Xsolla Capital’s Indie Game Fund – Funding For Royalties
Game development is expensive regardless of if you’re a huge studio, or a small independent studio. The fact remains that it takes money to make a video game. Large AAA studios tend to have more of it to sink into a project then small independent studios do. To this end that Xsolla the e-commerce and payment platform is launching Xsolla Capital. Which is a $30 million indie game fund, that will invest in projects by indie game developers, in exchange for royalty rights.
Xsolla Capital’s indie game fund. What’s the catch?
The company which is based in Los Angeles, will invest with developers to help them finish their games and get it to market. Once the game is on the market and starts making money, Xsolla will get a percentage of those earnings as royalties. It’s not clear if the length of these royalties are for the life of the title or until the initial investment is paid back.
It would make sense for the royalties to continue for the life of the title. Otherwise the Xsolla’s indie game fund would at best only ever break even. Despite how some people believe that it should work, that’s not the goal of any business. Getting royalties for the life of a game will allow the fund to possibly grow. This would allow the fund to potentially fund more developers in the future. It would also offset the losses that the fund will take on commercial failures.
Let’s be honest not every game that the fund invests in is going to be a success. New products flop all the time, video games are no different. While I don’t expect Xsolla’s indie game fund to invest in projects in discriminably. The fact is that no one picks a winner all the time. While the guide lines for how a project will be selected hasn’t been elaborated on. I’m sure the fund will have some criteria to meet before handing over any funds to a developer.
Xsolla is a company with a lot of resources, and leveraging some of these resources for independent game developers is a great idea. As with all things it will be the execution that will shape the future of Xsolla’s indie game fund. It will be interesting to see the effects of the fund once titles it has helped fund reach the market.