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How MechWarrior Online got funded without Kickstarter Exclusive
How  MechWarrior Online  got funded without Kickstarter
October 29, 2012 | By Colin Campbell

October 29, 2012 | By Colin Campbell
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More: Console/PC, Business/Marketing, Exclusive



MechWarrior Online's long-awaited open beta begins today, partially made possible by a successful crowdfunding initiative that's raised over $5 million, without the help of Kickstarter.

Infinite Game Publishing and developer Piranha Online are showing how free-to-play games can make use of alternative funding methods to finance pre-release development and to engage consumers.

It helps that MechWarrior is a franchise with a substantial fan base that is clearly keen to see the property return in as good a shape as possible.

Dubbed the Founders Program, consumers were invited to join at one of three levels priced at $30, $60 and $120. The program offered exclusive mechs, in-game currency, beta-access and other treats, and even was formulated in conjunction with the MechWarrior fan community.

Nick Foster, CEO of IGP's parent company 7G Entertainment, explains, "Unlike most Kickstarter projects, we've had VC investment in the first minimum-viable-product part of the game. In talking with Piranha, we wanted to find a way to use the product that we'd already built to engage players and take their feedback. In that vein, we went on to the forums. The players helped us to gauge the pricing levels of each of the three tiers. Players are generally very sophisticated."

IGP president Kelly Zmak, a veteran game developer and former president of Radical Entertainment, adds, "We've sold over 70,000 Founder's packages. The basic demographics were 35 percent at the $30-dollar level, 30 percent at the $60-dollar level, and the remainder at the $120 level."

He says that founders are split between younger action fans and older players, some of whom have been fans of the franchise since the 1980s. "With MechWarrior fans from the old days, the age demographic is as high as 55 or 60 years old," says Zmak. "But we've also managed to capture the action fans. The current experience is eight-to-11 minutes long. It's a great adrenaline-rush experience where you get to cooperate with other players."

Advantages of independence

In this Kickstarter-frenzied era, it's interesting that MechWarrior Online would choose to circumvent that popular form of crowdfunding. Partly, that decision was driven by confidence in the brand's ability to raise enough interest without the benefit of a Kickstarter profile.

Foster explains, "There are at least 14 million fans of the franchise in North America. That helps. You get press. People understand right away what they should expect the game to be. You have your players before you start generating revenue."

Obviously, by going alone, there's also Kickstarter's fees to consider. In this specific case, there was a very practical consideration.

He says, "We're a Canadian company and Kickstarter is only viable for U.S. projects [for now -- ed]. But the main reason was because we had the product already at a stage where we believed it spoke for itself. By making it available to players in the closed beta, we had very quickly built the word-of-mouth. We didn't need a lot of marketing to pull in the amount that we did. Our confidence came from talking to these players directly on the forums, prior to going live with the program."

Where the money goes

The standard Kickstarter model allows consumers to buy into an endeavor in order to bring it into existence. But MechWarrior Online already exists. The question is, what is the money being used for?

Foster says, "We've raised minimal investment funds to build a viable product for each of our games. We then launch it [in beta] and use that minimum viable product to start generating an income stream. We keep a very close partnership with our developers and use that income to reinvest in the game, build out the features that the users want, and head into a period of ongoing development. New content, new features.



"We look at how players are playing the game. It's a way of taking a smaller initial investment, compared to retail, and still create the momentum and overall revenue generation over a longer period of time, rather than the two or three months of sales window that retail games have."

Does this mean that, without crowdfunding, the game would simply not come into being? "Not quite," he says. "The product will be a lot better for players because of the crowdfunding. It's allowed us to maintain a higher level of ongoing development in the product, than if we were waiting for momentum to build immediately after going live. In the next few months, we'll be able to release a lot more features."

Fundamentals of crowdfunding

Even though the MechWarrior Online team didn't use Kickstarter, the basic consumer desires and behaviors that drive Kickstarter campaigns align with independent fund-raising efforts. Zmak says, "The reason we give to Kickstarters is because it touches on a passion. It touches on a fundamental belief. It resonates with something we want. That's why the most successful Kickstarters have generated so much money. But I also believe that the majority of Kickstarters will be relatively low dollar amounts. For the $2 or $3 million efforts, it's easier for people to wrap their heads around what that game is going to be. It's easier for people to have a vision and share a vision for what that game could be."

Kickstarter is enjoying a honeymoon right now, before some of the funded efforts have a chance to fail and thereby to generate consumer disappointment and even anger. Zmak adds, "There's a reasonable level of skepticism that is going to slip into the community as more failures reveal themselves. But I don't think that will ever erase the passion that has driven people to participate all along."

Foster says, "For me, the key to crowdfunding is that there are gamers out there who want to engage with content creators. They want to engage with developers. They have good ideas themselves. They want to be a part of this process. Right now, they're going in through mechanisms like Kickstarter. At IGP, we've demonstrated that an independent company can also run a program that can be very successful. This is the next level, if you like, of customer engagement. The closer you can get to your customers, the more they're willing to embrace your products and invest in them."

So, having successfully raised a sizeable pile of cash, do these guys have any advice for would-be crowd-funders?

Foster says, "The key is to understand what your goals are. Any kind of crowdfunding can be the momentum that gets your project going, or it can be the element that kills it off very quickly and gives it a negative reputation. Also, you have to understand what's involved in running a successful crowdfunding project. It will involve some marketing. It will involve press. It will involve demonstrating to your potential players or customers that you are able to make that product, that you have a track record. Then it will involve treating the customers as if they are investors in your product. At that point, that's what they are. To some extent, the companies that can manage those steps are also likely the groups that are going to be successful with the funds that they raise."

Zmak adds, "There's a responsibility that needs to be taken very seriously. You don't go into these with a casual approach. There's almost an amateur approach now to some fundraising, which I think is highly risky. We need to recognize that people are giving us their money for a reason, and that value statement has to be there for us to be successful."

Colin Campbell is a features writer for IGN. You can follow him on Twitter @colincampbellx


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