Mike Wilson and Harry Miller, two of the founders of Gambitious Digital Entertainment have learned to be patient.
Very, very patient.
The company they founded was an idea pretty far ahead of its time with it launched in Amsterdam and Austin in 2012. Four years later, the plan to offer equity crowdfunded investment in indie video games to accredited investors (or as they're evocatively called in Europe "sophisticated investors") is still a slow build.
For one thing, Gambitious is publishing relatively low-budget games such as "Train Fever" and "Magnetic: Cage Closed" globally and the laws for equity crowdfunding vary from country to country.
"We're a bit surprised at how long its taken for those laws to actually become laws. Not just here but internationally," Wilson said. "Every major market is having a discussion about equity crowdfunding. We've really just been biding our time exploring this and that. International finance and securities law is not something we want to mess with. But things are starting to settle."
In the U.S., regulations related to the 2012 U.S. Jumpstart Our Business Startups Act are allowing more flexibility for companies like Gambitious. But overseas, it could be a few years before the coast is completely clear. So their efforts, Wilson and Miller say, have been cautious, slow and conservative.
"We started to just build a small network of accredited investors friends and family in the habit of looking at indie games and seeing what a great business it can be and what a quick return," Wilson said.
The pool of investors who can contribute a minimum of $5,000 to indie games with budgets of about $100,000 to $350,000 started at about 15, grew to 35 and is now making a jump as Gambitious adds 50 more carefully selected investors.
It's not an open offer to the public; potential investors still must qualify as accredited and apply to be in the pool. But it's part of a larger plan that Wilson and Miller hope will eventually lead to being able to include investors at much smaller amounts. That could put it in competition with crowdfunding sites such as Kickstarter, which has seen huge heights and also some scandalous disappointments with high-profile video game projects. But that likely years away.
For now, Gambitious is running on a parallel path to Devolver Digital, a publisher of indie games that Wilson, Miller and Rick Stults founded in 2009. That company continues to operate and has published hits such as "Serious Sam" and "Hotline Miami." Devolver gives Gambitious a look at indie publishing opportunities and a pipeline for game developers who might need help with marketing, production, public relations, trade shows or other costs that aren't necessarily related directly to developing a game.
Investors on Gambitious can choose from several game projects in development. And although it's labeled "equity crowdfunding," the investment does not earn an investor a stake in the company or the game's intellectual property. Instead it's pure profit sharing, with payouts going first to those investors.
The digitally distributed games have five years to generate revenue returns for them.
"There's not really a name for what we're doing," Miller said. "We're offering publishing, but you're not buying equity in anything. You're not buying a tiny part of a game studio or IP, which can be very burdensome to everyone involved."
It's one reason, Wilson says, that venture capital is largely absent from the video game publishing scene.
Of the six games already published by Gambitious, four of them made back their cost within a month of release.
"The worst one we've done made 35 percent back within a year," Wilson said, giving investors four more years to recoup money as Gambitious continues to package its titles in game bundles and promotions. Only one game of the six released so far, Wilson said, is unlikely to break even.
There are currently four more games in development with funding from Gambitious including "Transport Fever," a sequel to one of the previously crowdfunded games, "Train Fever."
Gambitious is betting primarily on unknown game developers with original properties, some of whom might be working on their first game with no experience in the business side of making games. As publisher, Gambitious parcels out funding, unlike Kickstarter, which gives a lump sum of money to successfully funded campaigns.
"(With Kickstarter) there's no responsibility to deliver what you said you were going to deliver on time or on budget," Wilson said. Some developers who have pitched to Gambitious, Wilson said, had successful Kickstarter campaigns that still only raised a portion of what a developer needed to finish a game. Some of the work Gambitious does as publisher, he said, is to protect game developers from themselves.
"When you're building a game you don't just hand (developers) all the money up front. No venture capitalist would do that, no game publisher would do that, no movie studio would do that. You pay on milestones as things get accomplished," he said.
While Wilson and Miller say they want to help democratize funding, they're still careful to warn investors that they should be comfortable with the idea that they could lose their investment and that they should understand the risks.
"We're trying to be very controlled about it and as responsible as we can," Wilson said. "If someone puts in a significant amount of money that they could have put into a mutual fund or 401(k) and nothing ever comes out, that's not OK. We take that very seriously."
Gambitious and its founders invest in projects with the same terms as other investors in the pool. Though the road has been winding, both founders say revenue has been steady and that they're committed to making sure Gambitious continues to help indie developers get their games out the public for many years to come.
Said Wilson, "We don't want crowdfunding to be a thing that only happened for a few years in games and then went away and nothing came out."