Gold Rush: The race for crowdfunding dollars and the squeeze on smaller game developers

What does Kickstarter think?

In the wake of Kickstarter’s second-ever million dollar campaign — Double Fine Adventure from veteran developers Tim Schafer and Ron Gilbert, which eventually raised over $3 million — critics questioned whether such blockbuster campaigns detracted from smaller projects.

Kickstarter analyzed the figures at the time and concluded that the opposite was true. “In the month before Double Fine, the video games category averaged 629 pledges per week,” said a Kickstarter blog post. “After Double Fine’s launch, the video games category averaged 9,755 pledges per week, excluding pledges to Double Fine itself. The jump is similar in terms of dollars.”

Those figures were from early 2012, but according to Kickstarter spokesperson Justin Kazmark, there is still space for small and large developers to coexist on the site.

“Emerging and established game developers alike continue to find tremendous support on Kickstarter,” Kazmark told GamesBeat. “While most successful video game projects raise less than $15,000, we’ve seen more and more million-dollar projects brought to life with thousands of backers.

“The diversity of projects in terms of scope and scale is very healthy for the Kickstarter community overall and it’s good for creativity itself. Creators learn from and inspire each other; the growing network of backers bring increasing support to projects of all sizes; and gamers have the opportunity to get behind more imaginative, ambitious, and whimsical ideas.”

Crowdfunding as marketing

The other big crowdfunding player is Indiegogo. It recently announced a partnership with video game publisher Square Enix, bringing a whole new angle to video game funding and pushing the issue of marketing to the fore.

The Square Enix Collective puts gaming projects in front of a Square Enix fanbase and permits them to decide which are worthy of pushing for funding on Indiegogo.

John Vaskis, the gaming vertical lead at Indiegogo, told GamesBeat a bit more about the project’s purpose. “The Square Enix Collective partnership has been created to help promote, market and finally fund indie/mid-tier game development,” he said via email. “The initial group of developers that were selected for the Collective program have garnered a significant jump in media going on around their game early, which is great in a crowded market, and they have received feedback from their fan bases early on to help guide game development as it goes on.”

Kimmich says that the Collective is effectively a way for Indiegogo to rapidly build its user base, meaning more funding dollars available to all.

“If I’m Square-Enix and I cut what is effectively a gray-label deal with IndieGogo to run ‘sponsored’ campaigns through the service, utilizing the IndieGogo brand for its crowdfunding credibility, and my own resources to drive new products and hopefully backers to the site, then perhaps I’m actually contributing to growing the available base of potential backers for everyone,” Kimmich said. “And this is why IndieGogo has pursued these sorts of deals: to grow their reg-base faster than what might otherwise occur organically. Kickstarter, as the market leader, chooses to use a more organic approach to ‘user acquisition.’”

On a case-by-case basis, the importance of Kickstarter and Indiegogo campaigns as marketing tools is undeniable.

Carmaggedon: Reincarnation raised over $600,000 on Kickstarter back in June 2012. Neil Barnden, the cofounder of developer Stainless Games, told GamesBeat that “Kickstarter was an option that meant those pledging their money had a genuine interest in the project and would therefore support us and our vision for the project. It was also a way for us to partly kick-start the Carmageddon Brand, by using Kickstarter as a platform for marketing the title.”

As a small developer, Buchanan soon realized how tough it was to be the marketing team for his own project. “Running a Kickstarter campaign is almost a full-time job,” he said. “The time I had been spending working on the game was suddenly being used writing press releases, Kickstarter updates, and corresponding with backers. I set up a facebook page, started tweeting, wrote interviews, and slowly but surely the campaign started gaining momentum. I’m very lucky that I had the free time to manage all of this, but I suspect some of the failed Kickstarter campaigns simply underestimate the amount of energy required.”

Buchanan says that marketing your game is something you need to do before heading to Kickstarter to avoid sinking without a trace. “When I launched the campaign, it fell into the sea of Kickstarter projects with barely a ripple,” he said. “With no prior knowledge of the game, most news outlets saw it as a risky bet and didn’t consider writing about it until after it had successfully funded.”

Hlynka agrees wholeheartedly. When asked for the one key lesson from his failed campaign, he said,”Attempt building an audience before using Kickstarter. [Use] other sites and news outlets, conventions and contests before seeking crowdfunding, to get [your game] in people’s minds. And make sure any gameplay videos and descriptions are as polished and clear as possible before asking for money.”

The future of crowdfunding

“With every passing day, crowdfunding becomes more of the norm for funding for game development, which does make it a bit harder for developers big or small to raise funds,” says Indiegogo’s John Vaskis. “Developers need to become more creative to mobilize their fan base to their campaign.”

This is easier for big companies with marketing budgets and large fanbases, but it’s harder for small developers to aspire to.

But in order to remain relevant, independent developers must embrace the marketing of their own titles, according to Kimmich.“Most independent game developers think of themselves as ‘developers,’ not ‘marketers’ or ‘publishers,’ and fail to recognize that there are key skills that are embodied in these terms that they must learn to continue to be relevant in the future.

“In any system — be it the iOS App Store, Google Play, Steam, Kickstarter or IndieGogo — where there are low barriers to entry, and limited or no curation, there will be noise, discovery will be hard, and large players with the capability to use their know-how and cash to build up an advantage. History would indicate that, usually, consumers end up seeing this as a benefit — at least in the short-term — even if the content creators do not.”

Both the Elite: Dangerous and Carmageddon: Reincarnation teams told GamesBeat that they would likely return to Kickstarter, given the success of their campaigns. “We’d absolutely do it again; it has turned out to be an exceptionally positive experience,” said Braben on his Elite Kickstarter.

So with the trend for larger projects using crowdfunding only likely to increase, the need for smaller developers to market themselves effectively is absolutely paramount.

“The bar is being raised by those with the ability to do so,” Kimmich said, “and the Earth continues to spin on its axis. Life goes on.”

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