Valve's Newell: Gamers could be investors

— 2:08 PM on July 21, 2009

Thanks to the online distribution boom, smaller developers have been able to profit from unorthodox games. But what about more ambitious projects? Valve co-founder and head honcho Gabe Newell thinks there's a way those can go forward, too.

In an interview with ABC's Good Game (that's from the Australian Broadcasting Corporation, not the other ABC), Newell said he was "super-interested" in the concept of financing games via the community. Here's a transcript:

So, right now, what typically happens is: you have this budget, it needs to be huge, it has to be $10 million to $30 million, it has to all be available at the beginning of the project, and there's a huge amount of risk associated with those dollars, so all the game decisions have to be incredibly conservative. And what I think would be much better is if the community could finance the games. In other words, "Hey, I really like this idea that you have, and I'll be an early investor in that."

In venture capital, there's this concept that your best investors are your customers, because they have secondary gain if you're successful—they not only want a return on their money, but they're incredibly happy if you actually make a great game that they get to play. It'd be really great if we could evolve Steam in a way that made it possible so that a developer can say, "If you want this game to start moving forward, here's the sort of seed round where people can sort of opt in and say, 'I'll pay $30 and then I own a piece of this game going forward.'" I think it'd be really valuable to figure out the infrastructure and legal issues and financial issues that allow community-based funding rather than publisher- or bank-based funding to occur.

In other words, Newell seems to be longing for indie games on steroids: potential blockbuster titles that could be developed without a publisher-friendly, formulaic framework. As he points out, though, the legal ramifications of having thousands of fans sink money into an unproven project probably need some exploration. (Thanks to Shacknews for the tip.)

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