Kickstander: What is Kickstarter Really?

This seems like a stupid question to ask. If you have spent any time following video games in the past twelve months, you’ve probably heard of Kickstarter and crowdfunding. But I ask the question (and intend to answer it, obviously) because there still seems to be a lot of mixed terminology about what Kickstarter REALLY is.

The difference between “free” and “free to play” is the same as somewhere offering free food from a buffet versus one offering free bread only.

This confusion goes through backers of all stripes, with Gama Sutra UK editor Mike Rose recently publicly saying he’s not going to be supporting any more video game Kickstarters. After 18 projects and more than $300 with nothing to show for it, he’s done.

Cognitively he knows that backing a Kickstarter isn’t the same as buying a game and there are risks involved, but emotionally he’s grappling with a lot of disappointment that these Kickstarter projects haven’t delivered a title as indicated. Rose mentions The Banner Saga as the key focus here (with its choice to release a promised free multiplayer spin-off as a free-to-play (F2p) multiplayer spin-off, which is a big difference, and still no sign of the single player game) but that’s just the most recent straw in a large pile.

If someone with the experience of Rose doesn’t get what Kickstarter is, then there have to be a lot of others who don’t either. Stoic Studio’s Alex Thomas revealing that something like seven out of ten Banner Saga backers didn’t even watch the campaign video indicates a lot of people aren’t really doing their research and are probably going in without a full view of what they are contributing to.

As always, this should be taken as applying just to video games. Kickstarter covers a lot of different creative categories, each with its own different internal dynamic.

What Kickstarter Is

Let’s strip away the happy hyperbole of what Kickstarter says that it is. Let’s dump words like “ambitious, innovative, and imaginative” when they aren’t really required to be listed on Kickstarter or successfully raise money through it.

Kickstarter is a market where project creators pitch video game ideas (in various states of completion) to an interested public in an attempt to attract them into purchasing reward levels that will fund the development and possibly release of that pitched title.

Kickstarter is a market, but instead of selling potatoes, it’s selling reward levels and the chance to be part of the game development industry in some small way.

It’s a market in that there are transactions between buyers and sellers, or in this case gamers and game developers.

There’s a pitch which outlines the reasons why backers would want to see this title released, but crucially there are the rewards to indicate the price points potential backers should consider. The majority of backers buy at the reward levels. Although a backer can elect to not receive any rewards and just donate to the project, very few do. Of the 87 142 backers for the Double Fine Kickstarter, only 778 of them elected not to receive a reward level – a ‘donation rate’ of less than 1%.

What Kickstarter actually funds can vary considerably for video game projects. Although the perception is a Kickstarter will fully fund a project from start to finish, this isn’t true – there are proof of concept / investor demo Kickstarters which expressly aim to use crowdfunding to help them secure a much bigger investor / publisher deal. Then there are the Kickstarter project funding gaps filled by other investors, as was the case for Haunts: The Manse Macabre and Star Citizen. Kickstarter may be only one source of funding among many.

Although some use the terms interchangeably, someone who has indicated they will pay money to a Kickstarter project is a pledger while someone who has contributed to a successful Kickstarter project is a backer. One has pledged the money but it hasn’t left their account and they can change their mind; the other is now behind the project due their financial contribution.

UPDATE 22 March 2013: And it embarrasses me that I forgot this point: Kickstarter is a promotional platform. The project creators use it to attract attention to their title in an attempt to reach the specified pledge target. Right now it can work very effectively – simply announcing a Kickstarter can see your project listed on gaming sites all over the web, raising its profile more quickly than if you tried to engage each of those sites directly.

What Kickstarter Isn’t

It’s not a store. Mostly. Unless you’re American McGee. If you go into a store, you are purchasing a project / service that already exists, even if it has to be built for you. Kickstarted video games don’t exist as completed, proven titles – they are still being prototyped and built for the first time. There are no guarantees.

It’s only a long (and risky) pre-order system if you’ve purchased a reward level that includes a copy of the title. It’s popular to use Kickstarter to buy titles early and cheap (with extra bonuses from the reward levels) but not every Kickstarter video game includes a copy of the title among its reward levels.

Kickstarter isn’t this. Unless he’s planning to return to her with Sleeping Old Women: The Game.

It’s not a donation, unless you forgo all reward levels and are content to see no return of any kind from your money.

It’s also not begging or panhandling or charity, given that the reward levels provide some kind of return for financial contribution to the project. The pitch is certainly soliciting for funds, but that’s a world away from begging.

It’s not an investment. A backer has no formal say on the development of the title from the point they pay for a reward level, has no equity in the company / title and the rewards are fixed (and at the discretion of the project creator to an extent). There is no return on investment other than what has already been specified.

It’s not a way of fully funding most titles in most cases. As pointed out above, how much Kickstarter actually funds of a title’s development varies wildly. A lot of backers don’t have a particularly strong knowledge of how much it costs to create a quality video game, so aren’t willing to pool larger sums of money unless they are really, really excited by the concept, even if that larger sum is actually a realistic amount. A five-figure Kickstarter might fully fund a small indie title, but bigger more sophisticated titles require more money than that to keep their staff paid. As Double Fine indicated, even simple games cost a professional studio between US$2m and US$3m to complete; at this point in time only 12 of the 2 840 successfully Kickstarted games titles (i.e. video games, board games, card games, etc) have raised over US$1m.

It’s not really patronage, at least not in the high-minded classical sense. A backer is not commissioning a creative product from the creative but ‘buying’ into an existing idea and receiving rewards for it. Also the vast majority of individual pledgers aren’t offering a significant amount of money to fund the game development, with most offering less than $100 to a project; crowdfunding is based on the principle of a small amount of money from a lot of people, after all. Patronage also generally requires a direct payment from patron to creative artist, but Kickstarter stands in the middle of that relationship, acting as the collector of funds that it then distributes when certain conditions are met.

Everyone Loves Semantics

Funding is all well and good, but delivery is more important.

What Kickstarter is and isn’t will end up being very important to how successful this channel continues to be in the future. At this point in time a lot of Kickstarters are reported as an event unto themselves, but the reality is that it is a fundraising mechanism. Yes, it’s a public fundraising mechanism that can be used to help market your title to a wider audience, but it should be recognised that a successful Kickstarter is just a means to an end, and no guarantee that the pitched game will ever see release.

Kickstarter still has a while to go before it shows itself as a channel that leads to completed and playable products. If evidence of this isn’t more forthcoming over the next 12 months, I’d certainly expect interest in it to waver for all but the largest, most professionally developer-backed projects.