Gambitious wants new investors to help back future games

In 2009 Kickstarter spun up, eventually bringing about a new era of crowdfunding games. Then in 2015 equity investment site Fig burst onto the scene, seeking to raise millions of dollars for games through a blend of traditional crowdfunding and equity investment. In between those two dates, a small company called Gambitious quietly entered the marketplace. Now, after funding and successfully completing its first wave of titles, the publisher is ready to start making some noise.

Founded in 2012, Gambitious is the brainchild of Epic Tales producer Paul Hanraets, Mastertronic CEO Andy Payne and Devolver Digital founders Harry Miller and Mike Wilson. Their goal is simple: Seek out independent games that are likely to succeed, and help them get the money they need in order to come to market.

But Gambitious works quite differently than either Kickstarter or Fig.

"Gambitious is a hybrid crowd finance platform and indie publishing label," Wilson told Polygon. "A developer pitches us. They tell us what they think they need and we help them figure out what they really need to reach the market."

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If the team at Gambitious thinks the game has potential, they'll back it to the tune of, say, $250,000 or more — the full sum needed to finish the game. Then they'll pitch the project to their stable of active, high net worth investors to help spread the risk. Everyone invests on the same terms.

Even if none of those investors bite, Gambitious is still committed to funding the full amount needed to make the game. Wilson refers to this as "backstopping" the project.

"We commit to these indies," Wilson said, "and say, ‘OK we'll go and raise that money from 10 or 15 or 100 investors.' The developer doesn't care. It doesn't affect their deal at all."

Then, Wilson said, Gambitious keeps those developers accountable for milestones and — just like a traditional publisher — holds money back until those milestones are met. Through this method he and his team have been able to build up a small portfolio of successful projects.

The result of the Gambitious model is that games either succeed or fail on a timely schedule. No years of waiting for a return on investment, and no endlessly kicking the can down the road by delaying release dates.

"It's just like any venture capitalist, or anybody with a mind in their head, would do," Wilson said. "You don't give someone all the money up front. It's not because these people are bad people; it's because bad things can happen. All the money gets spent and nothing comes out, or certainly not everything that was supposed to, or when it was supposed to, or in the same scope that it was supposed to."

Gambitious' biggest success story is its very first game, a transportation simulation called Train Fever. With the help of Wilson's team of investors, developer Urban Games was able to raise more than 250,000 euros. After the game released in September of 2014, it became profitable within the first week of sales. Wilson says that to date investors have earned 180 percent on their investment.

"On a high level we’ve shipped six games of middling quality," Wilson said. "But four of those six titles earned out within a month of launch. That was the goal. Quick wins for these new investors to show them how it works and give them that positive experience.

"We’ve shipped six games of middling quality. But four of those six titles earned [investors' money back] within a month."

"You can imagine how quickly they’ll tell their friends. 'This just happened to me. I put five grand into a thing and so far I’ve got six grand back and I’ll keep getting checks for the next four and a half years.' That’s the experience we’re trying to provide."

Of course, Gambitious is not without its failures. The biggest failure to date came with action strategy game Breach & Clear: Deadline.

"Both Devolver and Gambitious, and several of the founders of each company as well, put in a good chunk of what became a $490,000 raise," Wilson said. "I say became, because we actually asked the team to add co-op multiplayer about halfway through development, and this increased the budget by about $90,000."

When the game launched in July of last year, it performed "well below expectations," according to Wilson. So far investors have only made back 29 percent of their initial investment, and that's only because as a show of good faith Gambitious' leadership team restructured the payouts, Wilson said. Every time someone buys Deadline, investors from the Gambitious community get paid first, and Gambitious and Devolver get paid last.

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"That is the important distinction for potential investors with Gambitious versus other crowdfunding platforms," Wilson said. "We value and respect the money invested by individual investors because we are also investors in the project, at the same terms as everyone else."

It's a stark contrast, Wilson said, to a crowdfunding platform like Fig, or even Kickstarter.

"I feel like crowdfunding thus far has been treated as dumb money," Wilson said. "'Gimme gimme gimme!' That’s not something that’s going to work out in the long term. ... That’s fine when it’s 20 bucks for a game, or 50 bucks for a game and a T-shirt. But if it’s money you could have put in your 401k or a mutual fund, if it’s a significant amount of money to you, that’s not OK. It’s not OK for what’s been happening in crowdfunding to continue to happen."

Gambitious is actively seeking new investors, and applications are open at its website. The team's goal is to refresh the pool, and to drive more funding for the sequel to Train Fever, which is already in the making.

"We want to say yes to more games," Wilson said. "But we’re still not taking a thousand new investors. We decided 50 new investors would be a manageable number to take care of the slate we have for this year.

"At some point next year we’ll be doing public-facing raises, where gamers can put in whatever percentage of their income the Securities and Exchange Commission decides is legal. It’ll be by the letter of the law. There won’t be any guessing or gray areas or any of that. I’ve somehow made it 22 years in this business without ever being sued. If I’m in it another 20 I’d love that track record to stay intact. It’s just not worth it. There’s no rush."