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 Post subject: Kickstarter
PostPosted: Mon Jul 16, 2012 11:58 pm 
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So why haven't you guys crowd funded yet????I had mentioned this in another thread and AGDI had indicated that they didn't see Kickstarter as an avenue that could raise considerable amounts for a game. I wonder if recent projects have changed their view on that?

I know one of the other reasons you indicated for not wanting to go down that track is that managing the rewards can be time consuming. But you can choose what kind of rewards you offer? Surely getting a thousand or so people commiting the money up front for a digital download would help? You will need beta testers anyway so allowing people to pay for the right surely wouldn't be that time consuming?

I would love to see Mage Initiation be released as soon as possible, and while AGDI/Himalya may be late to the Kick starter party I think you have built up enough good will in the adventure game community that people would back you.
Plus I imagine having fans interact with you about your project would be extremely motivating

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 Post subject: Re: Kickstarter
PostPosted: Tue Jul 17, 2012 5:54 am 
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Crowd-funding is something that is needed to get projects off the ground. Himalaya is already up and running. Unless they need an influx of cash then it is probably best not to. If they're capable of making the games they want to make with the funds they have, why crowd-fund?


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 Post subject: Re: Kickstarter
PostPosted: Thu Jul 19, 2012 2:40 pm 
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My thoughts on using Kickstarter as a funding method haven't changed all that much. After estimating the amount of money we'd likely generate from a campaign, factoring in shippable rewards, and crunching the numbers it doesn't offer a much higher margin on development funds than the amount we're already spending via self-funding. Particularly when you take into account Kickstarter's, Amazon's, and the wretched IRS's fees.

To receive an amount of cash that's adequate enough to pay a team of full-time workers and release the game in a timely fashion, it's almost a certainty that you'd need to be kickstarting a renown IP. And even then the fees are somewhat cost-prohibitive. Personally, I'd much rather sell the lavish reward tier items as swag/merchandise on the back-end, rather than giving it all away beforehand as incentives. There are also all kinds of nasty tax consequences that could occur if you fail to account for certain issues and don't have a very good financial person in your corner.

Additionally, there's the point that Kickstarter is merely for funding individual projects; and not intended to sustain a company. With a large majority of orders pre-sold, there's going to be less people to buy it once the final product releases, unless it's a huge hit that manages to transcend genres somehow. Unless you can raise significant funding and generate a decent profit, using Kickstarter to fund games feels a bit like treading water to me. As a company, you always need to have your "next" game in the works... so in my personal opinion, relying on Kickstarter is not a good long-term strategy, and I still feel more comfortable sticking with traditional funding methods for now.

I don't shun Kickstarter completely, though. I've backed several projects and would even consider using the platform under the ideal circumstances (or if it was the only way to get a project done). For the time being though, we're exploring other avenues.


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 Post subject: Re: Kickstarter
PostPosted: Sat Jul 21, 2012 7:12 pm 
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Would you consider using some pre-order system (not ks)where people also got the feeling they were helping the game get finished by pre-ordering. I realise this puts admin work in during the development stage but surely any funds aid development and the press that a pre-order run would get is a good thing? I don't really see any downside to accepting pre-orders, it gives you some assurance of certain purchase numbers and would be pretty easy to manage.

Quote:
As a company, you always need to have your "next" game in the works... so in my personal opinion, relying on Kickstarter is not a good long-term strategy, and I still feel more comfortable sticking with traditional funding methods for now

I can see the point that if you use all the pre-sale money on development and then don't sell many extra after release then you end up having nothing left to fund your future projects. But surely for making games to be sustainable you are going to need to sell enough copies to cover your development costs and fund a future game, regardless of when you actually receive the payment. I can't really imagine from an economic point of view why you would ever not want to pre-sell something. It doesn't mean you have to put all the presale money into development but it gives you options.
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There are also all kinds of nasty tax consequences that could occur if you fail to account for certain issues and don't have a very good financial person in your corner.

Hmmm I used to be a tax advisor I don't really see a Kickstarter being anything too complex.

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 Post subject: Re: Kickstarter
PostPosted: Mon Jul 23, 2012 5:39 pm 
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The tax consequences under the US system can be dire if you don't plan properly. Some people are under the impression that Kickstarter funds are gifts/donations and therefore not taxable...which it could be depending on the project and circumstances.

But if you have a business entity and intend to sell the crowd-funded game, it's taxable income. There's revenue recognition principles to follow (ie, the money isn't considered "earned" until the game is delivered), and while your development costs could mitigate what you owe, you can get hit with underpayment penalties if the IRS thinks you're just hoarding the money. But it needs to be budgeted for ahead of time to make sure you're being compliant plus having enough cash on hand to pay people.

Taxes aside, there are a lot of campaigns that don't seem to take into account how much it's going to cost to get swag made PLUS get it shipped (the latter which is an expensive wildcard.) If not properly planned, most of the campaign funds will disappear before the game even gets made-- wasn't there a disastrous console campaign where a VC had to get brought in because they ran out of money?

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 Post subject: Re: Kickstarter
PostPosted: Tue Jul 24, 2012 1:17 pm 
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The Prince of Shapeir

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Quote:
Would you consider using some pre-order system (not ks)where people also got the feeling they were helping the game get finished by pre-ordering. I realise this puts admin work in during the development stage but surely any funds aid development and the press that a pre-order run would get is a good thing? I don't really see any downside to accepting pre-orders, it gives you some assurance of certain purchase numbers and would be pretty easy to manage.


We were considering that concept when we first announced Mage's Initiation. We were going to initially accept pre-payments as a means of funding Collector's Edition swag, but ultimately didn't feel comfortable holding onto people's money for over a year when we couldn't guarantee a specific release date. (Then Kickstarter got big and it became the norm). Still, at the time, I wasn't certain if there was any legislation which would prohibit holding onto funds, and didn't want to risk it biting us later on. As things are, I'd still only feel comfortable taking pre-order cash once we get closer to a release date. Pre-paying customers behave differently once money has been exchanged, and there's an obligation to give regular updates right up to the point when they have their purchase in hand.

Quote:
I can see the point that if you use all the pre-sale money on development and then don't sell many extra after release then you end up having nothing left to fund your future projects. But surely for making games to be sustainable you are going to need to sell enough copies to cover your development costs and fund a future game, regardless of when you actually receive the payment. I can't really imagine from an economic point of view why you would ever not want to pre-sell something. It doesn't mean you have to put all the presale money into development but it gives you options.


I'm not against pre-selling, per se. It's just that the timing still needs to be right. I'd like to have everything coordinated nicely and be able to give a fairly solid target release date. At the moment there are still too many variables making a release date unpredictable. There are other reasons for keeping Kickstarter on the back-burner too, which I'm not at liberty to discuss, but we'll see what the future holds!


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 Post subject: Re: Kickstarter
PostPosted: Thu Jul 26, 2012 12:22 am 
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Yep. Budgeting for the swag is VERY important - AND having a good accountant is key. I cannot stress this enough! There are risks, for sure... for us, time will tell how it goes. We're making the game, though, so that's exciting!

I do think, though, that some people are abusing KS in ways. People talk about running a KS for every project that some group might want to start, and I can say that's something that IQ does not intend to do at all. It's to Kickstart a project and hopefully bring it some success to continue on. Not to fund every project. I just saw some game that had on KS for it's project - and now is in the middle of a second one to fund their PC port of it... Plus another that had a VERY VERY successful campaign, and now another one with the same IP is having one for an On-Line version....


Bt

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 Post subject: Re: Kickstarter
PostPosted: Thu Jul 26, 2012 7:03 pm 
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Indeed, I concentrate in taxation but all my management accounting education has come out in spades when I did mock budgets for campaigns. I've also been talking to more accountants in my network about raising awareness for crowdsourcing in the professional sector, since I've noticed a lot of people and teams veering into dangerous territory in terms of what's allowable tax-wise and books-wise.

But even if your team lacks the resources to recruit an accountant who knows the gaming world on a consultant basis, the most important thing is to do some pre-planning. Research your costs to have swag made, and shipped. Depending on the scope of your campaign, is it doable for a team member to handle the storage and shipping of swag manually, or have you shopped around for third-party shipping & fulfillment services?

Granted, your budgeted amounts will rarely be 1:1 to the actual results, but they should be close enough for most of the expenses involved. Budgets are key to making sure you are left with enough funds to actually make the game with.

I think KS can be a good thing, but now that we're in a post Double Fine world there will unfortunately be abuse of the system. A lot of people are getting starry-eyed at the possibility of an explosive campaign that makes nearly 10 times its goal without stopping to think about the responsibility involved.

I have faith that IQ will succeed, as will many of these other indie projects-- it's the six and seven figure projects, and if they deliver or disappoint, that could deem if KS is still viable in the future.

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 Post subject: Re: Kickstarter
PostPosted: Sun Aug 12, 2012 12:13 am 
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Joined: Tue Jan 28, 2003 2:58 am
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Blackthorne519 wrote:
I do think, though, that some people are abusing KS in ways. People talk about running a KS for every project that some group might want to start, and I can say that's something that IQ does not intend to do at all. It's to Kickstart a project and hopefully bring it some success to continue on. Not to fund every project. I just saw some game that had on KS for it's project - and now is in the middle of a second one to fund their PC port of it... Plus another that had a VERY VERY successful campaign, and now another one with the same IP is having one for an On-Line version....


Bt


If you mean who I think you mean, both are completely different situations. The first is the same team that completely mismanaged the funds they received from their first kickstarter doing a second kickstarter to try and salvage their project, the second is two teams using different engines and editions of the IP making two separate games.


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