Crowdfunding and Games

Just hours ago, Ouya's Kickstarter campaign closed with over $8 million raised in one month. For those living under a rock, Ouya is an open source video game console that costs $99. They figured the best way to finance their little console was through a crowd funding site called Kickstarter. In their own words "Kickstarter is the world's largest funding platform for creative projects. Every week, tens of thousands of amazing people pledge millions of dollars to projects from the worlds of music, film, art, technology, design, food, publishing and other creative fields."
Crowd funding has provided developers alternate investment routes. And while it has worked with projects like Ouya, there is no guarantee that it will work for everyone.

No matter what type of project, whether it's a rock album, a science fiction short film or your birthday party/Bar Mitzvah, finding someone who will believe in your project as much as you do might not be too hard; but someone who will actually pay to see your entrepreneurial dreams come true, that's the hard part. Video games are no exception. The gaming industry is one of the most profitable in the world and behaves much like every other industry: they identify a need, find a target audience, preferably a niche, and money will come if you do it right. But the ability to find resources through crowd funding, might make developers overlook their target audience. To engage a large community into paying for your product, it has to satisfy a need. And it's not about how much money you're asking for. Ouya's initial goal was $950,000. They found a niche in the gaming community and went after them. Sadly, many developers have tried to make games that could be appealing to the masses, and the message was lost in the crowd.

There have been some success stories, like Tim Schafer's Double Fine Adventure and John Carmack's Oculus Rift. It's no surprise that these projects are successful, because there are big names behind them. No matter how innovative you think your product might be, crowd funding can and will help only those who have done a proper market research.