The Importance of Crowdfunding
Kickstarter has given the board gaming community many games that might never have been published without it: Gloomhaven, Scythe, The 7th Continent, Conan, Dark Souls, or the many games from CMON which are now famous and sell in huge numbers (Zombicide or Blood Rage, just to mention a few). Put into numbers, the ten most successful Kickstarter games raised a total of $60 million with the help of some 450,000 backers! Designers and publishers who are important and famous today would not be there if not for Kickstarter. When they were unknown beginners, the community decided to give them a chance and put their trust in them. “Kickstarted” games make up a tenth of the 100 best-rated games on BoardgameGeek. A final illustration of the importance of crowdfunding: games published on Kickstarter now make up 15-20% of the total sales of the American board game market.
Crowdfunding is a win-win situation for those involved: the creator, i.e. the publisher, and the backer, i.e. the gamer. But what does this mean in the case of board games?
The most important argument for crowdfunding is that it gives creators, who otherwise would not have the capital to enter the market, a chance to prove themselves.
The publisher’s benefit on Kickstarter is that they can optimise their game: during the campaign they can see right away if players are interested or not, and the result of the campaign tells them how many copies they have to manufacture. A Kickstarter campaign is a huge challenge, like voluntary market research with high stakes and product optimisation. The publisher will avoid the mistake of not manufacturing enough copies, resulting in potential buyers remaining unsatisfied; they also avoid manufacturing too many copies, resulting in games gathering dust in the corners of warehouses. What is more, the “customers” give the publisher the full amount needed to produce and publish the game, which is a huge help, especially for new publishing houses.
What do Backers get out of it?
First of all, they provide invaluable help simply by being there. There is emotional value, a good feeling, in contributing to the creation of something. It also has a rational consequence: the backer gets to play the game if the campaign is successful.
However, the crowdfunding business model offers backers an even greater reward. Here is an example: a publisher runs a campaign for their game on Kickstarter, and backers can get it for $75 during the campaign. The funding goal, i.e. the necessary amount to fund the game, is $50,000, so the creator needs around 700 backers. If they manage to reach the amount, the game is funded and the backers receive their game in 6-12 months.
However, the publisher can say that should they reach $70,000 instead of $50,000, they will add an extra game element because the production cost is lowered by the greater number of ordered copies. The extra money can be used to reward the backers. This is what we call Stretch Goals. The next free add-on comes after $90,000, the one after that at $110,000 and so on. The more people back the game, the longer the Stretch Goal list becomes, and the more free content the backers receive. The game from the example is Blood Rage, for which the creators raised $900,000 instead of the original $50,000. For their original $75 pledge the bakers ended up receiving $250 worth of stuff, in the form of 28 Stretch Goals. When the game entered retail this amount of extra content could be bought for $250, whereas the original backers only paid $75. It turned out to be a good deal for both parties.
It is important to mention another good motivation for supporting Kickstarter games: exclusive content. This is content that is not going to be available in retail versions of the game, and it will not be available for separate purchase after the campaign has ended. These exclusive elements boost the value of the game: should you ever decide to sell it, you could get a price way above the originally pledged amount.
How does it all work in practice?
1. The creator plans, prepares, and tests their game, creates the budget, organises production, and then launches the (usually month-long) campaign with a set deadline. They try to convince as many people as possible that the game they designed and prepared is good, worthy, and doable.
2. At the beginning of the campaign, the creator sets the minimum amount (the funding goal) they need to reach to be able to manufacture the product in a profitable way. They provide backers with a “motivation list” telling them what they could receive should different levels of funding be reached. These are the Stretch Goals.
3. Backers can choose to support the project at any time during the campaign. They choose the pledge level they find most attractive.
In order to do this, they need to sign up to Kickstarter, either with their email address or their Facebook profile. Note that during the sign-up process they need to provide their banking details because Kickstarter debits the money automatically, should the project be successful.
Transactions via Kickstarter are completely safe, and there have never been any major issues. Their financial provider is Stripe, which is one of the biggest financial providers in the US.
4. If the project is not good enough and fails to meet its funding goal, the campaign is deemed unsuccessful and no money is transferred: nobody collects any money from the backers.
5. If the project meets its funding goal, it is deemed successful. Kickstarter automatically debits every backer with the amount they pledged.
If for some reason a backer does not have enough money in the given account, they have six more days to before Kickstarter tries again. After this six-day period the system automatically cancels the pledge and it does not attempt to collect the pledged amount again.
6. Shipping costs are added to the pledge, and usually there is a table with information on the costs at the bottom of a campaign page. Often the shipping cost for your country is automatically added to your pledge, but there are also campaigns where shipping costs are settled later, via the Pledge Manager. The creator tries to offer the best shipping conditions and usually ship the finished game via a delivery service. If the product has the EU-friendly label that means that there is no further tax or customs duties to pay for the game, so you only pay for the pledge itself plus shipping.
7. During the campaign the publisher sets a shipping deadline. This is usually 6-12 months after the campaign ends. Over the course of this period the creator informs backers about the manufacturing process with updates on Kickstarter or per email.
8. When the product is ready the publisher sends a follow-up email to make sure the shipping address is still the same and the game is shipped.
About Risks and Honesty
Kickstarter is not a shop, but a fundraising platform. The money you pledge is officially considered as a donation and the games you receive are complimentary copies in exchange for your donation. Theoretically, it is possible that a creator runs away with the money and never delivers the game, but this is almost unheard of in the board game category: since the 2009 launch of Kickstarter this has happened only once (and the backers were eventually paid back).
Kickstarter users are protected by American consumer laws, so any misuse of the received pledge money could be punishable by law. As far as we know, to date no board game project has disappeared and no creator has run away with the backers’ money (unfortunately it has happened in other industries). In other words, there should be nothing to worry about.
However, there are two real risks when using Kickstarter. Firstly, there can be (potentially significant) delays in delivery, and unfortunately this occurs relatively frequently. Secondly, sometimes the product backers receive is not of the quality the creator advertised or what was expected. We will do our utmost to keep to our deadlines.