This feedback loop is critical because the requirement that you demonstrate success before taking on additional debt helps keep you from getting in over your head. If, for whatever reason, someone gives you more loans than you can repay, one day your employees are all out of work, your company is gone, and the State of Rhode Island is suddenly the proud owner of $1.4 million in R.A. Salvatore Amalur fanfic and a game that could be a hit if only you had 300+ employees for at least a year to finish it.
I get that the analogy is not that simple. There is colossal investment required in back-end systems and technology that players will never see, much less pay money to finance, before your game's first rat can be coded and killed. Unfortunately, it appears that the economics are precisely that simple. Whomever puts up the $100+ million to finance the game is taking their chances with remarkably little evidence that you can succeed. It's only after the game is launched that development can proceed (or not) rationally with resources allocated based on revenue - a successful game like Rift gets the continued investment to slowly add features, while an unsuccessful game sees layoffs, merges, and possible shutdown.
MMO development needs to get away from the approach where games spend ages in development - with corresponding costs - and emerge to the consumer only fully fleshed out and AAA-quality (or, more likely, bust). There needs to be a way for games to succeed - or, yes, to fail - earlier in the process. The alternative is to continue to see success defined primarily by whose fundraisers are able to keep the doors open for long enough to finish the un-finishable - a prospect which is going to get harder as more games go $100+ million into the hole.
A few random ideas that have been tried with varying degrees of success:
- The browser game Kingdom of Loathing launched in 2003 as basically a page where you would click to be told a joke and granted relatively arbitrary stat points. This was okay because the humor - not necessarily the gameplay - was the product, and things like classes and content got added to the game over time.
- Fan-favorite Diablo-alternative Torchlight was originally a prototype for a future MMO, though it's unclear whether/when said MMO will ever materialize.
- The folks behind the Pathfinder MMO made the somewhat controversial move (see: Epic Slant) of using Kickstarter to fund a technical demo. On the plus side, this is how things should work - demonstrating fan interest while simultaneously moving the project forward. On the downside, the ultimate goal is to secure the funding to go back to the old model, and fans may be left holding the bill (and some souvenirs) if the project never gets that big investor.
- The Storybricks Kickstarter campaign (which I've covered previously and looks unlikely to succeed unless someone wanders up with over $220K at the last minute) sought the approach of crowdsourcing a product that is as much of a back-end technology for a future game as a game in and of itself. Psychochild has made the point that projects which have been funded through previous Kickstarter campaigns have been effectively sequels or otherwise possessing built-in audiences. Fate of the project aside, I don't know that this one case will definitely answer whether this project - currently an alpha world-building tool - is too abstract/early for end users to be willing to buy in.