Announcing our funding

[DavidKaye]

There's been a lot of negative talk lately about the way that gaming is increasingly dominated by a handful of huge companies. That's why I'm really pleased and excited to announce that we, Sparkplay Media (http://www.sparkplaymedia.com), just closed $4.25m in venture financing led by Redpoint Ventures, a VC firm who backed MySpace, Netflix and Tivo among others.

While I don't think the game itself is going to be tremendously interesting to you guys as players (the QT3 audience is not our target market), I'm excited to share the news with you. We're making an MMO, but with a bit of a twist that we're still being infuriatingly vague about. Suffice to say, our business plan does not read 'copy WoW and hope for the best'.

Anyway, I am psyched! I am moving to San Francisco to make this my mission, so expect to see some posts elsewhere as I hit up resident San Franciscans for general advice and recommendations :)

Gamasutra and a few others wrote it up, which I've pasted in below.

- David

http://www.gamasutra.com/php-bin/news_index.php?story=17387

Startup developer-publisher Sparkplay Media has announced that it has secured $4.25 million in financing from Redpoint Ventures and Prism Ventureworks.

The company says it will use the funds to expand development of its first MMO, Earth Eternal, as well as other browser-based 3D multiplayer games.

Sparkplay was founded by former Iron Realms (Achaea) principals Matt Mihaly, Chris Kohnert and David Kaye, and the management team also includes veteran development consultant Martin Best as VP of production. The company indicates that its vision encompasses both MMOs and virtual worlds.

Said Mihaly, "We’ve been self-financing, and thus bootstrapping, for two years now and are incredibly excited about the chance to expand and accelerate our plans. We’re developing a different kind of game: one that combines compelling traditional MMO gameplay with new experiences that can be shared with friends on social networks and beyond."

[Thrag]

Congrats, but beware the curse of funding. Too many companies get funding and suddenly forget the frugality that allowed them to survive until that point. I've seen a lot of startups fail because the second they got funded they became totally irresponsible with money, started hiring like crazy, opened a new fancy office, etc. and wonder two years later what happened to the 20 mil.

[Alan Dunkin]

Yeah no kidding. Dual 24" Dells and Aeron chairs for everyone in your swank new top floor office suite.

--- Alan

[SirBruce]

According to the website, Earth Eternal's business plan is free-to-play, browser-based MMOG with microtransactions on top of that for avatar customization, etc. So you're not copying WoW; you're copying RuneScape and such. Not that there's anything wrong with that. :)

I hate to rain on your parade a little, but back in 2007 you said the game was fully funded. So why did you have to raise venture capital now?

[Dirt]

So what's Earth Eternal about?

[Shadari]

So what's Earth Eternal about?
The Earth. :)

[DavidKaye]

Congrats, but beware the curse of funding. Too many companies get funding and suddenly forget the frugality that allowed them to survive until that point. I've seen a lot of startups fail because the second they got funded they became totally irresponsible with money, started hiring like crazy, opened a new fancy office, etc. and wonder two years later what happened to the 20 mil.

I hear you. We bootstrapped for two years, and our previous company (Iron Realms) never took significant outside funding of any kind, so we're confident that we can continue to keep a tight reign on our spending.

According to the website, Earth Eternal's business plan is free-to-play, browser-based MMOG with microtransactions on top of that for avatar customization, etc. So you're not copying WoW; you're copying RuneScape and such. Not that there's anything wrong with that. :)

I hate to rain on your parade a little, but back in 2007 you said the game was fully funded. So why did you have to raise venture capital now?

Heh. Well, the first thing to note is that we (as a team) have been doing virtual item sales/microtransactions longer than anyone in the industry. Iron Realms adopted that business model in 1997 or so. Matt also, as far as I'm aware, invented the dual currency model: paid for credits + in-game gold, with an in-game player to player exchange so everyone (not just players who pay) has access to everything.

As for why we took funding, your take is not quite accurate. The best time to raise money is not when you have to - quite the reverse, actually. We had access to funds to take us well through Earth Eternal's release, but we saw an opportunity to raise money on favorable terms from high quality investors that would allow us to do more, and do it faster. Believe me, it was not an easy decision to make, as we were so used to the creative freedom of being entirely self funded. We looked at the market, evaluated our opportunities and took the decision. Time will tell whether that was a smart move.

[DavidKaye]

So what's Earth Eternal about?

Check out our website (http://www.eartheternal.com). It doesn't quite tell the full story, but it'll give you a rough idea. Like I said, we're not expecting to count many QT3ers among our player base: you guys are way too demanding :)

[Zep--]

OMG! It's a game about Furries!

Zep--

[SirBruce]

We had access to funds to take us well through Earth Eternal's release, but we saw an opportunity to raise money on favorable terms from high quality investors that would allow us to do more, and do it faster. Believe me, it was not an easy decision to make, as we were so used to the creative freedom of being entirely self funded. We looked at the market, evaluated our opportunities and took the decision. Time will tell whether that was a smart move.

Well, at any rate I think I'll put Redpoint and Prism on my list of companies looking to invest in MMOG development. :) Thanks for the heads up.

Bruce

[Dirt]

Ungently Touched!

According to the website, Earth Eternal's business plan is free-to-play, browser-based MMOG with microtransactions on top of that for avatar customization, etc. So you're not copying WoW; you're copying RuneScape and such. Not that there's anything wrong with that. :)
Nah. Runescape uses in game advertising. They're copying Maple Story. It's a proven business model. One that Disney is using for their online Pirates of the Caribbean game.

[DavidKaye]

Actually, RuneScape charges a $5/month subscription for full access to the world. As far as I'm aware, they only just break even on the advertising-supported free players. I don't think they do in-game ads either: just banners around the java client.

[SirBruce]

RuneScape uses advertising for the free players, but has a subscription option for goodies as well. But I thought they had added microtransactions as well? Anyway when I hear browser-based they're always the first I think of, but Maple Story might be a better analogy. Or Dofus.

Bruce

[TomChick]

Congrats, David. You guys should throw a big expensive party to celebrate and invite all of us! Open bar, plz.

-Tom

[DoomMunky]

Yeah yeah! Then we'll have a LAN party with our StusserBehemoths and frag until the sun rises over the Golden Gate.

[DavidKaye]

Thanks Tom!

Actually, Redpoint is throwing us a party at GDC but as they're footing the bill we have limited leeway with the guestlist. I think Jeff Green got an invite though :)

[Zep--]

Don't forget the cocaine....and the hookers asses to snort it off of.

Zep--

[metta]

Don't forget the cocaine....and the hookers asses to snort it off of.

Zep--

Geritol and a zimmer frame for Jeff, plz!

[bloo]

Does this mean Matt Mihaly will be posting less on Mud-Dev? ;)

(not that anyone is much, lately, I just recall seeing lots of his posts over the years)

[MyNameIsWill]

Congrats, David. You guys should throw a big expensive party to celebrate and invite all of us! Open bar, plz.

-Tom
Those are the best, huh?

[DavidKaye]

Does this mean Matt Mihaly will be posting less on Mud-Dev? ;)

(not that anyone is much, lately, I just recall seeing lots of his posts over the years)

Heh, here's hoping! He should be too damn busy.

[SorenJohnson]

RuneScape uses advertising for the free players, but has a subscription option for goodies as well. But I thought they had added microtransactions as well? Anyway when I hear browser-based they're always the first I think of, but Maple Story might be a better analogy. Or Dofus.

Bruce

Maple Story is not browser-based - it's a 821 meg downloadable client. Yes, 821 megs. And I don't remember seeing any ads inside of the game (plenty on the web-page...) It's crazy how many models there are right now, and it's not clear yet if there is a best option yet (flash vs. java vs. AJAX vs. downloadable vs. shockwave(!!!))

Good luck, David. I like the art style you've been showing (so far...)

[TomChick]

Ha ha, Soren Johnson just outed himself as a Maple Story player.

-Tom

[SorenJohnson]

50 million players can't be wrong!

... actually I had to get help from a player to figure out how to get into the tutorial, so - coupled with the huge download - I'm sort of bemused by their success.

[DavidKaye]

Thanks Soren! I know what you mean about Maple Story. We think that kind of monolithic download is a huge barrier, so we're just asking players to download a very small plugin and after that the game will be progressively cached as you play.

[SorenJohnson]

The market is so bizarre right now... if you make a list of ten things not to do (like, say, this:http://freetoplay.biz/2007/07/05/top-10-ways-to-remove-barriers-to-entry-in-mmos-and-virtual-worlds/), it takes little effort to find a counter-example for each one. This is not to say its not good advice; it's just a sign of how far we have to go to get to the best model(s) for the player.

[DavidKaye]

On the whole, that's a great list. What counter examples are you thinking about?

[AaronSofaer]

World of Warcraft comes to mind as a counterexample for a number of those.

[SirBruce]

Maple Story is not browser-based - it's a 821 meg downloadable client. Yes, 821 megs.

Yes, I know that. Some else brought up Maple Story, not me.

Bruce

[SorenJohnson]

Yes, I know that. Some else brought up Maple Story, not me.

Bruce

ah, I see, I misread your sentence. Sorry about that.

[SorenJohnson]

On the whole, that's a great list. What counter examples are you thinking about?

it is a great list... I'm just saying that there are plenty of examples of companies who have succeed without following them.

for example:
Free to Play: WoW
Little of no download: MapleStory
Deferred sign-up: RuneScape (plenty of other examples)
Easy payments: Dofus (http://tobolds.blogspot.com/2007/10/dofus-review.html)

what I was trying to say is that if there are so many people succeeding doing it "wrong", it's a sign how much room for growth there is online...

[EvilIdler]

Countdown to sensationalist article:
"Spore delayed because of addiction to Maple Story!" :P

And over 4 million dollars funding? I should poke some devs and artists at work..

[DavidKaye]

what I was trying to say is that if there are so many people are succeeding doing it "wrong", it's a sign how much room for growth there is online...

Yep. Lots of competition too of course, but that's all part of the fun...

[Lietgardis]

Blizzard is working hard on minimizing the WoW trial download -- "the goal to stream a trial version of 'World of Warcraft' to prospective new users so efficiently that they can start playing in just 10 minutes." (http://www.mtv.com/news/articles/1581456/20080212/id_0.jhtml) This guy's description (http://forums.f13.net/index.php?topic=11835.0) makes it sound great already. Their resources make me cry.

Congratulations to Sparkplay!

[DavidKaye]

They already have that working - it's very slick.

And yes, Blizzard's resources are insane. They spent more on CG movies for WoW than we have spent on the entire development of Earth Eternal to date.

[Alan Dunkin]

Those Maple Story ads sure get the point across though.

--- Alan

[jpinard]

Can I ask... why move the company to like the 3rd most expensive place in the country? Why not move somewhere super cheap to live in like Michigan? Heck, you'd probably get wicked tax breaks to boot if you were HQ'ed here. While the weather is nicer in California, I bet you're paying 50% more on overhead (not to mention housing) to be someplace like that.

[Mordrak]

This looks like it could be neat. The animal based races are a nice touch. Sure they've been done before, but these are more Disney-esque which is a better choice.

[DavidKaye]

Can I ask... why move the company to like the 3rd most expensive place in the country? Why not move somewhere super cheap to live in like Michigan? Heck, you'd probably get wicked tax breaks to boot if you were HQ'ed here. While the weather is nicer in California, I bet you're paying 50% more on overhead (not to mention housing) to be someplace like that.

Primarily, it's about access to talent. While I am sure Michigan is lovely, it's unlikely to offer us the same choice as the Bay Area.

This looks like it could be neat. The animal based races are a nice touch. Sure they've been done before, but these are more Disney-esque which is a better choice.

Thanks, that's nice to hear. One of our reasons for choosing the style was that by going a bit more stylized, we have a better chance of appealing to audiences in the East without alienating players here either. This is less likely to be the case for a game like Age of Conan, to take a random example.

[SirBruce]

Do you have to make it San Francisco? The city is expensive and hard to get to. The south bay is much nicer, and that way I could work for you guys without the long commute. :P San Jose, Santa Clara, Sunnyvale, Campbell... even Mountain View would be fine. But other than Cryptic, game studios seem averse to going any further south. :(

Bruce

[Kunikos]

Can I ask... why move the company to like the 3rd most expensive place in the country? Why not move somewhere super cheap to live in like Michigan? Heck, you'd probably get wicked tax breaks to boot if you were HQ'ed here. While the weather is nicer in California, I bet you're paying 50% more on overhead (not to mention housing) to be someplace like that.

Nevada is nice too. No state income tax FTW. ;) Reno isn't as bad as Reno 911 makes it out to be (I also have yet to see any sheriffs anywhere, just lots of city and highway cops). You're 35-40 minutes from Tahoe skiing, about 1hr 30min from Sacramento (IKEA, Frys). It also has more than one season, which is better than Las Vegas (they have both hot and HOT AS THE SUN).

[SirBruce]

Do you beg for jobs everywhere you go?

Only when I'm desperate, which is currently. (But maybe not for much longer.)

Bruce

[Mordrak]

Only when I'm desperate, which is currently. (But maybe not for much longer.)

Bruce

Err, Damn. That was a knee-jerk reply, you beat my ninja delete. Apologies. :)

[SirBruce]

Err, Damn. That was a knee-jerk reply, you beat my ninja delete. Apologies. :)

It was a fair cop. I don't mind legitimate criticisms; it's when people say stuff about me that isn't true that bothers me. :)

Bruce

[jpinard]

Primarily, it's about access to talent. While I am sure Michigan is lovely, it's unlikely to offer us the same choice as the Bay Area.



Thanks, that's nice to hear. One of our reasons for choosing the style was that by going a bit more stylized, we have a better chance of appealing to audiences in the East without alienating players here either. This is less likely to be the case for a game like Age of Conan, to take a random example.

Talent would come to you. Plus Universty of Michigan and Michigan Tech are nothing to sneeze at. BTW - Google is here...

[Alan Dunkin]

You can move to Austin, it's cheap and plenty of talent around here. Getting talent to move there, that's another issue, however.

--- Alan

[DavidKaye]

Indeed. We're pretty much set on the Bay Area for now, I think.

[checker]

Free to Play: WoW
Little of no download: MapleStory

My favorite thing is that Dofus is both a big download _and_ it's a flash game. And super successful. Hilarious combination.

Dave Perry gave a speech in Montreal where he enumerated like 50 models from Asia, and we've got these Korean academics giving a talk at GDC listing a bunch as well. As Dave said, it's still the wild west.

Chris

[MattMihaly]

Does this mean Matt Mihaly will be posting less on Mud-Dev? ;)

(not that anyone is much, lately, I just recall seeing lots of his posts over the years)

I don't think I've posted to Mud-dev in at least three or four years! (In fact, it's been about that long since I've read it or its reincarnated version.)

(Also, if I had my druthers, we'd put the company in lovely Marin county, SirBruce, but that's too unfriendly to anyone commuting from anywhere but inside of Marin or the north side of SF.)

[checker]

(Also, if I had my druthers, we'd put the company in lovely Marin county, SirBruce, but that's too unfriendly to anyone commuting from anywhere but inside of Marin or the north side of SF.)

But I've heard there's good sushi there.

Chris