Not-for-profit game developer faces major obstacles

Creating a game in the hope of making the world a better place — as opposed to making a buck — looks like a noble endeavor. But if you decide to dedicate yourself to such a generous project, be warned: major obstacles await. The most significant problem? Big game companies.

Platform holders like Microsoft, Sony, Nintendo and Valve currently do not allow not-for-profit games on their platforms. It’s not that these titans of capitalism have any philosophical problem with not-for-profits, they just don’t have the systems in place to deal with such philanthropy. Not-for-profits qualify for tax-exemption benefits that are not available to standard for-profit companies.

An outfit called Glitch recently highlighted the problem. Glitch is a Minnesota-based community-driven arts and education center for emerging game makers. It provides artist residencies, grants and support for fledgling developers. Now it’s looking for ways to publish games that emerge from its activities, while sticking to its not-for-profit status.

The first games the company wants to publish are HyperDot by Charles McGregor of Tribe Games and Optica by Farzan Fatemi of Graveck Interactive. Both games are currently being ported to consoles. But there’s a problem.

Glitch executive director Evva Kraikul explained: “As we entered the publishing space, the first barrier was getting set up on each platform. Realizing that our [not-for-profit] situation was unique, we reached out to Sony first to ask questions while setting up a developer account. After a bit of email run-around, we were told that they would only accept for-profit organizations as publishers and urged us to create a LLC, LLP, or Inc. We emailed to clarify but stopped receiving responses from their developer relations team shortly after.”

Kraikul said she is also speaking to members of the publishing team at Valve, trying to work out a solution that would allow not-for-profit publishing. Glitch is opening a storefront on Itch.io, a web-based portal for indie games.

Publishing platforms are legally obliged to keep records of the companies with which they do business. A system of tax codes have been simplified into data fields which do not include not-for-profits.

Other entertainment industries, such as books, music and movies, have developed more complex ecosystems which include not-for-profits, which are legally designated as “501(c)(3)” organizations. But it’s still a new area in gaming.

“It definitely soured our experience when it came to setting up developer accounts on all the platforms,” said Kraikul. “If we didn’t see 501(c)(3) listed as an option then we figured it would also be an uphill battle similar to our experience with Sony. Since it was so uncommon to even see publishing as a 501(c)(3) listed, we figured we could either try to change policies and practices amongst all platforms we’re targeting, or develop a solution that would include a for-profit arm within our organization.”

Glitch’s solution was to create a benefit corporation as a subsidiary organization. B-corps are for-profit businesses that are driven by social impact missions. “This way we are able to publish on all platforms while staying true to our mission, beliefs, and goals,” said Kraikul. “But it has brought its own set of barriers and complications. The 501(c)(3) and benefit corp are two different organizations, which means additional costs, separate accounting, and differing legal needs.”

Polygon contacted all the major platforms. Nintendo declined to comment. Sony, Microsoft and Valve had not responded by deadline time. We’ll update this story if that changes.

Only GOG offered an explanation. A spokesperson said:

During the 10 years GOG.com has been operating in the digital distribution market, we yet have to receive a request to release a game from not-for-profit organization. So at this point, we don’t have a system to allow such games to appear on GOG. It’s hard to say that we have a plan to change this, since no such organizations contacted us about that possibility. As of right now, if such game would be pitched to GOG.com and would pass our internal curation process, we’re open to discuss such option. But we’d definitely need to make a deeper research what that would require from us from the legal and financial perspective, to make it possible and lawful.

Kraikul predicts that more not-for-profit publishers and developers will emerge, especially as its advantages become clear. “There are no shareholders at the table and all of our information is available to the public for maximum transparency. All funds are reinvested back into the organization, our public programs, and ultimately the game makers. I see this as an opportunity to push the medium forward by investing in the people behind the games and empowering them to think bigger and think differently about what’s possible.

“I do believe that there’s a growing group of organizations that may want to publish in this way,” she said. “It will take some effort on the platforms to accommodate organizations like us in the future, particularly building out practices to handle the tax exemption component.”

source:-polygon