WHAT IS CROWDFUNDING ABOUT?

Someone comes up with a good idea for a cool gadget, an innovative product or a useful service, or in our case a board game, and they would like to make their project come true. However, they don’t have a many (hundred) thousand dollars to finance the production costs, they don’t want to loan money from a bank, so they decide to raise the money with the help of their target audience who would probably buy the product even if they saw it in a shop.  Basically, the creator asks their audience to loan them the money for the production and publication, and as an exchange, the backers get a lot of good deals and freebies, things they wouldn’t be able to get in a shop. If the creator manages to convince their audience that their product is good and that they can also deliver it, and if he manages to find enough backers then the creator gets their money in advance and manufactures and ships the product the „buyers” paid for before the set deadline. In an optimal case it’s a cooperation which is very useful, innovative and fruitful exchange for all parties, but we’ll get back to this later.

A SHORT HISTORY OF CROWDFUNDING

It’s not such a short story as one would think because crowdfunding is not a 21st century invention. One of the first examples of crowdfunding is the “saving” of the Bank of England in 1730, when the community of London merchants raised the necessary gold to restore the value of the pound and by this saving their own money as well. Another early financing system was the publication of so called war bonds; a great example is the (otherwise not too well known) Brit-American war in 1812, to finance the war the parliament of the United States raised 11 million USD from its citizens and from this source it could defend the country against the British army. We could also mention the Hungarian war bond published during the first World War, starting from 1914, the Hungarian Parliament collected 235 million dollar worth of Forints from its citizens. Another interesting trivia: in 1885 when the government of the USA couldn’t provide enough money to build the pedestal for the Statue of Liberty, Joseph Pulitzer (the one who gave his name to the prize) advertised a financing campaign in the leading article of the The World, 160 000 backers raised the necessary funds, not to mention the fact that with this move, as a sort of early Stretch Goal, Pulitzer got 50.000 new subscribers for his newspaper.

The first modern crowdfunding was done in 1997 by the British rock band, Marillion who raised 60.000 USD for their US tour in an internet campaign targeting their fans. They let the genie out of the bottle, although in the early years this kind of financing form was almost exclusively used in the art and music industry. The first really serious initiative, Artistshare was also created in this field in 2003. A few years later industry the independent platforms appeared that still lead the market: IndieGoGo started in 2008, Kickstarter in 2009, and crowdfunding initiatives supporting humanitarian projects, such as GlobalGiving, Kiva or Wokai, became also increasingly popular.

The Importance of Crowdfunding

Kickstarter has given the board gaming community many games that might have never got published without it : Gloomhaven, Scythe, The 7th Continent, Conan, Dark Souls, or many games from CMON publishing house which are now famous and sell in huge numbers, for example Zombicide or Blood Rage, just to mention a few. Just to talk about numbers: the ten most successful Kickstarter games raised 60 million dollars in total with the help of 450 000 backers! Designers and publishers who are important and famous today wouldn’t 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 last number about the importance of crowdfunding: games published on Kickstarter now make up 15-20% of the total sales on the American board game market.

Everybody wins!

Crowdfunding is a win-win situation for everyone: the creator, that is the publisher, and the user, that is the gamer. What does it mean in the case of board games ?

The first and biggest argument for crowdfunding is that it gives creators, who otherwise wouldn’t have the capital to enter the market, a chance to prove themselves. It’s a huge gain for everyone.

The publisher’s big “gain” on Kickstarter is that they can optimise their game:  during the campaign they can see right away if the players are interested in the game or not, the result of the campaign shows how many copies they should manufacture, in one word the Kickstarter campaign is a huge challenge, sort of a voluntary market research with high stakes and also product optimisation. This way the publisher won’t make the mistake of manufacturing too few games which results in many potential buyers remaining unsatisfied; they also won’t manufacture too many games which would result in said games gathering dust in the bottom of warehouses. What is more, the “customers” give the publisher the full amount needed to produce and publish the game, which is a great help, especially for new publishing houses.

What do backers get out of it?

First of all, they provide invaluable help in the mere  . It has an emotional value, it’s a good feeling to contribute to the creation of something and it also has a rational consequence, this way the backer has the opportunity to play the game when/if the campaign is successful.

However, the business model of crowdfunding offers the backer a much bigger gain and reward. Let me give you an example. A publisher runs a campaign for his game on Kickstarter, backers can get it for 75 dollars during the campaign. The Founding Goal, the necessary amount to fund the game, is 50 000 dollars, so they would need around 700 backers. If they manage to reach the amount, the game is founded and the backers get their game in 6-12 months.

However, the publisher can say that if they reach 70 000 dollars instead of 50 000, for your 75 dollars I’m also going to add an extra game element to your game because the production cost is lowered by the greater number of 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 dollars, the next 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 I used in my example is Blood Rage, where the publishers raised 900. 000 dollars instead of the original 50.000, so for their original  dollar pledge, the bakers received 250 dollar worth of stuff, in the form of 28 Stretch Goals. Later, when the game entered retail this amount of content could be bought for 250 dollar, while the original backers only paid 75. It’s a good deal for both parties.

It’s important to mention another good motivation to support Kickstarter games: these are the Kickstarter Exclusive content: game elements that are not going to be available if the game gets released in retail and they won’t be available for purchase after the end of the campaign. These Exclusive elements boost the value of the game, so if we decide to sell it later we can get a price which is many times more than the original.

How does it all translate to Cultistorm?

Our game contains (beside many other game elements) 240 cards – these give the engine and the replayability. There will also be a short story collection, a music CD, an Artbook, and a Script Book for the narrative gameplay. To be profitable, we need to manufacture at least 1000 copies, this is going to be our aim, our Funding Goal. HOWEVER, if we have more than 1000 backers but more and much more, then we will release a lot of extra content (Stretch Goals) and our backers will get them for the same price as the base box. Let’s see: if we have enough backers to be able to give you all of our Stretch Goals, then instead of 240 we’ll give you 650 cards and we will also add the seven mini extensions, four expansions, and some more gifts. For free!

Our Stretch Goals will be published before the campaign, so if you haven’t checked them out yet, you can do it on these pages:

  • Pre-campaign promo gifts
  • Social media Stretch Goals
  • Kickstarter campaign Stretch Goals
How does it all work in practice?

1) The Creator plans, prepares and tests their game, creates the budget, organises production, then launches the (usually a month long) campaign with a set deadline and they try to convince as many people as possible that the game they designed and prepared is indeed good, worthy and doable.

2) In the beginning of the campaign, the creators set a minimum amount, (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 would receive if different levels of funding are reached. These are the Stretch Goals.

3) The backer can choose to support the project any time during the campaign. They choose the Pledge Level they find the most attractive.

To be able to do this, they first need to sign up on Kickstarter. They can do it either with their email address or their Facebook profile. Important: during the sign up they need to give their bank account number because in case of a successful project Kickstarter debits the money automatically.

Transactions through Kickstarter are completely safe, there has never been any 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 it can’t raise enough funds to meet its Funding goal, the campaign is deemed unsuccessful and no money is transferred! Nobody takes any money from the backers.

5) If the project meets its Funding goal, it’s deemed successful. Kickstarter automatically debits every backer with the amount they pledged.

If for some reason the backer doesn’t have enough money on the given account, they have six more days to get the money to the account. Kickstarter tries again after this 6 day period, if it doesn’t work, the system automatically cancels the pledge and it doesn’t try to get the money again.

6) The shipping cost is added to the pledge, usually there is an information table about the costs at the bottom of the campaign page. Usually the shipping cost for your country is automatically added to the pledge, but there are campaigns where you have to settle the shipping costs later, through the Pledge Manager. The publishers try to offer the best shipping conditions and they usually ship the finished game through a delivery service. If the product has the EU-friendly label it means that there is no further tax or custom on the game, so you only need to pay the pledge itself and the shipping.

7) During the campaign the publisher sets a shipping deadline, it’s usually 6-12 months. During this period the creator informs the backers through so-called Update Emails about the manufacturing process.

8) When the product is ready, the publisher sends a follow-up email to make sure the shipping address is the same and the game is shipped.

About risks with 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’s possible that a creator runs away with our money and never delivers the game, but it’s almost unheard of in the category of board games. Since the 2009 launch of Kickstarter this has happened only once and the backers were later paid back.

Kickstarter users are protected by American consumer laws, so any misuse of the received pledges could be punishable by the law. As far as we know, up till this day no board game project has disappeared, no creator has run away with the backers’ money.  (Sadly, it has happened in other industries.) In one word, this shouldn’t stress you.

However, there are two real risks to using Kickstarter. Firstly, there can be (sometimes quite significant) delays in delivery, sadly this occurs quite frequently. Secondly, sometimes the product we receive is not the quality the publisher had advertised or what we’d expected. We’ll do our best to keep to our deadlines and that is why we don’t manufacture in China, (Chinese manufacturers are often responsible -directly or indirectly- for the delays or quality problems.)

KICKSTARTER TUTORIAL

Quick guide to Kickstarter

Creator

The publisher of a board game, they’re usually also the designer. If we click on the “Created” link next to their photo, we’ll get a list of their previous projects. On the “See full bio” link we can read information about them, while clicking on “Contact me” allows us to communicate with the creator directly. They’re usually helpful and answer our questions.

Funding Goal

It’s the minimum amount needed to make the game possible. If the campaign doesn’t reach this amount, the game is not made and the backers are not debited with the amount they pledged.

Reward

Everything the creator offers the backers.

Pledge Levels

In most cases you can back a project with different, pre-calculated amounts. There is a description of rewards for each level, the more money you offer, the higher value package you receive.

Backer

Someone who financially supports a project. If you decide to help a project, that is you click on the Pledge Level which seems the most attractive to you, you “back” the project. It’s important to know that Kickstarter is not a shop, but a crowdfunding platform, where the creator basically collects “donations”. The backer makes the creation of the game possible by their donation, as an exchange the Creator gives them a copy of the game and many promotional gifts.

Manage your Pledge

You can change your pledge level any time during the campaign, you can even decide to cancel your pledge (by clicking “Cancel”) No money is debited on your account until the successful end of the campaign, in case of an unsuccessful campaign, no money is debited at all.

Stretch Goal

Extra rewards, that is bonus content you get for free if the founding of a project surpasses a certain level. The more people back a project (with the more money), the more Stretch Goals are unlocked, which motivates backers to pledge for a higher Pledge Level, to buy paying add-ons and to share information about the game with their friends, hoping they would also join and unlock further Stretch Goals.

Kickstarter Exclusive

We call such game elements, gifts, etc. “Kickstarter Exclusive” which are only available during the active campaign. They cannot be bought either after the campaign, or in retail if the game becomes widely distributed. These exclusive elements and games which contain these elements have a much higher value and can be sold for a much better price later, sometimes it’s multiple times the original price.

Add-ons / Optional Buys

Add-ons are extra content that aren’t free. They either belong to a higher Pledge Level or we have to add the price manually to our pledge, by clicking on the “Manage” button. In most cases these optional add-ons can be added even after the campaign in the Pledge Manager.

Pledge Manager

The platform where we can manage and fine tune what exactly we’d like to use our pledge for, we can also pledge further amounts to be able to get more offered content.

Shipping cost

The cost of shipping. There are projects where this is partly or completely calculated into the pledge, but it’s less rarely the case. The description of Pledge Levels always mentions if the shipping cost is included or not. There is usually a separate tab at the bottom of the project page, giving information about shipping costs to different countries. In most cases, if our Kickstarter profile is complete, Kickstarter automatically calculates and adds the shipping to our Pledge Level, but sometimes we have to do it manually or the shipping cost is calculated later and we have to pay it separately, after the project is finished.