Kickstarter - Why are some so expensive!

[Neil79]

Here's an interesting post from Cinemaware

This will be a different kind of update. It won’t feature great graphics or inspiring music. This will be an update about full transparency and the reality about making a game like Wings: Director’s Cut.

Many fans and would-be backers have questioned the budget set for the campaign (US$350,000). Some feel it is too much, some too little, some think that a game like this can be done easily and with modest sums. The project gets compared to other Kickstarter campaigns, most of which are not comparable due to different genre types, technical requirements, game scope and so on and so forth. And many don't understand why the same funding pattern is not met.

Therefore we have felt that a sincere analysis and explanation of how a funding campaign on Kickstarter works is necessary. So that all of you have an opportunity to understand how a game like this really gets funded and the amount of effort (and resources) necessary to make it a reality, we would like to expose the following important aspects:

1) First, everyone should understand that Kickstarter keeps 5% of the entire funds collected. This is clerarly stated in their rules, but maybe many do not pay attention to this detail.

2) Second, Amazon Payments (the payment processor for the pledges) also keep essentially 5% of the total. Therefore, before any funds get transferred to Cinemaware, 10% has already been discounted. This is necessary for the viable operation of these companies and we feel the service and opportunty they provide to help us materialize such great projects is worth every penny.

3) Then, after receiving such funds, we need to account for distribution costs. Yes, even digital downloads cost money to distribute. It is a well-known fact that both iTunes and Android appstores charge 30% for offering titles through their platforms. Given that we will have to provide these games at “no cost” to backers (not necessarily true, since you all already will have “paid” for the game) there’s no additional increase in revenues to us until we fulfill all pledges – yet we must pay the appstores their due share (based on a pre-determined MSRP, which is TBD).

4) The PC platform also has a distribution fee, which is lower than the appstores above but still can vary from 5%-15%, depending on platform, region, transaction fees, etc. Again, backers will receive their copy “free of charge” but we still have to account for this potential expense.

5) Finally, we have to fulfill all prizes for all pledge levels – irrespective of the quanitites each pledge received. We have design costs, manufacturing costs, and then shipping costs and comissions for a fulfillment center to do this job (we certainly do not want to spend the next year going to UPS shipping boxes rather than working on developing the game!). This cost alone can also range from 10-15% of each pledge, depending on quantity of prizes, shipping location destination, and so on.

6) Finally, we have the actual costs of running the Kickstarter campaing itself. All activities, regardless of how small they seem, have a certain cost associated to them. It is of course part of our job and passion to keep providing you with advance insight into the project, how we are progressing, what kind of exciting content it will feature, etc. All this takes people’s time and effort, it takes production effort and investment.

7) Only THEN do we finally get to the bottom line budget – the funds LEFT to actually make the game. Needless to say, it is quite a considerable distance from the original $350,000 we are asking for you all to pledge (which is always why there’s hope among all KS project creators that they will surpass their initial funding goal).

In other words, we wanted to be transparent with everybody. Cinemaware and its team members are not getting rich on this campaign, or will have the luxury to create a AAA budget production simply on the funds raised. There is a lot of sweat (and tears) spent as each one of us works passionately towards the vision all you backers have so kindly believed in us to fulfill.

We hope this makes it a bit easier to appreciate what a small (but passionate) group of game developers need to go through in order to materliaze the product that you, the fans, want to see. This is not just true for Cinemaware, it is certainly true for most other developers trying to find success here. We also hope that our transparency earns more of your respect and support. We will keep answering all questions and doubts in order to gain your confidence.

 

[orderoftheflame]

Tbh, $300-400k for a game isn't that much at all. Especially with KS and Amazon taking a cut, and having to pay for rewards and shipping them.

On the Double Fine Adventure backer forums, they did a post of exactly how the breakup of money happened.

Out of the $3.4 million, Amazon and KS took $175k each alone. Rewards were $475k, including $190k on shipping alone.

Spoiler

Obviously they massively over reached their targets, but the breakdown could be similar percentage wise for other games. When you take the yearly salary of a developer, and add all the other costs involved in as that article shows. a few $100k doesn't go very far at all.

 

[Moothead2]

I'm starting to find Kickstarter annoying in the fact it seems like everybody is using it just so they don't have pay for any/a fair proportion of the costs themselves.

 

[orderoftheflame]

I'm starting to find Kickstarter annoying in the fact it seems like everybody is using it just so they don't have pay for any/a fair proportion of the costs themselves.

O_o

Rather than have a publisher pay everything for them, and then have to pay them back?

How many developers actually have the dough to support themselves upfront from their own pocket 100%?

 

[arknor]

kickstarter = free money to some people

 

[V4NT0M]

I'm starting to find Kickstarter annoying in the fact it seems like everybody is using it just so they don't have pay for any/a fair proportion of the costs themselves.

Personally I think it the better idea than sourcing funding from investors or publishers who have their own vision of a product or profit margins.

 

[m4rk84]

Personally I think it the better idea than sourcing funding from investors or publishers who have their own vision of a product or profit margins.

The reality is it's a delicate balance between the two. Kickstarter is great when used for good, however with as much freedom as Kickstarter brings to developers some of these products are going to end up leaving the investor with a sour taste.

 

[Moothead2]

O_o

Rather than have a publisher pay everything for them, and then have to pay them back?

How many developers actually have the dough to support themselves upfront from their own pocket 100%?

Personally I think it the better idea than sourcing funding from investors or publishers who have their own vision of a product or profit margins.

I know where you're coming from don't get me wrong, but in my opinion it takes the risk from them and puts it straight onto the lap of the people who have backed it. For example if a new developer wants to make a game and uses kickstarter to get the funding that means they have to put little or no money from their own pockets into it then if the game doesn't come out the developers can walk away without much loss but the little Jimmy who backed it is down $10/$20/$50 etc.

I just find it wrong although maybe I'm just in the wrong mindset looking at it .

 

[orderoftheflame]

I know where you're coming from don't get me wrong, but in my opinion it takes the risk from them and puts it straight onto the lap of the people who have backed it. For example if a new developer wants to make a game and uses kickstarter to get the funding that means they have to put little or no money from their own pockets into it then if the game doesn't come out the developers can walk away without much loss but the little Jimmy who backed it is down $10/$20/$50 etc.

I just find it wrong although maybe I'm just in the wrong mindset looking at it .

I doubt there's many developers looking at it in that way. The vast majority seem to be people with an idea that they want to take to people, but their chances of generating the money to do so through regular channels is slim. Most of them seem very keen to make a game as good as they possibly can, make a name for themselves, and get in through a market that despite being a niche, people want.

Just taking DFA as an example, it's summed up in the first minute of so of their video.

"You should make a point and click adventure game"
"I would, but if I pitched that idea to a publisher they'd laugh in my face."
"But I've got money, and I'd buy a copy.."

Tim Schafer's reputation is solid, he makes amazing games, but they generally aren't massive profit spinners for publishers like a AAA action game would be. Adventure games have been a niche market for years so getting a publisher on board would be harder still. However, there's a huge number of people that want that game and are happy to pay for it in this way.

Between not getting a chance to play the kind of game I'd really like to play, and that game never being made. I'd rather take the risk of it failing, than never knowing.

 

[Semiskimmed]

I'm starting to find Kickstarter annoying in the fact it seems like everybody is using it just so they don't have pay for any/a fair proportion of the costs themselves.

i sort of agree tbh, we're being swamped with these left right and center. it'll only get worse, it just means extra sifting throught he tripe (that yogscast minecraft clone springs to mind!)

 

[HangTime]

Tbh, $300-400k for a game isn't that much at all..

Agreed. $350k minus the initial 10% commission leaves $315k which equates to £200k. Lets say roughly a quarter to a third goes on other costs such as those mentioned in the article.
This leaves us with £130-150k.
Depending on the size of the team, it would be very easy to swallow all of that just in wages even without considering all the associated costs with making a game like hardware, licensing, advertising, overheards (premises & services), recruitment, employee benefits etc.

Of course some indie studios probably have a 'virtual office' to cut down on costs, and some probably a very small team, but overall to make a decent game I'd be wanting a $500k+ budget.