Saturday, September 9, 2017

Why You Shouldn't Support Kickstarter-Only Businesses

I feel like I'm going to be screaming at a brick wall here, at best. At worst, I'm going to get dogpiled by Kickstarter fans and those who use Kickstarter as their primary means of business funding. But this is something that's been on my mind for awhile and I feel the need to sound off about it.

Kickstarter is ruining our hobby.

"What's that?" you say. "How can you even make such an accusation when Kickstarter has given us amazing games that we wouldn't have had otherwise."

"Wait a second," you'll follow up, "don't you work for a company that uses Kickstarter, like, a lot?"

Yes. Yes, it has, and yes, I do.

On the first point, I'd say that's what Kickstarter is for. It's to launch brand new things that otherwise wouldn't have ever been able to see the light of day. It's not designed as a primary means of funding for an entire business, project after project after project, with reprints of existing product funded through Kickstarter as well.

On the second point, yeah, I've argued that we should all--every single one of us in the gaming industry--step back from Kickstarter and re-examine what it's done to us all. It hasn't changed the face of the industry. It's given an illusion of golden-age prosperity while blowing up a massive bubble underneath which is going to burst, just like the dot-com bubble in the 90s and the real estate bubble in the 00s. Of course, nobody will notice because our industry is a niche hobby and we're the only ones that will be devastated by it.

Regarding the company for whom I work using Kickstarter, yeah, we do. You know what else, though? We're not averse to retail sales (in fact, we'd love to have more), and we don't engage in laundry lists of Kickstarter-exclusive add-ons. Our stretch goals are all eventually made available to the general public.

It's important to say here that I am not against Kickstarter in general. It does fill an important purpose, and it has given us great projects we never would've seen otherwise. That's what it's for. It's the misuse and over-reliance upon it with which I take issue. So I don't feel guilty about asking people to support my company's Kickstarter campaigns, or those of other companies who use it responsibly.

I take issue with companies who abuse the spirit of it to fleece gamers of a quick buck (or a quick million).

An All-Too-Common Case Study

In the interest of avoiding lawsuits, I'm going to omit names, but let me tell you a 100% true story.

Once upon a time, there was a small, upstart company that nobody ever heard of, that wanted to produce a board game based on one of the biggest licenses out there. With rumors and whispers of "video game money" behind them, they managed to secure the license. Funding the game itself, however, was another story.

What did they do? They turned to Kickstarter. Great! This is exactly what Kickstarter was invented for. It would fund their game production and get them started as a business.

Their Kickstarter was a phenomenal success. It raised over three million, one of the biggest Kickstarters ever.

As these things do, they passed stretch goal after stretch goal, leading to more than double the original intended material--most of it available only to those who pledged the very top level, and none of which was ever intended to be released in retail outlets. They opened the floodgates to a huge wealth of additional add-ons, including at least ten more of the should-be-much-maligned "Kickstarter Exclusives." I'll get to those momentarily.

There were also a huge range of add-ons which were emphatically not Kickstarter Exclusive. So you have literally fifteen-thousand-plus people who purchased the game, and tons of whom added on all the Kickstarter Exclusives. At this point it's getting to where you have to be a lottery winner to afford anything else, so you think, "I'll buy the rest when it comes out in retail," which was an implicit promise, as all of the other things had retail values listed. 

The Kickstarter ends with a release date of a few months away.

Two years pass. The company does a good job of keeping everyone up to date, so most people are forgiving about the interminable delay. After all, we've been trained by Kickstarter to suffer that crap by now, right? It's just the cost of doing business, and as long as the company keeps apologizing, no harm, no foul.

The game finally comes out. It's gorgeous. The pieces are detailed and sturdy, the boards high quality, the materials and production values outstanding. Success, right?

Where's the Rest of It?

Hold on a second.

In the intervening year or two, only three of the promised add-ons have shown up in retail outlets, and those only easily found in Europe (which is ironic given that it's a distinctly American license). Further, only the huge boxed-set add-ons are available. The company claims that they're having trouble with getting distributors and game stores to carry the product, and they can't figure out why no stores want to carry them. Among these unavailable add-ons is a single miniature figure which is one of the most desired components of the entire game. It, incidentally, hasn't even been made available in Europe.

Now the company releases a new product for the game. They announce (shockingly) that it's going to be funded--you guessed it--through a short Kickstarter. At first they announce that limited add-ons will be available, which excites people. Maybe we'll finally be able to get that stuff we've been waiting for!

Nope. The only "add ons" that are available are the option to purchase the entire original game, at a cost of over $150, or the entire original game plus all of the available add ons, at a cost of over $650. 

When people ask why they won't make these exta add-ons available individually, the response is a lame excuse about the complications of shipping, and muttering that "we only have limited stock."

If you only have limited stock, the honorable thing would be to make those add-ons available individually, not forcing an extra $650 to screw over those who went in whole-hog originally.

It gets better. Turns out that even though they did not advertise this, the new product itself was created in limited numbers, and within hours of the Kickstarter starting, you could only get it if you paid for the two big-number pledges. 

After loud complaints were registered about this, the company backtracked. Sort of. "Okay, they said," we'll make the product unlimited, but anyone who orders it from here on out is going to have to wait an extra six months to get it."

In response to the complaints about their promises to get things into retail, the company then announced that from here on out, they will not be supporting retail releases, due to them having so much confusing trouble getting retailers to carry their stuff. They also do not have and thus far don't intend to have, a web store to sell direct. So if you want their products, you're going to have to support their Kickstarters. 


Why Won't Retailers Carry Our Stuff?

Let's break this down. 

  1. You released a product with a gigantic additional box of goodies, which you have no intention (and never have) of releasing to retail. A box, incidentally, which you could have sold in retail stores as a major expansion to the game, costing easily as much as the core game did. 
  2. You released a slew of "Kickstarter-only" promotions to add-on to the game. Again, stuff retailers can't, and won't be able to, get hold of. 
  3. Your game carries a very high price point for buy-in. Now that's understandable and can be overcome given how gorgeous the pieces are. But it's possible that you didn't consider your cost model and overspent so that you can't possibly make a profit on retail sales. That's an argument for a different blog that highlights problems with the distribution maket. 
  4. You utterly failed to produce the majority of the promised retail add-ons, and your excuses about why don't hold water. You can afford to produce major boxed expansions that carry a retail value of over $70.00, but you can't afford to produce a single miniature that would have a production cost of maybe $5 per unit, and carry a retail value of $40? 
  5. You produce a second, smaller, follow-up Kickstarter which would be an opportunity to get some of the remaining stock of these add-ons into the hands of fans who were unable to get it the first time around, but instead you decide to require over $650 of purchases, including an entire second set of the game for people to get hold of these? Your excuse..."we wanted people who missed the first Kickstarter to get a chance at these," even though you have utterly failed at the (let's face it, very simple point-and-click) process of setting up a web store on your site to sell them directly simply falls flat.
  6. You complain that fans are "whining" and "retail stores won't support us for some reason we can't fathom." 

Shady Business Models

Folks, while I'm against using Kickstarter as a primary means of funding business, that's not what I'm talking about in this article, and not what I mean when I say "Kickstarter only companies." My issues with over-reliance on Kickstarter as a primary funding source are entirely different and they reside more in my concers for future sustainability. That's an entirely different article.

This article is about expressly Kickstarter-only companies. When I say that, I mean companies who through their Kickstarter and business practices, completely undermine retail outlets, then complain that retail outlets won't support them, then throw up their hands like some kind of victim and announce that from now on, their product will only be produced, funded and sold through Kickstarters. 

Why We Need Game Stores

Game stores are an important part of our business. It's really easy for people to stick their noses in the air and say, "The industry is changing and that's just the way it is," but that's not true. What is true is that we, the gamers, are hurting our industry by supporting this attitude. How many people do I see touting how wonderful Roll20 and other online game sites are, because "they allow me to game when there's nobody anywhere around me to game with in person." 

I'm not blasting online gaming sites. They are great for those who need them and they provide an important service. 

I am, however, calling bullshit that there's not four other compatible people in your area with whom you could game in person on a regular basis. What is missing, then, is the means by which you can hook up with these folks. Guess where that is? 

You got it: your local game store. Game stores provide a lot more than a simple retail outlet. They're a place to meet people, network, get the latest buzz about what's going on in the industry that you missed online, or who in your neighborhood is doing what. You could have a designer looking for playtesters right down the street, but you'll never find them online, because quite frankly the Internet is the size of the Earth and bigger. 

Game stores are also places where you can--wait for it--look at the game before you buy it. Often, they'll run demoes so you can even try it out? Does that $150 board game look amazing, but you aren't sure it's worth it? Go to your FLGS and ask if they're running demoes. They want to sell it as bad as you want to know if it's worth buying and they may well be willing to bust open a box and run a game. Hell, if you like it they might even sell you that opened copy, maybe even at a slight discount. If not, well, they can always then continue to demo it for others. 

I had a regret purchase of a board game (a different one) from a well-known company recently which I would never have purchased, had I bothered to talk to my FLGS owner about the actual contents and discovered I'd have to pay a premium price for the privilege of getting hollow parts I needed to assemble myself, which could've been just as easily injection molded by the company. It was an impulse buy and a hard lesson learned. 

Gaming stores are part of our culture, and they're a part of our culture we shouldn't let go. Could the current retail and distribution model be overhauled? Absolutely, and I'm not the expert to have an answer to that problem. I also admit it's really hard to justify not saving 40% or more on Amazon. In the end, however, you get a lot more than just a cheap game at a game store. You get community and comeraderie, and that's good for the industry as a whole. 

Game companies that decide "screw the retail model," are undermining our whole industry, and they're hurting themselves. Fewer people will be exposed to your game when it's not out there on shelves, when there aren't in-person local communities generating buzz, running games and speading the word. The Internet is a cold place, folks. It really is. Nobody's going to sign up to play an online game of something they've never heard of. Okay, some people might, but they're comparatively few. Walk into a store and see the games, watch people playing them, on the other hand, and you get, "Hey, that looks really cool. How does it work? Can I sit in and watch, or maybe play awhile?" 

Bam. Before you know it, you've got a new fan, and every new fan is a potential for five, ten, or twenty others that they might introduce to your game. 

Use Kickstarter, but Do It Right

Kickstarter-only businesses are basest, darkest, most corrupt form of capitalism there is. They're irresponsible and greedy, and they don't deserve to be a part of our hobby. Don't support them, and if you're a game publisher, don't be one.

Use Kickstarter. Absolutely, by all means, use it. If you've got a great product you couldn't support otherwise, go for it, but do it right. Do your research, understand that it's going to cost you money to produce and ship these stretch goals, and don't get in over your head. 

Further, don't unleash a horde of "Kickstarter Exclusives." This just pisses off the retailers who are seeing you say, "Don't wait! Buy it now and fuck whoever comes later!" If you unveil stretch goals, make sure that they absolutely will be available for sale at a later date. If you can afford to discount them during your campaign, that's fine. You probably should do so anyway--you're trying to fund your game production at this stage, not make a million off of it. 

Which brings me to my next point. Do not ever set a $5,000 goal and call your Kickstarter a failure if it funds but doesn't make $1 million. If you can't fund a game for less than $20,000, then set your funding goal at $20,000. If you make more than that, party on. Put that money aside and use it to fund your next project straight to retail, rather than squandering it and running back to the Kickstarter well. 

Finally, don't say, "Without Kickstarter, how will we know if a game will sell?" The answer is, you won't. But guess what? They didn't have Kickstarter in 1974. Gary Gygax, Don Kaye, Dave Arneson and the rest of Tactical Studies Rules had no idea if their little hand-assembled boxed game would go anywhere. They just believed in it, invested the money, and took a risk. 

That's how business is supposed to work. Certainly a good business needs to engage in risk management, but Kickstarter isn't risk management. It's fear-based marketing that's doing more harm than good, and when used irresponsibly as a sole funding source while eschewing retail outlets entirely, is creating a very dangerous bubble for our entire industy. 

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