Trials & Tribulations of Kickstarter

 

If you haven’t done so already, I ask that you check out the At the Gates Kickstarter page. Our goal is to innovate and take strategy gaming to the next level, but this campaign will be our sole source of funding for development. And hint, hint: the more successful ATG is the more articles you’ll have to read in the future!

To those of you who have already contributed and helped us reach our funding goal, I offer my most sincere thanks!

This post originally began its life as a humble comment on our Kickstarter page, but after writing for a bit I realized it would be even better as a full-blown article!

 

What Do You Have to Consider With a Kickstarter Campaign?

Many people don’t realize creators ultimately end up with a fairly small slice of the Kickstarter pie. You can immediately cut 20% off the top due to processing fees and failed transactions. Then there’s the cost of fulfilling rewards, marketing (yes, it’s important), both planned and unplanned contract work, licensing multiple software packages – the list goes on and on.

Oh, and as with everything in life, the taxman always wants his share. It’s particularly rough if you make a large amount of money from your campaign, and then nothing for the next two years, as you’ll be taxed at a much higher bracket than you would if the same amount of revenue had been spread out. Suddenly that amazing $1,000,000 Kickstarter haul starts to look a lot more like 300 or 400 thousand. Yikes!

In retrospect, I’m very glad I did extensive research on all of this ahead of time. I can see how teams end up in big trouble by overestimating the actual funding they end up with, either due to a lack of research or worse, just sheer excitement. The cost of physical rewards can really sneak up on you, and this is why we’ve been so conservative about what tiers we’re offering for ATG and the $ figures attached to them. This is a sad tale, and I imagine it will be one that’s increasingly common. It’s particularly depressing because I also have a personal connection with that project.

 

Kickstarter & At the Gates

In case anyone was wondering, yes, I have done my homework! $40k is not a large budget for a complex strategy game, but it’s possible because I know exactly where every cent will eventually end up going. Having a small, very talented team comprised almost entirely of your friends really helps! (Thanks again, guys!)

That’s not to say success is guaranteed – for us or anyone else. There’s risk with every large project. This is especially true for games, which can be both beautiful and well-engineered but end up being zero fun to actually play. It honestly surprises me how optimistic people are about the probability of most Kickstarter projects following through on their claims. The rate of failure here is likely to be in the same ballpark as traditional games development… and that number ain’t good. It might even be worse, as large companies have staff paid to ensure projects do succeed!

This is why I welcome and even encourage folks to challenge us on not only what we’re doing with ATG but also how we plan on doing it. (Yes, that is an open invitation – fire away, I promise I can take it!)

In my personal opinion, Kickstarter is neither charity nor even patronage. It instead serves as a means for customers to pre-order products directly from their creators, providing the funding necessary to develop innovative concepts. Patronage can be a part of that, but only when the chances of ending up with something at the end are very high. Accordingly, there’s no way I would launch a Kickstarter campaign without having a fully-playable prototype ready to show off. In my mind you just have to be able to demonstrate what you’re actually building, regardless of your track record.

This is also offers a built-in advantage to the developers. We’re already about halfway down the road of development, and much of what remains is simply polish work. Not bad!

 

The Future of Kickstarter

I often wonder how Kickstarter will change once the first big failures hit. I have great faith in the model and believe it’s how a significant chunk of future PC games will be funded. There are a large number of people who agree with me on this. But there’s no guarantee the larger community will maintain that opinion after throwing thirty, two-hundred or a thousand dollars at vaporware.

What about you? If games you’ve contributed to go down in flames with nothing to show for it, will it lower the chances you contribute to future projects? And what risks associated with ATG’s development concern you the most? Let me know what you think!

- Jon

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If you’d like to discuss this topic further (or anything else related to ATG) be sure to stop by the official Conifer Games forums – we’d love for you to become part of our community!

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14 Comments

  1. If you’re really bringing in many hundreds of thousands of dollars that you’re not going to spend until a subsequent calendar year, you should hire a tax accountant to help you solve your tax problem. There are lots of ways you can avoid paying taxes on all of that revenue when it’s not actually income because you’re going to have to spend it to fulfill your bargain.

    Reply
  2. Wedge

     /  February 12, 2013

    The thing that worries me about high-profile failures is not how backers will respond, but how it will affect developers who want to kickstart their projects in the future. Kickstarter’s policies say that projects MUST either deliver on their project or give full refunds. What happens when a dev burns through $1M, fails, and is financially unable to fulfill that obligation? I don’t know, but I suspect we’re going to find out in the next couple of years, and I’m worried that when it does developers will find out that the risks of using Kickstarter are too simply too high.

    Reply
    • Yep, it’s kind of the Wild West right now. I really have no idea where things will go. I’m just trying to build a solid game and hopefully that will help me weather any future storms that might blow through.

      – Jon

      Reply
    • daviddesj

       /  February 12, 2013

      That’s a good reason to set up a single-member LLC for your project. No need to take on the risks and obligations personally.

      Reply
      • S-Corp, baby! ;)

        – Jon

        Reply
        • daviddesj

           /  February 12, 2013

          The LLC is simpler and easier. If you’re only going to have a single member, the only real reason to have an S corp is if you expect to make so much money from your project that you can pay yourself a normal salary and still have profits that you can distribute as unearned income. If you’ve got multiple members/partners, then the tradeoffs are more complicated. Anyway, I didn’t mean to sidetrack this too much.

  3. Did you include a direct link in this post to the Kickstarter?

    Reply
  4. Dasick

     /  February 12, 2013

    Not sure about all the financial side of it, but you guys got a small team, a prototype of sorts and you seem to be on top of things. No concerns there.

    My actual concern is a couple of points about the design of ATG, specifically you mention the need/reliance on AI to deliver challenge, and I see a problem. No matter how not-stupid an AI is, it’s up against a thinking, learning human mind – given time, even the smartest AI will be outplayed and become trivial. It needs some way to keep the player on her toes for as long as possible, and things like (random?) advantages might be a better way than pure “AI”. I’m sure you can come up with a better system, but just pointing out the problem with reliance on AI.

    Reply
    • Yep, AI will always be a challenge, and that’s one of the reasons why our planned release date is so far off.

      In many ways, players will be fighting against the world in ATG as much as they are the other players. The weather and diminishing resources are obvious in their effects, but just the need to migrate around the map forces players to think outside of the box. Trying to plow through even the most feeble AI takes on a new meaning when you HAVE to do so before your food stocks run out. The game would probably be fun, even without any AI whatsoever, and that’s a great sign. :)

      – Jon

      Reply
      • The way to really think of it is this: AI is a usually weak puzzle that you lay on top of a game. People don’t actually have to solve the *game* (or even get very good at the game) to win; they just need to solve the weak AI puzzle.

        So yeah, relying on AI is generally bad because it’s basically laying another interactive system on top of yours. For this reason I would say either design it to be a single-player thing, where the system itself is what’s difficult to solve, or design it to be multiplayer.

        Reply
  5. I’m a big fan of turn-based strategy games, not so much of 4X games like Civ. What you’re creating sounds like it has much more to do with strategy and less to do with certain management aspects I never enjoyed. I especially like the idea of mobility instead of having dozens of fixed structures.

    Reply
    • Glad to hear it, Scott! I’m very much hoping to bring in some new fans to the 4X genre with ATG, but I’m sure some of the innovations will turn off some veterans as well. We’ll eventually find out if it was a good trade-off!

      – Jon

      Reply

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