Bleszinski has invested in Fig, pledging to help us bring ambitious new projects to life through equity and reward-based crowdfunding. We are super excited to welcome Cliff, a believer that Fig can help game makers find passionate supporters for their projects while retaining creative control.

Everyone knows his work from the Unreal and Gears of War series, and recently Boss Key’s debut title LawBreakers. But Cliff is also dedicated to helping the industry grow in healthy ways, for game projects of all sizes to get made and be successful.

As the only funding platform created by gamers for gamers that offers rewards and investment based funding, we are grateful for our investors and advisors who are leaders in the industry – amazing to have you be a part of the Fig family, Cliff!

Cliff’s news comes at an auspicious time; in just one day, the successful campaign for Consortium: The Tower will conclude its campaign having surpassed its goal of $300,000 in less than a week.

Backed by another celebrated industry vet, Dr. Greg Zeschuk, Consortium: The Tower is an awesome single player sci-fi simulation game by iDGi, where your actions don’t just matter in one game but carry over to the next installment in the trilogy. We thank the over 2,800 backers thus far and can’t wait to see the campaign through to the finish line!

Consortium: The Tower Launches on Fig

We here at Fig are excited to announce our latest crowdfunding campaign, for the new title from Interdimensional Games (iDGi) – Consortium: The Tower. It’s the sequel to the critically acclaimed 2014 title.

Consortium: The Tower is a first-person science fiction simulation set within the hyper-futuristic Churchill Tower in the heard of London, England, in the year 2042. Acting as Consortium Officer Bishop Six players re tasked with a hostage-rescue mission that quickly becomes something much more. Players can choose to fight, sneak, explore, or talk their way through an interactive story driven by their own actions and decisions.

After the game’s Kickstarter campaign didn’t manage to reach its campaign goal earlier this year, iDGi brought the project to Fig to give the game the potential to achieve wider exposure and garner more funds by posting rewards and investment campaigns to fund this project on Fig.co.

The campaigns for Consortium: The Tower are a great illustration of why independent developers should choose Fig for their fundraising campaigns. Like other crowdfunding platforms, Fig.co gives developers access to reward-based crowdfunding from fans. What’s more, starting with Consortium: The Tower, Fig has decided not to take any percentage of the money raised in the rewards-based crowdfunding campaign (some crowdfunding platforms charge a 5% transaction fee, and an additional 5% platform fee). After the credit-card processor takes out its fee, about 97.3% of these funds will go straight to the developer.

In addition to rewards-based crowdfunding platforms, Fig also gives developers access to equity crowdfunding from investors and game fans who want to participate in the game’s potential success by buying Game Shares™. This opens up a previously untapped new fundraising channel for the developer.

The lead investor in iDGi’s investment campaign is Dr. Greg Zeschuk. Developers will know “Dr. Z” as the co-founder of Bioware and developer of a multitude of seminal RPG hits like Baldur’s Gate, Mass Effect, and Dragon Age. Investors in this campaign will be investing alongside Dr Z, who will also be purchasing game shares with the same business terms.

For more details on how our crowdfunding platform works, check out our blog post on this topic. And if you have any questions, send us an email at invest@fig.co and we’ll explain any aspect of the process.

In regard to the potential securities offerings under Regulation A relating to the above, please note that (i) no money or other consideration is being solicited hereby, and if sent in response, will not be accepted, (ii) no sales will be made or commitments to purchase accepted until the offering statement for the potential offering is qualified by the U.S. Securities and Exchange Commission, (iii) any such offer may be withdrawn or revoked, without obligation or commitment of an kind, at any time before notice of its acceptance is given after the qualification date, and (iv) an indication of interest is non-binding and involves no obligation or commitment of any kind.

How Investing in Game Shares™ through Fig works

I thought it would be helpful to show how Game Shares pay dividends based on the potential success of a game. There are two phases: the fundraising phase and the future game sales phase. It all starts at the Fig.co website. We made a nice flow chart so you can see how it works, and it’s all explained below.

flowchart

The Fundraising Phase

You can back a project in two ways: making pledges and investing in Game Shares.

Pledges

The first is by making a pledge. This is just like rewards-based crowdfunding. You want to see the game happen, you want a copy of the game, and you want other rewards, so you make a pledge. If the project is successfully funded and the game is made, you receive the game plus any rewards you signed up for.

Your pledges go directly to the developer. Your pledge is made through Fig.co, through a credit card processor. They charge a transaction cost of about 2.7% of your pledge. Fig doesn’t charge any fees (like the 5% transaction fee and additional 5% platform fee some crowdfunding platforms charge) to the developer for your pledge. That means 97.3% of the money you pledge goes straight to the developer to help make the game.

Game Shares™

Reward crowdfunding can be lots of fun, but the success of many crowdfunded games has made a lot of people (including us) wonder: Why does it have to stop at rewards like a T-shirt or your name in a backers’ list? Why can’t gamers and backers share in a game’s success? That’s when we came up with the Game Share™. (We’re applying for a trademark, because we think it’s pretty cool.) This is an investment security you’ll be able to buy on Fig.co. Game Shares are designed to track the game’s sales receipts collected by Fig. When and if the game makes money through sales, Game Shares are designed to pay you dividends.

Fig generally uses 5% of the money it raises from the sale of Game Shares to help cover our publishing and offering costs. The remaining 95% goes to the developer as the development funds for the game.

Funding the developer

Once payment for the Game Shares has been collected, Fig pays this money to the developer in one lump sum. Why is this important?

Well, normally, a publisher pays a developer bit by bit, in “milestone payments” dependent on the developer passing periodic reviews. The developer passes the next review, and receives the next milestone payment. These reviews can take up to 40% of a developer’s time—that’s time spent on overhead, instead of making the game. With Fig, the developer gets the money all at once. They also don’t have to submit regular milestone reviews to receive that money, although we do have inspection rights (See Fig’s FAQ section on Fig.co). This means the developer can spend all of their time working on the game. (We know it sounds crazy, but that’s how we think it should work, and we think you’ll agree.)

Future Game Revenue Phase

Assuming the game is successfully published and starts to make money from sales, those sales start to be paid out to Fig, which in turn distributes the sales receipts to the developer and investors. For each game, Fig will set up a limited-liability company (LLC). This keeps everything nice and separate and self-contained for each game project. Fig manages this LLC and makes sure the investors get paid. That means the developer doesn’t have to make those payments, or take on the onerous accounting that goes along with them. Again, the developer can focus on making the game. (We know, it still sounds crazy.)

When the game sales receipts are collected by our LLC for the game, Fig takes 5% of this money to cover the cost of our ongoing services such as publishing, paying investors and maintaining regulatory compliance. Our contribution can also include distributing and paid marketing when the game launches, making us a co-publisher. The remaining money is divided between the investors and the developers, with the developers typically receiving the majority share (with a 2.5% distribution to Fig). This means our best interest is the same as that of the developer and investors—making the games as successful as possible!

This system has two benefits: You, the investor, are paid from the same pool of sales revenue as, and at equal priority to the developer. This also means the developer’s best interest is aligned with your best interest.

So, in Conclusion…

That’s pretty much it. By setting up an LLC for each game, we’re creating a system that is straightforward, transparent to both developers and investors, and fully aligns the interests of Fig, the developer and you – the investor! We’ve taken a lot of the time-consuming, expensive hassle of milestone payments, publisher reviews and investor payouts off of the developer’s plate, so they can focus on the job you want them to — making a great game!

Thanks,

Justin Bailey
CEO, Fig

Do you still have questions? Does any of this business jargon not make sense to you? Send us an email at invest@fig.co and we’ll explain any aspect of the investment process.

 

Welcome to Fig!

As someone who’s been entrenched in the gaming industry for the past decade, I’ve been able to watch the evolution in game development and financing models that have fundamentally changed the way in which games are brought to market.  

As the COO of Double Fine, I was on the front lines of finding and adopting new funding models that enabled the studio to stay independent and retain creative control. It was exciting to see all the game campaigns raising millions of dollars through crowdfunding, and to see the struggles and opportunities afforded to each of them.  I experienced the complete crowdfunding arc from campaign inception to commercial distribution. Along the way, we were transparent with our community and we learned a ton in the process – which is good, because there was a lot to learn!

During those years, Tim, Brian, Feargus, and I all heard from a bunch of independent developers who wanted to know if crowdfunding was the right avenue for them. When crowdfunding made sense for these developers, they also sought our feedback on their campaigns, assistance getting the word out, and endorsements and promotional support of their games. We noticed after a while that the majority of games that were succeeding with crowdfunding were the very games that we helped advise – this was exhilarating! But one thing that didn’t occur was a year-over-year growth of crowdfunding to support bigger and more complex games, nor was there a way for talented developers without existing communities to get discovered, and this lead to an alarming number of crowdfunding campaign failures.

It was parallel to this that I met another game financing pioneer, Aaron Isaksen, Co-creator of the Indie Fund, a group of successful indie developers who project finance other developer’s games – and they are quite possibly the most successful investment group in games. The two models seemed complementary, and Aaron and I spent a great deal of time figuring out how project financing and crowdfunding could work harmoniously together.

Fig comes at an important time – the stakes have never been higher! Crowdfunding is evolving to allow for project-based investing by fans, and Oculus shows the potential of this approach.  Most of the developers we talked to want their customers to be invested in their games—it’s a way to get more involved with their community and to give back to those who gave to you.

That’s why we’ve taken what has been the ‘one size fits all’ model of crowdfunding – one that currently covers everything from taxidermy to interpretive dance – and created a platform that’s just for games.  It’s why Tim, Brian, Alex, and Feargus – each of whom have run some of the largest crowdfunding campaigns, and delivered some of the most successful games, are a vital part of our board of advisors.  It’s why we’re so passionate about allowing gamers the option to invest in our platform’s titles.

By coupling investment based crowdfunding with a strategy to build and retain a lasting community, Fig has the potential to grow crowdfunding in games into a healthy and self-sustaining ecosystem. Together with our advisors –  the creators who’ve helped influence and evolve the whole crowdfunding medium – we’ve envisioned a new model where studios can stay independent, new talent can be discovered, and profits can be shared with the fans and investors who’ve helped them along the way.

Each and every new campaign we launch is an opportunity to try new things within the funding ecosystem for games and learn from our community. We’re excited about our latest campaign, Anchors in the Drift, and can’t wait to share more with you.