Huh, I was wondering if this was legal (seems like an unregistered securities offering, which has semi-strict requirements even after 2012) and then read this at the bottom:
> The securities offered by the issuers on the Site (the "Securities") may be sold only to (A) investors who are (i) "Accredited Investors" as defined in Rule 501 under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or (B) certain eligible investors who are not "U.S. persons" as defined in Rule 902 under the Securities Act, or (C) otherwise eligible to invest in Securities as discussed elsewhere on the Site
I'm assuming C) covers general crowdfunding investors but I also thought that you still had to check net worth/etc. which I didn't see going through the site anywhere (though admittedly I did a very cursory glance).
There's actually a recent ruling from the SEC that allowed raising funds from non accredited investors when it comes to crowdfunding. So it's actually legal to sell equity in crowdfunded projects to pretty much everyone [0]. But there are a LOT of rules and limitations around the whole process, which makes sense imo
There's a two-tier system, one is just like Kickstarter where consumers "pre-order" the game and one for "accredited investors". Most people aren't getting a return on the investment, just the game/merch.
I clicked through on the site, they are allowing unaccredited investors. They did asked for my net worth and annual income. The limit on investing this way is, must be a multiple of $5,000 and cannot exceed 10% of your annual income.
As long as they don't do any advertising they should be okay. But if a single non-accredited investor lands on their website as the result of clicking an ad, the law has been broken.
"But if a single non-accredited investor lands on their website as the result of clicking an ad, the law has been broken." + invests. Right? Otherwise, AVG which is all over social media would be at fault.
Soliciting investment from non-accredited investors is illegal. I learned this from an attorney who specializes in securitization when I was exploring doing a crypto business. It was also explained to me that local angel investing groups exist pretty much for this reason. They create a semi-private network of accredited investors which can be used by the local community to solicit capital in a legal way.
You don't have to "actively" seek investment from non accredited investors for it to be illegal. So a crypto currency could still absolutely be subject to action from the SEC even if they only had a "invest now" option on their website without promoting it . It's just that the SEC doesn't care as much and focuses more on the big fish. Still, passively selling illegal securities is still illegal :)
Fig is legal because of a recent crowdfunding law that made it possible to buy equity while funding a project. I think the website was created right after the law passed too, but maybe my memory is fuzzy here
I guess I am a bit curious as to why this is being posted now since Fig has existed for a while. People talked about it and the fact that the founders of it used it for funding of Psychonauts 2. It definitely has had some success stories such as What the Golf? which is available on Apple Arcade already and I found quite fun. Outer Wilds and to a lesser extent Pillars of Eternity 2 are also games that seem to have been successful that used the platform.
It's interesting that Fig.co hasn't been much of a topic at all on HN; only 6 submissions from the domain over the years, only one with more than 20 upvotes (the current thread being the second fig.co submission to reach that many upvotes)
(Incidentally, a Docker-related tool called "Fig" got 160+ upvotes 6 years ago; didn't see any discussion threads about Fig.co when doing a search: https://news.ycombinator.com/item?id=7132044)
It's also interesting that they might not have any nearly as big in the future, as interestingly Microsoft has purchased almost all of the developers (Obsidian, inXile, Double Fine) that had major Fig funded projects. (They did not purchase Fig itself though.) It's fascinating that most of the biggest dividends so far paid to Fig investors have been from Microsoft buy outs.
Xbox Game Studios has been on a really interesting developer growth and M&A spree the last couple of years, in response to allegations that the Xbox One did not have enough first/second party exclusive titles compared to the PS4. They've made it a big part of their E3 announcements both of the last two years. They've been honoring existing publishing agreements for the most part, so it'll be months to years before it's obvious how much Microsoft has changed the landscape. (It's why Gearbox still published Compulsion's We Happy Few and Obsidian's Outer Worlds, for two instances, and per-Fig requirements/expectations Psychonauts 2 won't be Xbox exclusive but will probably be Double Fine's last title to not launch Xbox exclusive.)
(It's also partly fascinating because inXile and Obsidian have bad blood between each other and now they are both owned by Microsoft. Microsoft has said they'll keep them separated.)
It's also interesting, as a platform, in that it allows users to actually invest, rather than "here, take some of my money and maybe I'll get a videogame in two years". Riskier, yes, but I think ultimately healthier for both fans and developers.
I think one of the examples this perhaps is most intriguing is when a crowdfund is so successful the company ends up turning around and bringing in a ton of cash after. In that scenario, one could see these early backers actually getting their investment back out... and still getting the game/end product.
I think it's a nice potential outcome. And in the case of failure, you still didn't get your video game and are out your investment... the same as a normal crowdfund.
Of course, if I recall, actual "investment" via Fig sits an order of magnitude above what most backers would even consider, which is why Fig still does normal crowdfunding too.
> "In that scenario, one could see these early backers actually getting their investment back out... and still getting the game/end product."
Doesn't strike me as an investment choice with good odds though. There aren't precise figures available but the consensus of statements from people who've worked in the games industry is broadly consistent: for the large publishers, of ten games developed, you can expect one to significantly profitable, another two to break even, with the remainder losing money. For small indies, the numbers are estimated to be one-tenth of that or worse.
Makes for fascinating reading if you want to know a bit more about how the sausage is made. A couple of the more interesting anecdotes I came across were at:
Yes, it's a big difference in price. I backed Pillars of Eternity 2 via fig and IIRC the backer tiers started at $10 whereas investors started at $1000/share.
If memory serves the shares were also just shares (with a copy of the game included obviously). If you spent $1000 as a backer instead of as an investor you got a whole lot more rewards for your money.
It's easy to talk about success stories but I think for a proper analysis, we need to look at the full picture. I'm not too familiar with Fig, but ever since Kickstarter, I've been burnt about investing into unreleased games.
I founded exactly 10 game projects from around when it blew up in 2011. I would say I've had roughly 1/3 success release, 1/3 still working a decade later or half-release, and 1/3 completely disappeared. And it's not like I backed random shady stuff either, one of them for example was CLANG, which literally had Gabe Newell in the intro video.
So yeah, I'd like to see statistics about all the projects, not just the handful of successful ones.
I finally got OW when it was on sale last month and it definitely lives up to the hype. I wonder had I seen its fundraising campaign on Fig.co (or any crowdfunding platform), if I would've smart enough to recognize its genius/creativity.
(I think I saw in a Reddit post that the game's structure and most of its planets were already set when the game was pitched years ago)
Does anyone know if Randy Pitchford has is a Stakeholder for Fig? I know he's a member of the "advisory board" and company also owns the rights to the Homeworld IP.
For a first, all the visual style that got changed between the concept art and models shown in the pitch; especially since the devs then spent close to a year on this without communicating with their backers. And especially since they most likely used their improved graphics to secure the deal with Microsoft, instead on focusing their effort on fulfilling their promises on gameplay features, many which are missing from the current game.
For me, I expected something more closer to the classic XCom games from the 90s. What I got feels more like a spin-off of the contemporary X-COM games, with interface, camera and general gameplay cloned 1:1.
I don't think the older games are necessarily better. But they are different and the pitch gave the impression that the intended product would be closer to X-Com than XCOM.
I have only ever funded one project on Fig, and I regretted it. The developers missed their release target by several years, which wouldn't be that big a deal except that they were also pretty poor communicators for a lot of that time. Then they went Epic exclusive right before release.
I'm not saying this reflects badly on Fig per-se, just crowdfunding in general. I'll never do that again.
Apart from Humble Monthly, I think maybe all but one game I've bought this year was Epic exclusive. Unless Valve decides to get off it's monopoly laurels, I would expect that to be the new default in PC game launches going forward. Epic's offer is just so much more compelling than Valve's. And it sounds like they should have the tools to roll out onboarding a lot more games ready this year, so they'll probably have a large wave of non-exclusives as well.
I would always assume anything you crowdfund will disappoint you in some way. Plans change. When you crowdfund, expect the general direction, not the exact outcome.
Valve hasn't been resting on their laurels, they've been doing a lot more for gaming than Epic has. They've been doing a lot of work on Proton to allow more people on Linux to play games, plus their "Remote Play Together" that lets you play local multiplayer games with friends over the internet. The EGS is so barebones that people have to go on the Steam forums to get tech support questions, not to mention that they don't have a Linux client, and their limited availability in some countries means that paying for exclusivity prevents some people from being able to play the game.
It can't be overstated how big of a game changer Proton is. You can use it outside of Steam but if it weren't for Valve we wouldn't have it.
Prior to Proton, gaming on Linux was hit or miss. Many games never worked, some worked like crap, some required convoluted incantations of Wine settings and specific game versions and then only on every second Sunday.
Now? I install games via Steam's normal interface and 90% of the time it just works. And most of those that don't work use some non-Steam DRM that won't run under Proton.
A bonus point is that it reports your usage as running under Linux so publishers and devs get accurate numbers for how big their potential market is on Linux which is good in the long run for getting native Linux games.
Steam has never been a monopoly, except for the online sale of PC games developed by Valve. On the other hand, among the online video games marketplace, it has enjoyed a situation of market dominance.
88/12 revenue split vs Steam's 70/30. But you also get more visibility from being on a less crowded, less junky storefront.
And although it's unlikely to continue too much longer, Epic has set an interesting precedent with funding $10-off coupons during sales out of their own pocket. If you're at the classic $15-25 indie game price point, there's a nice possibility there for your customer to get $10 off and you to still get your full cut.
On the other hand, because of the curation, niche games can't really get on Epic, so we can only get those on Steam (or GOG for some). But yeah, discoverability is pretty bad on Steam, I don't think I've ever browsed the shop to look for games to buy, I always arrived to the store either to buy or check a game.
And all of that is before you mention their incentives for timed exclusive launches, which I believe often amounts to a revenue guarantee on your projected sales, and I think they deliver it up front.
So a cash-strapped game developer can go into the final stages of their game launch pre-paid and knowing they're already fiscally on track before it's even out. For indies that's a no-brainer.
Interesting phrasing, as indies aren't getting onto the storefront at all without accepting timed exclusivity. It's not an option that can be taken, it is mandatory to be on the storefront unless you have enough clout to tell Epic to shove it (CDProjekt Red).
That's assuming of course that Epic chooses to accept your game in the first place. My major issue with discussions regarding the EGS is that everyone discussing it talks as if every developer has access to what it's offering, which is not the case even in the slightest.
The timed exclusive offering is a great option for indie developers, and the fact that so many have taken it seems to reflect that.
My understanding is that right now Epic's submission pipeline is very manual, there's not a lot of self-servicing. So they are focused on submissions which move the needle the most for Epic: Exclusives, free titles (also available to indies), and then AAA games. I believe they've suggested the wider release of EGS for more developers should be sometime this year.
Maybe not the exclusivity part, but it being a curated platform is very much a win from the consumer's point of view. Being good enough to be on the EGS actually means something in an age when anyone can ship their garbage on Steam or itch.io or any number of smaller storefronts.
Speak for yourself, I happen to like the idea that there isn't some arbitrary gate keeper determining what is and isn't good enough to be on their store. I'll decide what is worth my money thank you very much.
Sure, and Steam exists for that. But that's also why it's clogged with thousands of shovelware GameMaker titles, porn games, and downright scams. Discovery on Steam is completely broken.
The EGS is much more akin to a console ecosystem. You don't have to use it, except perhaps for the occasional exclusive. But lots of people feel that there is value there.
On reddit mention of the Epic Game Store brings out rabid haters. I know it's not as fully featured as Steam, has made some questionable moves (refund policies, sales without informing devs), and has quite a large stake owned by Tencent.
But then I hear that devs are getting cash up front and a bigger cut (I think it's like 85% compared to Steam's 70%) of profits. I'm happy that a developer may not need to crunch, or at least possibly not worry that if the game doesn't sell they'll be bankrupted.
I'd really like GOG to get a little better about this considering how great Galaxy 2.0 is and their general "No DRM" policy. It would become my default but Steam is still king for now
Given Epic's behaviour and reactions to people bringing up their flaws I wouldn't be surprised if they pull the carpet out beneath the devs' feet as soon as they think they have the market cornered. Right now they're slinging Fortnite money around everywhere to try to resolve all their problems but that's not a good way to earn trust.
That's been my experience on Kickstarter too. A good 2/3 of the games I backed never had a proper final release. I don't see things being too different on Fig. Game funding, just like any other investment, is a risky endeavor and people should know what they're walking into.
I would never crowdfund a game that wasn't open source. There is literally no point. If you don't get the source code then you have zero recourse when they decide to jump ship. And if they aren't regularly committing their work to a public git then you have no way to know if they're bullshitting or not.
Per-game fractional equity stakes are something I am also considering for my own endeavors. I think it makes sense for rapid release schedules, where you plan to build the "factory" that can ramp a dedicated pipeline of hypercasual games with in-game monetization on a predictable and speedy timeframe
It would be interesting to explore 100% crypto smart contract solutions to this. I know a couple of years ago a lot of people were interested in fractional ownership for real estate development. But I am not sure what if it went anywhere
I really wish the hypercasual trend would go away. It's closer to slot machines with ads than to Tetris, and I think games as a medium are worse-off for it.
The book "Blood, Sweat, and Pixels" mentions Fig. It was started by several gaming industry developers/producers saw the success that Kickstarter offered the gaming industry.
That seems to be a big difference to me. I wonder if this is more like SeedInvest than KickStarter, but more people understand the Kickstarter model. I can't look now, because I'm getting a "site can't be reached" error.
Kickstarter asks the community to shoulder the risk of development -- you put your money in, with explicitly no guarantee that you'll get a game out of it (just a guarantee of a good-faith effort to put the game out), much less a good game.
As much as the big publisher model trends towards games that feel somewhat alike and tend to chase trends, it moves the burden of risk onto an entity that's designed to assume that risk.
Unless I'm missing something, Fig's model also asks the community to shoulder the risk. The only substantial difference is that with the Fig model the community also shares in all of the potential upside, whereas Kickstarter offloads the risk, but caps the maximum upside at getting the game you backed.
To be clear, fig also provides the Kickstarter model alongside its investor model. So you don't have to choose one platform over the other in terms of how you want to risk your money.
For potential backers, it seems that Fig is much more curated? KS allows literally just anybody to create a campaign, but I'm assuming from the limited selection of open investments that Fig has a threshold of viability.
By and large, it's pretty easy on KS to see when a campaign is created by known developers/publishers. But there's still plenty of noise and anomalies, like this "Day of Dragons" which seemed to raise half a mil based on coincidental timing: https://www.eurogamer.net/articles/2019-10-11-harry-potter-a...
It's nice to have several competing services (this way we might avoid situations where developers loose all access to funding if they are dropped by monopolist like Patreon).
And Fig seems to be way more specialized, since it also offers to act as a publishing.
> The securities offered by the issuers on the Site (the "Securities") may be sold only to (A) investors who are (i) "Accredited Investors" as defined in Rule 501 under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or (B) certain eligible investors who are not "U.S. persons" as defined in Rule 902 under the Securities Act, or (C) otherwise eligible to invest in Securities as discussed elsewhere on the Site
I'm assuming C) covers general crowdfunding investors but I also thought that you still had to check net worth/etc. which I didn't see going through the site anywhere (though admittedly I did a very cursory glance).