Psychochild's Blog

A developer's musings on game development and writing.

6 April, 2014

The two faces of Kickstarter
Filed under: — Psychochild @ 10:00 PM

Kickstarter has been a game changer, pretty literally. As I’ve written in a series of articles over on Shoost, crowdfunders are taking the place of publishers for game projects, and the consequences of that are.

But, precisely what are backers getting out of a project? That’s a surprisingly deep question. Let’s take a look at what people think they are getting when they back a project.

Troubled backers

Big news recently was Facebook acquiring Oculus. This would be just another everyday business transaction in the tech industry, except for one little complication: the highly successful Oculus Rift Kickstarter campaign.

The issue is that people saw Oculus as the scrappy underdog that would bring about an open VR platform supplied with a few million dollars from fans. Instead, it gets absorbed into the latest company people love to hate (and are even starting to even loathe). Some people got very upset.


I saw this image a lot. This is how some KS backers felt.

Other people were confused by this “sense of entitlement.” Of course a company is going to sell itself to a big company for $2 billion! KS backers got what was promised to them, and anything else was just a fantasy! But, I’m not so sure its as simple as that.

I think these two points of view demonstrate the two perspectives on what it means to back a crowdfunding campaign.

Bringing something cool to life

VR hasn’t exactly had the most glamorous history. There were the heavy helmets and poor tracking of early game systems available in some arcades. There was the unloved Virtual Boy that is the butt of many Nintendo jokes. There was VRML….

But, along comes a company that has a lot of potential. They do a Kickstarter campaign, riding the initial wave of enthusiasm after the Double Fine campaign raises an amazing amount of money. Best of all, they seem to want to open the platform to as many developers as possible. VR has a real chance this time, and instead of being a walled garden it could be something that everyone enjoys.

Some people saw the Kickstarter campaign as a way to bring something so cool and with so much potential into being. Without their support, the Oculus Rift would have been delayed, or perhaps even canceled entirely. People invested in the vision of what the company seemed to be promising. They saw themselves as investors picking a diamond in the rough, and the success of the campaign was validation.

So, to these people the sale to Facebook feels like a betrayal. First, Facebook threatens the open nature of the project that was promoted heavily. As a friend linked to me, Facebook makes their money by being an obstacle. The Facebook acquisition is likely to close off more than it makes available.

There’s also the question of return on investment. When you’re supporting the scrappy underdog with financial support, you’re happy with your payoff being the warm glow of doing the right thing. When the word “billions” gets thrown around to purchase something you supported, that warm glow fades and you wonder why you spent so much money on a gizmo guaranteed to be obsolete.

Placing a pre-order

The other dominant perspective is that backing a Kickstarter campaign is like placing a pre-order. You’re placing money down for something not widely available yet, in the expectation that you will get it sooner than you could otherwise, perhaps with a few specific perks thrown in. But, this gives you no special advantage beyond what’s stated in the campaign. It’s a business transaction, pure and simple, with nothing guaranteed beyond what is written as a backer reward.

The “pre-order” mentality seems to be a much more modern interpretation. A lot of the earliest Kickstarter game projects were little indie games looking for a small amount of money to get finished. Often these projects were made freely available afterwards, you just got that warm glow as a way of thanks, and perhaps some unique bit of swag. But, as Kickstarter campaigns have become bigger, I think the “pre-order” frame of mind has become more prevalent.

Looking at the larger picture

It might be interesting to look at these two perspectives when it comes to something smaller than a company selling itself to Facebook. Let’s take a look at what it means if a campaign fails to deliver on its promises.

If you’re supporting something cool, you’re less likely to be upset. There is always risk for highly creative efforts like games. Sometimes you have all the right elements: experienced developers, an intriguing idea, and the money from the campaign. But it never quite comes together. It might be that the idea proved more complex than originally thought. It might be that the developer doesn’t attract the right people to realize the vision. Not that you like wasting money, but you understood the risk was there.

However, if you feel like you’re placing a pre-order, you’ll probably be more upset if a project doesn’t deliver. You might demand your money back, just like you would if GameStop didn’t fulfill your pre-order for a hot new console game. The failure of the project should not take your money for nothing in return. This perspective views the support less in terms of risk and more in terms of a purchase, and as a business transaction the person paying money expects to be given what they ordered.

I think the biggest problem is that many people seem to be happy to have it both ways. In the case of Oculus, their pitch felt very much like they wanted grassroots support for something that wasn’t going to be made by established companies, at least originally. But, with the Facebook purchase they can treat it like a glorified pre-order. Which is fine if that’s what you went in expecting, but I wonder how many people were really that excited about buying first-generation tech for the sake of buying the tech.

Understanding what you’re supporting

I’m not sure you could say that one perspective or the other is more accurate, especially given the evolving history of Kickstarted games. I think the truth is probably somewhere between these two viewpoints, and depends on what is being offered. A company offering a spiritual successor to a game that the creator original made is making a different proposition compared to the lesser known person who has a crazy idea and wants to see if others are willing to help make it a reality.

So, I think it’s important for the individual to understand what they’re supporting. Backing a game from a currently unfashionable genre is different than backing a game from someone who could pretty easily land a traditional publishing deal. Backing a quirky indie game is different than backing an investor-backed company pitching the opportunity to own some early hardware. Just because something is on Kickstarter doesn’t mean you can necessarily make assumptions about the motivations and eventual goals of the company pitching the campaign.

This doesn’t absolve the people and companies who run the campaigns, however. People looking for crowdfunding should be up front about what they want to accomplish. Be clear about what people are getting, and be explicit. Crowdfunding campaigns should realize that if they exploit people’s goodwill, it may come back to bite them if you you sell out to Facebook down the road.

So, what do you think? Do you view most crowdfunding campaigns as investing your money in something cool without a guarantee of a return on investment, or do you prefer to view it as simple pre-orders? Or do you see it as somewhere in between?


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19 Comments »

  1. Simple experiment: run a kickstarter with no tangible rewards or reward levels. Backers get nothing but the warm glow of sending their money to a project they would like to see happen in the world. If the project succeeds, they have to buy retail like everyone else.

    See how it does. If it’s a wild success, people are — in their heart of hearts — interacting with the platform as pure patrons.

    If they complain, odds are quite good that you’ve demonstrated that they actually consider it a form of pre-ordering.

    Comment by bombasticus — 7 April, 2014 @ 9:05 AM

  2. I am far down the patronage end of the continuum, or so I believe. Careful patronage, in any case. I have put money behind a few Kickstarters, but generally only when I felt the team involved had a really good chance of meeting concrete goals. (Though we need a term for backing a Kickstarter you know won’t make its goal just to feel good or say you did so, knowing you money was never going to leave your wallet. That makes up the balance of my pledges. Sorry Storybricks.) So my care in picking means they have ended up being like pre-orders. Go me, I guess.

    Oculus Rift though… something I didn’t and wouldn’t support… that has a different kink to it. Seeing that go to Facebook cannot be high on any backer’s list of “Here is how I hope this plays out!” Facebook grabs your darling technology and you have to wonder what they will actually do with it. I know Carmack says it will be hands off, but when somebody gives you two billion dollars, how hands off can they remain?

    And then there is the fact that Carmack and company came hat in hand looking for crowd funding, only to turn around and end up very rich. I’m pretty sure nobody kicked in hoping that later investors would get to cash out in a big way before anything had really been delivered.

    That is sort of a one-two punch of betrayal, and Carmack saying that the reaction caught him by surprise beggars belief.

    Still, this is probably an outlier, and people backed it got what they were promised, in that “Support your local PBS station and get a $10 T-shirt for $50″ sort of way. OR doesn’t legally owe any of the Kickstarter backers anything beyond that. But I would be pissed if my local PBS station cashed out after they sent me my T-shirt all the same, so the anger isn’t a surprise to me.

    Comment by Wilhelm Arcturus — 7 April, 2014 @ 9:27 AM

  3. Had Occulus been completed and delivered BEFORE having been bought by FB, I think there might be a slightly (slightly) different reaction, focused entirely around “Anyone but Facebook!”, and none of this “this isn’t what I signed up for”.

    I wonder if things would have shaken out differently had the Occulus folks said outright that they wouldn’t take the buyout option off the table should a good offer come along. I can see, really, both sides, and I think there’s still the possibility that everything will wash in the end. But investments through KS were made to very specific people for a very specific purpose. Now the game has shifted so that “very specific people” are Facebook employees beholden to Facebook’s Manifesto, and “very specific purpose” is going to be based on principles that may or may not differ from those posted by the Occulus KS, and which were probably the REASON why people pledged to the campaign. I tend to lean more towards those who are upset. It’d be like giving your brother in law 10,000 to buy a car, and later on you find out that he spent it on hookers and blackjack.

    Comment by Scopique — 7 April, 2014 @ 9:57 AM

  4. bombasticus wrote:
    Simple experiment: run a kickstarter with no tangible rewards or reward levels.

    I don’t think you have to be that extreme. Let’s take a look at a very early Kickstarted game, A House in California (https://www.kickstarter.com/projects/149077132/a-house-in-california-a-point-click-art-game). This was funded in 2010, long before the Double Fine campaign brought a lot of attention to Kickstarter.

    It’s a game that looks like it was designed for an Apple II, with a promise to be free and open source. The rewards are early access to the game, a USB drive with the game, or a printed cigar box containing a CD and a USB drive of the game. This is a relatively obscure game that was unlikely to become a big success, so I find it hard to believe that people were really shelling out money for the physical artifacts. But, there were 77 people out there who wanted to see this become a reality.

    These types of games were pretty common in the early days of Kickstarter. As I said, I think there was a change in expectations later, especially in the flood of projects since the Double Fine campaign. (I’d also argue that a sizable number of people who supported the Double Fine campaign were more interested in showing support for adventure games than the specific game, especially given that the game wasn’t even described in full in the original campaign.)

    Wilhelm Arcturus wrote:
    (Though we need a term for backing a Kickstarter you know won’t make its goal just to feel good or say you did so, knowing you money was never going to leave your wallet. That makes up the balance of my pledges. Sorry Storybricks.)

    Heh. Yeah, the psychology around supporting (or not supporting) a campaign that is likely unsuccessful is interesting.

    I know Carmack says it will be hands off, but when somebody gives you two billion dollars, how hands off can they remain?

    I think we just need to look at EA’s history of acquisitions. Every company acquired by EA says they’ll remain independent, but they all get consumed in the end.

    …only to turn around and end up very rich.

    They may not end up that rich, possibly only well off, depending on how much money was poured into the company via investors and venture capitalists. I’m sure they burned through a lot of cash on hardware. But, those investors probably made out pretty well at least. :)

    …in that “Support your local PBS station and get a $10 T-shirt for $50″ sort of way.

    Ah, donating to a PBS station is a great example. Imagine if you had sent off a check to the PBS station, only to have them turn around and become a FOX affiliate later. You might be a bit peeved that your money didn’t go toward more Masterpiece Theater as you had expected, even if you weren’t specifically promised that’s what would be done.

    Comment by Psychochild — 7 April, 2014 @ 10:03 AM

  5. I think all these rewards for various Kickstarter supporter levels are very much like preorder-bonuses, especially for computer games.

    We went from preorder to prepurchase to finance the project in part fairly quickly!

    Be it the Elite maker Braben, Richard Garriott, John Carmack or Peter Molyneux, they really need Kickstarter to get their projects funded and started? No. But they run around with the hat collecting anyways and use it as an early kind of promotion.

    That’s what Kickstarter also has become, some kind of attempt to generate enough buzz to find dollars above the <100 dollar range. People don't invest in a bubble on Kickstarter most of the time. They prepurchase. That changes the spirit of the platform quite a lot.

    Small companies with small budgets usualy fail to meet their goals and if they get founded, they are really on a budget. You often see this in the resulting game, unfortunately.

    Another aspect is the entitlement aspect. People invested money, how much of a say or right to get informed should they have?

    That's up to the project in question to promise this or that or not, there is no obligation to succeed and deliver what was promised.

    If this project gets founded, you get a pony! Unfortunately we ran out of money nevertheless aaand… how about half a pony … or in some cases the money is gone for nothing.

    This makes Kickstarter a rather bad kind of "preorder/prepurchase". People love it nevertheless.

    I only surf to Kickstarter when someone points me there. Big investors probably look at Kickstarter now and then by now, but for them it's probably more a Facebook game than business.

    I am not sure what I will do in future, but I don't feel like supporting the guaranteed Kickstarter successes and pay 2 years in advance for a game, even if an ingame memorial gets erected for me. And those who would need support more and deserve a chance, well, these usually fail even if you feel like putting quite some money into it.

    Comment by Longasc — 7 April, 2014 @ 10:23 AM

  6. I hear you, but let’s try the experiment — and if it sounds “extreme,” what does that tell us right away?

    Patronage is patronage. Paying money for a thing is paying money for a thing. If we look at Kickstarter and ask, “where is the thing I am paying money for,” doesn’t that answer your larger question?

    Comment by bombasticus — 7 April, 2014 @ 10:38 AM

  7. Simple experiment: run a kickstarter with no tangible rewards or reward levels.

    The problem there is that what you are proposing isn’t simple and assumes a binary situation apart from other factors. I can come up with scenarios that will go either way.

    If you get a gaming dev celebrity to do a Kickstarter… say Sid Meier… with no tangible rewards, I bet you have a success.

    If you get a nobody like me to do a Kickstarter, and I offer tangible rewards in excess of the value of the actual contribution, I bet it ends up a failure all the same.

    While you might be able to draw some conclusions from those scenarios, I would suggest that the patron vs. pre-order question would remain unanswered.

    Comment by Wilhelm Arcturus — 7 April, 2014 @ 12:18 PM

  8. A lot of resistance! So try it. Get a relative celebrity to try a no-rewards Kickstarter and watch the response patterns. Are people confused?

    Or even better, take two functionally identical unknowns and run two functionally identical campaigns — one on a no-rewards patronage basis, one with rewards — at exactly the same time. See which one does better and watch the response patterns. That way, you’ve standardized for just about every variable, right?

    Which one do today’s Kickstarter backers gravitate toward?

    Comment by bombasticus — 7 April, 2014 @ 12:53 PM

  9. Kickstarter campaigns have always confused me, but I do pay attention to the “donate this amount, get this free loot at that level donation” definitions. If, indeed, the final version of the product is one of the offerings, the chances that I might throw money at it are greatly increased. Otherwise, the campaign falls into the realm of “wouldn’t it be great if this existed?” speculation, and while I might agree in theory, I wouldn’t vote with my cold-hard cash in fact.

    So, for the Oculus kickstarter, I see that at some levels people were being offered kits for personal development – a tangible reward for when the product was completed. Did they get them? Did the Facebook sale somehow change their commitment to those kickstarter patrons? Is the commitment actionable? They are the only ones who have any right to complain.

    Comment by randall — 7 April, 2014 @ 1:15 PM

  10. A lot of resistance! So try it.

    Oh, no no no, the long standing punishment for coming up with new ideas is being forced to implement them yourself. If you feel that such an effort would prove anything, it is clearly up to you to follow through.

    I look forward to your observing your follow through on this.

    Comment by Wilhelm Arcturus — 7 April, 2014 @ 1:54 PM

  11. Point taken! But on the other hand, I’m not the person actively wondering whether people think Kickstarter is a pure patronage platform. Fact is, friend, I can predict with 100% certainty what the results will be.

    Comment by bombasticus — 7 April, 2014 @ 2:46 PM

  12. Here’s an proposition no one’s considering: If the Oculus team had mentioned in their campaign, at any time, that they were financing their current research in the hopes of being bought out by a larger company like Facebook (they apparently had been courting Zuckerberg for some time according to an interview Luckey did), then do you think they would have received as much community support? Where would Oculus be if supporters knew they were considering selling?

    If the answer to the first is no, then we’ve got an ethical issue here, one where the team benefited from a form of dishonesty (of half-truths). I don’t think they would have received a tenth of the support they got if they’d made it known that they were building up to a big sale in the name of bringing VR to the world (their slogan until now has been “it’s all about games”). That’s an angle I’ve seen hardly anyone consider. Instead it’s all being phrased in such terms as to be ambiguous or sympathetic towards the Rift team while painting supporters as as the source of all the heated debate right now. I think there would be no heated debate if they’d made it known from the outset that they were considering selling Oculus Rift to the highest bidder. What do you think?

    Comment by Doone — 7 April, 2014 @ 8:15 PM

  13. Randall wrote:
    Did the Facebook sale somehow change their commitment to those kickstarter patrons? Is the commitment actionable?

    As far as I know, dev kits were delivered. I think the particular snag is that the developers thought they were developing their games for a cool, open platform. Take Notch’s response to the news linked above. He pulled support for putting Minecraft on Oculus Rift because he finds Facebook to be “creepy”. And, he was in at the $10k level and wasn’t really fussed with visiting the offices, so it’s not like he was just pre-ordering a kit. He saw this as something cool and independent, and selling to Facebook fundamentally changed the nature of what he was supporting.

    Is this actionable? Well, there’s the rub. Oculus never said they would or wouldn’t sell themselves to Facebook. But, you could argue they pimped themselves as “indie” in their presentations. But, is this enough to say they were being deceptive? I’d say, probably not legally actionable, but it has left a lot of people feeling betrayed, obviously.

    Doone wrote:
    I think there would be no heated debate if they’d made it known from the outset that they were considering selling Oculus Rift to the highest bidder. What do you think?

    I think this is implicit in the two perspectives I describe in the post. If you view KS support as a pre-order, then you probably view the company behind it as primarily a for-profit business. You’re not going to be surprised if they sell themselves to a larger company, because that’s what businesses do.

    But, if you were supporting the Oculus Rift project because you wanted to see something cool come from it, you probably saw the company less as a for-profit business and more like a bunch of people doing something new and awesome. Wilhelm’s example of supporting your local PBS station would apply here; you don’t expect PBS to take your donation then turn into a network affiliate.

    Comment by Psychochild — 7 April, 2014 @ 11:23 PM

  14. My accountant says it’s neither patronage nor pre-order, but an investment. I’m thinking he’s wrong.

    Comment by Ernest Adams — 8 April, 2014 @ 3:15 AM

  15. I think that the really scary question that comes from this Oculus Rift development is: how is this going to affect future crowdfunding campaigns for cutting-edge products that may be too speculative to receive traditional backing? Has Oculus Rift “soured the milk” for everyone else?

    Comment by Djinn — 8 April, 2014 @ 7:52 AM

  16. @Brian: Not quite what I was getting at, but I plan to publish my thoughts on it tomorrow. That way I can set-up the question I’m asking with more context. Suffice it to say, I think their approach to gathering support was slightly dishonest. They knew that they probably would have received less KS support if their backers knew they were for sale. That’s all supposition, but as I said I’ll flesh out my thoughts tomorrow :) It’s a good conversation to have, though. I think Kickstarter is fast turning into a hub for venture capitalists to shop rather than a grassroots community.

    (Post is at http://xpchronicles.com/2014/04/09/oculus-rift-selling-out-and-cashing-in/ -Psychochild)

    Comment by Doone — 8 April, 2014 @ 7:23 PM

  17. I think this is an interesting mismatch between the typical person, who thinks in terms of implicit agreements, and business people, who tend to do whatever benefits them or their business unless there is a contract forbidding it. Lots of people seem to have a very fuzzy line between purchases and investments. (And don’t even get me started on people who think that Kickstarter pledges are donations.) But there’s a common theme of people buying a band’s album, or a book, and feeling that entitles you to have expectations, or even demands, on future output. (eg. the infamous “George R R Martin is not your bitch” post – http://journal.neilgaiman.com/2009/05/entitlement-issues.html)

    In general, I think this view is mistaken – you buy a product now to get that product, no more, no less. But on the other hand, these days we’re often being told that we need to support creative workers by paying for their stuff, to allow them to carry on making it. So perhaps it does come across as hypocritical if, having had the support of fans in that way, a creator or creative company decides to do something entirely different, or sells out to another company that may put an end to the previous plans. I suspect it feels to these people like they’ve been exploited, because even if they view it as a pre-order, they view it as a pre-order that supports the company’s goals, goals they perhaps shared. And it will put them off contributing to campaigns from different people in the future.

    When Kickstarter first started I vaguely remember them explicitly encouraging people to offer non-physical rewards. Mostly this was so that they could be delivered regardless of whether the project succeeded or not. But the march towards pre-order mentality has seen that largely erased. And I think there’s a feedback loop involved here, because if backers no longer feel like they’re supporting a cause – or worse, feel like they’re being asked to provide seed funding for a company with no chance of return – then damn right they’re going to want to get a physical product for their money.

    Some of this, I suspect, will go away as people get more used to crowd-funding and understand the way it tends to work. But maybe in some cases it will get worse, as the continued push to have fans essentially invest in the creative arts meets the reality of those creators often choosing to follow a different path later.

    Comment by Ben Sizer — 11 April, 2014 @ 9:48 AM

  18. Ernest Adams wrote:
    My accountant says it’s neither patronage nor pre-order, but an investment. I’m thinking he’s wrong.

    *shudder* He’s probably saying that to drive more business to him. If it truly is an investment, I think some people would like to see their share of that $2 billion in Facebook money for Oculus.

    Ben Sizer wrote:
    Lots of people seem to have a very fuzzy line between purchases and investments.

    I don’t think it’s necessarily fuzzy, but crowdfunding is still a very new phenomenon so there’s no authoritative answer. People are making assumptions about what their money is getting them. For some, it’s a purchase. For others, it’s patronage with the understanding that this cool thing will exist in the world that they helped to support. Doone’s post I linked in his comment above is an interesting perspective on why someone would feel betrayed. I think it’s a bit deeper than “I bought your work, now you dance for me monkey!” we see discussed in that Neil Gaiman post above.

    Interesting times, at least.

    Comment by Psychochild — 15 April, 2014 @ 1:32 PM

  19. Here’s an interesting article I just came across, talking about taxed and Kickstarter: http://nofilmschool.com/2014/04/crowdfunding-taxes-kick-starters-hidden-bite-stop-the-bleeding/

    The summary is: get ready to pay taxes on that KS campaign income.

    I was reminded of this post because they talk about portioning some of the income as a “gift” for tax purposes. That would allow you to take some of the money tax-free.

    Comment by Psychochild — 26 April, 2014 @ 11:35 AM

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