Square Enix's key to crowdfunding: Focus on your core audience

Back in January 2014, the Square Enix Collective launched as a crowdfunding assistance and indie publishing branch. So far, the initiative has pushed five games through crowdfunding, of which four were successful. But now, the company is beginning to make direct investments in games as well.

"We don't consider the collective to make us a billion dollars," said Phil Elliott (pictured), head of the initiative, speaking at Reboot Develop last week. "But the main thing is to build relationships. It's so much harder for big publishers like us to maintain and find new relationships with all the companies out there. How else can we find the next big thing?"

Everybody benefits from fresh ideas, he says. "Increasingly in the triple-A space, it's harder and harder to risk it. Where do these new ideas and these new experiments come from? And how do we as an industry help that and make it stronger?"

One of those answers, for Square Enix, is now direct funding. "We've had a lot of feedback from teams that don't think crowdfunding is right for them, for lots of reasons," Elliott said. "But until now that's the only way we've been able to support teams. We're going to be making some direct investments into projects from now on."

Essentially, funding will be presented as an alternative to crowdfunding, after the game has gone through the other community-oriented stages of the collective process. Square Enix will retain revenue share on each title, but the amount changes on a case-by-case basis, with investments of up to $300,000 USD. Importantly, developers will retain the IP.

Developers can still elect to do crowdfunding, though, and to that end, Elliott shared some of his learnings, especially regarding promotion.

"This has changed a lot in the last couple years," he says. "When we launched World War Machine, we had the press release ready, and we sent it out. It was the first crowdfunding effort Square Enix had ever supported. It's an obvious story - clearly I know what a story is, I used to be a journalist! Well, it turns out I was wrong. And it turns out it wasn't that interesting to a lot of people."

"We did get some good visibility on a few sites, which resulted in around $400 of funding," he said. "Our expectation was that press coverage, that's what moves the needle. But it doesn't. Press is absolutely important but not in the way you'd expect. I talk to a lot of teams now that are very excited about the possibility of us sending out a press release. But the truth is, over the last couple years, while we thought press would be important, there have been too many negative headlines [about Kickstarter.] That negativity absolutely takes its toll. The message [press] were getting from their readers is 'look, we don't want to hear about games we might not even be able to see, we want to hear about games we can play in 6 months.'"

For Square Enix, their main method of communicating about their crowdfunding programs is sending news out to their core network who have signed up for their mailing list.

"But how do you do that as a small team?" he posed. "Why would the press open that email?" Elliott asked some prominent people in the press, and found that on average, they get around 100 to 150 emails from small devs about crowdfunding, or asking for early access coverage and the like.

Nobody's got time to read all those emails, he says. "In truth, you might not be able to solve this problem, but you might as well give it a go. It's about the people, and not the publication. Who is it that's writing about Kickstarted games on this publication? Or games in your platform, or games in your genre?" That, he says, is who you should reach out to.