Kickstarter and Crowd Funded Development: An Analysis

[Sevre]

When you look at the gaming industry the first thing you see is a real "us vs them" mentality, 'us' being the consumer and 'them' being evil big-money corporations who will always deserve our antipathy. Don't try to deny it, the gaming community is bound together by a fundamental distrust of big business, who are portrayed as corporate fatcats who don't understand, and certainly don't care about what we want but are only interested in lining their own wallets with our hard earned cash.

Every discussion, debate, and discourse revolves around this relationship, whether it's about DRM, Piracy, or how evil publishers are skewering our childhood memories, the dynamic never changes. Why do indie games garner so much support? It's certainly not because they're quality works of art, most of them are rubbish, but we still like the idea we're buying into. The little guy, doing it on his own, trying to scrape together cash to survive in a market dominated by Modern Battlefield Warfare 6. There's something there that's missing between ourselves and EA, or Activision, or anyone else. It's called empathy, we can relate to the indie game developer, we're in the same boat, up shit creek without a paddle but we'll share the rum anyway.

Now what does empathy have to do with Kickstarter, Double Fine, and 'investing'? More importantly, why is it a bad thing? The purpose of this short piece is to show how the Kickstarter method of game development is a fine way of screwing over consumers.

For those unaware, Double Fine, headed by the enigmatic Tim Schafer (who is a seriously cool dude, don't get me wrong) have started up a project on Kickstarter, which allows individuals to collect money for their project through donations from other individuals. At the time of writing, Schafer and Co. have collected some $2 million and have 23 days left to collect as much money as they can for an as yet unannounced game (but it could be Psychonauts 2 right?).

I totally get the weltanschauung behind projects like this, rely on the charity of gamers to fulfil your hopes and dreams of giving gamers what they want, it's just an exchange of benefits right? In a way it is, but in reality you're just screwing over good-hearted gamers.

This isn't meant to be an attack on Tim Schafer and his studio, but an outline of the serious flaws behind this idea. There's a reason we have a distinction between customers and investors, there's a reason we have laws protecting consumers, and different laws protecting investors, and when you spend the majority of your time on a gaming forum it's easy to forget that there's a real world out there while you eagerly await that long overdue game release.

Nostalgia is an excellent business tool, no matter what gaming community on the internet you frequent you'll see threads like "Remember X game and how awesome it was?" and "We need a sequel to Y game!". Why is Nintendo able to churn out the same titles on a yearly basis with different cover art and still able to remain incredibly profitable? Why do we still get excited over Sonic games? Why are reboots so appealing? Developers and publishers understand the advantages of pedigree, and have no problem leading you on if they can guarantee a sale before the game is announced.

With that in mind, as I've already shown we're more likely to be empathetic towards a small studio, or an individual than a large corporation, and that would explain why Tim Schafer's project has been such a startling success when he hasn't even announced what he intends to do.

Every business project needs investors, it needs capital to start up, and on the surface using people who have a genuine interest in what you're going to do, and not just how profitable it is, seems like a great idea. Schafer is about to make a game the fans want, something he couldn't do otherwise. The problem is that he, and every other developer on Kickstarter, is capitalising on the goodwill of fans rather than the money of actual business partners.

When you invest in something, you're entitled to certain things, such as a share of the profits, a say in how the product is being made, and the accountability of the developer. This is but a handful of rights and protections investors have, depending on your jurisdiction etc. Now when you use your customer as your investor, you strip them of any such entitlements or protections.

Ladies and Gentlemen, when you use Kickstarter, you lose your rights, you're 'investing' in these projects, but legally you're being treated as a charitable individual. If I told someone outside of our community that we've just given $2 million dollars to a man for no obligations but to produce a game, they'd think we were all mad.

Objections to this would be "But Sevre! You do get something in return! You get X reward!" and to that I would say the very thought of someone paying, and I quote, $30'000 for a picture of Ron Gilbert smiling, makes me lose faith in humanity. "But it's my money Sevre, and I can do what I want with it."

Wake up, by allowing developers to treat you in such a way you're not just losing a serious amount of money, you're producing a negative effect on the whole industry. We constantly complain about publishers and corporations treating us like shit, but if we're so willing to give up our hard earned cash on the basis of nostalgia and empathy, we deserve to be treated like shit. Kickstarter is a game changer, it changes the balance of power from the publisher to the developer, and we, the consumer, still get the shit end of the bargain.

I want Half Life 3, Psychonauts 2 and a Timesplitters sequel as much as anyone else, but if developers want to raise capital for these games, then why don't they treat us the same as they would treat any other business partner? Why are we seen as just giant walking wallets of cash by every other actor in this relationship?


Before you part with your money, you may want to stop and think about the consequences, rather than the rewards.

 

[ultimateownage]

I can see what you mean. There are a lot of things which need to be taken into consideration with how projects like this should work. The people donating get no promise that the game will be worth the money they put in, and financing the games doesn't work in the same way as it would for a publisher. A publisher invests because it thinks the game will be profitable for them, but these people are investing because they want to play it.
But I don't think it's inherently a bad idea. This is the first time anything like it has been done, so there's definitely going to be issues with it now, but I think the concept is a fairly good one. Normally, the Developer would get the 2 million dollars from the Publisher and then spend it all on making the game. Then once the game earned that 2 million back, the rest of it would go to royalties and the Publisher. And in the end, what the Publisher would have been doing is giving the money that the game would earn from the people buying it to the developers, and once it's released the people who buy it then give the money back to the publisher (as well as extra money made, or losses if it does badly). In the case of the donations, all of the donations over $15 get a free copy of the game. So the people who donate are essentially cutting out the period between getting funding for the game, and getting the money back for it. And because the amount people fund is also the the amount of money that was going to be earned, it means that it would be very unlikely that they would ever make a loss. They would know how much money they would get for the game and how much money should be put into it, and how high the demand was. There would be much less risk, and risk is one of the biggest factors in game making. Lots of things people want are turned down instantly because it would be too risky, and things like Modern Warfare 78.29 are constantly being released.
Of course, the amount of money being received to make the game would be much less than with a AAA title. Two million really isn't that much in the grand scheme of things. So it's not suited for big games, and would never be able to replace Publishers. This way of funding would work as some sort of bridge between the indie development scene and the big AAA development. The kind of area where Mojang and Double Fine are currently at.
As for the consumer, that's where most of the issues would arise. They are indeed putting money into a game they don't know about (this time, at least) and they wouldn't get a return on their investment like the publishers would. But the developers don't care about the game as long as it makes money. Here, people who donate get the game as well as extras (like the documentary and such) for a much lower price than it would be at retail. There is that inherent risk of buying a game that there is no information about, definitely. But putting money into games is always a risk and some people will always be dissatisfied. The publishers and the customers have different reasons for wanting to put money into the game. As for the joke donation amounts, I think those are there for anyone who has a ridiculous amount of money they want to put into the game. I doubt the person donation $15,000 is actually putting it in for the small extra they get.

Sorry if none of this makes sense. I'm pretty tired and I wrote this in sections between losing concentration.