Kickstarter And The Wisdom Of Crowds
The future of indie game development or a bubble waiting to burst? Camouflaj, Stainless Games and Gambitious on the future of crowd-funding
Ryan Payton remembers the moment clearly. After all, moments that change everything tend to stick out in the mind.
After a relatively brief but eventful career in commercial game development, in which he worked as a producer on the Metal Gear Solid franchise and as creative director at 343 Industries, Payton took the decision to start an independent studio. It was 2011, iPads and iPhones were seemingly in every palm and every pocket, and Payton had assembled a talented team to make core games with AAA production values for iOS devices. He named the studio Camouflaj; it's first project was République .
"If people in the industry are sick of hearing about Kickstarter now, they're going to be sick to their stomachs in six or eight months"
Ryan Payton, Camouflaj
But the reality of independence was somewhat less romantic than the ideal. Payton had a rough plan to "scrounge up" the $1 million budget for République while still holding on to the IP, and maintaining control of the game's marketing and distribution.
"In the first two months of really shopping it around, we got a lot of encouragement, a lot of good advice from people in the industry," says Payton. "But a lot of them just said, 'Hey, what you're trying to do is near impossible if you don't have money to bring to the table'."
It was after one such meeting in Seattle that 'the moment' occurred. Discouraged by their lack of progress, Payton and one of his colleagues retired to a local diner, ordered sandwiches, and commiserated over what they were being asked to sacrifice to bring République into the world. During one of several long silences, Payton checked the news on his phone, and there it was: Double Fine Adventure had raised $1 million in less than 24 hours through something called Kickstarter, just by asking nicely.
To an increasingly jaded Payton, it was the solution to what, just five minutes before, had seemed like an impossible problem.
Stainless Games' Patrick Buckland saw it differently. As the co-founder and CEO of one of the UK's oldest independent studios, he has seen numerous bubbles inflate and burst. The millions of dollars raised by Tim Schafer and, later, Brain Fargo struck Buckland as more about the wave of public excitement around the platform than Kickstarter itself, but, even with tempered expectations, crowd-funding signified an exciting shift in the development model for independent studios.
"We fought for years to get the rights to Carmageddon back, and as an independent company this is the perfect way to fund [Carmageddon: Reincarnation]," says Buckland. "We've been discussing Carmageddon with publishers for more than a year, but a publisher doesn't want to fund someone else's IP. I mean, why would they do that? It doesn't make any sense at all. Why fund someone else's brand when you can fund your own?
"There are various embryonic funding companies out there, and we're talking to them, but it's still not working yet. It's still not like film industry, where there are companies that - if your script is good enough and you've got the right names - you can get your film funded. That doesn't exist yet in video games, and even when you do that in films you still lose the IP. But crowd-funding can do that critical thing of letting the creative people retain the brand.
"The core difference is that if you do get external funding you owe them the money back, whereas Kickstarter is perfect because instead you owe them the product. That's brilliant, because, as a developer, what you really want is to get the product out there."
The Problem With Pledges
That's the theory, at least, and at this point it's well understood. In the five months since Tim Schafer made his highly lucrative bet, every new Kickstarter project of vague interest to gamers has been followed by dozens of interviews, mostly asking the same set of questions, atomising the issue to a pointless degree. Indeed, the most interesting question regarding Kickstarter and crowd-funding for video games - i.e. is it just a bubble waiting to burst? - can't be answered in a convincing way, and certainly not by anyone attempting to raise money through the platform.
The truth is, whether Kickstarter proves to be a fad or a sustainable option for funding development, at this stage neither outcome is assured. There are problems and pressures at every stage of the process, for both the developers looking for money and the people ready to donate.
For Payton and Camouflaj, the very fact that the money largely comes from regular people and not publishers or investors presented numerous obstacles. Despite the pedigree of its team and the ambition of the project, Payton was surprised at the community's assumptions about how games are made, what they cost, and even how independent developers live from day-to-day.
"One of the points of frustration for me has been the Kickstarter phenomenon plus the whole notion of indie credibility, and how those are really interlinked," he says. "We got a lot of criticism early on that we were too polished, that the game seemed of too high a quality, so people thought we didn't need the money because it would get made anyway."
That expectation very nearly brought the project to its knees. Camouflaj reached its $500,000 target with less than seven hours on the clock - more on that later - but Payton's revelation that he would use a portion of the money to pay his team a salary was greeted with numerous complaints. Indie developers were supposed to live in basements and eat ramen noodles, not raise families and pay for healthcare. With no financial return for their investment, it's only fair that pledges should be allowed to voice their concerns, but this incident illustrates the gulf between loving games and understanding the process by which they are created - a gulf that could prove problematic for the Kickstarter model in the future.
Payton is keen to point out that the entire experience was a "net positive" for Camouflaj, but it's clear that the journey was harder than he expected for a team with experience on Metal Gear Solid, Halo, F.E.A.R. and inFamous, among others.
"I was so disappointed in our performance that entire days would go by where I wouldn't check the Kickstarter page once. I didn't want to know," he admits. "But even at that point there was still positivity. We weren't getting the pledges we wanted, but we were still building a community, getting lots of encouragement, and getting offers from companies all over the world offering to help make the game if the Kickstarter didn't work out. They would have owned the IP and everything, but at least I could have paid my guys and we would have made the game regardless."
Even a failed Kickstarter campaign can reap benefits in other ways, but it's easier to rationalise the consolation prize when you weren't its recipient; had République fallen short of its target Camouflaj would have been forced to relinquish control of the IP, and Payton would have been right back in that diner in Seattle.
One of the key obstacles to getting pledges was République's $500,000 target. Payton knew that the game demanded a budget of $1 million, and half of that would allow Camouflaj to engineer a deal for the rest without handing the rights to a publisher. But there's more to setting a target figure than necessity alone; there's the psychology of the community to take into account, and even Kickstarter advised Payton to lower the target to $400,000, based on the likelihood of the campaign's momentum reaching the original figure anyway.
"The terms of Kickstarter are weighted heavily in favour of the creators, and so far the whole system seems to be running largely on goodwill"
"We decided from the beginning that we were going to ask for what we needed, and if we didn't reach it at least we were being honest and direct with the community," says Payton. "I worry about the projects that are setting their targets lower because they assume they're going to get more."
However, with Kickstarter, honesty (or sincerity, at least) isn't always the best policy. République was at "proof-of-concept" phase: it had an array of concept art, an impressive trailer, and a clear demonstration of the core gameplay loop, which is far more than most. Given the product Camouflaj was making, Payton believed that $1 million was a bargain, but the Kickstarter community isn't composed of iOS developers or experienced investors. Millions of people play games on their iPads, but that doesn't lead to an understanding of how much they cost to produce.
"I thought people would think we were insane - that there's no way it would ONLY cost $1 million. People in the industry have asked us how we were doing it for so cheap, but the interesting thing was that the Kickstarter community thought we were over budget. For what we're delivering it's the exact opposite."
In the end, Double Fine's seminal Kickstarter project raised just over $3.3 million, and the resulting game will no doubt reflect every cent of that investment, but it's worth remembering that the initial target was only a fraction of that amount. The people pledging their money no doubt had a vision of the game in their heads, but how many of them truly understood what a $400,000 point-and-click adventure from a studio with Double Fine's overheads would actually be like? And how happy would they have been if that's ultimately what they were given?
That Lunch Ain't Free
There is no hint of opportunism to Camouflaj or Stainless. These are experienced developers with long track records of finishing games to a high standard and shipping them on time, and a new source of finance won't dull their professionalism. Indeed, Payton speaks of the unique nature of crowd-sourced funding: when the money comes straight from the fans, the duty to spend each cent wisely feels greater than if it came from a publisher.
However, both Payton and Buckland agree that, if anything is going to burst the Kickstarter bubble, it's likely to be the actions - or inaction - of a few careless or dishonest developers. Whatever else can be said about those donating their money, every dollar is invested in good faith; faith that the product will fit the description offered in the pitch, and that it will arrive within a reasonable time-frame. Given how few caveats are attached to the money from the perspective of the developer that's not a lot to ask, but some controversy is inevitable. Is it reasonable to expect 10,000 people to have the same conception of a "reasonable time-frame", for example, or to hold the same expectations of the final product?
"Crowd-funding is at its early stages of development, and I'm really excited to see where it goes, but as it continues we're also going to see some huge, colossal mistakes, controversies, scandals," says Payton. "I mean, if people in the industry are sick of hearing about Kickstarter now, they're going to be sick to their stomachs in six or eight months."
For the most part, the wisdom of crowds has proved effective, with the Kickstarter community neglecting unconvincing pitches and, in the case of Mythic: The Story of Gods and Men, exposing the lie behind bogus campaigns. The fallout from the first great Kickstarter disaster still hasn't arrived, and perhaps never will, but barely 6 months since Tim Schafer lit the touch paper we're still some way short of the arrival of that all-important first wave of games.
If there's trouble on the way it probably won't start until then, but Buckland believes the warning signs are already out there. In April, Warballoon raised $36,000 on a $20,000 target for its iOS and Android game, Star Command; a big win by any standards, until they realised that a third of their haul would be eaten up by designing, printing and shipping the t-shirts, posters and other items offered as pledge rewards.
The developers claim they "didn't fully appreciate" the costs and time involved, and published some good-natured advice for other developers to digest. That much is commendable, but the rest is the sort of bad planning that could sour the public's appetite for crowd-funding. With a publisher, asking for more money is an option, but second chances won't fly with the Kickstarter community.
"We know exactly how much everything is going to cost us," says Buckland. "We're an 18 year-old, 50-person company, so we're very used to doing this sort of stuff; we've got admin staff. But if you're a very small team doing it all on a shoestring, suddenly having to fulfil 3000 t-shirts or something, that could be overwhelming.
"But it's really just proper planning. For example, our top reward is an offer of flying the person from anywhere in the world from a major international airport, but obviously we checked the absolute maximum cost of an economy ticket first - it's New Zealand, by the way. It's our duty to make sure we make a reasonable profit after those rewards, even if it's worst case."
Of course, the danger is that poor planning, inexperience with budgeting, or the sort of politicking around setting a target that Payton described will lead to a developer failing to ship their product at all. And what then? Messy class-action lawsuits? It's the sort of controversy that the games press will eat up as hungrily as they did the enormous sums raised by Double Fine, Wasteland and Ouya, and one that Kickstarter may not be able to stand.
"At the moment, there's no guarantee of delivery," says Buckland. "Now, with a company like ours, we're going to deliver because we've got a huge track record and lots of other blue-chip clients - Hasbro, EA, Microsoft - who expect that from us. But there will be smaller companies out there who go over budget, get things wrong, and, y'know, generally fail, and the people who pledge aren't going to get anything for their money.
"I'd be very, very curious to see what would have happened if Portal was shown for the first time through a Kickstarter. If you only saw a video of it, would you get behind it?"
Ryan Payton, Camouflaj
"It needs to mature to a more eBay-like system, where if you pledge your money you're entering into a two-way legal contract. If you pay that money, they have to deliver you something for that money."
Until now, failure to deliver the product has been considered the elephant in the room, but Buckland believes there is another, more subtle problem that most developers aren't keen to address. What if the game is just plain bad? Kickstarter hands some degree of control over the sort of games that get made to the public, but it necessarily removes the right to make a reasoned judgement on the finished product; to see a bad game, and choose not to buy it.
"The general public may fund four games and only one of them will turn out to be any good, if they're lucky," says Buckland. "Not only will some of these games never come out, some of them will come out and they'll be crap, because some games are. You can't get it right all the time. That's any developer, and I'm including ourselves here. You can't get it right all the time."
This is more significant than it might seem at first glance. Kickstarter has afforded Buckland and Payton access to the sort of money that can make or break their projects, the sort of money for which a publisher would demand full control of their IP; in return, they need only ship a game they want to make anyway, and pay for some carefully budgeted rewards that represent the only difference between a $10 and a $10,000 pledge.
Make no mistake, the terms of Kickstarter are weighted heavily in favour of the creators, and so far the whole system seems to be running largely on goodwill. When we refer to a Kickstarter 'bubble', that bubble may consist only of the desire to spend considerably more than a product's retail price just to be sure it exists at all. In that context, traditional notions of "value for money" are moot, but the onus is nevertheless on the developer to make sure their donors don't feel cheated.
This explains the disproportionate popularity of legacy Kickstarter projects. So far, the surest route to a successful campaign is to have some degree of nostalgia attached: Wasteland is the most obvious example of this, but Tim Schafer's name is synonymous with a distinctly old-school and widely adored variety of adventure gaming, and it isn't ridiculous to suggest that those contributing to Double Fine's ostensibly 'new' project were actually donating to their memories of Full Throttle and Day of the Tentacle.
This is evident in the gulf between Camouflaj and Stainless Games in hitting their respective targets: Carmageddon: Reincarnation eclipsed $400,000 with almost two weeks to go, eventually raising more than $625,000; République squeaked past its target with 7 hours left, and only after a huge eleventh-hour push on the part of the development team and members of the press. When you consider the AAA experience behind République - and let's not forget that David "Solid Snake" Hayter and Jennifer "Commander Sheperd" Hale were announced as voice-actors in the middle of the campaign - the relative difficulty it experienced is striking, even dispiriting.
That isn't to say Carmageddon: Reincarnation isn't worthy of its success, of course, but the similarities between the wisdom of the crowd and that of sequel-obsessed publishers are difficult to miss. If Kickstarter and crowd-funding are to serve as an antidote to that commercial culture, it's surely through funding ambitious, original work, and not just repackaged memories. Payton points to the Banner Saga - a seductive, animated strategy game that raised more than $700,000 on a $100,000 target - as an "encouraging" example of just that, but he acknowledges that the current trend for the high-earners is still towards, "guys who made their names in the Eighties or Nineties reviving old IP."
"When you pitch to the community and try to get them excited about something that they can't get their hands on and play, it's easier to fall back on tried-and-true genres," he says. "There's lots of nostalgia, but I'd be very, very curious to see what would have happened if Portal was shown for the first time through a Kickstarter, or a Dota, or a Diablo. If you only saw a video of it, would you understand the vision? Would you understand something so new, and would you get behind it?"
Buckland goes a step further: "It will be a shame if it doesn't work for new stuff, but I really wouldn't be surprised if it doesn't. It'll be a shame, but there's a flip-side to that: if I myself was pledging money would I want to trust in a completely new idea? I really don't know."
An Equitable Future
If this article has leaned towards the negative so far, it's only because the positive benefits of crowd-funding have already been clearly demonstrated. If you have a good idea, a decent track-record, a knack for PR and, preferably, a retro IP or two gathering dust somewhere, Kickstarter could provide funding without the need to pander to a publisher's demands. This is undeniably a good thing for the industry, but, as previously discussed, there is a growing sense that the first wave of Kickstarter releases will directly precede the first wave of Kickstarter controversies, spoiling the party for everyone.
"Crowd-funding is the most important opportunity indies have ever had, and there's a good chance it will come and go if we don't protect people that are putting money in"
Mike Wilson, Gambitious
Enter Gambitious: the most prominent of several new crowd-funding platforms with the driving aim of making sure that worst-case scenario never arises. If Kickstarter's credibility is ever to be destroyed by thousands of frustrated donors, the team behind Gambitious intends to have constructed a sustainable framework for crowd-funded game development long before that happens.
"A lot of people feel that many of these projects are not really thought out," says co-founder Mike Wilson, whose long career has taken him from id Software to Take-Two Interactive to the Gamecock Media Group. "I feel crowd-funding is the most important opportunity indies have had, maybe ever, and there's a good chance it will come and go if we don't leigitimise and protect people that are putting money in. If you fund 15 games and only 2 come out, are you going to keep on doing that?"
While Gambitious will support Kickstarter's donation model, it's main focus is "equity" crowd-funding, where money invested translates directly to a financial return should the game make a profit. The project slate will be far smaller than the hundreds of Kickstarter campaigns running at any given time, a reflection of both the platform's more stringent selection process and the sort of audience it is hoping to attract: not just the public, but informed people with capital to invest in promising ideas from experienced teams. In all cases, the developer is required to submit a detailed business and marketing plan, and in all cases the developer keeps their IP.
"We'll have plenty of up-and-coming indies, but we'll have more established teams who know what it means to finish a game, and that you need money for marketing and testing and localisation and all of these things," says Wilson. "You might still take a shot on a brand new team with a brand new concept, but at least you'll know that you're taking a chance, that it's a long-shot.
"If it's just $20 or $50 and you just want the game and a few perks, then fine. That's going to be incorporated into Gambitious as well, but for the projects to get bigger and from more established teams, you're going to need a bigger range of investment. You'll need people putting in a few grand, and those people will need to be protected."
That "protection" speaks to equity crowd-funding's most prominent wrinkle: the Kickstarter model's simplicity makes it more accessible on a global scale, but what Gambitious is trying to accomplish is hindered by national law. The company is based in Holland - where legislation around crowd-funding is relaxed - and uses a co-operative legal model developed by its partner company, Simbid. At present, any European incorporated company can use the platform, though US companies will need to do so through a European partner until legislation in the country changes - which it will when the JOBS Act passes into law in 2013.
"It sounds complicated, and it is complex in terms of regulation and insuring that everything is legally set up," says Andy Payne, owner of Mastertronic, who is helping to establish and populate the Gambitious platform. "That's what the guys at Simbid, who are behind all this, have done. I'm not a financial expert; I'm a games industry person, so we've been looking long and hard at the technology platform and the way it works, and we're very comfortable that those guys have done a very, very good job of building something that is 100 per cent legal, that works and that's scalable.
"We're building an advisory board of notables, to have as an option for the developers: a hired gun team to do the marketing, selling, communications, monetisation, distribution, and everything else that goes round selling games in this connected digital global market, and take a revenue share. To be very clear, it's not publishing; to be very clear it's not a service model that charges developers. It's taking the game and then monetising it and taking a percentage. You only get paid and you're only successful if the game's successful."
Gambitious is planning an official launch at Gamescom, but the beta version of its website already features games from 3D Realms, Firefly Studios (the Stronghold series), and Triumph Studios (Age of Wonders, Overlord) - the projects depicted on the website are place-holders, Payne tells us, and will be replaced by the real games once the platform launches.
It's a promising start, and if Gambitious has judged the market correctly it will be a crowd-funding destination for a more engaged crowd, one that can happily co-exist with Kickstarter's more informal and accessible structure. There will be fewer games and fewer investors, but larger investments and larger rewards. Whether it's the future that crowd-funded game development needs will become clear with time, and even Gambitious won't be cajoled into a prediction.
"We don't have a blueprint for this," says Payne. "It's new territory. What we have is a load of ideas, the will, some technology, and a network of people who have got disillusioned, bored, and given up on the old publishing model, including most of the publishers - they don't know what they're doing any more."
"The common thread for all the parties involved in this is that we're really trying not to fuck it all up for games," Wilson adds. "The opportunity itself for developers and fans is more important than any of our jobs. We just want it to exist, because if crowd-funding produces more bad than good, that'll be the end of it."