The_White_Rose
Member
If all the investors back out, what happens?
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Psychonauts 2 needs to sell over 2 million copies at $60 for Fig Investor break even
- Thread starter hollomat
- Start date
Aren't they locked in at this point?
Spiritwalker
Member
Yeah, they're screwed if this is accurate. Most people got Psychonauts for like a dollar through bundles or Steam sales.
Nope apparently since they did not have approval the first project was just reserving a place to purchase it after finalization. However they are not required to now so they are going to lose most of those backers probably since it is now a waste of time and money.
No. the investment amount was based on investors "reserving" an investment.
The investors have no obligation to make that investment and can back out if they want to. The investment in Wasteland 3 works the same way and although $2.2 has been reserved by investors, none of that money will be collected until the offering is approved by the SEC and investors actually submit the money (could take 9 months if it takes the same time as psychonauts 2).
They will have less funds than anticipated and they'll need to either:
1) Reduce the scope of the game
2) Increase the funding coming from Double Fine
3) Increase the funding coming from the unnamed Large investor
4) Seek an alternative source of funding
5) Cancel the game
Ah okay, either way I am sure Psychonauts 2 will get finished which I am happy about, but this is why I didn't invest and just backed because there were a bit too many unknowns.
That includes investment promises of $2M which have not yet been collected. So about 50% of the money still needs to be collected and there's a good chance most of it won't be.
Lasthope106
Member
I don't really understand why people are freaking out. It's an investment, and all investments come with risk. You have the data, make a decision on your own based on it. Who knows, it could end up being the next GOTY - highly unlikely - but that's what putting your money where your mouth is all about.
I plan to buy it at full price when it launches. Tim & Co. deserve that from me.
I plan to buy it at full price when it launches. Tim & Co. deserve that from me.
How very misleading.
2 million copies at 60 bucks? In what universe does anyone think that is going to happen?
My guess would be they need to get to $30 in order to get some decent sales on this type of game. Especially because most of the die hard Psychonauts fans already backed this and thus already have a copy.
The average price for the game when all is said and done will probably be around $15. That means they need to sell....6 million copies? And that is just for investors to get their initial investment back? Yikes.
My guess would be they need to get to $30 in order to get some decent sales on this type of game. Especially because most of the die hard Psychonauts fans already backed this and thus already have a copy.
The average price for the game when all is said and done will probably be around $15. That means they need to sell....6 million copies? And that is just for investors to get their initial investment back? Yikes.
kimifan141
Member
Psychonauts started off well for me and then it became tiring and haven't it played it again since.....which reminds of brutal legend...oh...
I looked into FIG and it's basically a scam if you want to make money. The deck is stacked against public investors. If you want to support a game to see it be made that is fine but Kickstarter seems to be a better alternative for this. The point of FIG is to invest and make money back but it's only good for the people looking to get your money. Take your money elsewhere to invest, better opportunities.
Triggerhappytel
Member
It's only a cool method to invest if the terms offered are any good though. Otherwise there's already a much more popular and well-known crowdfunding site out there called Kickstarter. Which, ironically, Double Fine helped push into the mainstream for videogame projects.
This is not a risky investment. This is the equivalent of funding a Uwe Boll movie. The only reason to do this is for tax purposes.
SmokedMeat
Gamer™
Yeah, that's not happening. Good luck selling 500,000 at $60, let alone 2 million.
Triggerhappytel
Member
So, I don't know if this has been asked, but is it a bit shady that they changed the terms of the investment in the 9 months while this SEC stuff was finalised? I mean, on the emails sent out to smaller investors who'd reserved a 'spot' so to speak, is it clearly marked that the terms of investment have changed, or that there is a screen where you have to review the minutiae of the deal before it is finalised?
One of the emails notes that the new offering has changes in the investment structure but doesn't go into the details. However in Figs defense, now that there is an actual offering, what they can and can't say about the investment is dictated by the SEC and I'm sure stuff like the break even chart they had back in January wouldn't fly.
Before finalizing your investment, you have to sign some agreements digitally saying that you have read through and agree to the offering documents.
I'm pretty sure I can see the reason for the change though. Currently FIG gets 9.5% of the gross retail price of any copies sold ($5.66 if it sells for $60). Currently only 30% of this gets paid to investors, but the initial breakeven (the silicon angle link in the OP) assumes 100% of this gets paid to investors instead of 30%.
Not sure why the change from 100% to 30%. It's very significant and investors are getting 1/3 of what was initially presented
OrbitalBeard
Member
A risky investment is one in which you actually have a shot of making a profit.
This isn't that. No one outside of the developers and Fig are going to be getting anything more than a copy of the game and some swag.
Storm Chamber
Banned
I think the word you're looking for is "donating"
This post is bizarre. That's not what investment is about. I guess some people might actually invest with that mindset, but I'm absolutely sure they are the vast minority. Why wouldn't they donate then, if their main goal is "fulfilling passion projects"?
CrichtonKicks
Member
This is why FIG is so scummy:
Psychonauts 2 need $3.3 million to fund. It made $3.8 mm. So if they end up with less than $3.3 million on hand, when all is said and done, the project should never have gone through. Except the normal backer money has already been taken. So the nearly $2mm in backer funds should be refundable but it won't be.
Backers were potentially defrauded.
Says it will fund "an amount". They need to be up front with specific amounts. Because if they don't completely make up the difference to $3.3 million then the project should be canceled and all backer money refunded.
After all of this, I won't be participating with FIG. Even if Pillars 2 uses it.
Shao Kahn Brewing a Stew
Banned
I signed up for wasteland 3, but I was iffy with the process and the return (if any). I didn't pledge any yet...
Question: Can existing investors back out? Is there any monetary loss?
For Wasteland 3, since you've just reserved a spot, you can definitely back out. Whenever the offering is approved by the SEC,and they email you asking to confirm your investment, either tell them you don't want to make the investment anymore or just don't respond.
For Psychonauts 2, even if you've agreed to the investment and sent the investment money to FIG, you should be able to back out for the time being. The money is currently just going to an escrow account until they've received all the investment amounts.
For Wasteland 3 there definitely won't be any monetary loss and for Psychonauts 2 there shouldn't be either.
They could also resubmit their SEC filing with revised terms that doesn't clearly give Fig investors a small residual claim of cash flows. I highly doubt the break even for the developer and private investor are that low. I understand that they maybe shouldn't be at the same level due to substantial risks that the other investors bear, but this is a joke.
They clearly aren't going to do that. As far as I can tell they don't actually want to make this a serious investment platform because such a low rate of return will kill it.
Funny enough, it mentions in that disclosure that 0% of funds from DLC and expansions will go to the investor pool.same goes for the planned VR Psychonauts game or any Psychonauts 2 sales on VR platforms.
Using UE4 probably cut a lot of costs already while giving us amazing visuals. Also they are getting some money from an outside investor.
Getting sponsors would probably be good though
Reading the original article, isn't the ROI 60% ($300 profit on a $500 investment)? That still seems well above general market returns for it to be a realistic outcome (or so high risk that a 60% ROI is what makes it worthwhile). Either way, it's poor form from them to change the information presented in a discreet manner like that.
You're right. Updated the OP with the correct numbers.
Yeah the reason the original ROI is so high is because the risk is so high. Even selling 1.7M copies at an average retail price of $30 is unlikely, going off the sales of the original psychonauts. Based on the new terms even getting out with only a 10% loss seems impossible.
Waddle Dee
Member
Ouch. I want the game to do well, as I quite liked the original, but this looks like it's gonna be the end of the road for the series.
Delusibeta
Banned
The problem is that Fig has dramatically decreased the probability of an investor making any profit by a couple of orders of magnitude. This will likely result in investors backing out, lowering the amount of money Double Fine will receive. When you consider that there also backer money in play (which has already been collected in full), and you have a giant mess that fully deserves to blow up in Fig's face.
NoPiece
Member
They only have 24,109 backers, so there are probably quite a few die hard fans and regular fans that didn't back it, and will buy it. But getting 2 million sales, let alone 6, seems very unlikely.
People who invest in games also want to support those games being made, there's obviously tons of stuff you can invest in that gives you way better return on your investment if you're only looking at the financial angle.
(Also posting this in the reddit thread since the author of this thread referenced it but left out the detail about 30% being a minimum on dividends, which is a pretty fundamental omission to his analysis) You can find that post here, but there are also inaccuracies in that math.
I'd love to respond in more detail, but we're heavily regulated and everything has to go through a process, so it makes responding on forums kind of difficult. For instance, I can't respond about tax questions, then I'm giving tax advice - I can't make certain statements about financial analysis, because they could be viewed as investment advice, or could be used later as a forward looking statement. Anyway, it makes having an active dialog very limited and delayed.
I can tell you that the 30% is a minimum that's there to give investor confidence that we intend to pay at least that amount, and we're not limited to that, we can pay more. I can't be more detailed than that because it then needs to go through the process, filed with the SEC, etc. I can tell you that we have been actively evaluating how to communicate/illustrate this more concisely, and that solution could potentially include altering the minimum for other games, since we have to use the minimum in all our illustrations, and that seems to be causing a lot of confusion on this point.
I would encourage anyone starting detailed threads regarding new business models and filings to also examine other filings and compare them to our statements. Without that context, it's easy to draw conclusions and arguments that are largely based on hyperbole.
And also, to echo other's comments, our aim is to give people an option to invest larger amounts of money (instead of just donating them), and in so doing help us support a game. In return, they get the opportunity for a return based on the financial performance of that game. We think that's what's missing from the current ecosystem and we're proud to provide another alternative to developers and gamers.
~~~
An offering statement relating to Fig Publishing, Inc.s Fig Game Shares - PSY2 has been filed with the U.S. Securities and Exchange Commission and has been qualified. Prior to any investment in Fig Game Shares - PSY2, you should review a copy of the offering circular included in such offering statement by clicking on the following link: Fig Game Shares - PSY2 offering circular, or by requesting a copy by phone at 415-689-5789 or by writing to Fig at 599 Third St., Suite 211, San Francisco, CA 94107. No offer to sell any securities, and no solicitation of an offer to buy any securities, is being made in any jurisdiction in which such offer, sale or solicitation would not be permitted by applicable law.
I'd love to respond in more detail, but we're heavily regulated and everything has to go through a process, so it makes responding on forums kind of difficult. For instance, I can't respond about tax questions, then I'm giving tax advice - I can't make certain statements about financial analysis, because they could be viewed as investment advice, or could be used later as a forward looking statement. Anyway, it makes having an active dialog very limited and delayed.
I can tell you that the 30% is a minimum that's there to give investor confidence that we intend to pay at least that amount, and we're not limited to that, we can pay more. I can't be more detailed than that because it then needs to go through the process, filed with the SEC, etc. I can tell you that we have been actively evaluating how to communicate/illustrate this more concisely, and that solution could potentially include altering the minimum for other games, since we have to use the minimum in all our illustrations, and that seems to be causing a lot of confusion on this point.
I would encourage anyone starting detailed threads regarding new business models and filings to also examine other filings and compare them to our statements. Without that context, it's easy to draw conclusions and arguments that are largely based on hyperbole.
And also, to echo other's comments, our aim is to give people an option to invest larger amounts of money (instead of just donating them), and in so doing help us support a game. In return, they get the opportunity for a return based on the financial performance of that game. We think that's what's missing from the current ecosystem and we're proud to provide another alternative to developers and gamers.
~~~
An offering statement relating to Fig Publishing, Inc.s Fig Game Shares - PSY2 has been filed with the U.S. Securities and Exchange Commission and has been qualified. Prior to any investment in Fig Game Shares - PSY2, you should review a copy of the offering circular included in such offering statement by clicking on the following link: Fig Game Shares - PSY2 offering circular, or by requesting a copy by phone at 415-689-5789 or by writing to Fig at 599 Third St., Suite 211, San Francisco, CA 94107. No offer to sell any securities, and no solicitation of an offer to buy any securities, is being made in any jurisdiction in which such offer, sale or solicitation would not be permitted by applicable law.
SavoyPrime
Member
I'm a proud supporter of Psychonauts 2, cause I really enjoyed the first. But no way I'm investing in it. I seriously doubt it will sell that many copies. By time it's all said and done, I would be shocked if it did over 500K to be honest. And that might be really pushing it.
I didn't reference it because it's meaningless. FIG is under no obligation to increase the dividend from a legal standpoint and any increase would mean the extra money paid out is coming directly from FIG.
The entire reason I started this thread is I think its insane that under the current terms of the offering, the game needs to make $120M in revenue before FIG investors break-even. According to double fine (See link below), the budget is between $10-13.5M. It's ridiculous that the game needs to make between 8.9-10 times its budget before investors even make back the money they put in.
http://www.polygon.com/features/2015/12/3/9845122/psychonauts-2-double-fine-crowdfunding-fig
Even assuming the dividend gets increased from 30% to 100% (the absolute maximum payout it could be increased to), investors will only break even if the game makes $36M in revenue, which is 2.6-3.3 times its budget. It's more reasonable than the current terms, but still doesn't come close to adequately compensating investors for the risk.
I was extremely excited about having the chance to fund a sequel to one of my favorite games, while also earning a return on my investment, but this has completely soured me on the entire process and unless the terms significantly change for an offering going forward, I'd avoid them entirely.
You say to examine other filings similar to this, but it's really paving new ground. Only other video game I can think of that allowed people to invest in it was Project Cars and it was not an offering registered with the SEC. However, I can state without any hyperbole that if other similar offerings are structured the same way with crazy targets that need to be hit before investors break even, they are also terrible investments and I would urge everyone to avoid them as well.
At the end of the day, as a big fan of double fine and someone interested in investing in the funding of games I love, I really hope my math is wrong. But as it stands now, even with a 100% dividend instead of 30% dividend, the risk vs reward ratio makes absolutely no sense.
Edit: I've edited the OP to include a note that my calc is based on the dividend payout of 30% (as defined in the offering) and that it can be increased up to 100%.
Well I just invested $500. I noticed the terms changed and don't really expect to break even but hopefully I'll get some of the money back. Worse case I lose $500 which isn't too bad. I think it'll be worth it just to get all the sales reports and stuff like that. I love stuff like Steamspy so it'll be cool to have inside access to that.
It's kind of disingenuous of them to put the total as including previously pledged investments. I imagine many people will balk at putting down serious money. I'm surprised no gaming sites have picked this story up.
It's kind of disingenuous of them to put the total as including previously pledged investments. I imagine many people will balk at putting down serious money. I'm surprised no gaming sites have picked this story up.
Looks like FIG just announced they're increasing the dividend payout from 30% to 70%. Now instead of having to sell 2M copies at $60 for investors to break even, they have to sell 650k copies at $60.
I'm glad they're doing this, but am surprised they did this after they've collected the money from investors instead of before reaching out for the money.
https://blog.fig.co/were-increasing...il&utm_term=0_23841d6cea-78b0b1de99-149349533
I'm glad they're doing this, but am surprised they did this after they've collected the money from investors instead of before reaching out for the money.
https://blog.fig.co/were-increasing...il&utm_term=0_23841d6cea-78b0b1de99-149349533
Shao Kahn Brewing a Stew
Banned
650k is doable. Are they changing their numbers for everything on fig?
Crimson_Echidna
Banned
Hopefully Tim Schaffer didn't have the game end in a cliffhanger banking on a Part 3.
flaxknuckles
Member
That is still impossible
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