M&A and investment in the game sector Financing game businesses Alternative options The main risk with crowdfunding is that a developer will need to set Beyond publishing deals and a funding target on the online raising equity financing, other platform used and if this isn’t met, sources of funding for game projects no funding is made available. On are available and can often be average only half of crowdfunding used in combination with those projects meet their target. The sums key sources of finance. available via crowdfunding are also Crowdfunding often smaller than those from a publisher or equity investor. Crowdfunding has become a viable source of financing for developers. Government grants and tax credits Some projects have raised millions of Financial support is often available dollars through online crowdfunding from the public sector in the form platforms, eg Larian Studios’ of government grants and/or tax Kickstarter for Baldur’s Gate 3. credits. There are many well-known Typically, investors obtain rewards schemes in various territories, (such as early access, additional including the UK and the European content or in-game recognition) Union. In the UK, these include the UK in return for their investment. Games Fund, Video Games Tax Relief Crowdfunding is appealing for (VGTR) and Video Games Expenditure developers as they don’t usually Credit (VGEC). You can find more have to dilute their shareholding, information on these schemes in cede control of creative development the section on Tax. Industry trade or share revenue with investors. associations, such as Ukie in the UK, For these reasons it’s becoming also provide detailed information on increasingly common even for more these sources of finance. established developers to use crowdfunding in conjunction with another source of finance. 15