How Does Kick Starters Work For Video Games?

[JONNY-1992-_-]

I didn't know where to put this Topic but decided to post it here so I hope that's alright. I don't really know much about Kick Starters other than it's Crowd Funding and there's a target to reach to achieve a certain goal.

 

I don't know how this works for Video Games though. Take Shenmue 3 for example. I've never played Shenmue before, I don't have any interest in it either so I'm sorry if I come across as being ignorant about this whole thing as I haven't really followed news about this.

 

 

I found this on the Wikipedia article for Shenmue 3  -

 

'It met its initial target of $2 million USD in under eight hours, making it the fastest Kickstarter campaign to reach that amount. The campaign ended in July having raised over $6 million, becoming the most funded video game and the sixth most funded campaign in Kickstarter history.'

 

 

So, Using this as an example, The things that I'm confused about are this;

 

 

1. Do people that fund the Kick Starter have to still purchase Shenmue 3 once it's developed and released? Say for example that there are people who donated more money to this campaign than the total cost of the Game once it's released. Like $200 or something huge like that. It wouldn't be fair that they have to spend more to then purchase the Game would it?

 

2. Do the developers make a profit on this considering that they're expecting other people to fund their Project?

 

3. What's to stop other developers from using this as a way to fund development for a Video Game if they are allowed to make a profit on it?

 

 

Sorry if this is a little long but I wanted to be detailed about this so I can understand it better.

 

 

Thanks!

Edited October 5, 2015 by JONNY-1992-_-

[TheYuriG]

1. Do people that fund the Kick Starter have to still purchase Shenmue 3 once it's developed and released? Say for example that there are people who donated more money to this campaign than the total cost of the Game once it's released. Like $200 or something huge like that. It wouldn't be fair that they have to spend more to then purchase the Game would it?

 

2. Do the developers make a profit on this considering that they're expecting other people to fund their Project?

 

3. What's to stop other developers from using this as a way to fund development for a Video Game if they are allowed to make a profit on it?

1- It depends on the package you bought, most of those 1 2 3 4 5 10 dollar packages don't come with the game included, just a simple 'thanks'. Check the 'Rewards' section on the right side to know better.

 

2- Some can do, but most of the project is meant to only give enough cash to afford the project. I suppose all the extra cash goes to their pockets though.

 

3- Nothing. If you got a good idea and people want to buy it even before it's out, why not letting it? I mean, we got pre-orders already that are basically the same thing, no?

[PleaseHoldOn]

1. Do people that fund the Kick Starter have to still purchase Shenmue 3 once it's developed and released? Say for example that there are people who donated more money to this campaign than the total cost of the Game once it's released. Like $200 or something huge like that. It wouldn't be fair that they have to spend more to then purchase the Game would it?

 

It depends on how much you donated.  If you donated $5 (which is usually the minimum you can), you'll more or less get a "thank you" for your contribution and nothing else.  For example, if you donated $185 (like I did for Shenmue III)... you get the game (digital or physical copy), on top of any other bonuses (physical artbook, a shirt, in-game goodies, etc).  Usually the donation structure is broken up into tiers ($5, $10, $15, $50, $100, $1000, etc), and whether or not the game itself is included would be indicated as a reward for the tier you select.  I personally couldn't imagine backing a game without donating enough to have a copy of the game coming back to me... but sometimes people just want to throw $5 at a project to hopefully see it get made.

 

Sometimes, you can actually get a game cheaper than it'd sell for in brick & mortar shops and digital storefronts through Kickstarter (ie. donating $35 with a copy of the game being a reward, when it'd likely sell for $60 retail upon completion)... most likely because the developers want to encourage people to take the risk of funding an unfinished (or maybe not even started) game.

 

 

2. Do the developers make a profit on this considering that they're expecting other people to fund their Project?

 

I would assume that any money made on Kickstarter is used solely on the project and/or paying the developers for their time and effort.  If they make over the amount they were expecting, that additional money should go into making the final product better (many projects have "stretch goals" which indicate specific improvements they'd like to add if the money is available, and the cost associated).  If they decide to build a cheap, crappy game... and use most of the money to line their own greedy pockets... that's the risk you take as a backer I guess.

 

Any profits that are made on the finished product go solely to the developer.  As a backer, I would never expect to see my money returned to me.

 

 

3. What's to stop other developers from using this as a way to fund development for a Video Game if they are allowed to make a profit on it?

 

As long as Kickstarter exists, developers will use it.  Crowdfunding is basically the alternative for developers who would rather their fans support the game financially throughout it's development... then to "sell their soul" to publishers who oftentimes kill creativity/quality by pushing unrealistic deadlines and drowning the developers in debt.

Edited October 5, 2015 by PleaseHoldOn

[Caesar Clown]

Ok, just to clear something up that most people missed about Shenmue 3. It is not being funded by Kickstarter. When they were asked why they wanted so little, when a game like Shenmue 3 would take way more than $2 million (or $6 million), they said Sony is paying the bills. Kickstarter was simply for "bonuses", or most likely, a way to preorder the game and get a physical version of it. Shenmue 3 is 99% guaranteed to be released, that 1% being something bad happening. Since it was used as a preorder system, everyone who donated the minimum amount for a copy of the game will be given one, they don't have to pay anymore.

 

Most Kickstarter projects don't work like that. In a majority of cases, it's used to completely fund everything for the game. Once that game is out, they have a copy they can now sell in stores like Steam, PSN, Xbox Live, or the Nintendo Store. That's how they make their profit. You're an investor helping someone make a product, but your only initial reward is the game or the other bonuses you might have paid for.

 

The big problem is trust. Do you trust the person you're giving money to. Some developers will go years without producing a final product, spending the money they were given and not giving anything in return, saying "It will be released soon.". The number of successfully funded projects that have actually been released is really low, something like 30% for video games alone.
 

[Satoshi Ookami]

1. Has been answered. It solely depends on your pledge. In fact, you CAN subscribe enough funds to have the game delivered to you =) Even with some tasty bonuses =) Everything MUST be explained in project goals, otherwise, I presume the campaign can't start.

 

2. Depends on 3 things. First and foremost, if the project meets its goal. If it doesn't, developers do not get the money. But let's suppose big happy campaign ending. In that case, it depends on Obtained money - REAL amount of necessary funding. If the project is much more expensive than what the creator thought, the profit will decrease or disappear completely. On the other hand, developers can make some healthy money even before the game release if they are successful (or bastards if they don't deliver anything )

 

3. Kickstarter policy mostly. Not everyone can participate and not everything can be crowdfunded (nice, Chrome already knows this word ). And obviously, the cost of marketing. If you don't have marketing or you do not know any other successful or popular ongoing campaigns, you won't be known.

Edited October 5, 2015 by Satoshi Ookami

[PleaseHoldOn]

Ok, just to clear something up that most people missed about Shenmue 3. It is not being funded by Kickstarter. When they were asked why they wanted so little, when a game like Shenmue 3 would take way more than $2 million (or $6 million), they said Sony is paying the bills. Kickstarter was simply for "bonuses", or most likely, a way to preorder the game and get a physical version of it. Shenmue 3 is 99% guaranteed to be released, that 1% being something bad happening. Since it was used as a preorder system, everyone who donated the minimum amount for a copy of the game will be given one, they don't have to pay anymore.

 

Most Kickstarter projects don't work like that. In a majority of cases, it's used to completely fund everything for the game. Once that game is out, they have a copy they can now sell in stores like Steam, PSN, Xbox Live, or the Nintendo Store. That's how they make their profit. You're an investor helping someone make a product, but your only initial reward is the game or the other bonuses you might have paid for.

 

I get what your saying, but this seems like a lot of unnecessary detail in this post for someone just trying to understand the basics.  Ultimately, you back something on Kickstarter in the hopes that a finished copy of the game will be coming back.  Even Shenmue III isn't a slam dunk, like you said... though 99% is awful optimistic IMO.

 

The best way to approach any Kickstarter is, again, in my opinion...

 

a. If you invest money in a project, consider that money gone.  There's no guarantee that any project on there will see completion, or that you'll see a satisfactory return for your investment.  Shenmue III has an estimated release of Dec. 2017, anything can happen in 2+ years.  Don't give up your food money for the week "preordering" a game off Kickstarter.

 

b. Only donate to projects that you have a genuine vested interest in... that look as though the developers are dedicated, established and trustworthy.  That's not to say some indie developer with no credentials can't knock it out of the park, and maybe you want to get in on the ground floor, but be prepared to assume the risk if you choose to back them.  Like I said, consider the money gone because it very well could be.

Edited October 5, 2015 by PleaseHoldOn

[JONNY-1992-_-]

Thanks to everyone for all the responses. This has helped me a lot to understand things better and I appreciate it!

[DocVoltacon]

3. What's to stop other developers from using this as a way to fund development for a Video Game if they are allowed to make a profit on it?

 

As long as Kickstarter exists, developers will use it.  Crowdfunding is basically the alternative for developers who would rather their fans support the game financially throughout it's development... then to "sell their soul" to publishers who oftentimes kill creativity/quality by pushing unrealistic deadlines and drowning the developers in debt.

 

So true my friend and ther alot example Grip the spiritual sucessor of Rollcage I and II, Shenmue 3, Formula Fusion- Sucessor of Wipeout from Playstation and the last not forget Yooka-Laylee from former Rare employes and Creator of Banjoo- Kanzoie series kickstater save our franchise as we know It

[DEMON]

1. Has been answered. It solely depends on your pledge. In fact, you CAN subscribe enough funds to have the game delivered to you =) Even with some tasty bonuses =) Everything MUST be explained in project goals, otherwise, I presume the campaign can't start.

 

2. Depends on 3 things. First and foremost, if the project meets its goal. If it doesn't, developers do not get the money. But let's suppose big happy campaign ending. In that case, it depends on Obtained money - REAL amount of necessary funding. If the project is much more expensive than what the creator thought, the profit will decrease or disappear completely. On the other hand, developers can make some healthy money even before the game release if they are successful (or bastards if they don't deliver anything )

 

3. Kickstarter policy mostly. Not everyone can participate and not everything can be crowdfunded (nice, Chrome already knows this word ). And obviously, the cost of marketing. If you don't have marketing or you do not know any other successful or popular ongoing campaigns, you won't be known.

 

If you don't have marketing skills, you aren't even going to do very good on kickstarter as you will have to make it known to people you have a kickstarter for this game which probably costs money or if you are just very good at social media.

[fisty123]

I have pledged a few projects on kickstarter now well more than a few but anyway.

As mentioned above without a good marketing campaign it will be harder to get the required amount. A lot of game kickstarter projects offer a physical copy and bonus goodies that you can only get through the kickstarter to give it a reason to pledge even more instead of waiting for it to hit steam or PSN. I am a sucker for physical copies so this always pulls me in when I am deciding on that game or not.

 

There are Facebook groups and websites that will review and publish a document on your pledge which seems to have worked for a lot of the Visual Novel projects, the Greenlight function on steam has also proven to be helpful getting the projects name out there as well. (as mush as I am not a fan of steam it does work really well). So will also offer a free demo to also help the project.

A lot of fans of the projects rather the kickstarter idea as if the project does not get its intended market no one is charged however you are still apart of that project so if the creator wants to try again or provide a website to help out they send messages and updates to everyone who took part in the original pledge advising of the next steps even if its months after the campaign ended