Can We Fix Crowdfunding for Indie Games?

I have long been a skeptic when it comes to crowdfunding game development. I rode the initial hype wave, and I backed a few games. By and large, I’ve been satisfied with the results. However, a bunch of issues (some of which I previously talked about) have kept me from backing any further Kickstarters. I realize that these programs can be a big boost to both the marketing and financial aspects of indie game development, though. Is there some way we can make this system work better for everyone involved?

Fixing Crowdfunding: The Players

The players of the crowdfunding game are:

  • The indie studios. They want publicity for their game or idea, and the cash to go build it. They want to connect with an audience and make enough money to get the game built.
  • The crowdfunding platform. I’m most familiar with Kickstarter, so I use the two interchangeably. However, competitors exist. These guys want to fund projects, since that’s how they make their money.
  • The end user, the hopeful gamer. They want to find out about cool new things, help them get built, but ultimately they want something to show for their investment.

These three goals are not completely aligned. For instance, the crowdfunding platforms are largely unregulated. Ideally, they fund as many projects as possible, because that way they get their cut. Past that point, most of the blame for delivering or not delivering on the promises made during the campaign are outside their control. They’re going to take whatever action they need to in order to maintain their image, but there’s only so much they need (or even want) to do to police the projects being launched through them.

Meanwhile, the studios know that they need money. They’re putting their reputation on the line, sure, and they make promises in order to secure funding. But at the end of the day, their liabilities are currently relatively slim. I’ve not heard of a single crowdfunded project that was successfully sued for failure to deliver the promised product. There may be some, but they’re rare compared to the failure rate for crowdfunded projects in general. While they may act in good faith, there’s significant incentives to overpromise in order to meet funding goals.

Finally, there’s the end user. They are making an investment, with the promise of a product at some point in the future. While many people view this as a preorder, it’s decidedly not the case. They assume all the risk of funding the project, and their only reward is a copy of the game and perhaps some other goods that might be included if they pay extra. Copies of games in this day and age are not scarce – so the real reward here may be a discount, or the ability to fund a game idea that might not otherwise be possible.

Fixing Crowdfunding: The Problem

One study of Kickstarted games, cited in a recent Ars Technica article found that less than half of Kickstarted games had delievered on their promises, even partially.

Do you think that people would back projects if Kickstarter added details about the success rate of game funding projects to some confirmation page before a person’s pledge was taken?

Game development fails. It fails often. We hear about failed studios and projects on all ends of the spectrum on a daily basis. Studios go out of business, projects are cancelled, things are released to poor or middling reviews. Games are a creative expression coupled with technological feats, and sometimes art sucks and tech breaks.

Even the people we hold to be experts, masters in the gaming industry – people who lead entire studios – are unable to properly budget projects in terms of time or money required.

For instance, Tim Schafer admitted that the Broken Age Kickstarter plan only gave them enough time and money to finish 25% of the game:

We looked into what it would take to finish just first half of our game—Act 1. And the numbers showed it coming in July of next year. Not this July, but July 2014. For just the first half. The full game was looking like 2015! My jaw hit the floor. This was a huge wake-up call for all of us. If this were true, we weren’t going to have to cut the game in half, we were going to have to cut it down by 75%!

A recent firestorm around Peter Molyneux lead to this quote from Peter:

I have no idea how much money it costs to make a game and anyone that tells you how much it’s going to cost to make a game which is completely a new experience is a fool or a genius.

These are a couple of high profile crowdfunding snafus, but many other such quotes exist. Budgeting a game is a hard thing to do. Crowdfunding a game puts certain constraints and demands on what you ask for and what you promise. It isn’t a trivial thing to sort “good” crowdfunding campaigns from “bad” ones.

Fixing Crowdfunding: A Proposal

It’s clear that many indie studios don’t know how long, how risky, or how costly game development is. Maybe it’s an impossible problem to solve with 100% accuracy.

It’s also clear that the average backer of a crowdfunded project can’t evaluate these things on their own.

It’s also also clear that crowdfunding platforms have neither the incentive nor the expertise to critically examine the projects that studios submit.

Even if 100% success is impossible, 50% success seems terribly low. Can we all at least get a little closer and succeed at this more often?

What I think we need is a neutral third party. Some group that is tasked with several things:

  1. Evaluating the goals and risks of a particular crowdfunding game campaign. This could be both a “BS detector” and “mentorship” role. For instance, an established studio (which should presumably know better) asking for way too little money or setting unrealistic goals might be called out and told to fix their pitch. Meanwhile a smaller studio that is asking for too little money or that doesn’t have a clear plan for delivery might be provided with realistic guidance.
  2. Being a source of accountability for the project. In almost any major development project I’ve been a part of, there are specific milestones and deliverables – dates that must be made, and things that must be demonstrated. If I was hiring a contract house to do work for me, I’d enter into an agreement about what percentage of the money they get when, and what they have to provide in order to get there.
  3. Adding transparency to the development project, identifying issues, and involving the backers in a standardized way. For instance, let’s say that a deliverable is late and the company is asking for more of the backer’s money before that payment is due. This third party would meet with the developer and determine what the current state is, and then take the request to the backers for feedback. In this way, if a project is just completely off the rails, it might be possible to refrain from pouring good money after bad. Meanwhile, it gives a level of flexibility to the studio – if the situation has changed since the initial pitch, they can renegotiate in a way that allows the voice of their “investors” to be heard.

My goal here would be to get the benefits of having professional third-party assistance, without the negative implications traditional publishers bring.

This probably hews pretty close to the role a publisher has in traditional game development. Probably some smaller indie publishers (ie, Devolver or tinyBuild) are essentially filling this role for a small subset of games under their banners.

Implementing such a neutral group would be tricky for a number of reasons. I’ll try to address the ones I’ve thought of, although there may be more.

Where do we find this team of experts? It seems like there’s got to be people who have these skills already. Major publishers must be able to do this with some level of accuracy already. Game studio experts would also be a welcome addition to such a team. I almost view this like being on the board of directors at a company. There’s also similar groups that connect expert business owners with people founding their own businesses, like SCORE.

How do we pay these experts without incentivizing them to rubber stamp stuff so they get paid? Clearly, their funding should not be tied to the number of projects they greenlight. Instead, perhaps the studio must give them 1% of the amount they plan to raise via crowdfunding, as a deposit. Half of that can be paid back if the project never gets to the crowdfunding stage. This would mean that bigger projects (from presumably bigger studios) would be subsidizing the cost of smaller studios/projects getting the help that they need. I, personally, think this is a great idea. Another suggestion would be to record meetings and studio tours and post them on Twitch or Youtube – these sorts of things have proven interesting to the community in the past, after all.

How do we integrate this into the current crowdfunding model? My suggestion here would be to offer it as a certification – a “seal of quality” if you will. Going through this process would be completely optional, but doing so would help lend additional credibility to a project or studio.

Fixing Crowdfunding: Conclusion

As it stands, crowdfunding is not ideal for anyone involved. The big players have their reputations publicly smeared over things that would normally be private between publisher and studio, smaller studios play Russian roulette with fame and fortune but often end up collapsing, gamers get promised the world and frequently have nothing to show for it, and everyone points fingers at everyone else.

Something’s got to give – this is a wonderful opportunity for some truly innovative game development to occur, and crowdfunding has already proven itself an invaluable tool for everyone involved. I’ll admit my lack of expertise in this area, so you might hate my proposal. If the best thing I did was make more people consider the problem and get you thinking about how you might solve it, I’ll take that as a success.

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