"I said to them, 'So, you want us to do a Kickstarter using our name ... you then publish the game, but we then don't get to keep the brand we make and we only get a portion of the profits?' They said, 'Yes.'"
- Obsidian CEO Feargus Urquhart describes (quote edited slightly for clarity) a very tempting deal a publisher tried to strike with his company in order to get a game funded through Kickstarter.
Obsidian's self-published Project Eternity, if you've somehow missed it, has managed to raise over $1.6 million in the last five days, and still has nearly four weeks left of funding to go.
I've been wondering lately how the traditional game publishing world will change now that crowdsourcing game development is, I can say with confidence, here to stay. If this anecdote is any indication, they still haven't figured that out.
I'm not saying that publishers are on the verge of extinction, here. Even in this new Kickstarter age where developers can get funding directly from their players, there are still a lot of really annoying things you have to worry about in order to get a game out the door that, frankly, have nothing to do with actually creating games.
But clearly, for smaller-scale games made by studios with an extensive fan base like Obsidian, this sort of "publishing" model makes absolutely no sense. If publishers want to tap into crowdfunding to get a game off the ground, they're going to have to evolve into less of a gatekeeper and more of a strict marketing and publicity service that lifts some of the burden off of the people actually making the product.
It seems to me that the biggest advantage to having a publisher would be overcoming the barriers of entry to physical retail space and closed console markets. Without a publishing deal, games tend to be (more or less) limited to digital distribution and PCs. Obsidian's Kickstarted Eternity, for example, is PC/Linux/Mac over Steam and GoG, with no mention of shelf space or console.
Thus while I see a significant dichotomy between the retail-oriented console market run by traditional publishing models and the digital-oriented PC market soon to be dominated by indies and self-publishing studios, I don't see this dichotomy leading to the death of either group. Both serve different markets. The desire to play a slow, deep, story-driven RPG on a Linux computer isn't going to compete heavily with the desire to buy the latest annual version of a sporting franchise to play on your couch-based console.
I think it's more sensible to say that traditional publishers will lose a portion of their business that they didn't have any interest in anyhow.
Wishful thinking. Kickstarter is great but *extremely* limited in the kinds of projects that can be successful there. Has no effect on 99+% of the game industry.
The nice thing about this is that gamers will ultimately choose what games are made instead of the traditional "make-it and find out if it is good at launch" style. I've made too many awesome games only to find out at the end that the game was not received well.
I'm not sure if that's really going to change. Project Eternity is very much a "make it and find out if it's good at launch" game, and that's one of the bigger criticisms lobbed at the title so far.
We're really just replacing the "make-it and find out if it is good at launch" style with the "make-it and find out if it is good halfway to launch" style. The less story-driven the game is, the earlier the betas seem to be coming out these days.
You can have a million people say your idea sounds great and still have it turn out to be mediocre one you get to implementing the idea.
i know we are all very excited about Kickstarter, but its still too early to say its here to stay or that something else will die because of it (as is the common drumbeat of Gamasutra). what happens when some of these funded projects fail? what if the money is squandered? what if people dont get what they want?
we havent seen many of these projects completed yet. I could see a scenario where the funders become too jaded or cautious because of failures. Of course, it could be a huge success, who knows.
Everytime anything new comes around, the death of everything else is reported as imminent.
People predicting the death of handhelds due to Mobile
People predicting the death of consoles due to tablet/social
People predicting the death of traditional one time purchase due to freemium
People predicting the death of Publishers due to Kickstarter
Some people just get a little over excited and equate "This new thing is pretty cool" to "Everything we've previously used is now useless", which is ludicrous.
Is there a scenario that's plausible in the slightest wherein crowdfunding won't be here to stay? Is there any way this scenario could die, at least for well known smaller companies, like DoubleFine and Obsidian?
"It's too early to tell". Is it really? How long until it isn't too early to tell? How successful does a project need to be before it's "real" or "here to stay"?
@Jacob Given the amount of money we've seen raised for some game projects, there is no way that crowdfunding is going away. Even if Wasteland 2, Double Fine Adventure, and Project Eternity flop (which I don't think is likely, they're all pros), there's just too much promise and you can always find eager funders/suckers (your choice).
The publishers have deliberately abandoned a huge segment of the market as being too small to care about. Crowdfunding takes care of this collectively huge pent up demand.
Like @Dave and @Tom say, I don't see this at all as 'publishers die' or 'crowdfunding fails', instead we get an ecosystem where everyone finds their niche.
@ Jacob? its absolutely too early to tell. We've barely seen any finished results. its only a matter of time before a few high profile dissappointments pop up an then this model will truly be tested.
Projects will fail, but that's not unusual. Privately funded projects fail as well, only 30% of them actually finish, but that doesn't deter publishers or investors. Success will breed success and those companies which can thrive within this environment will propagate the model.
@"Privately funded projects fail as well, only 30% of them actually finish, but that doesn't deter publishers or investors."
Investors pay off losses with profit. Kickstarter profits are capped at how much you value the item you paid for vs. how much you paid for it.
For example, 9/10 games lose money, 1/10 games make 100 times their cost. Investors offset 9 games with the last game/expectation of the last game. If 9/10 games you give money to in Kickstarter fail, you don't offset your $450 with a copy of the one game that was safe. On the other hand, most kickstarter "investments" are on a very micro scale, and a lot of people consider them to be donations rather than investments expecting a return.
Comparing it to established investing isn't really applicable imo. They are two different monsters.
@Dave I disagree. I think even if there are high profile failures, that the companies will be blamed, rather than Kickstarter. After all, we already have the high profile FTL, and many other non-game projects. I seriously dispute any contention that Shadowrun, Wasteland 2, Double Fine's adventure (or even the new Obsidian entry) will fail. And with high-profile successes in the hands of gamers, high-profile failures just won't have the same effect.
@Ron Yup, I agree. Though you might re-read Dave's comments, because I don't think he was saying what you think he was saying.
I agree with Simon's points regarding the markets that traditional publishers serve, vs. the markets that self-publishing and crowdfunding serve. Kickstarter is providing many wonderful opportunities, but traditional publishers aren't going to die out any time soon.
But I'm dropping my bias as a gamer for a second and thinking as a financial professional: what about the sustainability of Kickstarter for large projects? (I'll define "large" as a game that received more than $500K in funding, and usually because the dev set that as the minimum goal.)
Publishers have typically supplied the "before money" if the dev didn't have enough of their own money, since indies typically don't have access to traditional lenders or professional investors. The "after money" comes from the gamers.
With Kickstarter, the "after money" is being used in lieu of the "before money". For most of these campaigns, there was no "before money". The vast majority of people who would've bought the game pledged. While a few games have made it to market after being Kickstarted (FTL being the first one that comes to mind), none of the large-goal games have been released yet, so there's no telling how they will actually do on the market right now. For niche genres like adventure games, you have to remember that a lot of people who would've bought the game already did and it will impact your sales, when compared to a game like FTL that would attract a larger audience.
I'm not a naysayer, I've contributed to a couple Kickstarters and want to see them succeed. All I'm saying is...if you want to run a campaign and have it be the push you need to make games for a living, remember to have some foresight. Do research on how much reward fulfillment will run you prior to kicking the campaign off, and don't forget about taxes. I do believe Kickstarter can be used to get some indie games off the ground and become the type that get onto Steam and sell well: but it's the large scale projects that make me question the long-term sustainability, and you should question that as well.
exactly, to my knowledge most studios that have a really successful launch off kickstarter do not constantly come back to kickstarter if they dont have to.
This rise in self-publishing and crowdfunding is showing a form of "reset" in the industry. While older developers we've grown up with are shutting down or "losing their visions," independent game development has continued to grow on the sides. Technology and the tools we have are also improving at an incredible rate, allowing more people to push their way into game development, and bigger companies are starting to notice, putting tons of resources towards independent support. Thanks to this, more developers are able to do what they do without the fear of publishers looming over their heads.
2013 is going to be an interesting year to be indie.
IT's just another avenue to pursue. It is another tool. And an unproven tool at this since all we have seen is money going in and nothing coming out yet.
And this rose is never going to be as beautiful as it is now when no one has experience a downside.
You thought it was bad paying for a terrible game. What about paying for vaporware?
OVerall Kickstarter is an avenue for a game targeting a smaller more hardcore audience. The mass market consumer just doesn't have the time or care enough to research these proposals.
While it is an unproven tool for the larger multi-million dollar Kickstarters, it has been a proven success for a number of smaller projects. FTL is one that just released this week and people are loving it.
@Zach: It's also been a proven failure for a number of smaller projects :p
edit: the point being that there isn't a strong proof for either side, not that it's a proven failure.
You give FTL as an example. There is a big difference between, "Hey kickstarter! Here's a game that we designed, help us make it!" and, "Hey kickstarter! Here's a game that's pretty much finished, help us afford the cost of getting it on the market!" The latter was the case for FTL, not the former, and the former hasn't really had any games released yet.
People don't see the fundamental difference between the old and new model. You can't judge a Kickstater project on a binary scale like a privately funded project. In a privately funded game, it is finished and on the shelves or it is not. That is the metric of success..
Kickstarter projects are (can be) incremental release builds of a game which could fail at any time but the users get access to working builds akin to "alpha" and "beta" builds of games currently. To the user their investment already reaps a reward with access to incremental builds and feedback to the developers early on. To the developers they get the funds to build tech, IP and expertise (most important imo). If the developers keep the users happy, they will foster a continuing relationship and future funding. Also without the publishers "cut", developers have much more financial flexibility.
It won't take long, the next COD or Minecraft will be made through a KickStater or other crowd funding forum, that is the nature of games (hit driven). Kickstater/indie projects are pretty much where most of the innovations in game will be made.
Until you have a Kickstarter getting funded that fully covers the production, marketing, and distribution costs of even a Darksiders level game, there will always be a clear cut and obvious role for publishers to play.
I think we will eventually see publishers using Kickstarter (by Kickstarter I mean literally Kickstarter as well as the general concept of pre-buying/donation) as a "show and prove" model for games that cost multiple millions to make, but still have budgets in the mid to upper single digit millions. Something along the lines of, "If you can get $Y amount of support on Kickstarter, we'll greenlight the project and throw in $X million of financial support. If not, well this is a game people don't want to buy and best wishes to you, but we aren't interested."
People have shown themselves to not like that approach though. THere was a Kickstarter a while back that was asking for $200k in order to create a prototype that was going to be pitched to publishers. They failed for exactly that reason. Nobody wanted to back a project that wasn't even the end project. They didn't want a project that couldn't be released on its own merits. Can't remember the specific project.
Why would anyone tie themselves to a "publishing" contract after a successful KickStarer? It's like well we could finish with the money we said we could and keep 100% of our IP (from which we can create more products getting to keep 100% of the profits) or we can get 2-5x more money and lose our IP and all future profits from said IP.. hmmm... let me think on that.
With a successful KickStarter and satisfied fans, publishers will have a very hard sell to convince developers to hand over their IP. Since the developer will always have KickStarter / GreenLight / etc..
@Duong: I know the board game section's logic has more to do with forecasting than funding. Not all publishing contracts sell ip rights, and few publishing contracts are just about funding. Publishers bring money to the table, but they also bring large marketing departments, legal departments, and QA departments as well.
I think right now the kickstarter market is unstable. I think people are still at a stage where they assume the companies are going to be able to deliver at or above the expectations set by their videos. Some definitely will, but betting on a kickstarter is anything but the 100% a lot of funders seem to think it is right now.
There's also a much bigger responsibility for developers to have better business sense. No offense to game developers, but in general they aren't great business people. Publishers help a lot here because they force the developers to view their passion as both their passion and a business rather than just a passion. Imagine if 38 studios opened a kickstarter for a KOA sequel before shit hit the fan, they probably could have made a million dollars. They probably still would have gone bankrupt, just in a less disasterous fashion.
Don't think it will die, but I do think it will be different than it is today. I do not find the kickstarter market to be totally stable at, but fully expect it to stabilize and be a sweet option in the next year or so. I think the board game section of it feel fairly stable right now though.
Thus while I see a significant dichotomy between the retail-oriented console market run by traditional publishing models and the digital-oriented PC market soon to be dominated by indies and self-publishing studios, I don't see this dichotomy leading to the death of either group. Both serve different markets. The desire to play a slow, deep, story-driven RPG on a Linux computer isn't going to compete heavily with the desire to buy the latest annual version of a sporting franchise to play on your couch-based console.
I think it's more sensible to say that traditional publishers will lose a portion of their business that they didn't have any interest in anyhow.
You can have a million people say your idea sounds great and still have it turn out to be mediocre one you get to implementing the idea.
we havent seen many of these projects completed yet. I could see a scenario where the funders become too jaded or cautious because of failures. Of course, it could be a huge success, who knows.
People predicting the death of handhelds due to Mobile
People predicting the death of consoles due to tablet/social
People predicting the death of traditional one time purchase due to freemium
People predicting the death of Publishers due to Kickstarter
Some people just get a little over excited and equate "This new thing is pretty cool" to "Everything we've previously used is now useless", which is ludicrous.
"It's too early to tell". Is it really? How long until it isn't too early to tell? How successful does a project need to be before it's "real" or "here to stay"?
The publishers have deliberately abandoned a huge segment of the market as being too small to care about. Crowdfunding takes care of this collectively huge pent up demand.
Like @Dave and @Tom say, I don't see this at all as 'publishers die' or 'crowdfunding fails', instead we get an ecosystem where everyone finds their niche.
Investors pay off losses with profit. Kickstarter profits are capped at how much you value the item you paid for vs. how much you paid for it.
For example, 9/10 games lose money, 1/10 games make 100 times their cost. Investors offset 9 games with the last game/expectation of the last game. If 9/10 games you give money to in Kickstarter fail, you don't offset your $450 with a copy of the one game that was safe. On the other hand, most kickstarter "investments" are on a very micro scale, and a lot of people consider them to be donations rather than investments expecting a return.
Comparing it to established investing isn't really applicable imo. They are two different monsters.
@Ron Yup, I agree. Though you might re-read Dave's comments, because I don't think he was saying what you think he was saying.
But I'm dropping my bias as a gamer for a second and thinking as a financial professional: what about the sustainability of Kickstarter for large projects? (I'll define "large" as a game that received more than $500K in funding, and usually because the dev set that as the minimum goal.)
Publishers have typically supplied the "before money" if the dev didn't have enough of their own money, since indies typically don't have access to traditional lenders or professional investors. The "after money" comes from the gamers.
With Kickstarter, the "after money" is being used in lieu of the "before money". For most of these campaigns, there was no "before money". The vast majority of people who would've bought the game pledged. While a few games have made it to market after being Kickstarted (FTL being the first one that comes to mind), none of the large-goal games have been released yet, so there's no telling how they will actually do on the market right now. For niche genres like adventure games, you have to remember that a lot of people who would've bought the game already did and it will impact your sales, when compared to a game like FTL that would attract a larger audience.
I'm not a naysayer, I've contributed to a couple Kickstarters and want to see them succeed. All I'm saying is...if you want to run a campaign and have it be the push you need to make games for a living, remember to have some foresight. Do research on how much reward fulfillment will run you prior to kicking the campaign off, and don't forget about taxes. I do believe Kickstarter can be used to get some indie games off the ground and become the type that get onto Steam and sell well: but it's the large scale projects that make me question the long-term sustainability, and you should question that as well.
2013 is going to be an interesting year to be indie.
And this rose is never going to be as beautiful as it is now when no one has experience a downside.
You thought it was bad paying for a terrible game. What about paying for vaporware?
OVerall Kickstarter is an avenue for a game targeting a smaller more hardcore audience. The mass market consumer just doesn't have the time or care enough to research these proposals.
edit: the point being that there isn't a strong proof for either side, not that it's a proven failure.
You give FTL as an example. There is a big difference between, "Hey kickstarter! Here's a game that we designed, help us make it!" and, "Hey kickstarter! Here's a game that's pretty much finished, help us afford the cost of getting it on the market!" The latter was the case for FTL, not the former, and the former hasn't really had any games released yet.
Kickstarter projects are (can be) incremental release builds of a game which could fail at any time but the users get access to working builds akin to "alpha" and "beta" builds of games currently. To the user their investment already reaps a reward with access to incremental builds and feedback to the developers early on. To the developers they get the funds to build tech, IP and expertise (most important imo). If the developers keep the users happy, they will foster a continuing relationship and future funding. Also without the publishers "cut", developers have much more financial flexibility.
It won't take long, the next COD or Minecraft will be made through a KickStater or other crowd funding forum, that is the nature of games (hit driven). Kickstater/indie projects are pretty much where most of the innovations in game will be made.
I think we will eventually see publishers using Kickstarter (by Kickstarter I mean literally Kickstarter as well as the general concept of pre-buying/donation) as a "show and prove" model for games that cost multiple millions to make, but still have budgets in the mid to upper single digit millions. Something along the lines of, "If you can get $Y amount of support on Kickstarter, we'll greenlight the project and throw in $X million of financial support. If not, well this is a game people don't want to buy and best wishes to you, but we aren't interested."
Almost every game in the Boardgames category of the website has that approach.
http://www.kickstarter.com/projects/1675907842/pathfinder-online-t echnology-demo
?ref=live
Which is quite surprising for me, as I was thinking people would not be interested on backing such a project.
With a successful KickStarter and satisfied fans, publishers will have a very hard sell to convince developers to hand over their IP. Since the developer will always have KickStarter / GreenLight / etc..
There's also a much bigger responsibility for developers to have better business sense. No offense to game developers, but in general they aren't great business people. Publishers help a lot here because they force the developers to view their passion as both their passion and a business rather than just a passion. Imagine if 38 studios opened a kickstarter for a KOA sequel before shit hit the fan, they probably could have made a million dollars. They probably still would have gone bankrupt, just in a less disasterous fashion.
Don't think it will die, but I do think it will be different than it is today. I do not find the kickstarter market to be totally stable at, but fully expect it to stabilize and be a sweet option in the next year or so. I think the board game section of it feel fairly stable right now though.