Kick-in-the-face-Starter

Back in June I wrote about Kickstarters and how good it is for the community because wargame development is, for most people, is prohibitively expensive. Kickstart campaigns gives those people the opportunity to pitch their ideas to the community and gain their support. It’s a very very good thing.

However of late I’ve noticed that there are more and more instances of established companies that actually have capital using kickstart campaigns to fund their latest projects. I have a problem with this because businesses are supposed to work on the following principle:

Initial investment

Research

Product Development

Product Launch

Sales

Profit

Investment settlement

Reinvestment

Repeat

Independents that don’t have that initial investment benefit from kickstarter campaigns because otherwise it would require an extraordinary long period of saving or a business loan which, especially in these times of austerity, they probably wouldn’t get.

Established companies have to make money before they develop new projects in the same way as a shop has to make money to buy more stock. It’s called economics. No money, no reinvestment. It’s not right for established companies to use kickstarter campaigns to fund projects when, seeing as they’ve already made money out of the community, they should be using capital.

There’s an argument that pledges equate to pre-orders and this is partly true however for a company to be able to fund the project and give pledges their rewards their paying an inflated cost. Let’s take a look at Mantic as an example. A company that has been kicking around for a while now. Their releasing an ever-expanding range of models for their Warpath game which suggests capital investment, yet they’re holding their hands out for community money for Kings of War and, more recently Dread Ball to the total sum of $562,845. And what do you get for your money? Well not a butt load. $80 gets you a copy of the game. Which won’t cost $80 dollars and it won’t cost $80 to produce. More over, as the retail price already has the cost price built into it you’re actually paying twice. But wait, that’s not all, you get a print of the cover art which costs pennies to produce beyond the salary of the artist, and a digital copy of the rules, which have already been written. Beats working for a living I guess.

Kickstarters for established companies boils down to this – profit. Kickstarter schemes to them are essentially a loan they never had to pay back. It’s free capital. So when the game launches and sells, any money they make goes straight into the bank. More or less anyway, I accept there are distribution costs etc but I’m willing to bet much of that is added into the cost of production.

The difficult thing is that there are lots of very cool kickstarter schemes out there, like Soda Pop’s Relic Knights, and some companies like them, such as Avatars of War, genuinely needed community money to take their development to the next level. There’s an argument that these companies are too super niche and found them in a position they couldn’t get out of but that’s the beauty of kickstarter campaigns; the community decides what’s worth funding and what’s not. And, realistically, like Membraine with their Exodus Wars game, if they hadn’t got any money they would have found the money themselves eventually.

Where crowd funding comes unstuck, however, is when a company can use their reputation and a marketing budget to promote their campaign above struggling independents. The obvious counter point is that free trade is a bitch and it’s a dog eat dog world out there. And that’s true. However, in a niche market where goodwill is as important a currency as the coin of the realm it’s a risky business to be so blatant in their profiteering. The conversation may as well go something like this:

Gaming company: Hey, fancy giving us some money to fund our new game?

Gamer: Don’t you have money of your own?

GC: Oh yes, but if you give us your money then we’ll give you a copy of that game and some other tat and you get to say you helped!

G: Hey that’s a great idea! I buy a game at an inflated price for no real reward.

GC: Yes, and when the game’s out we’ll make sure you get an inconsequential mention and then forget all about you, all the while profiting wildly from a game we had to make zero investment in ourselves.

Yes I’m a cynic but it’s also true.

I have very little hope this is going to change opinions as the fact that Reaper, one of the most established model companies in the world, raised almost $3.5 million for their BONES project. So people are clearly happy pledging. But I wouldn’t be me if I didn’t say something as kickstarter campaigns are meant for those that can’t do it on their own, not for those looking to do things on the cheap.

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18 thoughts on “Kick-in-the-face-Starter

  1. Soda Pop already had a lot of Relic Knights work done before the kick start, its added a lot and given all us gamers pure plastic models and not some resin/metal creations. The size of the starter has roughly doubled since the project started. I’m more than happy with what I’ll receive for my investment.

    I don’t see the issue really. Either soda pop go to the bank and pay shareholders pots of cash, or we the gamers fund them. Cut it either way our gaming dollars are entering the market.

    1. I did single out Soda Pop as an exception as it’s a small company. But a loan and shareholders aren’t the same thing and it’s not unreasonable to expect companies to bank roll themselves.

  2. I cannot fault your reasoning for established companies looking for an easy approach, and it does feel like a compromise of morals if not the ideal behind such a premise – but I do see why companies pursue this approach to production in the current economic climate too. It would be too simplistic to say that they do this to reduce expenses – because it also tests waters for further development. It reduces risk, kites a community and establishes a firm sense of what would be required to produce a line of products or services without compromising the core capital of the company.
    I know that the reward for pledging can be tenuous or unceremonial, but at the end of the day, it is the individual’s choice and their money to invest. Kickstarters – no matter what company produces them, are investments more than risks – so pledgers are aware of their choice and consequences, and assured of a return that they agree to by investing. The company that fails to reach their target loses much less than they would had they invested working capital into untested projects that may result in low sales returns, and lets face it – nobody wants to see any company(miniature based or otherwise) go out of business like so many others have lately.
    Maybe I’m an optimist, but I like to think that established companies look for far less than 100% of the required start-up costs when working on a kickstarter boost, and individual groups looking for first time investments will continue to kickstart regardless of big-time companies also swimming in the same water – their costs and fees will be reflected in their own goals and funding.
    I do get what you’re saying, but I do think that there is room for both, and that the companies that are obnoxiously looking for more than is reasonable will be recognised for what their are through their campaign goals and ultimately lose genuine support. I think that this is a really important topic that you’ve raised, and a very interesting conversation to have! Thanks for it!
    shane

    1. I’m not suggesting companies are duping pledges in the sense that they’re being told one thing and getting another but the company is definitely the one getting the lion’s share of the benefit. And as for testing the waters, that’s what market research is for. A company doesn’t invest in R&D unless their certain there’s a market to begin with. To do so is crazy.

      As I say, there is a place for kickstarters, I think they’re a really good idea. I just have a problem with companies that can afford to pay for projects holding their hand out.

  3. This is assuming a lot. How do we know Mantic are doing well? They are established but this does not mean they are well off. No doubt there were business loans to start up and probably others in the mean time. Perhaps they need this Kickstarter to get a game going that will bring them capital to pay off some of those loans. I could see it being used to clear debt, then further profit can be put towards future development without the sword of damocles hanging over their heads.(If thats the right metaphor)

    You are also assuming that people are not getting a half decent deal. Using the Dreadball as an example It seems that they are supplying a lot of decent stuff to those that pledge, albeit $150. A full boxed game plus extra teams, extra players MVPs tokens, an expansion book. Tat or not, it costs to make it and would cost to buy it, and if you don’t want the tat, well you do not have to pledge any coinage do you? If someone feels that the stuff offered is worth it thats up to them. Clearly you do not and thats fine as well but trying to apply some moral dimension to it is pointless at best. We do not know the facts of Mantics finances. They could be worse off than Avatars of War from a purely financial standpoint, how and indeed why would we know?

    I find some of the campaigns amusing as they try and figure out new things to add to the deals when they have clearly run out of ideas!

    In truth you will not pledge to a company you consider to be a “bigger” player based on what ever assumptions you make (I’m not trying to be inflammatory here) and thats fine. We all make our own choices and they are often based heavily on assumption. There is no moral angle to be had here, either you are willing to pay up early to ensure a project you like can come to fruition or you are not. Fair shout either way.

    I will, however, jump on and agree with you when Games Workshop run a kickstarter campaign. It doesn’t get more established than them. Unless they are going down the drain. Then I would let them off. Maybe.

    Thats what I think anyway, lacking in coherency though it may be.

    1. There’s no shortage of assumptions there either chap. I can assume Mantic are doing well enough as they’re aggressively rolling out Warpath. Moulds cost tens of thousands and pounds a pop and that money needs to come from somewhere. If it’s debt money (loan or overdraft) rather than capital from existing revenue streams it would be a disaster and a truly terrible business model.

      I don’t have a problem with crowd funding, pledges or rewards, I’m speculating that they’re not always as good value as they may first appear. And of course people have free will and if they want to pledge they will. I’m raising the point that should established companies be using crowd funding as a revenue stream.

      Let me be completely clear (again) I like crowd funding. I think it’s a vital part of the hobby, I’m merely saying that I question the morality of asking the community to fund projects that they’ll later charge that same community for.

  4. Wow controversial opinion there mate, I must admit I was surprised when I saw Reaper with a Kickstarter as they are the second miniatures company I think of when people ask what companies are out there, mostly because they have been around forever…

    Now I’ll admit I was tempted by the BONES offering near the end but that was purely as a look what I could get out of this mindset as I didn’t see the value early on, this in and of itself is a dangerous position to have as it could end up with people holding out waiting to see what they can get after others have pledged….

    The main issue I have with “established” companies using Kickstarter is the effect it has on Independent retailers. I know this is a bit less of an issue in the UK because there are less of these stores but in Australia we have quite a few and they struggle at the best of times these days against online shopping. Now when established companies are setting up a Kickstarter and getting people to “pre-order” these people now are not going to be buying the product from their local store, throw in all of the bonus rewards and well there might go all of the purchases an individual may have made for that product. This has less of an affect when it is a less established company as the local store may not of stocked the product in the first place.

    This also makes me wonder at the affect these companies using Kickstarter will have on their own sales once the release is done. For example if you are interested in Dreadball you may as well pledge the $150 level now as you’ll get pretty much everything that will be released in the next year (that is a guess at there release timetable) so how many people will be buying it once it hits the street?

    There are my thoughts anyway.

    1. Valid point about impacting on the release sales. This means kickstarters either aren’t factoring the possible drop off in sales in their costs or they’re allocating budget for more aggressive marketing.

      1. The counter point to that is that with a successful kickstarter, companies are going to know that there is a critical mass of followers who will sell the game to other gamers. The best way to get a game to sell is to have people playing it.

        And this is the challenge for both Drop Zone Commander and Firestorm Invasion, they both look stunning, but without people out there running demo’s will other gamers pick them up?

        There are already plans afoot for demo days run by pledger’s for Relic Knights and models won’t be shipping till May.

        Personally I’d be reluctant to kickstart a startup venture, I’d just have no faith they could bring the product to market. At least with established operations they have proven their ability to deliver.

      2. I can see the point but companies produce sample copies and send them to retailers and reviewers to build interest. Although pledges will inevitably play and therefore promote the game the major downside is that if it’s shit you’ve wasted your money. The ‘old fashioned’ means of demo boards in hobby stores and review in print and online means you have some vague idea of what the game is going to be like before you part with your cash.

  5. Phil, I have to say that I agree whole-heartedly with you here. Kickstarter raises considerable concerns for me also. Relic Knights is the closest I’ve come to actually putting my money behind something but your post adequately sums up a lot of the reservations that I have myself.

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