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Dealing with Crowdfunding

We've collected some tips and hints for both backers and developers when it comes to crowdfunding.

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Two and a half years ago crowdfunding video games went from a niche means of financing smaller indie projects to a viable way to finance mid-sized productions. Double Fine Adventures (later named Broken Age) broke all kinds of records - ever since then we've had a number of interesting gaming kickstarters and crowdfunded projects. There's the constantly record-breaking Star Citizen, Wasteland 2 and Torment: Tides of Numenera from InXile Entertainment, Obsidian's Pillars of Eternity, Cyan's Obduction, Comcept's Mighty No. 9, Frontier's Elite: Dangerous, Uber's Planetary Annihilation, Oculus Rift, Ouya... the list goes on and on. It's hard to argue against gaming being better off as an end result.

But it's not without problems. Recently Yogventures! - kickstarted to the tune of twice its projected target - was cancelled altogether. Double Fine Adventure - that turned into Broken Age - went over budget and we have yet to play the second act of the game (the estimated delivery date mentioned on the Kickstarter was October 2012 - but the scope of the game obviously grew). Shadowrun Online is still alive, but a plagued development means it may never deliver on its promise. Takedown: Red Sabre was a big disappointment when it launched. And then there are shady and potentially fraudulent campaigns, where Areal was the latest in a long line of campaigns that were shrouded in shadows of doubt.

You may be fooled into believing that you need a big name, or a big franchise (in need of a spiritual successor) to achieve things in crowdfunding. But games like FTL: Faster Than Light, The Banner Saga, Among the Sleep, and Shovel Knight, as well as upcoming games like Hyper Light Drifter, Superhot, The Long Dark, and Night in the Woods are examples of creative new ideas that were helped by the advent of large-scale crowdfunding.

Crowdfunding may not be for everyone. And there are certainly lessons to be learned from the events that have transpired since Double Fine Adventures forever changed the landscape. Here are a few pointers from our infinite well of common sense...

Dealing with CrowdfundingDealing with Crowdfunding
Dealing with Crowdfunding
Dealing with CrowdfundingDealing with Crowdfunding
Star Citizen (top left), Mighty No. 9 (top right), Yogventures! (middle), FTL: Faster Than Light (bottom left), & Superhot (bottom right).

Top tips for potential backers:

Pay what you can afford to lose There are no guarantees in crowdfunding, even if projects naturally come with a varying degree of risk. But don't spend more money on a project than you're comfortable losing. Spending £100 doesn't neceassarilly mean you'll get an experience worth £100.

Who are you dealing with? Anyone can start a Kickstarter and you don't only have to look out for scams, there are plenty of honest creators who like the experience and know how to pull off the projects they propose. Remember that Kickstarters try and sell you on the project, so try and read between the lines. You don't expect a used car sales man to point out all the potential problems - don't expect a Kickstarter to do this when they're looking for funding.

Is the budget realistic? Are they asking for too much money? Or not enough? What do they need the money for? To be perfectly honest, what you really need to be wary of is budgets that are too low. If someone is planning to make a large scale open world MMORPG and ask for $500,000, it should set of alarms. Sometimes a developer may only be asking for money for part of the development, or even to develop a prototype.

Is the delivery date realistic? Well this one is really hard to gauge, and maybe it's not key anyway. You want the developer to deliver a great game so they can be forgiven for not delivering the project on the date it says on the campaign page. Then again - if they cannot manage their time, it's difficult to see them sticking to budget.

Why is the developer turning to crowdfunding? There can be many reasons to turn in that direction. It can be a marketing move (to help launch a product). It can be a move to involve and engage a die-hard community in the development process. But it can also be a last ditch attempt to keep development and a studio alive. Placing your money with a desperate company is never wise, even if there are times and circumstances that certainly warrant a compassionate pledge.

Honesty. This is the number one thing you need to look for in a crowdfunding project. The developer should be completely transparent. If things are being glanced over, overstated or underplayed, you need to watch out.

Pointers for developers looking to crowdfund:

Plan your campaign. There is a paradox in asking for funds for a project and needing to show a project-in-progress to secure those funds. But perhaps it's not fair, at least not for most developers, to ask for backers to pledge in blind faith based on a concept and previous work. That's something only Tim Schafer and his peers are capable of.

Don't ask backers to fund your overhead, marketing or hardware (unless absolutely essential). There is fundamental difference between dealing with private individuals funding your game and another company paying you to deliver a product of a certain quality on a specified date. There is an implied contract that the money spent to back a project is used for the running expenses during its development. It can be middleware license costs for instance, but using backer funds to buy equipment that won't solely be used for the specific project is a grey area ethically. If you need hardware - be specific and transparent about why it's needed and how you plan on using it. As far as overhead goes, this comes back to planning - if you plan development carefully you can avoid unnecessary overhead costs, but sloppy planning means your backers will foot the bill without getting much in return.

Be realistic. It may not be sexy. It may not sell your project to the tune of millions, but if you paint yourself in realistic light there is a better chance of benefitting longterm from your community of backers. Remember backers aren't paying you for your good intentions, but for what you're actually able to deliver.

Stretch goals. We're not big fans of the stretch goal phenomenon. It's easy enough to understand from a campaign standpoint - it adds incentives for backers to put down additional pledges and tell their friends. But don't tell us adding PS4 and Xbox One support costs an extra say $50,000 - that's insulting our intelligence. We've seen support for additional platforms range from just a few thousand dollars to half a million. What's an even worse crime is promising additional platforms at certain stretch goals without having properly researched the costs involved and effort needed. And if you can't guarantee support for a platform, don't promise it.

Additional levels and characters may sound like a better idea, but just as allowing a free-to-play model influence game design it can be equally disruptive to allow this kind of modular thinking to dictate game design. So how do we deal with stretch goals then? Well, we tend to appreciate general statements that indicates extra funds will go towards polish and more content. If additional platforms are stretch goals - the costs need to be researched properly. And don't put new-gen support as a far, far away stretch goal when you know that's what your backers are pining for.

Consider Early Access / Alpha funding. These days most bigger crowdfunding efforts combine their campaign with some kind of pre-order / early access scheme. Early access comes with its own set of consumer traps and potential pitfalls, but if you're unsure how long your development will take and how much funds you're going to need to realise your goal - it's a much better model for all involved.

Transparency. Be honest with your backers - if you feel you cannot be truthful for some reason, then maybe crowdfunding isn't the route for you. If you're not comfortable to the kind of public exposure and potential vitriol a crowdfunded game can bring with it - don't do it. Some games can really benefit from an open environment where backers help shape the game, while others may be more personal narratives that don't benefit from group mechanics and public pressure.

So what's in store for the future then? Crowdfunding is a risky proposition by nature. High-profile failures and games that fail to deliver what was promised can hurt the movement and it probably already has. But it's hard to argue against its place in the landscape of the industry and our favourite hobby is richer as a result.

And the future of crowdfunding isn't solely about Kickstarter or similar (but smaller) Indiegogo. Nor is it confined to alpha funding / early access. There are new developments and hybrid concepts like the Square-Enix initiated Collective and the gaming specific Gambitious. Clearly we're still in the early stages of what crowdfunding could potentially grow into, we just need be careful not allow too many bad experience ruin its potential.

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