Community-based video game funding – could it work?

Gabe Newell recently suggested letting gamers fund a title, and in the process cutting out the middle-man that is the publisher. "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."

Newell probably isn't aware of it but this has actually been done before. The German band Angelica Express financed its last album by selling "shares" to fans.

They issued 500 "shares" at 50 Euros each (which sold out in record time and came with a detailed plan of how the money would be spent). With those 25,000 Euros, the band financed the recording of their album, the album artwork, the manufacture of the actual CDs, and the accompanying promotion.

Not only do the people who signed up for the shares get the new album but in return they also receive 80% of the earnings.

Could this also be model for the game industry? As Anthony Burch points out, there's no set format in which a game has to be released—the medium is much more "fluid" than films and print. Therefore, we as gamers can choose which way the medium goes forward simply by choosing what to pay for. They can be anything we want them to be based on how we vote with our wallets.

But will it work? As Burch points out so far we only buy finished games; we pay for the chance that this game is going to be good—but we don't value indie games by simply donating five bucks to the maker. We don't donate for quality but just the chance for it.

Is it because we assume that free stuff is automatically worthless? Is it the marketing behind big titles?

It might work with Valve, a company with good relationships with customers and a proven track record of awesome games. But will it work with others? Could this be one direction gaming might take in the future? What do you think?