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ICO Partners: Major projects mask general decline in Kickstarter funding

Smaller games losing out as top-heavy market trend continues, says analyst

Whilst 2015 has seen another bumper crop of high-profile Kickstarter successes, including the record-breaking Bloodstained and Shenmue 3 campaigns, Thomas Bidaux of ICO Partners believes that his analysis of the numbers behind the headlines shows a worrying drop in the number of smaller projects reaching their goals, with Kickstarter's gaming sector showing a continued swing toward a top-heavy success model.

In an extensive analysis on his company blog, Bidaux identifies trends from the first half of 2015 which indicate that projects in the $10k-$50k, $50k-$100k and $100k-$500k bands are expected to raise less money this year than last. Big names still grab the headlines, but the smaller projects which were once the bread and butter of the crowdfunding scene are suffering. Even though more money has been given to game Kickstarters in the last six months than the entire year previous, Bidaux doesn't see the situation as a healthy one.

"At the beginning of July, video games projects had already raised more money than the whole of 2014," says Bidaux. "This is without two of this year's heavy hitters, Shenmue 3 and Bard's Tale 4, (who have raised more than $7.8m between them). However, this is not something to be celebrated. While it is nice to see that Kickstarter is still a platform where a project can gather a lot of support (2014 was a very scarce year as far as big projects were concerned), the truth is, 2015 so far is the worst year yet for 'regular' projects.

"The majority of the money raised by video games was through very large projects. If the current trend continues, projects that raised less than $500,000 are on track to garner less money than in 2014.

"In 2013, there was a significant correlation between large projects hitting the platform and smaller projects getting more support. The big projects were bringing more visibility to the smaller ones. This behaviour has now gone apparently."

According to Bidaux's analysis, the $50k-$100k bracket has been the hardest hit, with just ten games getting funding so far this year compared to 54 in 2014 entire. In addition, rather than the general standard of submissions improving and increasing cashflow as a result, Bidaux says more and more low quality games are being submitted, resulting in a rise in the number of games which attract no backers whatsoever. In Bidaux's words, "even their mums didn't support their project." As a result, 150 games in 2015 so far have closed with $0 pledged, compared to 189 in 2014 overall. "This emphasises the burden on project creators to promote their projects as the discoverability on the platform is not helped by those low quality projects," he explains.

"Crowdfunding sceptics have another great case study of fans being mishandled; potential projects creators will have wrong expectations based on that performance"

Those embarrassing $0 projects are especially prevalent amongst mobile submissions, with 35 per cent of mobile games on Kickstarter failing to raise any funds at all in the first half of 2015 and only seven per cent hitting their funding targets.

"I think this is a maturity issue," summarises Bidaux. "Big projects go for low hanging fruit, using their brand power, and small projects are struggling to build a proposition where they can make the audience care about them. This is a shame, there is still so much potential for crowdfunding to grow, but there is a need for better best practice to be implemented across the board. That's also true for large projects: I can't believe Shenmue 3 was so successful when the campaign was poorly put together and terribly mismanaged (if you want examples then feel free to seek me out at the next conference I am attending). Crowdfunding sceptics have another great case study of fans being mishandled; potential projects creators will have wrong expectations based on that performance. The ecosystem needs a 'growing up' moment, probably starting with more transparency."

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