Valve on Community Funding

A Gabe Newell Interview on Good Game is a video conversation with Valve's managing director as well as John Cook and Jason Holtman. The conversation with Gabe has him recounting the history of how Valve got started back at the very beginning and also includes an interesting take on piracy representing under-served customers and how copy-protection is a step in the wrong direction. A topic highlighted by Kotaku is Gabe discussing the idea that there may be a way to develop games with the community investment, rather than publisher funding. It seems the community does this when buying games, but Gabe is talking more about up-front money and how it may help with the creative end. He says:
One of the areas that I am personally super interested in right now is how we can do financing from the community. So right now, what typically happens is you have this budget, it needs to be huge, it has to be ten million to thirty million dollars; it has to be all available at the beginning of the project. And then there's a huge amount of risk associated with those dollars so all the game decisions have to be incredibly conservative.

What I think would be much better would be if the community could finance the games. In other words, ‘Hey, I really like this idea that you have and I'll be an early investor in that.' In venture capital there's a concept that your best investors are your customers, because they have 'secondary gain.' If you are successful they not only want a return on their money, but they're incredibly happy if you actually make a great game that they get to play. It would be really great if we could evolve Steam in a way that made it possible so that a developer could say, you know, 'if you want this game to start moving forward, here's the sort of 'seed round',' were people can sort of opt-in and say 'I'll pay thirty dollars and I own a piece of this game going forward.'