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The Crowdfunding Revolution: Perspectives

April 21, 2011 Article Start Previous Page 3 of 3
 

Halfway there

One of the other early success stories for the service is Cardinal Quest. The Flash-based dungeon crawler developed by Tametick has the highest level of donations so far, and is currently the only game to have topped the $4,000 plateau, though it's still a ways away from its ultimate goal of $6,000. The two-man development team behind the project is hoping to raise enough money to work on the game full time.

And like Gibson, they believe that the specialization of 8-Bit is a good thing.

"People coming to [8-Bit Funding] are coming specifically for games," developer Ido Yehieli said. "That kind of targeted audience is worth a lot to game makers trying to finance their projects."

Both Yehieli and co-developer Corey Martin work full time jobs in addition to developing Cardinal Quest, and their ultimate goal is to earn enough money to take some time off and complete the game in two months of working full time, as opposed to a year or more just working evenings and weekends.

Once complete, they hope to sell the Flash license and then use that money to fund both a desktop and mobile version of the game.

While he initially began using 8-Bit as little more than an experiment, his early experience has convinced Yehieli that the service has a lot of potential.

"8-Bit Funding came at just the right time and if successful I believe it could change the nature of the game for indie developers worldwide," he said. "I think it is important for us to have our own site that focuses on indie gaming. In more general use sites games tend to be pushed to the side compared to other types of work and their community does not particularly care about indie games."

"Of course being open to non-Americans, unlike Kickstarter, was also a significant draw, as I am located in Europe."

But while a few early games have achieved success on the service, Yehieli doesn't believe that 8-Bit Funding or other similar services are appropriate for every type of game. It's not a coincidence that both Cardinal Quest and Expedition: The New World are both browser games, as opposed to something of a much larger scale. He explained that there are two types of developers that wouldn't necessarily fit the crowd sourced model.

"The first are people without a track record of finished games and without a solid base of players who know what they are capable of and can get the ball rolling," Yehieli said. "I think people might be reluctant to support such developers, fearing the games will never actually get made. The second group is people with very large scope projects who might require a lot more funds than [8-Bit Funding]'s audience is willing to provide. We can see it now in the fact that the projects who requested the highest amounts on [8-Bit Funding] are the ones who are experiencing the least success."


Cardinal Quest

In Conclusion

Crowdfunding is opening up new opportunities for indie developers, giving them access to financial opportunities that previously didn't exist. For small developers it can be the difference between whether or not a game gets made. But clearly these services aren't suitable for everyone.

For expensive, large-scale projects, it can be difficult to raise the amount of money necessary. And, just like everything else, those creators who are already known and have an audience have an advantage over new up and comers. It can also take a lot of self-promotion to successfully get the word out.

But there isn't really a drawback to testing the waters. It's a lot of hard work, but even if your game doesn't end up reaching its funding goal, the experience will likely be an educational one.

"Even though Megan and the Giant failed to raise the funding goal I was looking for, I learned a lot about my own project from the experience," said Wu. "Through having to market it to people before it was done, I had to define clearly what the project is and who it is for. Most of the work I did during the preparation for Kickstarter has been used again in the design and marketing efforts post-Kickstarter."

"Crowdsourcing is a good way to put you in the real world and it forces you to listen."


Article Start Previous Page 3 of 3

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Comments


Joe Cooper
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"Wu believes that there are two deciding factors when it comes to the success of a project on Kickstarter: a pre-existing audience and substantial marketing"



I wonder if the name "Pepwuper" was a turn-off. I find it pretty grating, I'd avoid the site just to avoid the name and wouldn't want to say "I donated to Pepwuper" at any point. Conversely, plenty of projects on Kickstarter certainly don't have "marketing" budgets or pre-existing audiences. Often, those are the go-to items when you don't really know.

Alex Weldon
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I was excited to hear about 8-Bit Funding, but disappointed when I arrived at the site and discovered that its exact functioning makes it of limited use for developers, and probably very profitable for its owners. I'd go so far as to call it unethical (though legally speaking, I can't call it a scam, since they tell you exactly how it works).



Kickstarter operates on pledges. No money is paid by the donors until the target is reached, whereupon the full amount is given to the project owner, who is then legally obliged to finish the project or return the money (which is then returned to the donors).



8-Bit Funding, by contrast, charges donors immediately, will NOT refund that money under any circumstances, and only gives the money to the project owners AFTER completion.



The whole point of securing funding is that the developer needs operation capital while working on the project. Only receiving the money after the product ships makes it considerably less useful.



Meanwhile, we all know that the completion rate of indie game projects is very low. In particular, the majority of 8-Bit Funding projects, which receive just a few tens or hundreds of dollars, are unlikely to be finished, as that money is not enough to serve as an effective carrot to motivate the developer to finish.



So essentially, a bunch of good-natured gamers are donating money that will never be returned to them and probably never make it into the hands of their intended recipient, to support a game that will probably never be finished, and in return for perks that they will probably never receive. Where does that money end up? In 8-Bit Funding's pockets, obviously.



The result of this is almost sure to be a loss of trust and goodwill between the gaming public and indie developers, and a short-lived but lucrative windfall for 8-Bit Gaming before people start figuring it out.

Joe Cooper
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Smooth.

Alfe Clemencio
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They used to have refunds until paypal said no. Talk to them.

Alex Weldon
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That's just an excuse. If they were interested in providing refunds, they could work out a system to do it... or better yet, do what Kickstarter does and not charge people in the first place until there's enough money to make the project happen.



Alternately, they could have a system whereby developers have a limited amount of time to complete their project, after which the money is put into a pool and distributed to those who actually do complete their projects, but didn't get as much money as they'd asked for.



Saying "oh well, Paypal won't let us give the money back, so I guess we have no choice but to keep it! Sorry!" is disingenuous and unethical.

Alfe Clemencio
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If you really want to find a way to refute their claims then simply state a payment processor that allows refunds that is not the one that kickstarter uses. They can't do what kickstarter does unless they have a similar non-payment processor. I guess they could just leave out everyone outside of states.

Alex Weldon
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Like I said, if refunds are impossible, they could make sure the money ends up in the hands of another developer, rather than their own pockets. Users could have accounts on the site; if the project they originally funded isn't complete within, say, a year, the money is returned to the user's account. From there, they can donate it to a different project, or have the money returned to them by cheque, less a $10 fee to cover postage and processing.



Just saying "oh well, can't find a payment processor who makes it effortless" is at best lazy as hell, but I believe more likely a disingenuous way of making excuses for keeping the cash.

William McDonald
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I've talked to Geoff about his site over the phone. The site is definitely having growing pains. Luckily a lot of the major issues have been resolved, although too late for me. We did a teaser for my game Kobold's Quest that got 800 views, lots of good feedback, launched 8bitfunding did a video got 4000 views lots of emails saying they were going to buy it, people seemed excited but no pledges... Couldn't figure out what's going on. WAS FEATURED ON BYTEJACKER and still no pledges... Now I'm pissed.



I wrote multiple emails about little bugs I found in the site, like it screwing with my title and not letting me setup USA as my country of origin with Washington as the state. I then asked 2 friends to try to pledge a dollar too see what's up. Then I watched in horror to see the registration / pledge pages COMPLETELY BROKEN (not being able to place state or origin with USA or Canada and province, the form resetting itself when you click submit)! I tracked down his phone number (it's not in contact us) after not hearing back. Talked to him for 20 minutes, recorded the conversation (because I am a bit upset and wanted to make sure I communicated everything)...



Well found out a lot about the site, he had no idea that these bugs were there. Overnight he fixed all of them, extended my project period and I suddenly found myself with $83 in funding trickling in, but alas the big wave of public interest had passed. My video is now only getting about 20 views a day... So out of desperation, does anybody want to help us complete Kobold's Quest a game where you feed babies to monsters.



http://8bitfunding.com/project_details.php?p_id=170



We just need the funding to polish our GUI / Menu system... Anything else listed was if we went beyond our goal. This game has been over a year in the making and everything works and is playable.



Oh and when the project timer is over the money is sent to us, they don't hold it until the game is finished they hand it to us the developers when the project's timer is completed. It's not as good as Kickstarter, but it's easier to get on, plus they got rid of a lot of that annoying registration junk that was broken and pledgers hated.



Thank you,

William A. McDonald

Designer of Kobold's Quest

Luis Blondet
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I was able to secure funding for my game using both Kickstarter.com and IndieGoGo.com and raise more than $4k, not bad for someone that has never made a game before ;)



My strategy was to use Kickstater because of its popularity, and then IndieGoGo to reach out to non-USA funders, then I would raise funds in the physical world and referred them to the site as part of the pitching process and just let anyone I didn't know just happen to stumble upon it.



I liked IndieGoGo better than Kickstarter. In Kickstarter, you have to meet or surpass your goal in order to get paid, while IndieGoGo let's you keep whatever you raise. Also, IndieGoGo gives you some metrics to help you tweak your marketing, it also gives you a basic HTML editor. Kickstarter doesn't give you any of that. Finally, my project was picked to be featured sections in IndieGoGo, perhaps because of all the traffic and funds I was bringing in while pitching my project, Kickstarter in the other hand, gave my project subsequent bumps due to traffic and funds raised...however, something weird started happening halfway through; even though I was raising funds and attracting traffic, my project started to stall and even sink towards the end in comparison to other projects that were not even raising as much and I think this is because Kickstarter is very arbitrary. You must be personally approved by an admin in order to be able to post and they tend to cherry pick projects that they want to be ranked higher.



I was really shocked when a board game based on the Mafia was featured over my game that is based on seamless education of ancient history. Do not expect for Kickstarter to help you at all if they don't like your project and do not expect to be ranked higher either.



I still will use both, or any and all available funding channels, for my next project, but the main landing page will be IndieGoGo instead of Kickstarter.





I still have my old pages up, if you would like to see how I did it, it may help you form a better strategy for your own fund raising;



Kickstarter - http://kck.st/es30Jf



IndieGoGo - http://igg.me/p/13572?a=58489&i=shlk





I hope this info helps someone. We indies need to help one another. Good luck.

Tim Carter
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Um... We already have "crowdfunding".



We've had it for years.



It's called the stock market. And it's heavily regulated.



Remember that, because you're treading into dangerous turf there.



In order to get around this, the "crowdfunders" position the "investments" that the crowd members make as donations. This will totally limit the ability of anyone to raise any significant amount of capital through this means. How much can you raise in a donation environment?

Kim Pallister
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Top Kickstarter projects have raised substantial money via the site. Six figures certainly, with one project raising almost seven figures.



Certainly reasonable numbers for someone doing an iPhone of FB game.



I agree it's amazing that people will make 'donations', but keep in mind that sometimes the prize levels for a given donation include a copy of the project.



Is that really all that different than pre-ordering the next Call of Duty?

Fox English
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Also you have to keep in mind that donations are a more preferable concept than investments to many indie developers - there is no expectations aside from creator-offered perks for certain milestones that may or may not have any real value. The stock market is focused on purchasing actual ownership of an idea, brand, or product and once a certain threshhold of ownership shares is reached and the original creator is seen as unviable for its future propogation they are removed from the process.



Meanwhile Kickstarster (and other crowd funding sites et al) is not about buying rights to the IP but wishing nothing more for it to see the light of day (and as Kim said, essentially pre-ordering the finished game).

Tim Carter
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Right, but all it will take is one incident where a "crowdsourcer" walks away with all the "donations", and takes off for the Cayman Islands or something, for the SEC to crack down on the whole process.



By the way, pre-ordering the finished game is, essentially, a making an investment. If you're garnering thousands of investments over the Internet, that's basically public funding. That falls under the domain of the SEC (in the US).

Joe Cooper
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Regulations aside, the point of it is to "crowdfund" things much, much smaller than you'd make publicly owned through the stock market. It probably costs several times the average Kickstarter project just for legal fees to make that happen.



There's potential for fraud, yes, but this can be more like eBay than the stock market.

Fox English
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Good points there; I see what you're getting at. Luckily Kickstarter seems more of a proxy service as opposed to other crowdsourcing sites, and they only (seem to) handle the transaction rather than hold the funds themselves, so at least they seem one step away from the potential for shadiness. Still I'm sure they could find a way if that was their perogative.



As for the pre-order concept, it is an optional perk to offer a free copy of the game in thanks for a certain donation amount offered by the creator. It's customary and recommended by regular donators on the site, but it's not required at all. I am obviously no lawyer though so I don't know if there is an actual line there that cross trade commission laws, but just wondering aloud if it is truly an issue and if it is, finding the best course of action to avoid problems in the future. Free copies of the game are the most appealing offer to many casual donators and most likely to get the higher amounts, but maybe that practice should be discouraged to prevent a real situation if someone gets an itch to start a fight.



It is a bit discouraging that it's so hard to legitimately get started unless you already have money. I guess the safest option is never make anything you wouldn't care about losing until you have the money saved up yourself? Wish I would have told myself that out of college :)

Tim Carter
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It could be a lot lot easier, if the game industry wisened up. For example, yesterday Valve says it wouldn't release sales data. This really really hurts developers, because it hampers their ability to get sophisticated finance - the kind of finance that goes beyond the norm.



In the game industry there are really only 2 ways to get investment: self-finance or get a publishing deal.



In the film industry there are something like 40 ways to get investment.



The game industry needs to stop thinking it has all the answers and open its mind a little.

Alan Youngblood
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Could you elaborate on those 40 financing options for films Tim? I'd like to take your advice and pursue alternative revenue streams but it would help to know what I'm chasing.

Tim Carter
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Are you making a film?



Okay, I'll throw one out at you...



International Co-Productions. These are tax treaties which enable a production to straddle the government funding available in multiple countries. Thus you might be able to make a movie that is a Canada-UK Co-Production, and pool your government funding from Canada and the UK to get it made. In order for this to work, the key talent needs to be split among the participating countries - and there is a specific point system devised to manage that. So our Canada-UK co-production would need some core talent that is Canadian and some that is British.



Since international co-production tax treaties have not been negotiated (or, frankly, even considered) in the game industry, our industry cannot make use of them.

Kim Pallister
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There's a key difference here. An investment in a company is exchanging money for owning a piece of it. Kickstartr projects do not offer such an opportunity. Just a chance to contribute some money out of the goodness of your heart, for something you want to see finished and shipped. Sometimes, there's a 'gift' for donors, which turns it into a sort of pre-purchase, but still no ownership in the company.



Microlending sites do loans, but not equity stake in companies.



I think there's an opportunity there, but you are right, THAT would definitely have the SEC's attention.

Tim Carter
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Yes, but this all depends on the definition of a "donor". If you "donate" something in the hope of receiving a good game, well the use of the word "donor" may just be semantic. You may actually be buying something before it has worth - traditionally the buying of a future value is called... wait for it... "investment".



What may actually be occurring is mass public investment (albeit on a small scale). And that is stock market territory... because that kind of thing is heavily susceptible to insider exploitation and abuse.



But, you know, if this is a small community with honest intentions and the ability to police itself thus, then maybe I'm wrong. But generally when it comes to money, self-policing techniques don't tend to work very long before some scam artist comes along.

Jesse Manning
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Donations are always nice, but I think a model more similar to kiva (http://www.kiva.org/) could potentially be more interesting. Using micro loans would lower the risk level for any single investor by spreading out the total investment and also making normal payments on the loans could help keep the developer on track for a finished product. Also I could see the repayment of loans making the bond between the developer and consumer stronger which could help with future projects.

Kim Pallister
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That "normal payments on loans" could be a problem unless they offer terms where the developer can choose to start payment post-ship. Since games tend to not pay until they are done :-)

Matt Glanville
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It's definitely much easier if you already have a lot of traffic. I'm currently trying to launch my game Luminesca on IndieGoGo and I'm finding the hardest thing is just getting people to look at the damn thing.



If anyone would like to take a look and offer suggestions I'm all ears!

James Booth
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Keep doing what you're doing right now. I have no money, but I at least went to indiegogo out of curiosity. Check out every forum for your genre and post on there as well; give them your blogspot as well. And put a face to your name so we know who we're donating to.

Daniel Boy
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@Matt

the underwater stuff looks way tighter than the aquaria movement, really gorgeous are the leaps out of the water.

But my question is: Was it a mistake to price the demo/test version at 5$?

Matt Glanville
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Thanks! I'm pretty happy with the way the character is controlled at the moment, it feels really nice and fluid.

You might be right about the demo pricing. I initially saw it as a type of alpha build (which it is essentially) but I'm now thinking it might make more sense to have it as a public demo, so this is something I'm looking into.

Megan Fox
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Matt, have you put together a press release and thrown it on http://www.gamespress.com/ ? And then also hand-submitted it to places like IndieGames.com, DIYGamer.com, RockPaperScissors (I believe you're PC-focused), etc?



Seems like yours is the kind of game they'd typically happily throw up news on.

Matt Glanville
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I've contacted a few and heard nothing back! Going to keep trying though, thanks for the extra links.

Lex Allen
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It's "RockPaperShotgun" not "RockPaperScissors". I looked all over the place for RockPaperScissors because I thought it was something new. LOL!

Josh Leeper
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I just launched a two-week Kickstarter funding campaign for an independent flash game currently in development called OVNI. The goal is to get the community involved in providing content levels, character designs, and story content as well as funding. After working with corporations, it's great to interact more directly with the people who are excited to fund (and play!) my game.

I wasn't aware there were game-specific crowdsourcing sites, but depending on how things work out with Kickstarter, they may be very useful in the future.

Thanks for the article, and thanks to everybody else for the informative comments!

Also, check out my Kickstarter project; I could use some traffic, and I welcome feedback from the community! http://kck.st/hJQQGN


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