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Kickstarter as Just Another Marketing Tool March 11, 2013

Posted by Wilhelm Arcturus in entertainment, Shroud of the Avatar.
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I think we all sort of get the idea of Kickstarter.  It is a way to fund a creative project via “crowd funding,” an off-shoot term of “crowd sourcing.”

KickStarter450

More specifically, Kickstarter is viewed as a way to fund such projects that are unlikely to be able to find funding through more traditional means or which are too small to attract institutional investors.  At this point, the most “funded” Kickstarter project, the Pebble watch, raked in just over $10 million.  That is a lot of money, but it is the outlier as far as projects go.  Most projects fall under the $10,000 mark.

Or at least they did up to this point.  Now Kickstarter seems to be getting cachet as a “place to be” for funding.

And so we have Shroud of the Avatar. Lord British is asking for a million dollars to help fund his return to his RPG roots.  That seems like a lot to you and I.  But when you are paying salaries and such, you can run through a million dollars pretty quickly.

It is likely that Mr. Garriott de Cayeux has invested his own money into the project.  But even if Lord B is merely adhering to the start up code of Silicon Valley (never use your own money… and I bet Curt Schilling wished somebody had mentioned that one to him earlier) he could get a million dollars invested via other means (and still keep full control) based on his name alone.  But a million dollars isn’t going to make this project.  The Kickstarter page says that there is already a good deal of money invested in the game.

The telling piece is the response to the “Why Kickstarter?” question at the bottom of the page.

Kickstarter has really changed the landscape for game developers. It allows us to connect directly with you, the players, and it keeps us from being so dependent on the traditional publishing model. It gives us a direct feedback loop with people who like our game and have decided to back it. We can hear what you like and don’t like and can make additions and changes based on that feedback, before the game is launched. Kickstarter has opened up a new era of game development that really benefits gamers.

While there is something to be said for not being dependent of the traditional publishing model, I get the feeling that funding and independence isn’t the key here.  Rather, it feels like Kickstarter being using as a marketing campaign that pays for itself.  It identifies people who not only have interest in the game, but those who are willing to put up money in advance and lets them pay for the privileged of  testing and giving feedback.  For just $400 they will give you access to a special developer forum!

And, of course, it also lets the team get a sense of how many really interested fans they have out there waiting for the project.  It is a very effective trial balloon.

So it all works very well for Lord British, giving him a pile of things he wants besides money.  And, of course, there is the money.  He is past the two thirds mark for his million dollars at this point, so he’ll get some cash, as will Kickstarter, which gets 5% off the top.

And Lord British is hardly alone.  He just happens to be the Kickstarter of the moment and can hardly be blamed for making effective use of such a popular tool whether or not his project really “needs” the money.

I just wonder what this increasing wave of popularity for Kickstarter as a funding platform.

Does using Kickstarter for publicity purposes defeat or diminish Kickstarter?  Do projects like this help other games that might really need the funding by drawing more attention to Kickstarter, or are they just taking dollars away from such projects?  What becomes of the small projects now?

(Of course, Wall Street is unhappy with this whole crowd funding thing on general “where’s my cut?” principles.)

Comments»

1. Brian 'Psychochild' Green - March 11, 2013

Yeah, Kickstarter is losing its shine as a way to fund games. I think part of the problem is that people have a very romantic view of Kickstarter, where they think that successful KS campaigns are a sign of a game getting a popular groundswell of support. The reality is that it’s now a business. One stat I found interesting is that 4 of the 7 KS game campaigns that raised over $1M last year used the same PR company. I had a friend who was working on a small-scale game KS project that was limping along…. until they used that same PR firm and they managed to meet their goal.

One of my co-workers pointed out, as we were discussing the drama over the Banner Saga game, that there’s some disconnect between physical objects where each order goes to paying for another object to be sent to someone, and a digital game where each additional order is pure profit, but people expect you to do more if you get more money (while not delaying the project!) (See this video for a funny take on this paradox: http://www.youtube.com/watch?feature=player_detailpage&v=aG5L9yEkwag#t=117s )

In the end, KS has very much become about marketing and pre-ordering a game, and not really about giving money to people who wouldn’t have a chance otherwise. We see big names coming in and, exactly as you said, see this as a marketing campaign that pays for itself. Or a way to get obligation-free money without having to give up equity/control of a project.

Personally, I’ve stopped supporting computer games on KS. I’m only really interested in the digital version of the game, and that will be sold when the game is developed anyway. I’ll be able to buy Shroud of the Avatar later if I don’t support the KS project. Oh, sure, maybe I’ll lose out on a few shiny things, but I’ll know more about what the game is like, and if I really want to put money into it. On the other hand, I’ve supported a number of KS projects for printed tabletop RPG books, because those do tend to be limited runs. And, often the books themselves are written before the KS project happens, it’s more of a known quantity what you’re getting.

My thoughts.

2. another anon - March 11, 2013

Kickstarter has always seemed like a clever racket to me.

You’re prepaying for something that not only doesn’t exist, it may never exist, and you’ve got no recourse if it doesn’t!

3. Wilhelm Arcturus - March 11, 2013

@Another Anon – Certainly the “take the money and run” scenario is possible. Unless you know something about the person you are funding, you are throwing in money with no real strings attached, something that has certainly put a damper on my involvement in KS. As Brian said above, and I have said in the past, with a lot of these I am fine waiting until the game launches and buying it retail.

Now, there are some cases where things are different. I backed a Jason Scott KS to fund three documentaries. Knowing Jason Scott, those will get done. Maybe not as soon as I would like, be he is obsessive and will get it done.

But the transition now seems to be to KS as something of a publicity stunt. I have no doubt Lord British will make good on all he promises. It is just a matter of wondering if this was the intent of KS. Of course, it brings them more money, so maybe so.

4. bhagpuss - March 11, 2013

I posted about Kickstarter today too. It’s a topic that’s hard to avoid at the moment. That Kickstarter is becoming a PR excercise for big projects that would have gone ahead in any event is becoming increasingly plain. Whether that affects small projects that really need the funding I doubt, because I don’t think many of them would attract much interest on Kickstarter anyway.

Certainly none of the small enterprises I’ve been interested in have gone anywhere on Kickstarter. I haven’t put any money into anything yet because its clear that things I’ve been interested in either have no hope whatosever of reaching their target or are going to soar past it effortlessly without my $10. If there’s ever a project I want to see happen that’s a few hundred dollars short two days from the deadline, then I might get my credit card out. Otherwise, why bother?

Far better to wait and see if the games ever appear and just pay the entry fee required when I know what I’m buying.

5. Josh - March 11, 2013

KS is an important alternative to the traditional fund raising sources for a whole host of reasons. The marketing angle is value added for early adopters of KS, but I’m not sure of how much of a value add or for how long it will be. As alternative fund raising becomes normalized, we will stop hearing about “X company has a Kickstarter!” stories, because no one will care. Further, as prior commenters pointed out, most of the winners (those who receive KS publicity) are those already engaged in a marketing spend.

The real important of Kickstarter is that traditional funding sources are over-regulated, indecipherable, and entirely outside of the reach of regular joes to engage in. Wall Street and VC are entirely the playgrounds of the elite, and often entirely divorced from value creation. As such KS represents one of the first in what I hope are a long line of alternatives. Some have pointed out that KS consumers arent investors and have no recourse. This is entirely the fault of the US government. Currently, it would be illegal for KS to setup their own investment market in any literal sense. There are some new organizations in the UK stepping in to fill that gap.

My prediction for the future is this: the banking class (I cant think of a better term right now, sorry) will not give up their legislatively-enforced strangle-hold on investment dollars in the United States by allowing real alternative investment clearing houses. More direct forms of micro-investment will pop up overseas where they are allowed to grow. There is a huge demand for a market in which investors can communicate directly with entrepreneurs. KS isn’t the full alternative, but a step in the right direction.

Wilhelm Arcturus - March 11, 2013

@Josh – Heh, you were writing that just as I was appending the link about “OMG crowd sourcing is bad! Might as well by a lottery ticket!” the end of the post. I think that aids your point.

6. HarbingerZero - March 11, 2013

For me it depends on the game. For the Pathfinder MMO – well I didn’t think it was handled all that well and I was pretty sure it was a marketing effort. So..no dough. For Anima, which I am 100% sure would not get made without the KS project to fund it – I was all in.

Crowd’s can be mobs, but even mobs learn. Given enough failed to deliver or shallow PR projects, and I don’t think the crowds will be reaching for their wallets as quickly as they are now.

Meanwhile – the great part is this – the small projects that are local – the ones that need a thousand or two? Those are the big winners long term. They have a way to rally the troops and the community and maybe get a spotlight from a place they wouldn’t otherwise be seen – not just for that project, but overall.

7. bluelinebasher - March 11, 2013

I think in LB’s case this is all a lazy cash grab. Obviously he saw the success Chris Roberts had with raising over 8 million for Star Citizen, and probably thought Ultima fans would/could do the same. They are even cross promoting at RSI for him:

“Richard Garriott, founder of Origin Systems and creator of Ultima, has a brand new Kickstarter which is very much in the vein of Star Citizen: a return to his CRPG roots, building a PC game based on his classic single player Ultimas. ”

http://www.robertsspaceindustries.com/chris-at-sxsw-dev-forum-and-shroud-of-the-avatar/

The big winner here is kickstarter for now. More hits on their page is always good.

8. Aufero - March 12, 2013

I think Kickstarter is just going through the same process every new business method does.

-At first it’s a crazy idea – no one has done this kind of thing before, and clearly it isn’t going to work.

-It works on a small scale for a few projects, and all the “serious” (read: heavily invested in older methods) players denigrate it as a flash in the pan, unsuited for “real” businesses.

-A few (out of hundreds or thousands) medium-scale projects have spectacular success, and suddenly everyone jumps on the bandwagon. There are riches to be made!

-The new method becomes a buzzword, and almost every new startup or attempt at funding has to relate to it. People who have no clue how or why the method has worked in the past use it as an incomprehensible magic talisman that will somehow guarantee the success of their latest get-rich-quick scheme.

-A hefty percentage of these projects and businesses fail. Sometimes for the usual reasons, (businesses fail all the time) sometimes because they started with no business plan beyond “repeat buzzword enough times and money will magically appear”.

-Everyone but the exceedingly hardy or very dedicated flees from the new business method, since it clearly failed.

-Find a new buzzword and repeat ad infinitum.

As for me, I only back Kickstarter projects done by people with real-world experience producing an acceptable product given a similar budget. (Richard Garriott fit this description twenty years ago, but more recent events make me doubt he can work within a limited budget anymore.)

“Indie” is all very well, but I know from painful personal experience there’s a lot more to software than talking excitedly about your ideas.

Josh - March 12, 2013

@Aufero – Very well put, I agree whole heartedly!

9. Matt - March 12, 2013

The Kickstarter wikipedia page says:

“People cannot “invest” in Kickstarter projects to make money.”

Well there’s your problem right there. Risk with no reward.

10. Wilhelm Arcturus - March 12, 2013

@Matt – Except that there are all sorts of rewards. I have a Defense Grid T-shirt, as example. And some of the rewards are contingent on the project being a success. So there are risks and rewards. Kickstarter is just not a way to invest money to get a specific return.

11. Matt - March 12, 2013

Those rewards are akin to pre-order bonuses rather than investment return. But normal pre-orders don’t have risk, you pay and eventually get something (or a refund).

If Kickstarter really wants to be an alternative funding source, then they have to offer real returns. I put some money in a project and then get a share of the profits. Otherwise any rational person is either going to wait for the official pre-order or donate only to people/orgs they know and trust.

12. Wilhelm Arcturus - March 12, 2013

@Matt – “Otherwise any rational person is either going to wait for the official pre-order or donate only to people/orgs they know and trust.”

On that we certainly agree.

Creative projects, however, do give rise to irrational responses… did you ever see The Producers… hence the current success of KS, if not all of their projects. Not everybody is rational at all times. There are things out there that people will throw money at just on the off chance it might happen.

13. reformedgamer - August 10, 2013

Reblogged this on Blog about games and commented:
Right on point

14. MMO Kickstarter Rewards | Keen and Graev's Gaming Blog - December 17, 2013

[…] can’t decide if Kickstarter is just a new fad for proving a concept, or marketing tool, but I know for sure it’s simply a dang useful tool for developers with good ideas.  Other […]


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