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Video games haven’t been a niche hobby for centuries now, but the scale of the industry built around gaming is still not as well-known as it deserves. Video game revenue in the United States during this period was approximately $39.4 billion First three quarters of 2023, Meanwhile, the films had good box office in the United States a comparatively modest $9 billion Throughout the last year.
Big, global revenue numbers The video game industry hasn’t been spared from layoffs, but people around the world are still spending on new titles and hardware. It’s a great time to be a gamer, but is it an equally good time to be a gaming studio? A gaming startup is changing its fundraising approach in a way that could pave a new path for studios that are seeing less interest from traditional, private investors.
Frost Giant, a venture-backed startup creating a real-time strategy (RTS) game stormgate, is turning to its community to boost its coffers ahead of the game’s launch this year. Company’s decision to test the waters equity crowdfunding round This came after it sold millions of dollars worth of merchandise to its supporters on Kickstarter earlier this year,
TechCrunch spoke to Tim Morton, Frost Giant’s CEO and director of production, about the company’s choice to pursue community funding, which he said could bring in more marketing and operating capital.
The logic behind the choice to raise more money before returning to venture capitalists is not hard to understand. The venture capital market for gaming companies has declined sharply since the Frost Giant last raised money ($25 million Series A in 2022, And with Stormgate expected to launch this year (Early Access launch is pegged for Q3 2024), more funding could give the company enough leeway to launch its game and collect early revenue from its release. This may even be enough to lure another tranche of traditional venture funding to his venture.
The state of gaming, enterprise and RTS
Esports have received a lot of press over the past decade, often focusing on multiplayer titles like League of Legends, Dota 2, and Counter-Strike. But in the early days of competitive eSports, RTS titles like Starcraft and Starcraft II were the pioneers. That part of the video game industry has grown a lot since those games were released, but RTS games were Crucial to the early development of eSports,
The Frost Giant has already garnered some credibility thanks to its pedigreed team, some of whom have worked on acclaimed games like StarCraft II and Warcraft III. Stormgate is the spiritual successor to the Starcraft franchise many ways, and the studio isn’t afraid to show it. Fans of those older RTS titles will find this new game familiar, and that promise is proving to be a boon for Frost Giant: The company’s Kickstarter event sold $2.4 million worth of bonuses to more than 28,000 backers, who signed up for things like entry. Paid for the upcoming “preview week” for the game, including access to its Discord server, beta access, and even access to physical merchandise.
Morton said his team was “positively surprised” by the interest generated by the Kickstarter. But it was not designed as a fund-raising effort; Instead, the company introduced the event as a way to offer its fans something special before the game launches.
He said the company has seen some interest in investing directly in the company both before and after its Kickstarter campaign. While Frost Giant hopes to increase viewership for its upcoming community, which is structured as a Reg CF (Regulation Crowdfunding) OfferingWhile it won’t match up perfectly with the gamers attracted to its Kickstarter, Morton expects some overlap.
So far, Frost Giant has received $611,421 in reservations for community fundraising on its Start Engine page. This is a good start and the momentum implies that the company will be able to raise some operating capital once the equity crowdfunding is underway.
The Reg CF offering is limited to $5 million, so Frost Giant has a tight limit on how much it can raise. But such offerings require financial disclosures. we found one A similar look at Substack’s financials When it raised capital from its community last year, and we will get a similar flow of data from Frost Giant.
Frost Giant has publicly stated that “Stormgate is fully funded for release,” meaning the new capital can extend its post-launch runway, allowing it to grow its revenues and attract venture dollars. Can get more time to draw better. Still, if the Stormgate crew decides to look toward traditional private-market investors, it may face an uphill battle: venture investing in gaming companies. Declined 79% globally and 86% in the United States Compared to last year 2022.
Stormgate will be free to play at launch but will allow gamers to spend money in-game. According to Morton, Starcraft II fans liked the increased amount of campaign content, cosmetics, and heroes they could choose from in co-op mode in that game, so expect to see similar products from Stormgate in time. Is. As someone who has a chest of Caitlyn skins for League of Legends and has spent more time than ever fixing his Tiefling Paladin in Baldur’s Gate 3 to make sure His armor all matches, I can assure you that gamers can be so fond of them that they are willing to invest money and time in their digital avatars.
Of course, no amount of Kickstarter wins, equity crowdfunding, or low-pressure monetization will make Stormgate successful if it doesn’t attract an active and passionate player base. How well is the title doing in this regard? The company states that it is 36th most wish list The title is on Steam today, and has gained over 50,000 followers on that platform.
This is a good start, but proof will be within reach soon.
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