Years ago, one of the only clear-cut ways to invest in video games was to invest in the big-name companies that produce them. Think stocks like Activison Blizzard (NASDAQ:ATVI) and Electronic Arts (NASDAQ:EA), and you’ll get the idea. But with equity crowdfunding, those thinking about investing in video games now have a number of options at their disposal.
Specifically, both investors and enthusiasts can invest with Fig to get a piece of the revenue pie in some of the hottest upcoming indie games.
Investing in video games through Fig isn’t like other video game crowdfunding efforts you might be familiar with. You don’t just get some sort of reward, accolade and/or early access to the games at launch (as you would with Kickstarter). It’s an actual investment that will prove profitable depending on the game’s enduring success. While the rewards-based system of old crowdfunding options still remains, the “investing system” is where Fig truly sets itself apart. Enthusiasts with an eye for games can contribute in game development like never before, all while making a profit on its overall success.
Through Fig, developers can raise capital from the crowd to help produce the game. Then, once the game is released, the revenue produced by the game is continually divided among the investors, developers and Fig. Dividends are distributed to Fig investors based on the number and percentage of shares they own, usually every 6 months.
While most of the games on Fig aren’t backed by the same well-established studios behind hits like Call of Duty: Modern Warfare and Overwatch, many of them still maintain a franchise lineage that is well respected among gamers. Either that or they convincingly build upon existing award-winning designs that give reason for optimism. While investing in brand new IP’s might prove the most profitable in the long run, there are numerous risks associated with equity crowdfunding like that through Fig. With these risks in mind, I’d like to get as close to a “sure thing” as possible with my recommendations.
Accordingly, to mitigate some of the risk, I’ll mostly focus on upcoming video games to invest in that are a part of critically acclaimed franchises or build upon proven video game designs. This includes:
- Homeworld 3
- Frozen Flame
While critical acclaim and/or clearly established influences don’t automatically translate into massive sales figures, there’s at least a little more room for reasonable hype because there’s a clearer foundation for quality than with more niche and “adventurous” IPs.
Investing in Video Games With Fig: Homeworld 3
Expected Release Date: Q4 2022
Cost Per Pledge: $60
Out of all the video games on Fig right now, Homeworld 3 is the closest to a sure thing as you can get … at least from a strategy gamer’s perspective. Its Fig campaign was successful, raising $1,505,840 from 8,414 backers. The game is currently in pre-production, and it is no longer taking investors but enthusiasts can still pledge money on a rewards basis.
Not only is Homeworld a well-respected franchise, but the studio behind the latest iterations, Gearbox Studios, is also responsible for other big titles like the widely popular Borderlands series and critically successful Brothers-in-Arms first-person shooter. But its acclaim isn’t just with shooter games. Homeworld has a 93 on metacritic, Homeworld 2 has an average of 83 and the remastered collection (which solely falls under Gearbox’s wings) has an average rating of 86. The Homeworld series is among the first to take compelling real-time strategy (RTS) into space, allowing players to navigate the universe on a 3D plane.
At $60 for the minimum pledge, backing Homeworld 3 means you have faith that the third game will continue to carry the torch for RTS space combat into the new decade. Now that the game has successfully entered pre-production, Gearbox is committed to dedicating 14% of its sales to Fig, of which 85% is payed out to investors via dividends for the first 18 months of the game’s release.
Although there’s always a fear that a game might not be released due to unforeseen hurdles, the fact that Homeworld 3 comes from a veteran studio that was also behind the release of the remastered version of the original series gives additional reason for optimism as the team has a track record of success. Furthermore, the company’s $1 campaign seemingly indicates less an actual need for funding and more a means to secure interest among its fanbase.
Expected Release Date: October 10, 2020
Cost Per Share: $1,000
Amico isn’t a game, but rather a system on which players can enjoy numerous retro games with visual upgrades. As such, it satisfies one of the core elements of risk reduction when investing in video games: it builds upon a proven formula/design. The whole remaster aspect is an increasingly popular move by big-time studios. In fact, the aforementioned Call of Duty: Modern Warfare recently got a remaster that quickly proved to be one of Activision’s most successful games ever.
But Amico goes back even further, remaking classic Atari games, with high-definition remasters of household names like Pong and Lunar Lander. Oh, and while the Atari games it aims to remaster might have greater relevance in the general gaming community, the designer itself — Intellivision — also has name-brand recognition among old-school gamers, as it is one of the original consoles released in 1979. As such, the console will also feature remastered Intellivision games and exclusives like the latest game in the old-time favorite Earthworm Jim series.
This massive library of proven titles all comes in addition to new family and casual oriented games with puzzle, card and sports themes. It aims to embody the simple, pick-up-and-play mentality of old but with an emphasis on fun for everyone. If you have faith in a return to casual, family oriented gaming, then Amico might prove to be a wise video gaming investment. It’s expected to be released on Oct. 10, despite possible struggles in development caused by the novel coronavirus.
Investing in Amico comes at $1,000 per share. As with Homeworld 3, of the revenue that Fig gets in its role for supporting Amico, 85% of it is distributed to investors. But there is no 18 month time limit to the agreement, and the distribution of revenue Fig receives varies since it isn’t just a video game like most of the other offerings on the platform. Fig will get 50% of the software sales, 30% of the direct hardware sales and 20% of the indirect hardware sales from Amico.
Expected Release Date: Early Access planned for Q3-Q4 2020
Cost Per Share: $1,000
The next game on this list, Frozen Flame, is much less of a sure thing compared to Homeworld 3 and the Amico console. At least in terms of having a studio and franchise backed by established names. However, that shouldn’t completely turn you off. While Frozen Flame lacks the history, much of the members of Dreamside Interactive have been involved with top tier video game releases in the past. Their list of collective experience includes big-budget names like Dota 2, Dragon Age, Assassins Creed and Diablo 3: Necromancer. And the game itself builds upon an extremely popular formula.
Specifically, Frozen Flame takes its inspiration from past survival games and combines these elements (exploration, item collection and crafting) with a massive online experience (up to 50 players), combat, base building and role-playing elements. It clearly takes inspiration from mega-hit Fortnite, while maintaining its own identity through its survival role-playing aspects. It sounds and looks like a winning formula when you put it all together.
An investment in Frozen Flame costs $1,000 per share. The exact details of the agreement between Dreamside Interactive and Fig is yet to be determined as the company is currently only collecting indications of interest with the investment option. Once their target has been met, they will reach out to investors who reserved shares and provide them with the details.
While Frozen Flame certainly holds a lot of promise from a gaming perspective and it at least mitigates some risk by building upon existing and effective video game designs in a way that looks meaningfully significant, there is still plenty of risk involved from an investment presepctive. After all, it’s a new IP from a new studio that hasn’t yet met its target to make the investment goal truly viable. Therefore, it’s one of the more speculative choices for those who are interested in investing in video games with Fig.
Also note that the information page for Frozen Flame does not address any potential impact that the global pandemic has had on the game’s development.
Robert Waldo has been a web editor for InvestorPlace.com since 2016. As of this writing, he did not hold a position in any of the aforementioned securities.
Investing through equity and real estate crowdfunding or asset tokenization requires a high degree of risk tolerance. Despite what individual companies may promise, there’s always the chance of losing a portion, or the entirety, of your investment. These risks include:
1) Greater chance of failure
2) Risk of fraudulent activity
3) Lack of liquidity
4) Economic downturns
5) Dearth of investor education
Read more: Private Investing Risks