Vague Patch Notes: Kickstarter shouldn’t be your investor demo funding

    
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Ah ha.

There are a few things that kind of make me see red about indie game studios. Generally speaking I’m of the philosophy that indie studios are very good for this industry. I want indies to get out there and succeed and so forth. But when I see something like Titan Reach failing at its Kickstarter and immediately announcing that it’s going to go on to Indiegogo, a site known for its flexible funding? My teeth start grinding right away about how the project was managed and the sheer basic level of “well, we could have made some money on this, so let’s go there!”

(Editor’s note: After publication, Titan Reach revealed to us that its Indiegogo campaign will not use the flexible funding option but instead will pursue a series of fixed goals through the platform. This was not originally stated in the team’s announcement but seems to be the case now.)

This isn’t really about Titan Reach, though. Or at least not completely. It’s more about why you shouldn’t give money to video games on Kickstarter… or, more accurately, why Kickstarter is a bad venue for funding part of a game which is what it is inevitably going to be. It’s about panhandling and rent-seeking and some ugly open secrets that we kind of need to admit about, well… every MMO crowdfunding effort. If not now, when?

Let’s not mince words: MMOs are expensive to make. Video games are expensive to make, and MMOs have all of that plus server architecture and obvious hardware overhead. They cost big money, and they cost the kind of big money that you don’t actually see from Kickstarter campaigns.

I don’t mean “except for the biggest ones.” I meant all of them, in general. I’ve had a hard time finding hard budget numbers on a lot of MMOs, but a lot of reasonable math puts the development cost for Guild Wars 2 around $60 million. By contrast, one of the most successful video game Kickstarter projects ever, Shenmue 3, closed at just over $6 million. That’s not even counting things like Star Wars: The Old Republic’s rumored budget… or the fact that most Kickstarters for MMOs come in around $1 million.

Remember, Crowfall brought in a lot of money, and it also had the developers explaining how in the heck the team expected to make an MMO on that budget.

This is not in and of itself a deterrent, however, because basically everyone knows that the Kickstarter money is not actually the development budget. It’s the seed money to make a demo for investors who will then decide that it sounds like some money can be made there. Your Kickstarter is basically how you hopefully attract bigger fish to give you real money.

This turned out super great here, guys.

Here’s the thing: Those investors are not assured of materializing. And that’s when you start getting into what makes me frustrated with a lot of Kickstarters, what I personally think of as the “panhandling” phase. Chronicles of Elyria turned to it pretty darn quick when it turns out that investors didn’t want to invest in the game without some significant changes that would, you know… make it likely for people to actually buy the game.

This isn’t scamming anyone. It’s not a matter of claiming that $50 will develop the game with no intention of ever actually producing the game. It’s more that the developers are genuinely trying to play a Ponzi scheme on themselves, using this infusion of cash for future intangible rewards in the hopes that enough work can be delivered to make the next ask seem more plausible.

I talked a little bit about the mental cycle associated with this particular process a couple of weeks back: You don’t want to be out all the money you already sank into the project, and you do like the ideas going into it. But the problem here is twofold. One, even though a lot of crowdfunding projects make it clear that what is being developed is a proof of concept and not a finished game, the onus is still on the developers if that concept is finished and no one bites. Two, sometimes the reason no one is biting is because the concept actually isn’t very attractive.

Like, I am admittedly a journalist and a fan of video games, not an investor. But if you tell me that your game is meant to be old-school, lack most modern convenience features, and reward “player commitment” (read: constant gameplay), my first instinct is not that this is going to be an absolute blockbuster. It’s that this game is a great way to lose exactly as much money as I put into it, given that it is eminently possible for games with modern convenience features to lose money.

And if I were an investor and didn’t understand most of these terms? Projects that appeal to the past rather than some nebulous “classic” concept make me anxious, and a new game doing so doubles that anxiety. Thank you, I’ll pass.

graft

What happens next is… well, begging for cash as described above. Keeping the lights on by moving the goalposts, changing the funding method, and so forth. Sometimes it even works! Project Gorgon has managed to keep itself going after failed Kickstarter projects via Indiegogo, although you could be forgiven for feeling like that waffles a bit on the line of “success.” (This makes me sad, as I quite like that game’s spirit.) We all know how much money Star Citizen continues to rake in, to boot.

But the thing is that it all belies a certain degree of that same basic cycle. Players want the idea of this game, but not enough players to fund it straight off… but the developers keep pushing for what they can get to keep things alive. Incremental progress is made, but the game just keeps limping along in a half-finished state. And what strikes me as saddest of all is that the sheer energy and motivation of the fans seems to drown out the reality of the problem.

Like, realistically? I want the Titan Reach crew to be able to make a good game and be successful and happy. But the original pitch doesn’t seem to be attracting fans. It attracted exactly 839 people, which is not enough players to support an MMORPG. Part of that is probably due to a lack of advertising and outreach, but another part is that some of the basic design concepts aren’t necessarily resonating in the first place. And it’s that sort of thing that causes me to get a little bit frustrated, since re-evaluating the ask of players is one thing, but failing to re-evaluate the design decisions that made that initial ask fail is very much a “two steps forward, one step back” problem.

And it’s also kind of a reminder of why my continual refrain is that you shouldn’t invest in video game Kickstarters.

The vast majority of us are not investors, and appealing to the things we like as fans of video games should not be a quick and simple way to bypass the normal requirements of putting up money to make a reasonable pitch to investors. If I realize that it could cost me a million dollars to pitch something but can’t afford to put that much money toward it, the burden for that should not be offloaded to people who get excited by the idea of that pitch.

We all know this is what’s happening. We even all know why it’s happening. But at the end of the day, it leads to some pretty unhealthy business practices and highly dubious financial decisions. It might not be a scam, but there is a spectrum of non-kosher financial behavior, and this sort of stuff falls into that spectrum with gusto.

(Editor’s note: An earlier version of this piece said Indiegogo does not offer all-or-nothing funding; in fact, it now does. It’s simply seldom used by game studios, which traditionally and for obvious reasons prefer flexible funding. We’ve corrected our error.)

Sometimes you know exactly what’s going on with the MMO genre, and sometimes all you have are Vague Patch Notes informing you that something, somewhere, has probably been changed. Senior Reporter Eliot Lefebvre enjoys analyzing these sorts of notes and also vague elements of the genre as a whole. The potency of this analysis may be adjusted under certain circumstances.
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