I guess if such a system of development were possible the world would be a different place. If you take this a few steps backward, you just return to share holdings in development and/or publishing corporations. Perhaps the mind set of trust, cooperation, accountability, shared risk and vision are not common.

I personally think the idea of plonking $5-10 toward a game concept I really like, and a company with good track record is a no-brain-er. Now to convince 2 million others to do likewise…

http://www.taleworlds.com/index.html

The model they used was purchase during any stage of development and you immediately got access to the latest stable build and any subsequent builds. The earlier in development you purchase, the cheaper it is, and you are never required to pay any more.

Not only would this help to fund development, but it provides a more accurate ‘cost vs. quality’ for anything the customer sees. If they pay fairly early in development, they may only pay $5, so when they get their hands on the build, they aren’t inclined to notice the rough spots (as much).
It would also help to generate, and more importantly maintain, a community for the game.

They did make their game quite mod-friendly, so in the end the developers were getting even more help from the community than just financing…

You’re completely right about the importance of having a previous game and community. Even with Valve/Steam support I think it will be hard for a studios first game to get much funding.

This could see a good move to game companies and even individual developers becoming “famous” and having people invest simply because they love their games so much. Someone like Jonathan Blow (Braid) could easily do this.

Check out http://www.wolfire.com/

I’ve been following their progress and it seems they’re adding new Blog content almost daily, keeping their fans informed. Anyone who pre-purchases the game, gets immediate access to their Alpha builds to see how the game is going. (essentially funding their development).

In fact I wonder if Valve got the idea from these guys, because they’ve been in contact with Steam in order to see if anyone who pre-purchases their game can get it from Steam after its been released, Steam essentially acknowledging the previous purchase.

As they’re not a commercial games company they don’t need to worry so much about keeping everything secret from anyone so it also builds hype and interest in their game while they’re still making it.

Of course it helps that they released a previous game and have built a community for themselves. If you were attempting to get funding for an unknown game with your unknown company you’re going to have to conquer several more hurdles than they did. Obviously loads of marketing will help but that can cost money.

Cliff