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ArtCraft Entertainment

ArtCraft Entertainment seeks to explore new sub-genres in the massively multiplayer online game (MMO) space, created by merging elements from different and disparate gaming genres. Their flagship title, Crowfall, exemplifies this approach, presenting players with an online experience that combines immersive role-playing with the addictive elements of a competitive strategy game.

Funding goal: $150,000 to $1,000,000


Company Highlights


  • To date, Crowfall has received over $9.9 million in funding, including more than $3 million in prior crowdfunding campaigns from over 33,000 backers.i
  • Crowfall.com also has over 146,000 registered users  and has received over 1.2 million unique visitorsii
  • In 2016, ArtCraft signed a European distribution deal with Travian Games which includes licensing fees of $2 million and an ongoing revenue share of all money collected from that region


Perks*

*All perks are individual, not inclusive of previous perks.  Specifically, you only get one perk reward matching your investment level.

All perk packages can be exchanged for equivalent store value in digital items in the Crowfall game store.

$100+ 2017 Contributor + investor badge 

$200+ 2017 Bronze + investor badge

$300+ 2017 Gold + investor badge 

$500+ 2017 Amber + investor badge 

$1,000+ 2017 Sapphire + investor badge

$2,500+ 2017 Ruby + investor badge 

$5,000+ 2017 Ruby + Medium Castle + investor badge

$10,000+ 2017 Ruby + Mountain Citadel + investor badge

**Details of the packages can be found in the Detailed Perks section below


Stretch Goals*

As certain investment thresholds are crossed, the following BONUS PERKS (in-game digital rewards) will be given to ALL investors:

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  • a Bloodwyne Fountain relic for your Kingdom (unlocked at $200,000!)
  • a small Villa personal house (unlocked at $350,000!)


...and a custom "Fallen Colossus" stronghold parcel, to build a player-run hamlet! (to be unlocked at $500,000!)

*Details of the Stretch Goals can be found in the Detailed Stretch Goals section below

Company Overview

Opportunity
In 2016, MMOs are projected to earn $19.8 billion in revenue, about 60% of all digital PC game revenue.iii By 2019, revenue is expected to reach $26 billion.iv One sub-genre of MMOs is MMORPG (massively multiplayer online role playing game), which includes notable titles such as World of Warcraft. The appeal of MMORPGs is that players develop their own characters in a persistent virtual world, usually by completing quests by themselves or as part of a group. However, most MMORPGs lack the compelling elements of strategy games, namely competition and victory. Strategy games are time-based where players must attempt to gather supplies, build resources, defend their bases, and launch attacks to ultimately achieve victory, all while knowing their opponent is doing the same thing. Unlike MMORPGs, there will ultimately be a winner. 

ArtCraft Entertainment seeks to explore new sub-genres in the MMO space, created by merging elements from different (and disparate) gaming genres. Their flagship title, Crowfall, exemplifies this approach, presenting players with an online experience that combines immersive role-playing with the addictive elements of a competitive strategy game. The aim is to capture a global MMO audience with a game that synthesizes character development, team building, competition, and social interaction.

ArtCraft Entertainment
ArtCraft Entertainment is an Austin, Texas based independent developer and publisher of cutting-edge massively multiplayer online role-playing games (MMORPGs). ArtCraft was founded by two experienced MMO executives: J Todd Coleman and Gordon Walton. Coleman and Walton have recruited an experienced team of AAA game engineers, managers, artists, and designers to build and launch Crowfall. In the video game industry, AAA, or Triple-A, is a classification term used for games with the highest development budgets and levels of promotion. A title considered to be AAA is expected to be a high-quality game, and one of the year's most anticipated titles.v


Executive Team

artcraft-todd-2.pngJ Todd Coleman, Creative Director: Todd brings a wealth of creative and entrepreneurial experience to ArtCraft. He founded Reliant Data Systems (acquired by Compuware Corporation in 1999), Wolfpack Studios, Inc. (acquired by Ubi Soft in 2004) and was the VP of production and creative director for KingsIsle Entertainment, Inc. As the co-creator and creative lead of Shadowbane, Wizard101, and Pirate101, Todd has built a reputation for pushing the boundaries of MMO design. His games have received numerous awards (including Game of the Year, Audience Choice, and Family Game of the Decade) and he was personally recognized by Gamasutra as one of the top 50 developers in the industry and by Massive Gamer magazine as the #1 Most Influential Game Developer in the World.

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artcraft-gordon.pngGordon Walton, Executive Producer: Gordon has been building games and managing game development for more than 35 years, and has spent the last 20 years managing MMO games. He was VP of Online at Origin Systems, managing Ultima Online (the first-ever MMORPG), VP and executive producer at Maxis, managing the Sims Online, and VP and Executive Producer at Sony Online Entertainment for Star Wars Galaxies. Gordon then went on to become the co-studio general manager at BioWare Austin for Star Wars: The Old Republic, and was most recently the VP and executive producer at Disney Playdom. He has personally developed more than 35 games and overseen the development of more than 200 games.

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Game Summary

Overview
Crowfall is ArtCraft's flagship title.  It is a massively multiplayer online role-playing game (MMORPG), a persistent virtual world that can be shared by hundreds of thousands (or millions) of online players. It is unique in that it has been designed as a "Throne War Simulator," offering gamers a very different in-game experience compared to traditional MMO titles. Crowfall combines the persistence of an MMO with the ability for players to change the virtual world, allowing teams to win (or lose), as in a strategy game. Thousands of players are vying for control of a virtual throne, where the only options are to win or to die.

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Gameplay
Like traditional MMOs, Crowfall has a third-person (over the shoulder) view with mouse and keyboard controls. The scoring mechanism is tied to various actions in each campaign. Players can build and destroy features within the virtual universe.  Find an old castle ruins, clear it out, and rebuild it into a fortress. Gather stone and build a stronghold at the mouth of a river. Collapse a mine to deny other players' the production of iron. Crowfall's action-based combat system allows players to engage in sword battles, throw fireballs, and even topple castle walls - all in real time, and all witnessed by thousands of other online players.

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Static Worlds
The problem with traditional MMOs is that they are inherently static, meaning the state of the virtual world doesn’t change based on the actions of the players. This model is known as ‘theme park’ MMO design, where the players are treated as passive participants in the world. The theme park model of design has some advantages; most notably, it allows the designers to retain as much control as possible over the players’ experience, so that they can homogenize it as much as possible. This homogeny is helpful to achieve scale, but, unfortunately, players eventually figure out the patterns of the game and realize they are no more the hero of the story than every other player. Once that happens, the experience becomes hollow.

Dynamic Worlds
Instead of pre-canned adventures built from a linear series of quests, ArtCraft is building worlds that are dynamic. Crowfall is built using this model, where players can make decisions and take actions that change the outcome not just for themselves but for every other player. This creates a far more engaging and immersive style of gameplay.

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Throne War Simulator
Crowfall is an MMO that players can actually win. ArtCraft calls it a "Throne War Simulator." The worlds of Crowfall feature unique maps, rules, and victory conditions. Each world is a unique strategy game, and players join teams (Factions, Guilds, or Noble Houses) to vie for control of a virtual throne. The worlds are also time limited - they last until one team conquers the map and is declared the winner. These "Campaign Worlds" can last a few weeks, a few months, or even up to a year.

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All worlds are fully customizable. In each, players can chop down trees, quarry stone, fashion tools, build houses, craft goods, and farm. They can also set up shops and trade with other players, defend their lands from an enemy clan, recruit players to be their vassals, raise an army, establish trade routes, and hire bodyguards, mercenaries, scouts, and assassins.

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In the worlds of Crowfall, there are three paths to building an Empire: Glory, Wealth, and Power. 

GLORY
Defeat enemies through brute force and strength in combat. Players can recruit an army and storm their enemy's gates, and use siege weapons to topple towers and tear down walls. The world is theirs to build, and destroy!

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WEALTH
The amassing of economic strength begins with a crafting system that leads to an intricate web of trade routes and supply lines that cross between campaigns and kingdoms. Players can invest their wealth and grow an empire - building castles, strongholds, shops, houses, temples, and guildhalls. They can craft artifacts of wondrous power, or other masterfully crafted goods, that can be bought and wielded by other players.

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POWER
The ultimate endgame - the net sum of a player's achievements across every campaign and every kingdom. Players serve as Monarch, carving their land into provinces, and recruiting vassals, noble houses, mercenary companies and merchant guilds to consolidate power under their banner.

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Eternal Kingdoms
In addition to Campaign Worlds, the game also allows players to create and manage their own guild and personal Kingdoms. Unlike Campaign Worlds, these never expire. They exist as social hubs, economic marketplaces, and guild housing for players to build cities, craft items, display trophies, and enjoy a bit of "down time" in between campaigns.

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Use of Proceeds and Business Model

Use of Proceeds and Product Roadmap
Funds will be used to complete game development of Crowfall for PC, with a scheduled launch date of mid to late 2017. Additional funding could be used for marketing and operations of the game post-launch. ArtCraft Entertainment's goal is to build up Crowfall's sales and momentum and then leverage that success to become a world-wide publisher and developer of other "community engagement" (team oriented) titles.

ArtCraft is also planning to explore additional platforms and markets for Crowfall (and subsequent titles).  This includes the possibility of porting the game to console platforms (such as Xbox ONE and PS4) as well as launching the game in additional territories (Russia, China, Japan, Korea, etc.).

Business Model
For Western markets, Crowfall plans to build out multiple revenue streams:

  • Buy-to-Play: Retail premium product. Buy once, play forever ($49.99)
  • Optional VIP Subscription: $15/month
               • Monthly VIP membership offers additional advantages and player perks.
               • 25% of current backers have opted for a package with a VIP subscription included
               • ~20-25% of players expected to use VIP post-launch
  • Micropayment Currency:
               • Virtual currency can be purchased to collect virtual (in-game) items
               • Players can purchase a "virtual kingdom" and settle it with Shops, Houses, and Castles, or collect virtual Pets and Mounts (prices range from $10 to $7,000)


    About 44% of Crowfall's current backers have opted for a pledge package that includes a VIP subscription and/or the pre-purchase of in-game items. 
    For other markets, the offering for Crowfall will likely be changed, however these will be separate "game universes" to prevent issues with pricing and game balance.  Distribution agreements in foreign territories typically include upfront licensing fees/advances plus ongoing revenue share from in-game sales.

Traction

To date, Crowfall has received over $9.9 million in funding, including more than $3 million in prior crowdfunding campaigns from over 33,000 backers.vi In 2014, Crowfall raised a Series Seed round of $2.355 million, at a post-money valuation of $10 million. In Q1 2016, it closed a $2.085 million Series Seed-1 round at a post-money valuation of $19.1 million In Q4 2016, it closed a $610k Series Seed-2 round at a post-money valuation of approximately $20.6 million.

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Crowfall.com also has over 146,000 registered users.vii The website has received over 1.2 million unique visitors, and has averaged 145,000 unique visitors per month, with 51% of visitors coming from overseas consumers. 

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Historical Financials

Costs related to the research and development of Crowfall during 2014 and 2015 totaled $1,374,306 and $3,488,790, respectively. The company conducted a Kickstarter campaign to pre-sell Crowfall, and continued to pre-sell the product on Crowfall.com after completion of the Kickstarter campaign. No pre-sale orders were fulfilled in 2015, so all proceeds have been recorded to deferred revenue, which stood at $2,224,611 as of December 31, 2015. These deferred revenues will be recognized upon completion of the revenue recognition process, which includes delivery of Crowfall. ArtCraft Entertainment had net operating loss carry forwards of $364,606 and $791,312 in 2014 and 2015, respectively. In 2016, ArtCraft signed a distribution deal for Europe with Travian Games which includes licensing fees of $2 million and an ongoing revenue share of all money collected from that region.

Industry and Market Analysis

Globally, there are 1.2 billion active gamersviii who are projected to generate nearly $100 billion in revenue in 2016.ix China is the largest market (followed by the U.S.) and accounts for one quarter of the entire global game market. Global game revenue is projected to grow at a compound annual growth rate of 6.6% over the next few years, and reach $118.6 billion by 2019.x 

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In 2015, there were 155 million gamers in the United States, four out of every five U.S. households owned a device used to play video games, and there was an average of two gamers per household.xi That year, total game purchases (video, computer, and other formats) in the U.S. totaled $16.5 billion, a 7% increase from 2014.xii

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In the U.S., strategy-based games were the most popular computer game genre (36.4% of all units sold), while shooter-based games (24.5% of all units sold) were the most popular video game genre.xiii

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Massively multiplayer online games (MMOs) encompass a wide range of genres including role-playing (e.g. World of Warcraft), shooter games, and a more recent and increasingly popular category called multiplayer online battle arenas (MOBAs), which includes games such as League of Legends. MMOs are projected to earn $19.8 billion in revenue in 2016, about 60% of all digital PC game revenue.xiv The market is projected to grow at a compound annual growth rate of 8%, and reach $26 billion by 2019.xv As more gamers, especially in Asia, shift to free-to-play games, virtual currency used to purchase virtual goods and avatars (i.e. microtransactions) is expected to account for more than 50% of revenue in the global MMO game market.xvi

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Comparables

Crowfall's main comparables are existing MMO games, almost all of which were released between the years of 2004 and 2014.

Guild Wars 2: Released in 2012, Guild Wars 2 is a massively multiplayer online role-playing game (MMORPG) developed by ArenaNet and published by NCSOFT. The game features an expansive and immersive world and a dedicated area for PvP players.  Within its first month of launch, Guild Wars 2 sold over two million copies.xvii Like its predecessor, Guild Wars, the game did not require a subscription fee, yet after selling five million units, the game changed to a free-to-play model in August 2015.xviii As of October 2015, seven million accounts had been created for Guild Wars 2.xix

ArcheAge: ArcheAge is an MMORPG developed by Korean developer Jake Song (former developer of Lineage) and his development company, XL Games. The game was released in Korea in January 2013, and in Europe and North America in September 2014 through Trion Worlds. ArcheAge is described as a "sandpark" MMORPG, which the developers say is a hybrid of the open, free-roaming style of a "sandbox" game and the more structured domains of a "theme park" game. 

Camelot Unchained: Camelot Unchained is an upcoming Arthurian fantasy MMORPG from City State Entertainment and Mark Jacobs, founder of Mythic Entertainment and known for his development of Dark Age of Camelot. The game offers the three factions of Arthurian, Tuatha De Danann, and Viking, and focuses on Realm vs. Realm, housing, and a player economy, along with crafting and other features. Launched in April 2013 on Kickstarter, the game has raised over $4.35 million to date.xx

The Elder Scrolls: The Elder Scrolls, first released in 1992, is a series of action role-playing open world fantasy video games primarily developed by Bethesda Game Studios and published by Bethesda Softworks. In 2011, Skyrim, the fifth installment to the series, sold over 18 million copies. Before that, Oblivion, which was released in 2006, sold over 7 million copies.xxi The Elder Scrolls Online, originally released in April 2014, is the first MMORPG installment of the franchise and was developed by ZeniMax Online Studios. When first released for PC, Elder Scrolls Online reported 770,000 users after just three months.xxii In 2015, the game changed from a subscription-based model to an upfront purchase cost, released console versions, and rebranded as The Elder Scrolls Online: Tamriel Unlimited.xxiii A month into that release, console-based sales totaled 800,000 on PS4 and 600,000 on xBox One.xxiv Global sales for the MMORPG installment have totaled 3.89 million units since launch.xxv

While not focused specifically on Player versus Player gameplay, the following games are notable for their success in the MMO gaming market:

World of Warcraft: Released in 2004, World of Warcraft (WoW) is an MMORPG by Blizzard Entertainment, a division of Activision Blizzard. It is the fourth released game set in the fantasy Warcraft universe, which was first introduced by Warcraft: Orcs & Humans in 1994. As of Q3 2015, WoW had 5.5 million active subscribers, down from its peak of over 12 million global subscribers in October 2010.xxvi In 2015, WoW generated $814 million in revenue, making it the fourth-highest grossing PC game of the year.xxvii

Tera: Tera is a 3D fantasy themed MMORPG developed by Bluehole Studio. The game was originally released in Korea in January 2011, but was brought to North America and Europe in May 2012 by En Masse Entertainment. Tera has typical MMORPG features such as questing, crafting, and Player versus Player action. The North American and European version originally required a subscription to play, but in February 2013, the game re-released as TERA:Rising and became free to play.xxviii After the switch, users jumped to 1.4 million, with North America contributing the majority of new players.xxix The free-to-play model also drove up Tera's revenues. In 2013, Tera generated worldwide revenues of $236 million.xxx

Investment Terms

Security Type: Preferred Equity
Round: Series Seed-3
Round Size: Min: $150,000 Max: $1,000,000
Pre-money Valuation: $22 million
Price per share: $1.1173

Detailed Perks

*All perks are individual, not inclusive of previous perks.  Specifically, you only get one perk reward matching your investment level.

All perk packages can be exchanged for equivalent store value in digital items in the Crowfall game store.

$100+ 2017 Contributor + investor badge 

  1. Access to Beta 2 and all subsequent tests
  2. Digital copy of Crowfall
  3. Allows you to post on the Crowfall forums!
  4. Thanks in the credits as a 2017 Patron
  5. 2017 Early Backer Avatar Frame
  6. 2017 Early Backer Forum Badge
  7. All 2017 Badges and Frames up to Early Backer level


$200+ 2017 Bronze + investor badge


  1. Access to Alpha 3 and all subsequent tests
  2. 2 months VIP membership
  3. Allows you to post on the Crowfall forums!
  4. Digital copy of Crowfall
  5. Thanks in the credits as a 2017 Patron
  6. 2017 Bronze Avatar Frame
  7. 2017 Bronze Forum Badge
  8. All 2017 Badges and Frames up to Bronze level
  9. Copy of Digital Soundtrack
  10. Copy of Digital Art Book
  11. Quarterhorse summoning figurine


$300+ 2017 Gold + investor badge 


  1. Access to Alpha 2 and all subsequent tests
  2. 1 month of VIP membership
  3. Allows you to post on the Crowfall forums!
  4. Digital copy of Crowfall
  5. Thanks in the credits as a 2017 Patron
  6. 2017 Gold Avatar Frame
  7. 2017 Gold Forum Badge
  8. All 2017 Badges and Frames up to Gold level
  9. Copy of Digital Soundtrack
  10. Copy of Digital Art Book
  11. Quarterhorse summoning figurine
  12. Warhorse summoning figurine
  13. A Small Fort for your personal kingdom


$500+ 2017 Amber + investor badge 


  1. Access to Alpha 2 and all subsequent tests
  2. 2 months of VIP membership
  3. Allows you to post on the Crowfall forums!
  4. Digital copy of Crowfall
  5. Thanks in the credits as a 2017 Patron
  6. 2017 Amber Avatar Frame
  7. 2017 Amber Forum Badge
  8. All 2017 Badges and Frames up to Amber level
  9. Copy of Digital Soundtrack
  10. Copy of Digital Art Book
  11. Quarterhorse summoning figurine
  12. Warhorse summoning figurine
  13. Nightmare summoning figurine
  14. A cottage for your personal kingdom
  15. A Medium Fort for your personal kingdom and a starting title of Knight or Lady
  16. 5 bonus tax-free parcels for your personal Kingdom (5 total)


$1,000+ 2017 Sapphire + investor badge


  1. Access to Alpha 1 and all subsequent tests
  2. 12 months of VIP membership
  3. Allows you to post on the Crowfall forums!
  4. Digital copy of Crowfall
  5. Thanks in the credits as a 2017 Sapphire Patron
  6. 2017 Sapphire Avatar Frame
  7. 2017 Sapphire Forum Badge
  8. All 2017 Badges and Frames up to Sapphire level
  9. Copy of Digital Soundtrack
  10. Copy of Digital Art Book
  11. Quarterhorse summoning figurine
  12. Warhorse summoning figurine
  13. Nightmare summoning figurine
  14. Two cottages for your personal kingdom
  15. Bonus tax-free parcels of land for your personal kingdom - 10 Total
  16. One cathedral, dedicated to the god of your choice, for your personal kingdom
  17. A Small Keep for your personal kingdom and the starting title of Knight or Lady


$2,500+ 2017 Ruby + investor badge 


  1. Access to Pre-Alpha 2 and all subsequent tests
  2. Access to the Development Partner's Forum
  3. 24 months of VIP membership
  4. Allows you to post on the Crowfall forums!
  5. Digital copy of Crowfall
  6. Thanks in the credits as a 2017 Ruby Patron
  7. 2017 Ruby Avatar Frame
  8. 2017 Ruby Forum Badge
  9. All 2017 Badges and Frames up to Ruby level
  10. Copy of Digital Soundtrack
  11. Copy of Digital Art Book
  12. Quarterhorse summoning figurine
  13. Warhorse summoning figurine
  14. Nightmare summoning figurine
  15. Three cottages for your personal kingdom
  16. A villa for your personal kingdom
  17. Bonus tax-free parcels of land for your personal kingdom - 20 Total
  18. One cathedral, dedicated to the god of your choice, for your personal kingdom
  19. Exclusive stronghold (Small Castle 2016) for your personal kingdom and the starting title of Baron or Baroness


$5,000+ 2017 Ruby + Medium Castle + investor badge


  1. Access to Pre-Alpha 2 and all subsequent tests
  2. Access to the Development Partner's Forum
  3. 24 months of VIP membership
  4. Allows you to post on the Crowfall forums!
  5. Digital copy of Crowfall
  6. Thanks in the credits as a 2017 Ruby Patron
  7. 2017 Ruby Avatar Frame
  8. 2017 Ruby Forum Badge
  9. All 2017 Badges and Frames up to Ruby level
  10. Copy of Digital Soundtrack
  11. Copy of Digital Art Book
  12. Quarterhorse summoning figurine
  13. Warhorse summoning figurine
  14. Nightmare summoning figurine
  15. Three cottages for your personal kingdom
  16. A villa for your personal kingdom
  17. Bonus tax-free parcels of land for your personal kingdom - 20 Total
  18. One cathedral, dedicated to the god of your choice, for your personal kingdom
  19. Exclusive stronghold (Small Castle 2016) for your personal kingdom and the starting title of Baron or Baroness
  20. 2017 Medium Castle


$10,000+ 2017 Ruby + Mountain Citadel + investor badge


  1. Access to Pre-Alpha 2 and all subsequent tests
  2. Access to the Development Partner's Forum
  3. 24 months of VIP membership
  4. Allows you to post on the Crowfall forums!
  5. Digital copy of Crowfall
  6. Thanks in the credits as a 2017 Ruby Patron
  7. 2017 Ruby Avatar Frame
  8. 2017 Ruby Forum Badge
  9. All 2017 Badges and Frames up to Ruby level
  10. Copy of Digital Soundtrack
  11. Copy of Digital Art Book
  12. Quarterhorse summoning figurine
  13. Warhorse summoning figurine
  14. Nightmare summoning figurine
  15. Three cottages for your personal kingdom
  16. A villa for your personal kingdom
  17. Bonus tax-free parcels of land for your personal kingdom - 20 Total
  18. One cathedral, dedicated to the god of your choice, for your personal kingdom
  19. Exclusive stronghold (Small Castle 2016) for your personal kingdom and the starting title of Baron or Baroness
  20. 2017 Mountain Citadel


Detailed Stretch Goals

Already Unlocked

Due to the total amount of funds raised, ALL investors will now receive...

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  • a VILLA (personal house) to place in your guild or personal kingdom
  • a WOODLAND GROVE resource parcel to add to your personal kingdom


At $500,000

If the total raise amount crosses $500,000, ALL investors will also receive...


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"Fallen Colossus" Hamlet Parcel
  • Like any stronghold parcel, this can be installed in your Eternal Kingdom and used by you (and a few friends) to build a player-run town, in this case a two-cell hamlet.
  • This is a UNIQUE parcel, meaning that the ONLY way to get one of these is to participate in the Title III offering before it ends.

Webinar Questions Answered


Are you looking at any licensed properties-- either licensing to build a world, or licensing items based on your IP?

We are not against using licenses for future products. The question comes down to value creation for the organization; generally, we believe we can create more value through IP creation and ownership, but if we have an opportunity to create a game based on a property that is large enough, that equation could flip.

We are definitely open to the idea of licensing Crowfall for other uses/mediums, but that will only be viable after the game is popular (and successful).

In your presentation, you mentioned "Crowfall is Artcraft's first project..." with a subtle hint toward follow-on projects... Post-Crowfall official launch (which I deem will be extremely successful, in my humble opinion), can you please give a non-committal range for each below:

First: thanks for the words of encouragement!  Obviously, we hope so, too!

 Can you estimate how much transferable Crowfall work may be applied to future projects that ArtCraft is considering developing in-house?

It really depends on the specifics of the new project, but it could range from a low of 20% to a high of 40-50%. 

As Todd mentioned in the webinar, there is another huge benefit beyond cost/time reduction - the reuse of tools, technology and learning often allows you to focus more effort on the unique aspects of the new game.  

How many such projects are kicking around in your "big brains"? 

More than we could get done in our lifetimes! Seriously, there are lots of interesting and potentially great ideas, the trick is picking the ones with the right market potential and market timing, and then getting the right team and resources to execute.

Possible licensing of your platform technology to other "game developing houses"?

It's possible, and we have talked about it internally, but this is a fundamentally different business than creating new consumer products.  It would need to be an independent business unit, managed separately from our core business.

Gained lead time on future ArtCraft projects, as a result of the learning curve associated with both your past/vast experiences in the gaming industry, and particularly with your most recent current start-up infrastructure, for future market dynamics for sustainability.....

This is answered above to some degree.  The time it takes to build and coalesce a team is not really something you can greatly accelerate, but having people with institutional and code knowledge, added to new team members can offer some acceleration in building new games.  The biggest time savings actually lies in "not making the same mistakes that you have made before", that's the real benefit of having a very experienced team.

Have you ever considered sponsoring or supporting game stores who offer PC/Internet Cafes?

This is not a major consideration in our domestic market, and it is something we would leave to the judgement of our regional partners in other markets where this is a significant factor.  If it becomes a significant trend for North American PC games, then of course we would consider it!

How did you build the community before Kickstarter?

We used some of our unfair advantages.  Both Todd and Gordon have access to the gaming press, due to our history in the industry.  We also have direct contact (via email and social media) with a number of the gaming "thought leaders"; influential guild leaders, streamers, etc. 

We started with a teaser website that we called our "Manifesto", it was a single page that, in a few short sentences, denounced the current slate of game offerings and boldly declared our intent to create something different.  Players could click "I agree" and sign up for our mailing list (or click "I disagree", and be forwarded to the registration page for World of Warcraft.)

Over the next 60 days, leading into our crowdfunding campaign, we played a game with our burgeoning community.  We called the game "guess what game we are building" and we put our daily teasers like concept art, lore or developer interviews to explain our vision in an intriguing and engaging fashion. 

Todd called it the "game of rampant speculation", playing on the fact that our players understand game design and could use the teasers and tidbits of information to surmise the whole of the design.  At the launch of the crowdfunding Campaign, we revealed the design in full (and we had amassed over 50,000 registered players at that point).

How do you know that the new MMO market is empty because of distractions, VR/mobile/moba/etc, and not just writing on the wall for MMOs? ESO seems to be a similar product, how are they fairing?

It's not that the market is empty, or the revenue level would be falling (it's not).  What's interesting is the pipeline of new games in progress is very shallow/sparse.  There are almost no MMO games announced to be coming from major western publishers (or from the major Asian publishers, either).  This is a major change from the last decade or more, when it was not uncommon to see 20-40+ announced games from major publishers in the pipeline.  Less competition for the same customers is good when you are a supplier.

While ESO is certainly an MMO, it is much more similar to World of Warcraft than Crowfall, with a development budget in the range of a hundred million of dollars.  We don't have access to their internal numbers, but they seem to be doing well from their published accounts, particularly once they released on console.

How long do you think Crowfall should last?

We hope it lasts a decade or more!  Successful MMO games do tend to have very long lifespans.  The real answer is that an online game will last as long as players remain engaged with the product and it has cash flow above its operating expenses.

How much effort did you guys put into marketing your crowdsourcing campaign?

I think you mean crowdfunding campaign (Kickstarter).  We did as much public relations (press coverage) as we could, and we were very engaged with our backers via our forums and social media. 

In terms of traditional marketing, very little.  We did two (very small) targeted test ad buys during the Kickstarter and from those tests we quickly determined that it was not possible to generate a positive ROI on crowdfunding backing (specifically, spending $1 on advertising did not generate $1 return in crowdfunding).  While occasionally we boost a post on Facebook, we don't plan to spend real advertising money until we are launching Crowfall later in 2017.

That said, we will certainly keep testing, and if we find that we can drive new pledges with a ROI, we could always elect to move some of those efforts forward!

I think you're right about the problem with developers creating "WOW plus..." concepts. How would you explain that Crowfall is not ALSO a "WOW plus..." idea?

That's probably a dissertation sized question!  A quick answer, though, is to look at the basic structure of WOW, and similar titles.  In a given session, players cooperate in small groups to complete quest lines, which are narrative wrappers around a common activity (fighting monsters.)

Crowfall doesn't using questing at all.  The game is about competing with other other players to gather limited resources to survive, build and siege strongholds, and conquer the world. 

I'd like to get an overview of the company culture, as well as the Talent Strategy.  In your "Company Highlights" section of MicroVentures, you mention that Crowfall has received almost $10 million in funding to date. What influenced your decision to get involved in equity crowdfunding through MicroVentures, giving backers a piece of your pie, versus reward crowdfunding, through Kickstarter or Indiegogo, for instance.

Three questions in one!

a)Company culture.   We think of our company culture as performance-based, team-oriented and accountable.  We come in to work during our work hours, and we work in groups to accomplish the tasks that make up Crowfall.  We have not enforced "crunched" and it is not part of our ongoing team management strategy, but instead have been successful hiring people who want to succeed and are willing to put in the focus and commitment to make that happen. 

We operate under an agile development paradigm, and individuals commit to goals and are responsible for achieving them.  We work as a team of sub-teams, as many tasks require multiple skillsets to accomplish.

We have an extremely tight-knit group of professionals who are amazingly good at what they do.  We have very low turn-over, and haven't had any significant challenge recruiting great people.

b)Talent strategy - We hire for talent + team fit.  The most talented person only works if they can work in concert with the people already on the team.  Given the founders experience, they have a deep network of people to draw on as needs arise.  That said, our team is currently ~2/3rds people who have worked with the founders previously, and ~1/3rd new talent.  We currently have no open positions. 

Why Equity crowdfunding?

We see crowdfunding as core to our company DNA.  When we started our company we knew we'd do a rewards-based (Kickstarter) crowdfunding campaign for our game. The 2012 Jobs Act had been passed and we talked about participating in an equity crowdfunding even then, but the rules to allow it were not released until this year.  We believe in being accountable to our players and our fans first and foremost, and adding consumer crowdfunding seemed like a natural extension of that philosophy.

What are the technical requirements for the game? minecraft can be played pretty much anything. likely one of the main reasons it did so well.   PC, Mac, Linux?

We are a PC-only game, at least for launch.  Crowfall is a game targeted for the more "hard core" gamer, so it will require a gaming machine-but we are mindful of working to keep the machine requirements as low as possible, to maximize our potential audience.

As we mentioned in the webinar, we believe there is a significant opportunity for Crowfall in the console market and it is something we hope to explore after shipping the PC version.

We are certainly open to exploring other markets, platforms and ecosystems when we can make the business case for them, and have the resources to do so!

What historical margins are you aiming for?

Historically MMO games have generated gross margins in excess of 40-50%.  The actual margins we will make will be very dependent on both the games' general success level and the market conditions at the time of launching the game commercially.

What is different about the Asian markets compared to the European or North American markets?

This is another question someone could write an entire book on!  First, not all of the "Asian markets" are the same, there are significant differences between even the three major markets (China, Korea, Japan).  And the "rest of Asia" market has exploded into a significant market too! 

A game like ours we hope will be well-accepted in Asia due to our focus on PvP competition and group dependency dynamics, both which you see expressed in the most successful MMO games in the Asian markets.  The challenges revolve around localizing (and culturalizing) the content of the game so that it turns on, rather than turns off the Asian consumer. 

At some point, we will find a partner (or multiple partners) to help us move into these territories.  Those partners can typically be relied on to provide culturalization, localization, marketing, operations, billing and support. We also expect our business model may have to adapt for the game to work well in Asian markets, and this work is also something we expect our Asian partner(s) to provide.

What is the typical revenue share percentage in the industry for distribution internationally?

This is difficult to say with authority, as so many of these deals are not public.  To further complicate matters, the calculation doesn't always come down to a simple "percentage" as there is always a negotiation around what cost(s), if any, are removed from the gross revenue prior to the calculation of the revenue share between the partners.

What we can say is that most deals involve either a fee or royalty advance at the beginning a deal, followed by some calculated royalty percentage paid monthly or quarterly after the game is launched.  We would typically negotiate for a royalty in the range of 20 to 35% of the game gross receipts and a guaranteed marketing and operations budget.

What other community touch points do you plan beyound the game itself? forums, mobile apps, etc? How would those be unique?

We currently have a very active website, forums and social media presence for Crowfall.  We hope to add a mobile access to the game post-launch that allows for appropriate interface to some game data and systems. 

You said that you appeal to all 4 of Bartle's Taxonomy gamer personalities. The "Social" and "Killer" personalities I think are more obvious, but could you provide some examples/plans/concepts that would  appeal to "Achievers" and "Explorers"?

Of course.  That chart is a great way of breaking down your game design to your key areas of strength (and potential weakness).  As you note, we don't expect to be the "best game" for all four of those player types, but we do expect that we can provide great features and content to appeal to each of them.

Explorers is easy, each of our campaign worlds is unique and must be explored to maximize the chances of winning the campaign.  Players begin each Campaign surrounded in a "fog of war" and exploration will be absolutely critical to the survival of both the individual and the guild or faction.

Achievers come in many forms, including players who specialize in combat, harvesting, crafting and mercantilism (building a merchant empire).  We are building systems that are incredibly deep, allowing for complex emergent behaviors and playstyles.  The three pillars of advancement in the game are: Glory (combat), Wealth (economy) and Power (social).  All of these are viable forms advancement paths for the Achievers.


Risk Factors

THE SECURITIES OFFERED INVOLVE A HIGH DEGREE OF RISK AND MAY RESULT IN THE LOSS OF YOUR ENTIRE INVESTMENT. ANY PERSON CONSIDERING THE PURCHASE OF THESE SECURITIES SHOULD BE AWARE OF THESE AND OTHER FACTORS SET FORTH IN THE COMPANY'S FORM C OFFERING STATEMENT AND SHOULD CONSULT WITH HIS OR HER LEGAL, TAX AND FINANCIAL ADVISORS PRIOR TO MAKING AN INVESTMENT IN THE SECURITIES. THE SECURITIES SHOULD ONLY BE PURCHASED BY PERSONS WHO CAN AFFORD TO LOSE ALL OF THEIR INVESTMENT.

The risks associated with our company include the following. Potential inability to attract, recruit and retain and develop necessary personnel, high level of competition, government regulation of use of individually identifiable data and issues relating to loss or theft of customer data, potential for security breaches and disruptions, the company's success depends on board and executive officers who may leave the employ of the company, the capital being raised is not enough to sustain the company's current business plan, lack of key man life insurance on executives and other key personnel, lack of audited financial statements, risks associated with properly calculating the company's tax liability, the fact that the company is not subject to Sarbanes-Oxley regulations and related controls and safeguards required of public companies, changes in employment laws or regulation could harm the company's performance, fluctuations in customer mix could impact financial performance, potential fluctuation of operating results, need to attract qualified customer service and technical support personnel, effect of cyclical, volatility or extended downturn in the United States or worldwide economy, ability to stay ahead of rapid technological change and dependence on new product development, failure to obtain new clients or renew existing clients on favorable terms, reliance on subcontractors, potential impact of military actions, global terrorism, natural disasters and potential political unrest.

The risks associated with the securities the company is offering include the following.  Restricted nature of the securities and lack of liquidity, the fact that the offering is not registered under federal or state securities laws, there is no guarantee of return on an  investor's investment, the majority of the company owned by a small number of owners, the company's ability to extend the offering deadline, potential dilution of your ownership interest in the company, the fact that the security is an equity security and not a debt security, and the potential that the warrants may expire worthless.

Endnotes

i.  https://www.crowfall.com/en/funding/

ii.  Ibid.

iii. https://www.superdataresearch.com/market-data/mmo-market/

iv. http://connectedconsumer.osborneclarke.com/digital-entertainment/key-trends-driving-the-mmo-gaming-market/

v. https://en.wikipedia.org/wiki/AAA_(video_game_industry)

vi. https://www.crowfall.com/en/funding/

vii. Ibid.

viii. http://www.marketwired.com/press-release/global-digital-gaming-market-estimated-grow-cagr-229-analysis-trends-forecast-2015-2020-2098742.htm

ix. https://newzoo.com/insights/articles/global-games-market-reaches-99-6-billion-2016-mobile-generating-37/

x. Ibid.

xi. http://www.theesa.com/wp-content/uploads/2015/04/ESA-Essential-Facts-2015.pdf

xii. http://www.theesa.com/wp-content/uploads/2016/04/Essential-Facts-2016.pdf

xiii. Ibid.

xiv. https://www.superdataresearch.com/market-data/mmo-market/

xv. http://connectedconsumer.osborneclarke.com/digital-entertainment/key-trends-driving-the-mmo-gaming-market/

xvi. Ibid.

xvii. http://www.inquisitr.com/331128/guild-wars-2-sales-break-two-million-mark/

xviii. http://www.eurogamer.net/articles/2015-08-27-arenanet-explains-guild-wars-2-going-free-and-the-addition-of-raids

xix. https://www.guildwars2.com/en-gb/news/the-journey-is-just-beginning/

xx. https://store.camelotunchained.com/

xxi. http://www.forbes.com/sites/archenemy/2015/07/20/the-resounding-whimper-of-the-elder-scrolls-online-release/#320599545ce9

xxii. http://www.forbes.com/sites/archenemy/2015/07/20/the-resounding-whimper-of-the-elder-scrolls-online-release/#320599545ce9

xxiii. http://www.vg247.com/2015/01/21/elder-scrolls-online-no-subs-ps4-pc-xbox-one/

xxiv. http://www.forbes.com/sites/northwesternmutual/2016/10/26/will-economic-pessimism-soon-give-way-to-a-more-positive-outlook/#2e486382449c

xxv. http://www.vgchartz.com/gamedb/?name=Elder+scrolls+online

xxvi. https://www.cnet.com/news/world-of-warcraft-subscriber-base-hits-12-million/

xxvii. https://mmos.com/news/superdatas-2015-stats-place-league-of-legends-and-clash-of-clans-at-the-top

xxviii. http://tera.wikia.com/wiki/Tera

xxix. http://venturebeat.com/2013/03/20/tera-mmo-has-more-subscribers-as-a-free-to-play-game-than-when-it-required-a-subscription/

xxx. http://www.gamesindustry.biz/articles/2014-07-18-the-old-republic-earned-usd165-million-last-year-report