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Reading Mike Rose's fantastic piece about why he won't be Kickstarting anymore I realised that I had sent a proposal for a rant about Kickstarter for the IGF. I had never fleshed it out. Now I feel the urge to.
The Problem with Kickstarter
It's actually pretty simple. You fund a game and it never materialises. That's the core problem most people have with Kickstarter*. At the root of it there's a quite simple mistake in how Kickstarter works: Upfront money and media hype is not compatible with interative development. Most Kickstarter projects are by small teams. A lot of them are quite experienced. Yet it is in the nature of Kickstarter that a project proposal is not fully developed when the campaign commences – not even when it concludes. Kickstarter serves many purposes, not the least of which is that it measures if there's a market for a game. The dynamics that builds up when a Kickstarter is unexpectedly successful is that features are added that prolongue the development of the game in question. A $700k project simply takes longer than a $100k project, even if your studio grows. Buyers also expect a grander game. There are exceptions to this rule, of course. But FTL simply would not have turned out well for $10k.
A Proposed Solution
Business sense tells me that building and nourishing a long-term relationship with your audience is wiser than betting on Kickstarter's quick fix. Introversion recently demonstrated that you can have the success of a Kickstarter without using the actual platform. How could Kickstarter adopt the cornerstones of that campaign? By opening a venue for contiuous financial support instead of a lump of money upfront. It would not be about kick-starting a product anymore but about building a relationship.
What changes would be necessary?
- Projects need to be in playable form from day one.
- New tiers need to be added on the fly.
- It's most likely a huge change for the studio culture.
- No funding targets anymore.
- Updates to your campaign are updates to your game.

Why not run a Paid Alpha/Beta instead?
You can do that. Introversion, Mojang and Wolfire have proved that it works. Yet if you happen to be in a less established studio, you might run into trouble finding an audience. And there are other properties a large site like Kickstarter offers.
The design of the Kickstarter site makes sure that users find their way through every project. The competition of Kickstarter projects between each other ups the quality bar of the campaigns. A large site establishes trust and that's important for any financial transaction. Similarly, the size of Kickstarter gives it leverage when it deals with credit card companies and banks. And at last, Kickstarter offers a hint of curation, which is essential once a platform grows.

I think Kickstarter is an excellent platform. Nevertheless, the blame of a postponed or halted game will hit the platform more than the project's owners. As their next step, Kickstarter should embrace the practicalities of iterative and continuous development. Or someone else will step up to fill that gap**.
* Minor issues like the bad discoverability might factor in, too. ** Yes, we'll end up with tons of perpetual betas. But Google and MineCraft demonstrated that players don't care too much about that.
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Aren't new tiers already a thing that's been added during the campaign is running? I mean, the problem is more in developers' end to not call the shots at right time.
Those are some pretty broad statements you're making there. Can you cite some sources?
http://www.gamasutra.com/view/news/187713/Opinion_Why_I_wont_be_Ki ckstarting_any
more.php#.UTUkqnwjqgp
But if you ever read a Kotaku comments section on an article about Kickstarter, you will see a lot of people complaining about it.
I realize it's been used mostly as a pre-order system as late, to sell copies of games that were already going to be made. But that's the wrong way to use KS, IMHO.
I think games or projects being made are just part of the risk. They aren't pre-orders, they are donations. Donations that might get you a reward. But you should be wanting to donate to the project.
Additionally, while I think it is honourable that you regard Kickstarting as a donation I doubt that the majority of users thinks that way.
Shadowrun Returns for instance, was going to be a fairly simple 2d game similar to the ones the company had made before. But thanks to the extra money, it's now a full blown isometric 2d game, like the original Xcom and looks awesome.
Crowd-funding is new and many still misunderstand it. And that’s OK! There are many uncertainties with any project on KS and Indiegogo et al. But, one thing is certain: Crowd-funding is beautiful. Please don’t be discouraged by some set backs.
The point of crowd-funding is to leverage the voice of an empowered crowd via its early involvement in creative projects. In other words, it’s a democracy. It allows us to “vote with our feet”. You effectively vote if a project should go ahead or not. Or you vote whether an existing product should have a certain set of features or a different one. A project may be about improving an existing offering or designing a whole new one altogether. Any stages from conceptualization to should or can be worthy of funding.
Us, the crowd, is driving innovation. We are asked about what progress we want. Don’t you think that’s cool?
In fact, it is über cool because, as the crowd we finally have a voice to engage the developer directly! And, as the developer, we can listen to all of our early fans directly! We get to implement the things you want in there before we complete the game. To me, as a game developer, that is beautiful! I get some highly valuable early feedback from core players (those that donated and therefore want to be involved in my project). It helps me refine the game, so that I make a game that the players love.
A game that uses crowd-funding wisely will be a lot better for players because of this interaction. It is easier now than it was ever before to make games that the fans actually want! Is this not the most important thing when it comes to innovation and progress? I feel that making something that nobody wants, needs or appreciates is a terrible waste of resources. There are so many games that don’t get played and end up being a pile of wasted resources, which could have been employed better elsewhere...
When investing in a startup, the investor for his or her “investment” is rewarded with an “ownership right” to a share of any potential profits, and faces limited liability (only what is invested can be lost). So the investor needs to evaluate the viability and the attractiveness of a venture as a whole.
In crowd-funding, the backer for his or her “contribution” is rewarded with a “voice” and a set of perks, has no right to a share of profits, but faces limited liability also. So the backer needs to evaluate only the viability of the project, rather than its potential in generating financial profits.
So, being a backer and an investors is related, but is not entirely the same thing!
As an investor the upside is theoretically unlimited and the downside is limited. On the other hand, as a backer of a crowd-funding project you have to be aware that your upside is limited as well as your downside. A backer’s upside is limited to the value or utility one expects to obtain from the intangible rewards (experience of the process and the fun of playing the game) and the tangible rewards (perks received). For a backer, the worst case scenario is therefore:
a) not being made part of the process (no voice)
b) not being able to play the game (no completion)
c) not receiving the perks promised (no or late delivery)
So while investing and “backing” is similar, how can you successfully select good crowd-funding projects by using some techniques from investors?
Follow these non-exhaustive guidelines:
1. How far has development progressed? The farther development has progressed, the more likely the game will reach completion, the more likely shipment will occur on schedule and the sooner you receive your perks. This also shows that the team is trustworthy. Development progress = effective management!
2. Is there a prototype that you can try out? This further mitigates development risk. A test version of a game would have overcome many significant development hurdles already.
3. Does the delivery of the perks depend on the completion of the game? All or at least some perks should be delivered independently if the game gets shipped on time or not.
4. Does it have a solid, diverse and experienced team that you can trust? Talent is the most valuable asset. A track record is important, but maybe an underdog has great potential too! The best blend is a mix of someone experienced and someone who has nothing to lose.
5. Does it explicitly outline the project’s milestones? There should be defined goals to reach. How else would they know where they want to get to?
6. Will you be involved in the decision making process, will you have a voice?
7. How creative or new is the idea? Will you be part of something ground-breaking that has never been tried before? It’s more fun to be part of something those who led the change.
For our game we deliberately postponed our crowd-funding campaign until now because I wanted my team to be able to fulfill as many of those guidelines before launching the campaign. Now that we are in a position to offer our backers a great project with zero development risk (as we will complete it whether we hit our goal or not), we can introduce you to Flirt Planet.
And, we are going to make Flirt Planet of the best and most innovative video games / dating services ever produced. I’m fussy enough to make sure that happens!
Have a look at our Indiegogo and judge for yourselves:
http://igg.me/at/flirtplanet/x/2309370
We offer you a robust campaign in which we mitigate risk for the backers by providing you with a stable game for you to play test. Risk and uncertainty get diminished and in return for your contributions expect to be involved in something innovative, have a ton of fun and receive what is promised to you on schedule!
Basically one key thing Kickstarter can't do DIRECTLY is fund a business start-up. Which is why all projects have to have start and end dates as well as well defined and limited goals. I'm working on an article trying to unwind all this confusion but so far the main players I've been talking too are busy fighting the law changes right now to respond to a nobody like me. :\
I'll be posting the article here and on my blog though no messaging system so not sure how that news would get out.. :|
There will be failures and scams, but the spirit of the thing is what matters: it's a chance to find like-minded people to fund otherwise impossible ideas.
I think it'd add a lot to the Kickstarter scheme, but would totally change its purpose. It won't only help to kickstart projects anymore... We are thinking about games here, but a lot of projects on kickstarter are already ready to go and they just need the extra money to start the production of the physical product (a book, a tabletop game, a new wallet, a watch, ...). Games are different because we ask the backer to give money before the product is made. Well, here it just looks the same but games being tricky products to make and having unpredictible development cycles, they differenciate from other products in that way.
A better idea would be to create a new platform of this sort where you can backe games, and only games, just like "my major company" is doing with music. AND on this platform, add the little extra feature that allows people to join in during the development and/or give more to help finish the game if needed in the end of the development. Having options to get alpha / beta access would be nice.
But as you said it'd be a great challange for the studio to keep up with all that for not 30 or 60days but for 6 months up to 2 years depending the project's scale. That could open a new position in the PR department ;)