Board Gaming, Randomly Awesome

Kickstarter: Little League vs. Major League?

“The healthiest competition occurs when average people win by putting in above average effort” – Colin Powell
 
So yesterday I talked briefly about my Kickstarter addiction. A couple of people talked about their similar issues, and among the comments was a sort of dismay that it seems that bigger publishers are getting into the Kickstarter craze.

The reasons are pretty obvious, it’s a crazy amount of buzz that can draw attention to their products, but there’s an argument to be made that Kickstarter is the best avenue for independent designers to see their game come to life. An independent designer doesn’t necessarily have the same access to resources that an established company has in regards to relationships with artists, printers, etc.

Board gaming, even in its high popularity these days  is a niche market, and one driven by disposable income, which as most will attest is harder to come by these days.

Do the advantages established companies have over individuals/start-ups make the playing field too sloped to one side for the other to enjoy success?

Or is the romanticized idea of Kickstarter being a place to get the things you couldn’t find elsewhere enough to convince you to spend your dollar with them?

It’s an interesting conversation that a lot of people have opinions on. Feel free to share yours in the comments below:

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17 thoughts on “Kickstarter: Little League vs. Major League?

  1. Joe:

    As an example, let me offer my viewpoint on one seemingly fundamental and elemental issue with Kickstarter: art.

    Before I do, let be take one step back. I love game companies of all shapes and sizes. They have given me hours of enjoyment, (which I paid for of course, so it was not a gift), and took risks and invested in people and ideas, and themselves spent money to develop something that was theirs. So when they win, we all win.

    And, as in all things in life, there is the ever-present struggle that ultimately ends up with the “fittest” surviving. As they should. But, mutations are good. And we do not get something like the human eye without them. To get that great success story, though, there had to be some small changes that succeeded, and then, those changes prospered.

    Where am I going with this? Well, a rather circuitous route, admittedly. If you are going to put something up on Kickstarter, or any other crowdfunding site (like http://www.indiegogo.com), you need to do it right. Playtest your game, have the mechanics worked out, the rules clear, etc., but…..wait for it…..you NEED the art.

    Why do I say this? Look at some of the “most funded” projects on Kicksterter. One thing comes shining through, in my mind, with each of them, and that is that they, for the most part, (I realize there are some exceptions, like Heroes of Metro City, for one), already have most of the game art done already. Why does that matter? Well, that is usually one of the most significant investments for a game. And also, one of the most difficult things to line up as a start-up, “this is my first game,” independent game designer.

    So when a bigger game company, with the connections, past successes and all that drops their next big project on Kickstarter, well, for me, they take a little something away from the point of the site.

    Of course, with that, I do have to say, there is still some, perhaps unconscious benefit, to the little guy. If ACME Huge Game Co., Inc. drops their latest expansion to their hugely successful game on Kickstarter, it does indeed draw traffic there, and just like in your local game shop, when the customer goes there to buy it, they will also likely shop around, and may just see your small game as well.

    It is a fine line, a double edged sword, a Hobson’s Choice, a Sophie’s Choice, a…, well, you get the idea.

    So, did I just argue myself into a corner. Dunno. But I do know that I am right. Whatever it is I think.

    BT

    1. Well said, Bill. Art is most definitely one of the biggest things that separates the established companies from the indie guys. At least, this is the case in the games that’s I’ve been working on, be they for an established company or my own start up.

      It’s probably a secondary argument to investigate the impact of game style on art budget. The art needed for Heroes of Metro City and the art needed for Settlers of Catan are hardly in the same ballpark. And sometimes you have the magical combination like Greater Than Games where your chief artist is one of the guys trying to make the game. I know when I go to publish, I’ll be trying to commission some of my more artistic friends to lend their skills to the effort.

      I don’t think you argued yourself into a corner. The idea there is that you can still get some attention by virtue of overflow, but prior to that you and others like you were the headlining act rather than the side billing. That’s still a perfectly sound argument.

  2. I think the focus of Kickstarter has started to shift away from the “funding source for projects without the proper means” to “risk and capital investment minimization”. This, in my opinion, is not the intent of the site. Kickstarter SHOULD be all about bringing small independent projects to market with the support of the community who feels passionate about its production. Instead, it seems like many projects are launched with the intent of either 1. minimizing any/all risk or 2. generating profit.

    On the other hand, I think we have seen Kickstarter projects from larger publishing companies who pick up games contingent upon a successful kickstarter. This strategy, although not necessarily the expressed purpose of KS, likely brings many games to market that wouldn’t have seen the light of day through independent publishing, poorly run, non-company backed kickstarters, etc.

    1. This pretty much summarizes my stance on the matter perfectly. Kickstarter is more special to me when it’s a champion of the underdog. Of course, that’s all intent, and there’s nothing stopping the larger publishers from getting in on the action, and it wouldn’t be the first time that a larger business extinguished the heart and soul of a good idea that provided competition.

      The follow up question is whether or not there should be any restrictions on who can kickstart a project. On some levels, we already see some of it. Rather Dashing Games did not use Kickstarter for Four Taverns (and printed in the USA to boot) and Greater Than Games has already stated that Vengeance will be the last Sentinels of the Multiverse product that will be on Kickstarter. They used it for its intended purpose, and now that they’ve proven themselves and established a brand loyalty, they’re clearing the stage to let others shine.

      However, I am also aware of at least 3-4 titles that are sitting in a production line collecting dust because the companies are uncertain that they will work out. Kickstarter is a good and safe way to gauge the interest level. In the end, people only have so much to spend on games, and I still like the idea of Kickstarter being a place where you are only in competition with people in the same or similar boats as yours.

  3. The Gaming industry is a hard Market at best.

    Most “gaming” companies are 2-4 good friends that try to make a go of it and either succeed or Fail as they are, but they rarely Grow. There are many reason for that, but the main one is that they make very little off a game they produce. Take for example a standard 40$ board game, and lets walk it backwards..

    a) Your Local game store bought that game for ~23$ from the Local Distributor.
    b) The Distributor likely picked it up for ~10$ – 13$ from the Production company
    c) The Production company likely paid ~ 3$ – 7$ to the company they paid to Print it.

    Meaning that the company that has their name on the box is only pulling a profit of ~6$ per game sold, and they have to make up all the time in development, eat food, and other random expenses out of that.

    The Disty doesn’t have those other costs, but they do generally incur the storage costs (things sitting on the shelf don’t generate money until they leave the shelf)

    The end store pulls the biggest profit, but generally also has the largest expenses in space, heating, etc..

    Now as a Company if your option was the above sequence… Or Skipping all that and going direct to the Customer.. Turning your Profit margin from ~6$ to ~34$ per box. Which would you choose?

    I’ll give you a hint, as we as Customers made the Choose long ago. You currently have the Option of buying a box game at your local store for Retail price, or at your Online retailer for 35% off Retail, which do you choose…..

    You do not stay in business unless you adapt in Niche industries.. Major game companies are adapting to a new way…

    ~Fk

    1. Realistically speaking, the VAST majority of projects on kickstarter are making nowhere near $34 a box profit. Remember that now, instead of the the distributor handling the…well…distribution, the small publishing company is now in charge of the packing and shipping of the game, which significantly eats in to profit. They now also incur your “storage fee” on top of that, as well as the headaches of international fulfillment.

      I challenge you to find a kickstarter title generating $34 profit per box.

      As for where I choose to buy my games…FLGS all the way baby! This, however, is more a question of loyalty and game space than one of price point.

      1. You’re Correct I forgot to Add in Shipping but even still at Maybe 10$ a box for shipping a 24$ profit is still far greater than 6$. As for storage fees, that is one of the beauties of Kickstarter, almost everything you have produced is pre-sold, so they will only exist as long as it takes you to ship them. And the extra you picked up for general market should be heading to a Disty to hit the normal chain and won’t hang around either.

        My numbers were rounded at best, mainly to give an idea of the Mark-up levels that a product goes through to get to the Local FLGS.

        I also generally support the Local store, when they have the product i’m looking for. I’ve been a store owner, and have respect for those that still try and make it work in today’s world.. It’s tough.

      2. I’ll be honest, it’s been a long time since a FLGS commanded my loyalty, but the local ones here don’t rub me the right way. Oddly enough, I’m still interested in creating an alternative, even though most of my game buying these days is strictly online. Jamey Stegmaier and I chatted very briefly about the concept, and if any of my enterprises were to generate the capital necessary to do it, I totally would.

      3. Using some rough numbers from a friend who has managed successful kickstarter campaigns, let me lay out an example:

        Let us say your game costs $11 per box to “land” in country and in your hands, as a kickstarter production. This doesn’t seem out of line (and is a real life number).

        Cost: $11

        Shipping an average side game in the USA averages between $10-14, + maybe $0.50 in packing, gas, etc. Lets call it $11-15. Taking the median there, it costs $13.50 to S/H.

        Adjusted Cost: $24.50

        Now, lets assume your pledge level for your game was, say, $50. That seems to be a pretty standard pledge level for a KS quality game these days. Fair?

        Average KS Pledge: $50

        Now…off the top, Kickstarter + Amazon + Credit Card fees are approximately 10%. So lets say they take that.

        Average KS income per pledge: $45

        Now we subtract out our costs: $45 – 24.50 = $20.50

        Profit per box = $20.50

        Now, on top of this, a lot of kickstarters try to undercut MSRP, with a pledge level of something like $45. That reduced profit per box to….

        $45 – (10%) – 24.50 = $16/box

        At $16 a box, you probably reinvest that profit to print 1 1/2 more games (to sell to distribution).

        Also, don’t forget about the hit most companies take on international shipping, the fact that they still likely have to pay artists/developers/designers, etc.

    2. I don’t disagree with you Frank. And certainly those companies are entitled to as much success with their products as anyone else are, but how many of those established companies are still producing original content any more? When was the last time you saw a game box where the designer’s name is one that’s a part of the publishing company. It’s a small but important difference when it comes to strict ideology. You go pitch your game to a publisher if you don’t want to deal with all the hassle associated with a Kickstarter campaign, but most people I’ve spoken to are willing to shoulder that burden to be more in command of their own dream. Maybe we’re all egomaniacal control freaks though. The point is, those 2-4 friends trying to make a go at it are fundamentally different than those other guys who are producing the intellectual properties of others. Maybe those other guys used to be that, but they became something else.

  4. I’ll talk about my feelings as a small publisher. Kickstarter has started to develop into a competion of sorts, one which small publishers are ill-equipped for. From our perspective, large companies are using kickstarter as a sales platform, not a launching platform as it is intended.

    I have doubts that games launched by the likes of Queen, etc. on KS wouldn’t be produced anyway. It *seems* to me that those projects are completed already, with full artwork finished before they are launched. Thus it becomes a sales platform for them, and they will get noticed because they are recognized names. Sure, it potentially draws more viewers to our projects too, but where are people likely to spend their money? Not on the little guy’s project that needs the funding to “come to life”.

    As a sometimes backer, I won’t pledge to large companies, even if I like the game. I’d rather give my money to a small publisher that needs a chance as long as they show me *some* of the artwork; have complete, clear rules; and a theme and mechanics I enjoy.

    In response to Frank’s post above about the profits made:

    Distributors pay 40% of MSRP. So if a game has a $40 MSRP, it’s getting purchased by a distributor for $16, and sold from the distributor to the retailer at $20. Distributors work with low individual margin but are profitable because of the volume of business they do. So if I set the MSRP for my game at $40, I likely had it printed and shipped to me for around $6.67 per copy. Which means I’m making $9.33 per copy from the distributor…until I take into account the fact that I have to pay to ship the games to the distributor, I have to pay the artist, I have to pay the designer, I have to advertise, and I have to spend hours and hours doing all of that, hours that are also worth something. So say I sell 1,000 copies to a distributor and have made $9,300. I spend $1,000 shipping to the distributor, $3,000 on artwork, $1,500 to the designer, and $2,000 on advertising. Now I’ve made $1,800 for my 300 hours of work. That’s $6 per hour.

    So Frank is right in saying that small companies will rarely grow as a result of KS, but there have been some that have found good success. But there’s no way we’re making $34 profit.

    1. You heard it here first, folks. Show your dreams mercy and strangle them in their crib. 🙂

      I’m kidding, of course. I appreciate you coming in and showing us some real figures and experiences from the front lines. Thanks for reading!

  5. Good discussion here. Very well done everyone.

    Very much appreciated the real world experiences and actual numbers. It is stark, indeed, the prospect of creating your own game, when the actual numbers are considered. This gives me even more perspective on what you guys go through, and how it truly does have to be a lot of love and passion for the project that carries you.

    I am going to be even more careful when I evaluate who I back on projects from now on.

  6. This has been a really interesting thread to follow. I have a few thoughts regarding the apparent advantages that established companies have over the little guy. First, Bill, I think you have some good points about art, but I don’t think big companies have that big of an advantage there as it may seem. I think it’s important for any project (I’m mainly thinking about board game projects, but this could apply to others as well) to have a few examples of art that look great. There is some up-front expense. But beyond that, I don’t think there is much of an advantage in having all of the art done. In fact, in some cases it’s a disadvantage, because I think that incorporating backers into the art is a great way to involve people in a way that is unique to Kickstarter.

    Second, although I don’t have the data to back this up, I think backers prefer to support the little guy over the big companies. However, that’s a generalization. I think the key is responsiveness and interaction (something that individuals tend to do better than companies). If you have a big company that is really good at engaging backers, the project will feel more intimate, and more backers will be drawn to it. Conversely, small-time creators may be terrible at responsiveness and interaction, and then it ends up feeling like a big, cold company, and fewer people will be drawn to it. In the same way, anyone (an individual or a company) can mess up things on Kickstarter like pricing.

    Third, as for profit, I can say for Viticulture that due to the cost of manufacturing, shipping, art, and design, we won’t make any profit unless we sell some games post-Kickstarter. I would wager that’s not unique to us, though–larger companies have to pay essentially the same production and shipping costs that we do, and probably the same for art and design. In fact, I think the sweet spot may be games where the creator IS the graphic designer (and a good one at that) and where art isn’t needed. The new game Compounded on Kickstarter comes to mind for that category.

    The exception to these rules seems to be games involving miniatures–that’s a market I don’t understand very well. It seems that they’ve found a loophole in the laws of economics, and I applaud them for it…I just don’t get it! 🙂

    Overall, I think it’s much more about the way a campaign is structured and run than who is running it that makes a difference to me as a backer (and a creator).

    1. Jamey:

      Thanks for chiming in on this topic. I appreciate your insight, given your recent successful run on Kicksterter with Viticulture, (of which I am a backer…)

      I do agree with you 100% that the “experience” of connecting with the backers, and reaching out to them, keeping them posted with frequent updates, all of that makes the “backers” feel more vested in the process and result instead of being just a “buyer.” And, though I have backed a few projects, I have had much different experiences with a number of different publishers.

      Just a little tip: keep people posted. They like it and it makes us all fee a part of things.

      For anyone interested, you really should check out Jamey’s website:

      http://stonemaiergames.com

      It is a great primer on Kickstarter projects and a road map to what you should do to position your passion project for a successful launch.

      Thanks again Jamey! Keep doing what you are doing. Looking forward to your expansion for Viticulture and your next big project!

      Bill

      1. Hey Bill, thanks for the link to my blog. Hopefully the series I’m doing on Kickstarter can help future creators. Tonight I’m putting up an entry about finances–it applies to this post to a certain extent.

        I completely agree about keeping backers posted, for better or worse. No one likes to be kept in the dark.

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