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Crowdfunding / Gaming

These gamers are racing to make equity crowdfunding work before it gets hijacked

Can Williamsburg's Equity Arcade make crowdfunding work for video games?

Equity Arcade CEO and cofounder Aaron Kaplan thinks about the future of equity crowdfunding in his Williamsburg office. (Photo by Tyler Woods)

Equity crowdfunding could be the largest introduction of money into capital markets in the history of the country, says Aaron Kaplan, the cofounder and CEO of an equity crowdfunding platform.
With big money comes big dreams and big opportunities, for adventurous startuppers and also for hucksters.
“Our concerns are that the initial people in this industry are going to jump in just to make a quick dollar,” Kaplan said in an interview in his fittingly gamed-out office. “And if the first one that gets big messes up, the whole industry is going to get a bad name.”
Kaplan’s company, which he cofounded with partner Konstantine Sukherman, is called Equity Arcade, and it aims to be a hub for indie gamers and the premier equity crowdfunding platform for video games.
“The whole goal is to build a community where gamers and developers can connect and have the community drive the development of the game so you have real feedback and more commercial success,” he said.
Here’s the problem: making an indie game is not easy. First of all, are you going to build it after work? OK, we commend your drive. Next, how do you know if you’re making the right calls? You need other people to play it and give feedback. Is this level too hard? Is this task too easy? And finally, how are you going to sell it? You could just release it and hope it does well on Steam, and that might work, but it might also just fade off into oblivion. Working at a big game studio eliminates all these roadblocks, but then, of course, you’re working on someone else’s idea.

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What Equity Arcade is trying to do is lower all those barriers to entry in the game world.
The company is publishing tons of content every day from a stable of freelancers. The articles are on topics that are mostly uncovered in the wider gaming world, focusing more on the business of games, rather than reviews. One recent article was about the economics of being a professional cosplayer.
By building a readership, they’re hoping to build community of gamers. And with that they’ll have a reservoir of available capital, a group of people who will test and give feedback on games, and then, of course, a primary market for games. Bang bang bang.
Kaplan said most of their users and writers are on the West Coast, and that right now New York isn’t a center for video games, a feeling that was echoed recently by Brooklynite Collin Cummings, who is starting a kind of General Assembly for video game development in the city.
“There’s gotta be a weird lack of infrastructure out there, as compared with code schools,” Cumming said. “With games it’s still weirdly archaic.”

Aaron Kaplan owning n00bs, probably.

Kaplan owning n00bs, probably. (Photo by Tyler Woods)


“The whole idea of what a gamer is changes in my mind,” Kaplan said. “You could be a gamer, but now you’re a shareholder in that game. Or you’re a tester for that game. We’d like to create a series of value added services where it’s not just that devs get a game funded.”
One advantage that Equity Arcade has out of the gate is that Kaplan and Sukherman both come from the business world.
Kaplan is a securities lawyer and Sukherman comes from the marketing industry. When federal lawmakers passed Rule III of the JOBS Act, it allowed any person to invest $2,000 or 5 percent of their annual income, but it also created a ton of regulatory work for the platform, likely with the idea in mind to make it as hard as possible for the hucksters to set up something easy and quick.
“It’s very difficult to be in this industry unless you understand the molecular structure of the regulatory environment,” Kaplan said.
So that’s where things stand. Can Equity Arcade build a good brand in the gaming crowdfunding space before the whole thing becomes a swamp of bottom-feeding, parasitic leeches? Will gamers actually interact with each other and willingly take to the community?
Kaplan knows not every article is going to be a hit, not every project is going to get funded, but as long as you keep a good ratio you’ll be doing better than the n00bs.

Series: Brooklyn
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