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Why Kickstarter's not going to change its all-or-nothing policy anytime soon Exclusive
Why Kickstarter's not going to change its all-or-nothing policy anytime soon
December 3, 2012 | By Frank Cifaldi




It was bound to happen eventually. Video game crowdsourcing via Kickstarter finally had its first so-close-it's-unfair moment, when M.U.L.E.-inspired trading sim Alpha Colony missed its $50,000 goal by just $28.

Pledgers drove funding up to 99.94% of the game's asking price, but because of Kickstarter's all-or-nothing policy, developer DreamQuest Inc. will see absolutely nothing of the $49,972 that was pledged to the game.

As it turns out, missing its goal was a blessing in disguise, but that's really beside the point. Alpha Colony is clearly a game that backers see potential in, and in just about any other funding scenario, DreamQuest would have an extra $49k in its coffers to keep the lights on and keep the game moving as it seeks additional funding elsewhere.

It's an issue we've seen creep up from time to time, most recently in this telling blog post from Project Zomboid developer Chris "Lemmy" Simpson: one simple miscalculation of money could spell the difference between a whole lot of money or a whole lot of nothing when it comes to crowdfunding.

We got Kickstarter on the phone to discuss its policies, and whether it was considering getting any more lenient on its all-or-nothing approach.

As it turns out, no. And here's why.

Creator protection

As Kickstarter explains it, the company doesn't want to put creators in a situation where they're forced to deliver anything under budget.

Most creators scope out their backer rewards based on their funding goal. Someone has to pay those T-shirt printers, after all, and if funding comes in below a creator's minimum goal, they may be stuck footing more of the bill than they'd anticipated.

"We want to protect them from that awkward situation," a representative tells us.

Backer protection, too

Of course, the same goes for backers.

When someone puts down money toward a Kickstarter project, they are doing so with the understanding that nothing is coming out of their wallets unless the creator's goal is met.

Backers are not putting money into a pool. Backers are, instead, making a decision that a project is worth their money if it manages to reach its funding goal.

Drama

"It creates this narrative arc," Kickstarter tells us.

"People get sort of emotionally invested in this idea. If you're approaching the deadline, and you're short, people rally behind it."

"It's almost like a gamification."

Benefits, even in failure

We asked what advice Kickstarter would give to game developers like DreamQuest who just missed the mark.

"It's not like you're walking away with nothing," they say.

Just about any campaign will manage to build a community around a game, even if it hasn't been developed yet. Developers can take that experience (and that fanbase), and seek funding elsewhere. Even on Kickstarter:

Second chances

There are no rules saying that you can't re-launch a project on Kickstarter, even at a different price. In fact, speaking to Kotaku, that was the company's response to DreamQuest's situation.

Unfortunately that doesn't always work and, in fact, did not work for DreamQuest...Alpha Colony's first attempt on Kickstarter raised over $100k before funding was canceled, more than double what it raised on its second, downscaled attempt.


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Comments


Maria Jayne
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If I knew the kickstarter would take my money even if the goal wasn't met, I think that would mean I wouldn't donate until I was certain there would be enough money to meet the target to make the game. Given I expect most people would also do this, it would actually mean nobody would donate and that kickstarter which has 40,000 willing backers is actually 40,000 people waiting for someone else to donate first.

Mike Kasprzak
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Yeah, I've supported and championed projects for the sake of "this should really exist" because of the cut off. Remove the cutoff and I wouldn't lift a finger. I almost never support IndieGogo campaigns.

Andrew Wallace
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To me this is the #1 reason. I'm astounded it wasn't mentioned in the article.

E Zachary Knight
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I don't think that IndieGogo's way of doing crowdfunding is a bad thing. It is simply different. It requires a different frame of mind for both the project creator as well as the project backer. With IndieGogo, the backer knows that once they back the project, their money is in. There is no going back, minus canceling prior to the deadline being met. But that is a risk they are willing to take. They know that even if the project doesn't meet the funding goals, it at least gets some money to keep momentum up.

Of course you could look at it in a different way. Kickstarter's all or nothing approach is a business first model. While IndieGogo's process is more geared to the arts, things that are more a labor of love versus business.

For instance, I would be more willing to put a serious or political game up on IndieGogo than I would be on Kickstarter. With such a game, you are not really in it to make money, just get some financial backing to help finish the project. On the other hand, a game that I would want to sell after completion makes more sense on Kickstarter. I am building a product and a business.

At least that is how I see it.

Michael Rooney
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@Zach: I'm not sure I agree. Just because it's art doesn't mean you shouldn't have a decent budget. That seems fairly irresponsible. Kickstarter's all or nothing model handles art fine when people set their targets at the minimum necessary funding amount, like they should be doing.

E Zachary Knight
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Michael,

That is true. However, My point was that the different funding models require a different frame of mind. It doesn't mean that either one is necessarily wrong for either purpose.

But, as you say, you can do something similar as IndieGogo via Kickstarter if you start with a bear minimum with clear projections of how the project completion will be affected as you exceed the funding goals.

Arthur Souza
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Also, guys, remember that indiegogo also has a fixed funding mode. Flexible funding is an OPTION, not the rule.

Michael Wenk
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Kickstarter says they don't take your money unless the project is fully funded.

Ian Fisch
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Good policy. I hope they don't change it.

Kenneth Blaney
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At $28 short, I'm surprised the developer wouldn't astroturf the project and just donate the last of the money themselves laundered through a friend or family member. I figured we need get a kick starter so close because anyone so close would do that and KS itself has no incentive to look that close to catch these cheaters.

Peter Streck
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$28 short it is so ridiculous that it implies the market did it on purpose.

Kenneth Blaney
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Ok, so it appears they were only $28 short at the last few seconds and thus didn't have the reaction time to actually kick the money in themselves. It would also appear that they didn't actually want the game to be kick started for just the $50k asking price.

That information takes a lot of the sting out of this and paints it less as a "missed it by that much" story as opposed to a more generalized story of a failed kick starter.

Peter Streck
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DreamQuest Inc. made a mistake by running a second Kickstarter for a lower funds.
If I would decide to invest in a game and the it turned out that in a second fundraising they need half of the original funding, my trust in that project has suffered substantial damage.
Their second funding round should have been the same or higher and they should have adjusted their goals and schedules.
The comment after this Kickstarter incident, that it was a blessing in disguise is both dumb and really damaging their credibility in the long run.
Hey You know what i have this game i am going to make and i just got $100,000. That is short of our goal.
The second time we need $ 50,000 and then they fall short as well. No they are basically saying fro $50,000 we really could not have made that game.

My advise:
Start your project.
- Gather the assets you need.
- Valuate these assets correctly.
- Plan a realistic production time with realistic milestones. ( even if it is a wide estimate it is better than not meeting your goals)
- Construct a Game production plan ( a business plan for your game )
- Check all the needs once more
- Start your Kickstarter pitch
- Be solid, passionate but most of all trustworthy.
- if you don't meet your funding goal adjust your plan realistically and try again!

After reaching the funds.
- Make sure that extra ideas do not make it into production after showing the agreed deliverable first.
- Make sure that the relationship with your investors is build on trust!

Peter Streck
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Anyway i hope they try to get funding again but now realistically and better!

Vin St John
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Agree completely. While it's certainly possible for them to scope down or seek funding elsewhere, this was not a strong part of the narrative of kickstarter #2 - they were not trying to fund the project but rather chip away at the costs.

To be fair, on a small team the "funds needed" can stop mattering as much as the "time needed" - a project could go from 100,000+ to 50,000 if the devs decided to go from working on it fulltime in 1 yr versus working on it part time in 3 years. I'm not sure if that was in there at all, but that is one way this could be valid.

But I agree that this is my first impression as well and I imagine many others feel the same way.


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