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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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    11 comments
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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Comments


Eon Puzzle
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It's not MechWarrior, but it's fun for both children and adults - it's Eon Puzzle. It's presently pending in a Kickstarter fashion but; like MechWarrior, without Kickstarter. Pre-launch perks are available.

Chris Edwards
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Who keeps calling this "crowdfunding"?!? It's nothing of the sort! The MWO Founder's program is just a pre-order promotion, no different than when any other game does it. You don't call DLC or expansion packs "crowdunding" do you? Why is this constantly being referred to as crowdfunding?!?

Raising the $5 million is still an impressive figure to be sure, but this is NOTHING similar to a Kickstarter or any other actual "crowdfunding" program. This money will help Piranha Games have more options, but development of this game was in no way, shape, or form dependent on these funds. This game was going to be made regardless of sales of these Founder's Packages.

Ardney Carter
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While I understand where you're coming from with your objection to the term 'crowdfunding' being used in this case, saying that the Founders program is "just a pre-order promotion" is not entirely accurate either since the primary perk for being a Founder was being involved in the early beta for the game and being involved as the devs developed it into a launchable product.

Dave Ingram
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I am very excited about this game. Mechwarrior 3 had some great memories for me -- the multiplayer mode was almost like an early MMO, because the clans and clan rivalries were so tightly knit. I can't wait to see how clans and large-scale competition flesh out in a real MW MMO.

Andy Borkowski
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Adding to that, here's an extended interview with President Russ Bullock on Mechwarrior and why Free to Play worked for them: http://www.youtube.com/watch?v=D1NmULp8yMY&feature=g-all-a

Maria Jayne
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Playing it now, I was one of the "Whales" paying out top dollar for the 4 mech founder pack. I'm enjoying it, although I'm disappointed there are only 4 maps so far.

Bud Leiser
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I just launched my Kickstarter for Cursed MECH a game that combines twin stick action with tower defense. Potential backers have not responded well to the idea that game is free to play. Yet here is a big name game raising 5M for their free to play game. Kudos to them! I do wonder however, they say they saved money by not using Kickstarter....but how much money did they MISS? If this was on KS I might have seen it, but it wasn't so I didn't. Cutting out the middle mans 5%-15% and calling yourself a "success" for raising 5M might sound cool. But what if you lost another 5M doing it?

Maurício Gomes
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8 posts (including mine)

2 of them are spam.

3:4 signal do noise ratio looks low.

Dave Ingram
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I've never seen spam posts in Gamasutra comments before this -- strange.

Nepster Martin
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Crowdfunding for game development projects is easiest way to raise fund because we can find millions game lovers ready to fund for development of exciting games. MechWarrior is good example of raising fund without help of Kickstarter but they may raise more than $5 million, this figure is low as compare to current gaming projects in crowdfunding website like Kickstarter. It can be option that if gaming industry has its own crowdfunding website, game development projects may have niche market of game lovers for funding.

Norman Huard
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The CEO of IGP disagrees with your article.

http://www.vg247.com/2012/10/30/mechwarrior-online-to-be-a-lot-be
tter-thanks-to-crowdfunding/
"Speaking to Gamasutra, Infinite Game Publishing parent company boss Nick Foster said that MechWarrior Online was traditionally funded at first, but then used crowdfunding to make up any shortfalls.
“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,” he said.
“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.
“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.”

http://www.gamasutra.com/view/news/180401/
'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.

http://massively.joystiq.com/2012/10/29/mechwarrior-online-the-st
ory-of-how-one-mmo-got-crowd-funded-wi/

"Nick Foster, CEO of Infinite Game Publishing's parent company 7G Entertainment, explained some of the rationale behind this approach to funding. "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."

http://www.crowdsourcing.org/article/mechwarrior-onlines-unconven
tional-crowdfunding-pays-off/20390

"The success of the Founder's Program reinforces IGP's vision to help independent developers build exceptional games with the right economic model for the global marketplace," says IGP CEO Nick Foster.

http://venturebeat.com/2012/10/29/the-first-of-three-major-titles
-from-igp-mechwarrior-online-moves-into-its-open-beta-test/


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