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How Learning Games Get Funded

While working on my neuroscience simulator, I ran up against that eternal question: "how do I get paid?" — I interviewed a handful of very smart developers working in educational games & assembled a comprehensive list of funding avenues.

SUMMARY

Available funding sources, edu design challenges, and overall lessons.

[ Part 1: Case Studies | Part 2: Summary ]



These are my compiled notes from talking with a bunch of folks about how to make a living working on educational games. Unless something's in quotes, it's paraphrased.

Mikael Uusi-Mäkelä, TeacherGaming:

"We're not competing against each other, we're competing against existing practices."

Chris Walker:

"If there's a good easy solution, I haven't found it and I've been searching for two years."

Gonzalo Frasca, Dragonbox:

"If you want to make money, go make Math Blaster."

Sources of Revenue

Crowdfunding

E.g. Kickstarter, Patreon

For Kickstarter, small indie projects seem to have stabilized at around $16-$20k, but a good studio can pull off around $70k.

Not many devs can support themselves purely by crowdfunding — maintaining a Patreon requires being a fairly-constant charismatic web presence. Besides Nicky Case, I've only been able to find one other fully-funded Patreon in the science/nature/education game niche.

That said, I think Kickstarters are excellent ways to get a project off the ground & build an audience. For some projects, you don't need to get funding for the entire game — Crescent Loom's campaign was explicitly just to make the prototype's core engine, with the gameplay and tutorials and whatnot slated for additional development post-Kickstarter. Keep people happy by under-promising and over-delivering.

Chris Walker:

A secret sauce for campaigns is endorsements from influencers. These people generally know that they're gatekeepers and the best ones will be happy to help you out if you're nice and your project is worthwhile & relevant.

Gifs are the golden language. Get one that is funny/has a great hook and wield it with extreme prejudice.

Do be careful about not delivering on your promises. The internet can be quick to turn on you.

Jesse Schell, Schell Games:

Games simply cost more than Kickstarters bring in. It's only ever going to be a slice of the pie.

Grants

E.g. SBIR

Grants take a lot of time to write, are slow & hard to get, but the money is substantial (depending on the agency and phase, an SBIR can be anywhere between $150k to $1M) and you don't need to re-pay it.

In the U.S., the Small Business Innovation Research (SBIR) program is the most common one used by game studios (universities & other educational institutions have other options). Most sections of government (from the Department of Education to the Department of Defense) have some small slice of their budget dedicated to SBIR grants. They're grants that are designed to stimulate private research and development in the area that department is interested in.

Even with a copy of a successful grant to work from, it took me about a month of full-time work to put an SBIR application together for Crescent Loom. You need to do market research, explain how your product will turn a profit, demonstrate that it's actually innovative in some way, assemble a prospective team of developers, collect letters of support from prospective influential customers, and provide budgets and production timelines.

But SBIR isn't the only option! Check for grants from your country and local area. For Canada, Tabby Rose has listed Ontario Media Development Corporation, Bell Fund, CMF, CCA, and XL as examples. There are also sometimes one-off opportunities that come up if you keep your ears open, such as Underrepresented Puzzle Creators or VR for Impact.

Brooke Morrill, Schell Games:

  • National Institute of Health (NIH) has the largest budgets and thus the largest SBIR program, but has strict requirements that the project somehow impacts human health.
  • National Science Foundation (NSF) is at a sweet spot of having a fair-sized budget and willingness to fund cutting-edge, novel projects that advance basic science education.
  • Institute of Education Sciences (IES) typically awards less than a dozen phase I SBIR grants per year, so they're more conservative and tend to select awardees whose product has a high likelihood of impacting education.

Lindsey Tropf, Immersed Games:

"The NSF is more interested in funding something with innovative technology that has a technical risk, but the Dept. of Education wants a product with an educational impact as its focus."

Jesse Schell, Schell Games:

The long submission-review-resubmission cycle means that it can take years to build up to momentum to actually get a grant funded. Also, the people on the review board are human and use personal knowledge to judge how tenable a proposal is. If you have an established history and they've heard of you, they'll be more likely to believe in your capabilities.

Melanie Stegman, Molecular Jig Games:

The people writing your letters of support should be the ones who you'll be selling to. The letters should should essentially say, "I am X. If they make what they say they're going to make in this application, I would be interested in buying it."

You can even get a letter from Valve (or some other publisher/distributor) talking about their assessment of how well it would sell.

Day Job

Most commonly seen in the indie space. Pay your bills with something unrelated, work on the game part time/weekends. Will make everything take way longer, but it's so much less risky than sinking your savings.

A possible path is to make the initial prototype while working a day job, slowly build an audience via crowdfunding, and then transition to full-time dev work when/if it becomes self-sustaining.

Partners

E.g. publisher, hardware manufacturer

I don't think I've actually seen an example of an edu game actually getting funding through a traditional games publisher. That... might be telling us something about the market as a whole. Nobody has figured out out to make those bets be successful.

(Take-Two Interactive bought Kerbal Space Program, but only after it had already become one of the most best-selling science games out there.)

But hey, things could change! Might be possible to start with a traditional K-12 resource publisher like Rubicon Publishing, or hardware specialists like Leapfrog or Thames & Kosmos (like what Schell Games did with Happy Atoms, see Case Studies).

Lindsey Tropf, Immersed Games:

Around 2014, Amplify commissioned a bunch of educational games for the launch of the "Amplify Tablet", a touchscreen device intended for schools. Although their plans were cut short just a year later as Chromebooks established their dominance of the market, and the games have been spun off into Touch Press Games.

Also, STEMscopes, a large educational publisher, has licensed some Filament Games products and commissioned some new ones.

Contract work

E.g. museums, universities, brainPOP, local communities

Contract work: some other party approaches you with an idea/opportunity rather than the other way around. Different contracts can be at very different scales, from working with a local college professor to a big corporation like Disney.

Getting the work here is pretty much entirely a function of networking, making good impressions, and getting your name out there. Also, there's no guarantee that you'll find the kind of work you're interested in, making this option pretty close to just having a day job.

Jesse Schell, Schell Games:

A common model is that an institution wants a grant, but that grant has a requirement for some kind of public outreach. The institution puts out a request for proposals to known game companies. These companies can then pitch what they can do with that available budget, and the institution chooses which of those companies to subcontract the outreach requirement to.

It's a symbiosis; the institution takes on the work of securing the grant, the game company helps them get the grant with an attractive idea, and then they both get paid.

Brooke Morrill, Schell Games:

Schell Games takes a fair number of non-educational contracts in order to pay the bills, and then use the profit from those in order to develop its own games. Our experience developing educational games improves the way we approach developing entertainment games and vice versa, so the mix of projects yields the best possible product.

Andy Hall:

You get contract work by getting involved with your local community & letting people know what your deal is. Months later they'll hear somebody say that they need those skills.

Excellent example of this kind of local community is the Boston Indie Game Collective, where a bunch of indie devs work out of the same space and can pass overflow jobs to each other. (Wicknote: in Oregon, there's the Portland Indie Game Squad)

Unity has become a standard, so knowing it will make you a lot more hireable, able to jump onto many existing projects, and make it easier to collaborate.

Gonzalo Frasca, Dragonbox:

The problem with client-specific work — like museums — is that it doesn't scale up. You do the job and it's just done, as opposed to having something you can add to your portfolio & reap the long tail.

Private Investors

E.g. seed funding, angel investors, Indie Fund

Friends / Family: This completely depends on your situation, but it's possible for some to privately pitch to personal connections and raise enough to get started. Repayment plans correspondingly vary on situation. Be wary, though: nothing ruins a relationship quite like borrowing handled poorly.

Angel Investors: These are groups/individuals who pool their money and resources to invest in certain types of projects.

A particularly notable group for games is the Indie Fund: " a funding source for independent developers, created by a group of successful indies looking to encourage the next wave of game developers. It was established as a serious alternative to the traditional publisher funding model."

They have a particularly developer-friendly funding model — they take 25% of the game's revenue following release until they've doubled their initial investment or two years pass. You can bet that their inbox is swamped with submissions, so once again the answer is plain ol' networking.

See also: Fig, SeedInvest

Lindsey Tropf, Immersed Games:

There are angel groups you can find where 30+ angels have shared meetings. For some, you present and everyone invests separately, and in others members vote and invest together. These are very sophisticated and can take up to 6 months to close funding, depending on the group, too.

Venture Capital / Professional Investors: Venture capital can come fast and in very large quantities, but they'll be looking for a 5-10x return in 5 years. Consequently, you have to be able to scale fast and will face immense pressure to do what'll sell over what'll be most effective.

Lindsey Tropf, Immersed Games:

"Professional investors tend to invest in like 0.1% of people they screen/talk to, while SBIRs have more like a 10% acceptance rate (depending on which program). Investors CAN move faster, but that doesn't mean they will, depends on who and their state."

"The most important thing to keep in mind if you want to seek out private investors (whether angels or professional investors) is HOW they are going to get their financial return.

For professional investors, this means they expect you to have an "exit" — your business needs to be acquired, for example, and they get a proportion of those proceeds. With angels, you may be able instead to make other agreements like revenue sharing. But in general, you need to have a plan and understand these implications before you seek private investment."

Erin Hoffman, Sense of Wonder:

"Games are a hit-based-market, which is why VCs don't like to invest i

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