Recapping Crowfall’s equity investment Q&A
Early this afternoon, ArtCraft Entertainment’s J. Todd Coleman and Gordon Walton answered investor questions about Crowfall’s equity crowdfunding venture, which closes out on Monday. We’ve collected some of the highlights.
Coleman says investors are “making a bet” that there’s an “eventual win” in terms of an IPO or buyout or some other way. In the gaming business, he says, most companies that have a win, “get acquired.” He wouldn’t say that’s even remotely in the works, but it’s a possibility for companies like ArtCraft and is one way investors might profit from their investment.
When asked whether the raise was initiated because the company needed money, Walton explained that the company didn’t realize they’d be able to do a raise like this (because it was enabled by a brand-new law last fall); in fact, ArtCraft ended a different raise to open this one and had run one prior to the Kickstarter as well.
“Do [we] need more money? Yes, we do,” Coleman says, but he stressed that every company needs and wants more money. He said he now believes the game will cost in the $11M-12M range, up from the original $8M estimate, thanks to mistakes, new features, design changes, and the Travian localization partnership, among other things.
But the raise has exceeded Coleman’s expectations such that worry over money isn’t “keeping him up at night.”
“The MMO business model is staggeringly good,” he argued, defending the subscription model’s consistency and the “strong business model” outlook for a solid MMORPG, especially one with a smaller base that is “delighted that [the studio] built them exactly what they wanted.”
The duo also noted that they rely heavily on gamers who promote the game by word of mouth. “We owe everything to the people who are following us,” Walton says, while admitting that surgical ad spends and targeted marketing are going to be a necessity in the future. Still, ArtCraft doesn’t want a bajillion people showing up on day one with 80% bleed-off a month later, so don’t expect that kind of overwrought advertising campaign.
As to localization, Coleman notes that the team’s relationship with Travian will allow the EU and US versions of the game to share resources and design — they’ll basically be the same game. A potential Chinese version of Crowfall, however, would probably be localized developed by a Chinese team based on a “snapshot” of the western game — ArtCraft wouldn’t loop back changes made for that community.
Walton concluded the call by explaining that he understands the raise is not for everyone and thanking even non-backers for their attention: “This kind of investment is not like putting money in the bank.