Which Crowd Funding site should I use for my game?

Well if you’re anything like Simon Roth, you use all of them.  Steam Greenlight, Kickstarter, and Indeigogo.  Why use just one?  Each game crowd funding site has strengths.  This is a pretty smart strategy.  Of course all projects should link to all others.

Greenlight Concepts
You can put anything up at any stage and use the site to gauge peoples interest in your idea.  Using the Greenlight concept page traffic can be driven from steam to your primary crowd funding site.

The all or nothing popularity of Kickstarter has a good number of projects going here for initial funding.  Arguably more popular for game design at the moment, but unfortunately only one funding option.

Different funding options (Fixed Funding and Flexible Funding) allow for more options when setting up a project’s funding.

Simon also did something smart with the Indiegogo project.  Being from Manchester U.K. the kickstarter is denominated in pounds.  The Indiegogo however is in U.S. dollars.  Running one project in each currency means that he gets both U.K. and international (we U.S. folks) support.  Noticed the dollar amount on the Indiegogo campaign is set very low.  That’s some good crowd funding strategy right there.

Is Kickstarter bad for games?

Not everyone likes kickstarter.  I do…  But then my day job is in financial services, so the complaints about kickstarter are peanuts in comparison.  Rab Florence’s great blog THIS FUCKING AMUESMENT ARCADE makes a few points about why kickstarter is bad.  We’ve taken a look at the good stuff.  Let’s look at the bad.

Most of this post was written in the voice of Mike Rugnetta… [insert link to future PBS Idea Channel episode].  There may or may not be a little man crush involved.

1.) Established industry veterans are using kickstarter to fund projects because of greed.

Not every Angel investor on the planet is willing to back every project. For venture capitalists, you have to demonstrate success before they will meet with you.  Even for proven industry vets like Peter Molyneux not every idea gets backed.  If you can’t draw a straight line between yourself, your ideas, and profit you aren’t likely to get backed by anybody.  Angel investors are not pushovers either.  They have to see some pretty compelling evidence that you’ll succeed, or they take a BIG chunk of your ownership.

And let’s face it.  Up till crowd funding sites were created it was really hard to accurately gauge community interest in something.  Even with the sites it’s still difficult to gauge if there isn’t interest, or if you just didn’t pitch it well.  You wonder why most games were Madden NFL 20XX?  Big companies cannot risk money on things that might not work.  So you get game franchises.

There could be some greed behind the scenes of crowd funding…  But I seriously doubt that many kickstarters, famous or otherwise, are taking the funds provided and using them for purposes other than stated.  That doesn’t mean that every kickstarter will succeed, and that every passion project will spend our money wisely…  It just means that I don’t see a lot of fraud going on.  At least not yet.

2.) “But these capitalist animals, Molyneux and Braben to name but two, are transforming Kickstarter into a shopping website for products that don’t yet exist.”

Actually that’s a pretty big criticism of kickstarter in general.  Like, all of it.  As this complaint is true the entire site over, it is unfair to heap the blame for this one on Molyneux and Braben.  Eventually having a ‘shopping center for things that don’t exist yet’ is a real possibility.  But not necessarily a bad one.

3.) “We are being exploited”.

This is an interesting point of view and not an uncommon one.  Lot’s of people feel that targeted advertising, and mass market products exploit the general populace.  Oddly enough everyone running the companies that produce the advertising and the goods bought by consumers are chasing ‘what the consumer wants’.  Like uroboros this cycle goes round and round.  Trust a business major when they say that consumers drive the market.  It took a business degree to get that straight in my head, but that’s the way the world works.  Educated consumers are in control even if the companies don’t want many of those to exist.

There is definitely a bit of mad rush of money because kickstarter is allowing a new way to express demand.  That will die down.  At some point it will become obvious again who’s in control.  Like a new game you’re obsessed about for exactly 38 hours (cough) X-com: Enemy Unknown (cough) then stop playing.

In the end kickstarter is just different.  Neither good nor bad, simply a new tool.  Some people will use it well, and some people will use it terribly.  Kickstarter will ultimate change the way that producers, be they game publishers or watchmakers, view risk.  They will see that there are passions out there they can’t account for with metrics.  The public is willing to pay for things that customer surveys simply cannot reveal.  Games can be viable even though, and maybe even because, they don’t target wide demographics.

The three points, being railed against, are the very things about kickstarter which will ultimately change the marketplace.  Niche marketplaces, like game design, stand to benefit the most by demonstrating that even niche’s can have wide appeal.  And some great games will get made along the way…  Some crappy one’s too…  But also some great ones.  What’s wrong with that?

Equity Crowd Funding in 2014?

The game design industry won’t see Equity Crowd Funding until 2014…  At the earliest.  Crowdfunding.org projects a best case time frame for the 10 steps between where we are today and active Equity Crowd Funding in the U.S.  This is, however, the federal government we’re taking about here.

There is a reason that is good, and a reason that is bad.  On one hand the timing gives another year of practice making, and studying donation based crowd funding.  In general that practice should be very helpful for anyone who wants to be good at Equity Crowd Funding later.

The bad news is that is an awfully long time in the market.  The excitement over crowd funding could be well over by then.  Interest could be less, and dollar amounts could be smaller.  People could be used to being sold idea’s instead of products, and maybe even bored with it.

What do you think of Equity Crowd Funding?  Tell me in the comments below.

Ownership and investing.

As a complicated person with many ideas, knowledge and experience I have an odd view point on investing in companies.  If we were to sit down and talk one on one about how to go about investing for retirement  for profit, etc. it would quickly become apparent that I am a fan of Jack Bogle.  Keep expenses low, use EFTS, re-balance every year, etc.  Invest in Exchange Traded Funds and understand regression to the mean.

Likewise as a business major I have strong opinions on when, why, and how to take companies public.  You don’t.  Companies perform better when they are private organizations.  People take companies public because they think they’ll make boatloads of money. Let’s relate this to the game industry.  Facebook and Zynga have both had tons of problems after going public.

But I’m very interested in equity crowd funding.  The JOBS Act signed this past April, although completely up in the air, promises to allow sites like kickstart to do more then just take donations for projects.  Right now you can’t buy ownership in a copy.  You pledge funds and if they meet a goal you get swag.  Equity crowd funding means those pledges buy you ownership of the project or company.  Exactly what I would talk you out of as an investor.

This is the central heart of the debate about allowing equity crowd funding.  Being a registered rep and business major there will come a time when I’ll someday be involved with asking gamers to help build a game by purchasing ownership in a project or company.  At the moment I’m not sure how to resolve asking for someone to buy equity when I wouldn’t advise them to make that purchase if the shoe was on the other foot.

This is all academic moral questioning right now…  But at some point this will have to get sorted out.  Not just by me, but by everyone.