Ouya Game Device Lures Game Makers With $1 Million Fund

Ouya Inc., the startup maker of a $99 video-game console, will spend $1 million to fund development of games made exclusively for the device, in a push to attract players and challenge more established platforms.

Games creators who raise money on Web-based funding service Kickstarter.com for exclusive Ouya titles during a period of just over a year starting on Aug. 9 will be eligible for $50,000 to $250,000 in matching funds from the Los Angeles-based company, it said in a statement today.

Ouya is heading back to Kickstarter to gain developer backing for its device, which uses Google Inc (GOOG)’s Android operating system. The company initially raised $8.6 million at the site to move forward with its hardware plans, before receiving an added $15 million in venture backing in May led by Kleiner Perkins Caufield & Byers.

“We’ve seen dozens of great games launch on Kickstarter, and now we are in the enviable position of being able to give back and secure the best, exclusive games for Ouya,” founder Julie Uhrman said in the statement.

Uhrman is betting Ouya will lure independent developers who have been making games for tablets and smartphones that run on Android and Apple Inc. (AAPL)’s iOS operating systems to switch back to home consoles.

Console Wars

Executives at Sony Corp. and Nintendo Co. (7974) are also offering incentives to attract smaller development houses to their consoles. The Ouya competes with Sony’s PlayStation, Microsoft Corp. (MSFT)’s Xbox and Nintendo’s Wii U for sales in a home console market that has shrunk as consumers shift to digital downloads and games on mobile devices.

U.S. retail sales of game hardware, software and accessories fell 22 percent last year to $13.3 billion, according to NPD Group.

The Ouya Free the Games Fund requires participants to make their games exclusive to the cube-shaped console for a minimum of six months. The developer that raises the most for its games on Kickstarter by the end of the program, on Aug. 10, 2014, will earn a $100,000 bonus, Ouya said.

To contact the reporter on this story: Cliff Edwards in San Francisco at cedwards28@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.