Editor’s Note: This article was originally published on July 21, 2020. The updates include new options to consider for investing in video games through Fig.
Previously, one of the only ways to invest in video games was through the big-name companies that produce them. This meant investing in video game stocks like Activison Blizzard (NASDAQ:ATVI) and Electronic Arts (NASDAQ:EA). But if you’re only thinking about investing in video games themselves, there’s now a clear-cut way.
Specifically, both investors and enthusiasts can invest with Fig. This platform allows them 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. (That’s usually all you could get with Kickstarter.) Rather, 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 remains, the “investing system” is where Fig truly sets itself apart. Enthusiasts with an eye for games can contribute to game development like never before. And they can do so all while making a profit on its overall success.
Through Fig, developers raise capital from the crowd to help produce the game. Once the studio releases it, Fig continually divides the revenue produced by the game among the investors, the studio and itself. Fig then distributes dividends to 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 gamers respect. 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 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.
To mitigate the risks, I’ll focus on upcoming video games to invest in that are a part of established franchises. I’ll also consider those which build upon proven video game designs. This includes games like:
- Frozen Flame
While critical acclaim or clearly established influences don’t automatically lead to sales, there’s at least more reason for hype. After all, there’s a clearer foundation for quality than with more niche and “adventurous” IPs. Let’s take a closer look at what makes each of these games investment worthy.
Investing in Video Games With Fig: Amico
Expected Release Date: Oct. 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 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. The initial release date is still Oct. 10, despite possible struggles in development caused by the novel coronavirus.
Investing in Amico comes at $1,000 per share. Of the revenue that Fig gets in its role for supporting Amico, 85% of it is distributed to investors. But the distribution of revenue Fig receives varies since it isn’t a video game. 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 the Amico console. At least in terms of having a studio and franchise backed by an established name. 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 the developers reach their target, they will reach out to investors who reserved shares and provide them with the details.
Frozen Flame certainly holds a lot of promise from a gaming perspective and it mitigates some risk by building upon existing and effective video game designs. However, looking at it from an investor’s perspective, there is still plenty of risk. 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, if you’re looking to invest in video games with Fig, it’s one of the more speculative choices.
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.
Expected Release Date: Early Access via Steam Q1 2021
Cost Per Share: $250
While it might not be part of an established franchise, Moonray has traits that could make it a worthwhile video game investment. Like Frozen Flame, it builds upon a proven formula in a meaningful way. That’s one of the key elements I look out for when considering lesser known titles.
PC Gamer touts Moonray as “Dark Souls meets Salvador Dali.” Judging from the screenshots and gameplay footage, that seems like a valid assessment. But it’s a little more intricate than that. While it seemingly uses the award-winning Dark Souls formula as a foundation, it also sets itself apart. The game features a Sci-Fi environment that most writers would never dare to imagine. It involves a world where beings have mastered the manipulation of matter, not technology. But these aesthetics and story aspects aren’t the only things that make Moonray one of the promising titles to consider when investing in video games.
While Moonray features “Souls-like” combat mechanics, it also features a unique upgrade system that takes advantage of its unique Sci-Fi world. This allows the player to manipulate matter for added gameplay depth. All of these elements help it stand apart as a title with strong potential. That’s probably why it has already exceeded its target fundraising goal by 773%.
Right now, an investment in Moonray will cost you $250 per share. It’s also at a stage where such an investment is currently an “indication of interest.” That means the true breakdown of how much you can profit from the investment will come at a later time. We’ll have to wait to find out how studio Element 115 plans to allocate its profits to investors.
On the date of publication, Robert Waldo did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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