Game changer: Can Tim Schafer’s Kickstarter project actually revolutionize the way this industry gets funded?

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Friday, February 17, 2012
EDITOR'S NOTEfrom Sam Barsanti

I think Mike has it right. This Kickstarter idea is great, but you can probably count the developers that could get away with something like this on one hand.

It’s unclear if Grim Fandango creator Tim Schafer ever intended to completely change the way games are financed, but his latest venture could have long-lasting repercussions on this hobby we all know and love.

Schafer, who’s one of the elder statesmen of the medium, has chosen to fund his latest creation through private contributions gathered by crowd-sourcing site Kickstarter. While indie developers have been using the popular web destination to find backers for quite some time, it’s highly unusual to see an industry luminary of Schafer’s stature utilizing the service. The pitch was simple: Should the developer and his San Francisco-based crew at Double Fine Productions manage to raise $400,000 in funds before March 13, they would not only create a new point-and-click adventure title, but also allow gamers to see inside the development process with a documentary video series.

That’s all interesting, but what’s really captivating about this whole thing is the response. In about a week, Kickstarter users have already pledged almost $2 million. To say that is amazing is an understatement. There’s an air of excitement surrounding this project, and some industry pundits are already postulating that this could be a “game changer” when it comes to how projects will be funded moving forward...but should the Activisions and EAs of the world lose sleep over it?

Probably not.

 

There’s no denying that Double FIne has tapped into something with this Kickstarter campaign, but it remains to be seen whether it’s a gaming fanbase fed up with the industry’s status quo or simply a lot of very rabid Tim Schafer fans wanting something new from the man responsible for some of the medium’s most revered titles. Even if we assume the answer to that question lies somewhere in the middle, calling this a “game changer” seems at least somewhat premature.

First off, Double Fine was looking for $400,000 to make a new title. That’s a lot of scratch to most of us, but in the realm of game development it’s pocket change. Schafer says as much on his Kickstarter page, noting “even something as ‘simple’ as an Xbox LIVE Arcade title can cost upwards of two or three million dollars. For disc-based games, it can be over ten times that amount.”

Raising that kind of money is still impressive, but there’s arguably a threshold to the amount of funds one can realistically expect to raise using something like Kickstarter, and I’m willing to bet it’s well below the $30 million of a big budget retail disc release. So, with that in mind, it seems likely that crowd-sourcing will only remain a viable tool for small projects in the foreseeable future. Big-budget titles are still going to need deep-pocketed publishers.

But the bigger question is whether or not we, as gamers, really do want this. I suspect that in the long run the answer to that will be “no.”

In a worst-case scenario situation, it’s easy to see crowd-sourced funding turning into the new pre-order campaign with developers continually trying to sell us on investing in their project in much the same way GameStop harasses us for an extra five bucks every time we try to check out. What’s worse is that games still get made if people don’t pre-order, but developers could constantly hold the threat of not making a title at all over our heads if their funding demands aren’t met. That’s not a good thing, particularly since it forces gamers to invest real money in projects without knowing much of anything about them. Sure, the pitch might be great and the pieces of concept art look cool, but there’s no way of knowing what a finished product will look and play like when it’s not even in the alpha stage.

There’s also the potential issue of “investors.” If a person donates money to fund a product designed to make a profit and that product makes vast amounts of money, does the “investor” have a right to share in those profits? A publisher certainly does – and it’s not a stretch to imagine that people who ponied up the cash to fund Generic Space Marine Shooter #4518 will expect a cut of the proceeds when it pulls in a billion bucks in its first week of release. We’re not at that point now, because this is still a novelty to most people, and no one expects the projects on sites like Kickstarter to make millions of dollars. If we start funding mid-level and AAA titles? That will all change...and so will people’s attitudes and expectations.

None of that even factors in the important services publishers do provide (marketing, public relations, production, etc.) that would now have to be handled by the developer, because the patrons who donated surely aren’t going to come up with TV spots and press releases. Even if those things are part of the funding, dealing with them takes time – time that could be spent making the game better. Publishers don’t always have our best interests at heart, but they do provide some valuable support that developers wouldn’t have in a consumer-funded environment.

The idea of a community where developers are free to be creative and try new things without worrying about publisher bean counters sounds great, and maybe some day we’ll get there. Only time will tell if what Double Fine is trying to do will go down in history as the start of a new era in game development or as an interesting historical footnote. If I were a gambling man, I’d put my money on the latter. What do you think?

 
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Comments (10)
37893_1338936035999_1309080061_30825631_6290042_n
February 09, 2012

This is really well done (which pisses me off, since I wanted to write about it.)

I think it's important to re-iterate that Double Fine is a well-respected developer with a small, but loyal fanbase. This campaign isn't feasible for many developers who are either too big for us to sympathize with or too small for us to even notice.

You made a very interesting point when it comes to "investing" in these types of projects, and what the expectations of that could be. It seems to be a matter of both dollar value and perspective. As an average Double Fine fan, I see my $30 contribution as more or less a pre-pre-order (of which you nicely detailed many of the issues that could raise on its own,) but when someone starts to pledge $10,000, $20,000, $50,000+, I have to think that the line between donation and investment start to blur a little.

As much as I trust and love Double Fine, I have to wonder what impact this might have on the industry as a whole.

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February 09, 2012

Thanks so much for the compliment -- I'm glad you enjoyed reading it. I think there's still a lot of stuff to discuss here, so I hope more people do writer about.

The big dollar donations are what intrigued me the most -- guys spending thousands of dollars on a Kickstarter campaign fascinates me. It's a curious situation -- where does the line between fan and investor lie? I think this system could work on some levels, but there'd have to some sort of manifesto or something outlining how contributing works. 

I look at it as a pre-pre-order too mostly. I don't mind it, because I suspect Double Fine will deliver, but I'm a worst case scenario kind of guy and can see where there might be issues with this approach. 

There are so many potential things to consider and discuss that I feel like we could all debate these things for ages without coming to any sort of definitive conclusion. It really is quite a story and I'm really excited to see how things eventually play out.

Scott_pilgrim_avatar
February 17, 2012

This is a great post, and I think you raised a lot of really important points. Checkpoint, over at Penny Arcade, actually had a really interesting take, as well:

http://penny-arcade.com/patv/episode/double-extra-fine

Skip to 2:53 for the relevant bit, but essentially, they make the arguement that by making their customers investors, they may have really put themselves in a corner. Regardless, I think you're right; this event's only be a blip on the radar.

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February 17, 2012

Thanks Ben!

I'll be sure to check out the link ASAP. I missed it in all of the earlier buzz.

Mikeshadesbitmob0611
February 18, 2012

This was a one-time occurrance that will never happen again. The fact that it even worked once is a novelty that won't likely be repeated, even if Tim tried it under the same conditions. Smaller indie projects, sure, but I doubt we'll see something like this ever again.

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February 19, 2012

I completely disagree with the idea that this will never happen again. I think it's pretty short-sighted to not recognize that this will launch a new strategy for some developers to fund their games.

First, developers will desire this method since they will own their IP. And no venture capitalists breathing down their necks.

Second, remember that people backing Schafer's project aren't really just donating for a special cause; they're basically preordering their game. If you put $15 down, that's probably what it will cost once released; so it's a preorder. Also, each step up in donation came with some pretty cool stuff that was worth the money; so nothing was really "donated" or "pledged". It really just functioned as any other preorder.

Now, can anyone do this? No. You need to have a good reputation in the community. Gamers need to trust that you will deliver a good product. Gamers trust Schafer. They know he'll make a game they'll enjoy. As long as the indie developer has some sort of track record for quality and success, support will jump on. Probably not to the $2 million dollar amount every time. 

But again, if you think this is a one-time occurrence, I think you're being extremely short-sighted. Publishers should be somewhat worried. The big projects will stay with them. But if a developer thinks he can deliver a great game on a smaller budget, Kickstarter has now become an option.

Default_picture
February 20, 2012

Hi Mike,

I think you're way too pessimistic - but some commenters are even worse! We've talked about this before, but since you updated your text let me add a few things:

1. There's way more than a handful of game "auteurs" that have a strong fan following and would be able to raise a shit load of money. I mean, how many cult games are there ? Do you know how long hundreds fans have been bitching for a new X or Y ?

2. You really think someone like Hideo Kojima or Tetsuya Nomura wouldn' t be able to raise 30 million ? That's ludicrous. That's only half a million 60 bucks pre-orders: it's nothing compared to the numbers theses guys regularly pull off on the basis of a couple of trailers.  I mean that's almost what NIER did on week one in Japan.

3. Games budget do'n't need to be that high. In 2005 the average PS2 game budget was 2 million, so that's what would cost a HD-ifed version of those which is perfect for a mid-budget game (I mean it still looks better than anything on the Wii), and a lot of that money is actually wasted on channels that you wouldn't need in the Kickstarter model.

4. Activision owns the Call of Duty IP so the dev's are F***d. But imagine they didn't. How many preorder could Call of Duty dev raise and input directly in the game budget, one year in advance for the next interation of the series ? Monolith for instance has been able to reclaim the "Xeno" IP by finding a loophole in system, aas did From Software with the "Souls" series they took away from Sony. It's very easy to imagine a AAA title funded this way, just do the math.

Still, great writing, as always.

Default_picture
February 20, 2012

Hi Ash,

I've been told I'm a pessimist a time or two in the past. :p

In regards to your first point, there are tons of cult games -- but the fact that they're cult means they don't have a wide mainstream audience, which is sort of necessary to raise tens of millions of dollars in my estimation. I mean, there are some fans of cult games who'd pony up a grand or more for a new title, but I don't think most people can afford that. With a smaller devoted pool of people to donate, can a cult title generate the amount of funds a mainstream game would cost in today's market? I'm not sure. Not saying it can't happen -- I just have my doubts.

Kojima and Nomura are like Schafer -- they're the few guys who probably could raise that kind of money. Top tier guys like that -- auteurs, if you will -- could conceivably pull in that kind of cash. They're sort of the exception, though.

Today's Ars Technica piece on this topic mentions that some of these budgets approach $100 million now. Keep in mind -- that's not the cost of developing the game. If you eliminate the publisher, you have to pick up the tab for marketing, PR, production, distribution, advertising, and all those other "business" things that a publisher handles so you can be a creative type making videogames. I'm not sure most developers will even want to deal with that stuff in the first place. It's the business of art, really. 

Ultimately, I think it's too soon to tell where all of this is going to wind up. Right now, it's a bit of a novelty for most people. I think we'll see more developers test the waters with it -- and I think that's actually a good thing. That being said, I don't really see it becoming the new standard of game funding and there are a lot of potential pitfalls with the system.

Thanks for the comment -- you all have certainly raised some interesting points. 

Default_picture
February 20, 2012

If can can still ass a couple of things:

1. What does a budget of a cult game need to be ? Certainly not 30 millions dollars, and when you loon at the pre-order numbers of game like the Atelier series and such, you see that a reasonnable figure could easily be obtained pretty quickly

2. Why would you need PR, marketing and so on when you're sure to be profitable ? Just let word of mouth and glorious internet do the rest

Default_picture
February 20, 2012

I don't know what the budget of a cult game needs to be since I don't work in that part of the industry -- but I'd guess a title like Atelier is still in the multi million dollar range. I wish there was a site that offered that sort of info -- and if there is, I'm not familiar with it.

You still need PR/Marketing etc. because every developer is looking to grow. Making games solely for the people who contribute is great, but that's preaching to the choir. Anyone who makes games wants the games to reach the widest audience possible so they can do bigger things, right? Word of mouth is nice, but an ad on TV reaches far more eyeballs than a series of message board posts -- and let's remember, not all gamers are like us -- many don't spend their days on game news sites or message boards or any of that. They see an ad on TV or a print spot somewhere, and that puts a title on their radar. You'd lose out on that huge potential market share with just word of mouth advertising. 

You need PR to coordinate with the gaming press for reviews/previews etc. These are all services developers still need on some level. 

Interesting points, though -- I don't disagree with what you're saying. 

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