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ICO Partners report suggests Kickstarter is in decline

New data shows less money going to fewer games projects

New data on games on Kickstarter has shown that both the number of projects and the amount of money pledged to them are falling, with Kickstarters in 2014 expected to raise less than half of the funds secured in 2013.

The data comes from consultancy firm ICO Partners, which has been analysing Kickstarter over the course of the first half of 2014. During that period, its analysts have discovered a sharp drop in the number, scale and success of games projects.

The numbers are necessarily extrapolated from six months of data, but barring a rapid uptick of both projects and funding, ICO Partners expects this to be the first year that gaming's share of Kickstarter shrinks - but does that mean we've passed peak crowdfunding?

In terms of the raw number of successfully funded projects, ICO expects a drop of around 20 per cent from 2013 for the current year, resulting in 350 successful campaigns compared to last year's 446. That, as analyst Thomas Bidaux notes is "a decline certainly, but not a terrible collapse," especially when we consider that 2013 was the best year ever seen for games on the service.

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Extrapolating from data for the first six months of 2014, we can expect to see a drop in funded projects of about 20 per cent

However, where Thomas does see some cause for concern is in the amount of money being pledged to those projects. In the first half of 2014, $13,511,740.36 was pledged to games projects on Kickstarter. That's a lot of cash, but it pales in comparison to the total for last year. If we double the number for January-June 2014, we get $27,023,480.72 - again, an impressive commitment from backers. But, as ICO's research shows, that's less than half of 2013's total of $57,934,417.74.

Bidaux sees three major factors in that decline: the lack of low-hanging fruit, a waning enthusiasm - partly driven by some high-profile failures - and the introduction of some serious and well publicised alternatives.

"If you consider that there have been 21 projects getting more than $500k in funding in 2013 and only 3 in 2014 so far, you might feel that Kickstarter is done for large projects," says Bidaux. "But looking at the projects profiles, a lot of those big hits in 2013 were banking on strong 'brands': Torment, Mighty Number 9, Elite, Camelot Unchained, Dreamfall, Richard Garriott's Shroud of the Avatar, etc. The three projects that raised over $500k in 2014 are Kingdom Come: Deliverance, Amplitude and Unsung Story. Hardly the wave of known brands that flooded Kickstarter last year."

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Whilst the number of projects has dropped by 20 per cent, pledge value has dropped by over 50 per cent.

Those big names make for good headlines and bring in a lot of cash, but Bidaux also believes that they have a halo effect, bringing people to the Kickstarter site, encouraging registration and engagement, and allowing the system to recommend other similar projects to the backers, helping them to discover smaller projects which they may have previously passed over. That said, those big names accounted for over half of 2013's funding total alone, so it may be as simple as a gap in that schedule.

As Bidaux points out, there's also a bit of Kickstarter fatigue. Journalists are no longer excited by the word in an email subject and backers who have already invested in projects which are yet to see release might be less willing to speculate further on other games which are still years away. In addition, some relatively big name projects which failed to reach fruition, like YogsQuest and Clang, may have left something of a sour taste.

Perhaps the biggest factor, however, could be that eternal curse of the first to market - that a better known, better funded company with a bigger audience will adapt your idea and enter your market, pulling cash and attention away from your business. Enter Valve and Steam Early Access.

There are clear differences between the two, obviously. In fact, many games that go on to participate in Early Access have already achieved funding via Kickstarter. However, Early Access allows developers to maintain a longer, closer point of contact with backers/customers, on a well trusted and prevalent platform which is geared up for regular updates and community discussion. Whilst other crowdfunding alternatives like IndieGoGo may not have troubled Kickstarter too much, Early Access has had a definite impact.

All data and graphs courtesy of ICO Partners

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Latest comments (11)

Andrew Goodchild Studying development, Train2Game2 years ago
I'm interested to know if Wasteland 2 affects this. I know I'm hooked, I think it is probably the first really high profile success, although even then, more was spent on it, so hopefully it quickly makes up that excess.

Speaking from my point of view, I backed six games that made funding goals. Wdifferently)ut seeing if any of them were worth it, I was not going to keep dropping Ģ15 -Ģ35 on more projects until I saw some results. Wasteland has been a success, and chances are Torment should be ok too. I believe the Obsidian are near completion, and Star Citizen has gone crazy (that needs to succeed if high budget crowd funding for games is to be proven viable). Then there is a lower key project Sui Generis, which seems to be ticking along, but I don't have alpha access, and Code Hero which was a massive bust.

From my perspective I can see wax and wane cycles, fund a few, wait for results, think about funding again, and certainly with goodresults seeming to appear for most of mine, I may fund a new batch. If I had funded Clang or Godus (not heard anything good about Godus) I may have thought differently.

Clearly Kickstarter not the darling of the gaming press it was 2-3 years ago though.

Edited 4 times. Last edit by Andrew Goodchild on 1st October 2014 9:39am

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Thomas Bidaux CEO, ICO Partners2 years ago
We shall see.

We can see if there are a return of Wasteland 2 backers specifically in a couple of months from now.
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Robert Ilott Build & CM Engineer, Criterion Games2 years ago
I Early Accessed Godus on Steam. It wasn't worth it. There may be a good game there in a couple of years but having seen the progress the team have made during the time I've had the game (about year) I can't help but wonder what they're doing all day...
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Show all comments (11)
back to traditional investment I say...
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Lewis Pulsipher Game Designer, Author, Teacher 2 years ago
I missed any mention of the median (as opposed to the mean), which would dispose of those disproportionate campaigns and give us a better idea of how years compare. Doesn't anyone understand simple statistics any more?
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Jesse Miller Staff Writer, PixlBit2 years ago
As Andrew mentioned, I think it has to do more with cyclic funding. When the Kickstarter phenomenon first took off with Double Fine Adventure back in 2012 - people became so enamored with the idea of being able to get "impossible projects" off the ground that two things happened:

1) We saw an influx of big name developers starting to launch projects.
2) We had consumers looking to back as many things as possible.

After the initial flurry, it was only natural that the market would slow - especially when games started seeing delays (Broken Age was supposed to release in October 2012 - Wasteland 2 was supposed to release October 2013). People had spent money without seeing results when expected, and naturally began to pump the breaks.

When I look at my backing history, I can see this pattern. I've backed things much more recently, but there was a large lull in between when I was waiting for projects to deliver before I started funding again.

One more thing to think about - is it possible that the popularity of Kickstarter games that publishers started gathering data on what consumers were willing to spend money on? This would give them better analytics s to what kinds of games to fund and as result - fund games that would otherwise have to resort to going to Kickstarter. After all, working with a publisher could be more beneficial to a developer as they are not beholden to refund anyone if they fail to deliver, which is what they would have to do if they failed to deliver on a Kickstarted project (per the terms and conditions of using the service).

I suppose in the end, it's a lot of things.
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for myself, its more of a meh factor. I have backed a bunch, and now that they are coming out and Im playing them, Im left wit a "meh" attitude.. None have really impressed me yet. So this sort of takes some of the wind out of my sails with regards to backing more and more.
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Thomas Bidaux CEO, ICO Partners2 years ago
Lewis: Go check the slides on my blog post. Median is mentioned.

Edited 1 times. Last edit by Thomas Bidaux on 3rd October 2014 4:20pm

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Maybe this is a problem on the supply side as well as mentioned in the article.There hasnīt been that many great, high profile projects to back. And definitely the problem is that not that many has delivered great results either. Also, I would point out that superficially looking at it, many projects have been quite unrealistic as well. Come on, somebody asks money for a project claiming that they would be doing a game on every conceivable platform with requested $175,000 USD or less?

Edited 1 times. Last edit by Ilari Kuittinen on 2nd October 2014 9:48am

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I think, overall the projects that could potentially do well are those using to KickFinish a new project with a semi experienced team to augment traditional sources of investment/own investment
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Andrew Goodchild Studying development, Train2Game2 years ago
The recent kickstarter conversations prompted me to browse the games section again, and I saw this beauty of spelling mistakes and cluelessness:
https://www.kickstarter.com/projects/1519029621/zero-point-game-console-upgrade-to-the-future?ref=category

Trying to work out if the backer was genuine or a shill.
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