
What the hell these game developers did with your kickstarter money - Liu
http://kotaku.com/5902280/what-the-hell-these-game-developers-did-with-your-kickstarter-money
======
patio11
Software development on a budget of $30k getting described as lavish. Ahh,
gamers, they're so cute. Poorly-informed over-entitled misanthropes, but cute.
"You're doing your shoestring budget wrong! You should listen to me! I've
never shipped anything longer than a blog comment but my years of experience
as a pir^H^H^H consumer mean I really know this job well!"

P.S. A business where the successful outcome is the principals end up in
personal debt is neither a business nor successful.

~~~
elithrar
> Ahh, gamers, they're so cute. Poorly-informed over-entitled misanthropes,
> but cute.

As a gamer, I completely agree with you here. The entitlement has grown
rapidly over the past 2-3 years, and in my opinion is only hurting those in
the industry looking to be adventurous.

Something like Minecraft might be the exception, but look at the shenanigans
surrounding the Mass Effect 3 ending (which was not as bad as some would have
you believe)—BioWare is releasing DLC to re-work something that was just a
clash between (entitled) gamers who interpreted advertising in their own way,
and the artistic direction of those who made the game. Considering the
backlash, do these gamers think a studio like BioWare (or publisher like EA)
will risk a game that isn't just a Call of Duty sequel again? Sure, but the
chances are less, and the resultant game is going to tread a significantly
less-risky path.

The comments regarding the $1000 (nothing!) spent on iPad hardware are just
inane.

~~~
danilocampos
The Mass Effect 3 ending was shit. Not artistic, not creative. Shit. A piece
of storytelling so completely divorced from the previous narrative tapestry as
to make even professors of English literature wince with disappointment. Its
only explanations are rushed development or a lapse in creative oversight.

On top of being shit, it was not at all what was described by the project
leads in interviews or in advertising. Game consumers are "entitled" to
receive what is advertised – return policies don't let them vote with their
dollars once a deception is unmasked.

You sound like you're parroting the narrative of an industry-captured press,
rather than detailing first-hand knowledge of the situation.

~~~
asynchrony
Doesn't it seem slightly bizarre to claim entitlement to an entertainment
product? At least as bizarre as lobbying a film maker/author into re-editing
some content that was found wanting.

~~~
danilocampos
Nope.

I have money.

I give it to you for a product you have promised me, according to certain
specifications we have agreed upon.

Here you go.

I am now entitled to the product as described for that money. Mass Effect's
epic conclusion was hyped for five years. It was the central selling point of
the series. A version of Excel that doesn't calculate things correctly is
broken. Similarly, an interactive story that fails to deliver on the promise
of complexity and interactivity in its most glorified and advertised of
moments is also broken.

Films and books don't belong in this discussion – they are not interactive
media. They stand no valuable comparison. This situation is more like a piece
of software that ships broken and needs a patch to sort things out. _That_
happens so often as to be unremarkable.

------
forrestthewoods
Damnit people. I've lost track of how many times the Star Command Kickstarter
story has been misrepresented.

The implication is that only $4000 (post tax) was spent on the game and that's
an outright lie. They spent 6k on music, 5k on marketing (poster + pax), and
1k to development/demo hardware. That's not necessarily ideal but it's not
entirely unreasonable either. You can argue the marketing/hardware issue
perhaps, but 6k went directly into the game in the form of music.

The real lesson to take away from Star Command is their under-estimation of
time and money required to create, package, and ship backer rewards. That's
the real danger that other projects should be wary of.

~~~
mattmanser
Huh, seems like a perfect representation that very little money actually went
to development to me!

Sounds like they didn't do their sums. Also how did they spend so much money
on incorporation, costs about £25 ($40) over here.

~~~
forrestthewoods
They are a three man team working without any pay. What did you expect the
money to go to? Proper salaries and benefits for the team would be a few
hundred thousand dollars, not 36k.

Spending $6000 on music counts 100% as "to development" and is perfectly
reasonable. For PAX if anything they should have spent more money to create a
bigger presence.

~~~
MrFoof
I'm genuinely curious as to how much music $6000 bought. That can afford quite
a decent-length soundtrack.

For not-very-well known composers, I've been quoted in the range of
$150-250/minute for music. I assume that if I went a bit higher up the chain
(small-time, but established) that the price would rise.

~~~
theandym
As someone who's worked in independent film and has been involved in projects
that have spent $10k's and $100k's in music, I dont see this as lavish or
irresponsible at all. Musicians are hard workers, and deserve to be paid for
their efforts. Just because the developers couldn't hack their way to a great
soundtrack and paid for decent/professional work doesn't mean they
misappropriated funds. I'd counter that they rightfully spent the money in
places that weren't their core competencies.

Edit: I know that film isn't the same as game development, but I feel that the
multidisciplinary aspect of game creation incurs costs in a far wider arena
than traditional software development.

~~~
MrFoof
I don't see it as lavish or irresponsible either -- I was just providing a
data point. If I could guarantee the sales would be a non-issue, I'd certainly
love to step up the production values of titles I make with more varied
soundtracks.

------
benologist
Direct link instead of Gawker's shallow little summary wrapped around a giant
quote from the direct link:

[http://www.kickstarter.com/projects/starcommand/star-
command...](http://www.kickstarter.com/projects/starcommand/star-command-sci-
fi-meets-gamedev-story-for-ios-an/posts/208395)

------
tptacek
As they said: they clearly overpaid on company formation ($4000 for legal and
accounting, which could have been accomplished to the same effect for around
$500 if they were frugal, including filing quarterly estimated returns). But
still, they'd have ended up with ~$9000 gross instead of $6000; the point
still stands.

Some of these Kickstarter numbers look more game-changing than they really
are.

But whatever, I'm not a games industry person; I'm really just here to chime
my recurring bell about "don't put your company together on a napkin, get the
LLC done; it doesn't have to be expensive and it will help you down the road."

~~~
jay_kyburz
I'm in the indie games business and I can say they overpaid for everything.

6K for music should be 1-2k at most!

Poster Art - What's wrong with those awesome sprites that Kotaku used. Should
be 0.

IPads? More that one?

PAX East? - That's a holiday not a legitimate business expense.

This is why they say so many people don't make their money back in the App
Store any more. You can't spend indie money like you work for a AAA studio.

~~~
InclinedPlane
_"PAX East? - That's a holiday not a legitimate business expense."_

For a game developer? No, it's a fantastic way to raise the profile of your
game. You get the most avid gamers interested in your game (who will spread
the word if they like the game) and you get press coverage too. For an
exhibitor PAX isn't a 3 day vacation, it's 5 or 6 days of working 12+ hours
days, most of them staying chained to their booth in their expo hall.

~~~
jay_kyburz
Nar, a game as great looking as theirs would get the press anyhow. The press
are dying for more interesting games to write about.

You raise another good point though, not only is it 3k, but its 5-6 days at
12+ hours. A whole week of dev time lost to the event.

Events are great fun, but if you don't have money you don't know what to do
with, I don't think they are a very good investment. Not much bang for the
buck I don't think.

~~~
corin_
I've been in the fairly unique situation of seeing the results a wide range of
companies in the extended games industry (from top games publishers to indies
to gaming hardware... etc.) got from exhibiting their products and I couldn't
disagree more about it being a good investment.

~~~
jay_kyburz
Hey Corin, I'd love to hear more about why you think so. I'm always trying to
work out how to best spend my marketing money (and energy).

Do you have any metrics you can share about how an appearance at a show relate
to final game sales? Or even press coverage?

For example, if they were to spend that money on banner advertising they could
generate say 6-10k clicks through to their website.

~~~
corin_
Press coverage - not metrics, but I've seen an awful lot of stories come out
of events, and most importantly an awful lot of journalists meeting
exhibitors, from bloggers to mainstream websites or newspapers. Obviously this
doesn't guarantee coverage, but it puts the ball in your hands, once you're
stood talking to a journalist while standing over your product it's time to
knock it out of the park.

I don't really have any customer data I can share with you, the sort of
selling points generally used are more vague - such as "The average spend per
visitor at last year's event on products sourced at the show was £767, a total
audience spend of £79.8m" (taken from the sales pitch of a 2012 event). The
overall focus of selling - though I'm not actually in sales so this isn't my
direct area - is about the size of the audience, and what sort of demographic
they are.

I don't know if events are a good use of your money when it's as tight as
that, i.e. if you can chose between $3k on an event or $3k on a PR company,
but only one, as I can't think of any exhibitor I've ever had that paid that
little, or that was small enough not to have marketing budget around it.

The single biggest argument I can give, I think, is that if you go to PAX
you're going to get more people looking at your game than you'd get clicks for
$3k online - and when it comes down to it, are you going to sell your game
better by having somebody look at your website, or stand in front of you try
out your game?

Incidentally, what adverts are giving you that click-rate, and do you have any
calculated CPA figures?

edit: I just want to note that like I said above, my experience comes more
from big budget companies like big studio publishers rather than indies, so I
can't necessarily say events are or aren't a great idea for people like you,
just that they do offer bang for buck.

~~~
jay_kyburz
Last time I did an Adwords Campaign I was paying about 30-50c a click. I'm
doing web games at the moment so really don't have any figures for buying adds
on mobile.

I have heard anecdotally that a click in a mobile game costs a lot less.

Fully agree that spending a small percentage of your marketing budget on shows
is great. And as I said before, they are heaps of fun and a great holiday for
the team. You get to rub shoulders with the press and meet other devs.

But, I think somebody else mentioned these guys aren't even paying themselves
a salary yet.

~~~
corin_
How does that 30-50c look once its turned into sales, as in how many clicks
per sale? (Unless you don't directly sell anything).

Anyone who exhibits at an event for fun is a fool, as is anyone who exhibits
at an event but doesn't find it fun. In my experience - and maybe this differs
in other industries or indeed other parts of the games industry - events
couldn't be further from holidays, most event organisers and exhibitors I
know, myself included, would tell you they are the most tiring and most
stressful times of the year. But for some of us, that's what makes them
enjoyable.

Of course there's fun to mix in and around them in ways that being away from
the normality of office life let's you have, but it's generally a case of
lletting off steam while working crazily hard, not of enjoying a break from
working. My last event consisted of 10 days without a break, 10-12 hours
minimum, or 15+ during the 4 days of set-up / pack down, but it was still the
most fun I've had recently.

~~~
jay_kyburz
"How does that 30-50c look once its turned into sales"

Haha, my conversion ratio is not quite there yet, that's why I'm not yet
retired.

Once my 50c click pays 55c in sales I'll roll every sale into more ads and be
as big as Zynga in no time.

I'm not crazy far off though, last time I had a run at it I made about 85c to
the dollar.

~~~
corin_
I don't know what sort of marketing budget you have, but if/when it has a
little leeway, try some more targeted advertising rather than AdWords. I'd
love to tell you that I could provide it, but the audience I have are PC
gamers and I don't honestly think you'd see great results with us, but there
will be sites out there that will give you a worse CPC but a better CPA than
Google can.

------
egypturnash
"Now, right off the top you had $10,000 for prize fulfillment."

The lesson to be learnt here? Very carefully consider your bonus goods. Will
making and shipping them cost more than the extra profit they make over the
base price? Price 'em out beforehand. And build in a healthy margin of error
in case you are wrong.

~~~
andypants
Kickstarter recommends providing intangible rewards. Some people just don't
listen to that advice.

To me, it just indicates a lack of creativity. There are so many ways to
reward people when making a game, such as allowing funders to name in-game
characters or locations, or to have a say in some of the game design. Posters
and t-shirts seem like very lazy rewards. And costly of course.

------
jay_kyburz
OK, I had another thought on this topic, another perspective as to whether
this money was well spent.

When you win Kickstarter and get 20-30k as an indie dev, that money is yours.
It's in the bank. You're expected to spend it to make sure the game is as good
as it can possibly be, sure, but it's now your money to _risk_.

I balk at spending 6K on music, because to me that sound like taking 6k out of
my family's bank account, going down to the casino and betting it all on
black.

But in reality, that's what I do every day. I sit down at my computer and I
bet 1 days salary I can earn it back selling my game directly to players.

My games only have a budget of around 100k each. Most of that my salary. Would
6k on music make 6k more over the life of the game? I don't know? Perhaps.
Perhaps I should grow some balls and spend and extra 6K of my family's money
on music for my next game as see what happens.

Those risks, those bets, are a lot easier to make when they are somebody
else's money. When you have an investor willing to share risks, or a publisher
who will own the game when it's done anyhow.

------
aristus
"Offering labor-intensive rewards that do not move your project forward are a
net loss." <http://carlos.bueno.org/2012/03/rocking-kickstarter.html>

~~~
jrockway
But remember, people on Kickstarter are pledging money, not _investing_ money.
So if you don't offer good rewards, you won't get any money, and your project
will never happen.

~~~
waterlesscloud
Unless of course the project itself is the real reward.

I think the tiered award thing hurts a lot of projects by distracting from the
basic fact that what you're really contributing to is making the project real.

------
macspoofing
>Leaving us with around $6000, which is income, so that was taxed

That's just bad accounting. Making a game costs more than $35k. There should
be nothing left to tax.

~~~
scott_s
And why does making a game cost more than $35k? Because you need to pay the
people making the game so they can _eat_ and _pay rent_. And what do we call
the money that we give people for that purpose? Income. Which is taxed.

------
mlguenther
Any _good_ accountant will tell you that you don't have to pay tax on money
that has not yet been earned. I've seen two of these article for two different
game devs, and they both take into account tax, which should not be part of
the equation until the game is actually released.

~~~
teamonkey
Kickstarter funds count as earnings.

~~~
mlguenther
I'm sorry, but you are wrong, any basic accounting knowledge (I am a CPA) will
tell you that income can be recognized when EARNED, not when received. This is
something the IRS agrees with.

Kickstarter funds have not been earned until the product is delivered

~~~
lusr
Aside from determining earned vs. received, surely the Kickstarter revenue
must still be offset against expenses before tax can be calculated?

~~~
mlguenther
Yes, there are many ways to offset the income with expenses. Though what most
Kickstarter video game devs are finding out is that they may not use all of
the money as expenses in the first year. If you are accounting on a "cash"
system, you would have to pay tax, if you are accounting on an "accrual"
system, you would not have to pay tax until the game is released, regardless
of how many expenses you have.

------
MengYuanLong
I am starting to love kickstarter more and more. It seems like it will be full
of business 101 case studies before the year is out.

------
jbellis
Link to last month's discussion of this story:
<http://news.ycombinator.com/item?id=3847373>

------
guelo
We keep hearing kickstarter projects complaining about tshirt costs, maybe
kickstarter should start warning people about this.

~~~
hack_edu
Or someone should make a startup that helps startups sell shirts on
Kickstartr, a startup!

~~~
harlanlewis
Kickstarter isn't far from its own optimization industry - like SEO and social
media consultants, but guidance for presenting fiscally impossible idea as
plausible and tantalizingly close. Then just make a slick concept video,
keyword that baby up, and astroturf some buzz. It can't miss!

------
bstar77
I personally do not understand why they would have paid for all of the
promotional material before the game was near completion. But I will say...
that demo is amazing and I am ready to throw money at them.

------
ChuckMcM
Interesting post. I wrote an article on comp.sys.amiga about why software
costs so much as a way to try to illuminate the unseen costs in development
and support.

I really do think that folks should create the LLC first, get that setup and a
copy of Quickbooks or what ever and "practice" running a company first.
Seriously, go out and create an LLC right now. Not only will you learn a lot
but the cost is moderate. Read the nolo press books, etc.

Do that and the rest is much easier.

------
skore
Since they asked for 20k, I have real doubts they made a good business
calculation. Especially if they note that "PayPal and Amazon take their
portions" - I'm pretty sure that Kickstarter tells you to adjust for that.

Had they received only the 20k that they asked for, they would now (adjusting
for less money necessary for rewards etc.) be left with almost no money at
all. That's simply not good business calculation.

------
gavanwoolery
$30,000 can take you a long way. I stretched $5000 for 6 months producing a
game, living like a peasant (in California, no less). These people just spent
their money foolishly on a number of items. Salary is number one, whatever you
have left after that can be used for other stuff. Why they did not budget
salary first, I have no freaking idea. What is annoying is that it gives
Kickstarter projects a bad rep, when there are those (such as myself) looking
to use Kickstarter for legitimate/better thought-out purposes.

And for the record, I looked forward to this game in particular, even tried to
donate money to them outside of kickstarter...

But please don't get me started on YogVentures (ugh)...
[http://www.kickstarter.com/projects/winterkewlgames/yogventu...](http://www.kickstarter.com/projects/winterkewlgames/yogventures)

~~~
ricardobeat
What's your opinion of YogVentures?

I have a suspicion that developing an open-world game not based on voxels is a
_very_ challenging thing, but then I don't work in game dev.

 _edit_ : should've read the full description.

Are the interpolated lines also used for collision/physics?

~~~
gavanwoolery
My opinion is that it is kind of a scam. If they can pull it off, I would love
to be proven wrong. But so far all they have is a no-name development team
that does not even have a website, and it looks like they just used a prefab
engine like Unity to produce their demo video.

I've developed with voxels for over 10 years...Marching cubes is nothing new
(in fact, I "invented" it on my own without knowing that the algorithm
existed) - and how they model the world is the least of their concerns. Making
an open world game of any sort is very challenging, and no one has done it
that successfully to date (even Minecraft is still more of just a sandbox than
a game, although I respect it nonetheless). Not that I would recommend
_against_ developing this type of game, it just probably not the first type of
thing you want to tackle without sufficient experience (I should know, I've
scrapped over 8 engines working on open world games).

Again, I have nothing against the YogCast people, but if they fail miserably
it makes raising money for other Kickstarter projects more difficult.

~~~
ricardobeat
Hey, you're the atomontage guy! I'd give you a couple million if I could :)

Totally agree. There are many examples of developers who seriously
underestimated the costs for a full game. With the influx of projects, I
believe some kind of vetoing will have to be implemented for projects >50k.

~~~
gavanwoolery
Thanks, I'm not the Atomontage guy though; his name is Branislav Síleš
(although I am a supporter of his project :) ). I built an engine called
Genesis in 2004-2006, and since then many unpublished projects (latest at
gavanw.com).

$50k is actually a good amount for an independent project...if the team could
demonstrate that they can make sufficient progress with that type of funding,
it could open the doors to more. Although, since Kickstarter takes 5 percent
it wants as much funding to come in as possible.

~~~
ricardobeat
Aw. I saw the posts and followed the links on your blog thinking that was you.
Are you developing a similar engine?

------
gonzo
Now do the math on building and shipping 85,000 watches.

Hint: Pebble have $117 each to get it done.

------
damian2000
Reading this it wouldn't surprise me if the whole kickstarter idea came from
some shady t-shirt manufacturers as a way to drum up more business. ;-)

------
zephjc
All I can think of is either complete amateur hour, or a Kickstart project
inspired by Mel Brooks' "The Producers"

------
robomartin
I don't know these guys. My comment isn't aimed at them at all.

I see a lot of projects on Kickstarter where I find myself immediately
questioning the numbers. Having the scars to prove that I've run a business or
two I generally have a good sense for costs, process and other elements of
typical projects. In so many cases on Kickstarter the numbers are so awfully
low that you have to wonder what will happen if the project reaches the stated
goal and is funded.

It is very easy to end-up working weeks-upon-weeks for $0.75 per hour and have
nothing to show for it but a huge loss at the end of the process.

My recommendation: If you are thinking about posting a project to Kickstarter
and don't know much about business (profit, loss, fixed costs, variable costs,
development costs, tooling costs, regulatory requirements, etc.) spend a few
hundred bucks to get advise from someone who does. I would run your numbers by
a CPA and some of the other stuff by, perhaps, an attorney with experience in
the field. If it is manufacturing related, there might be regulatory issues
(UL, CSA, TUV, CE) that an experienced manufacturing engineer might be able to
help you with. Be careful, regulatory testing alone can easily get into the
tens of thousands of dollars.

In general, don't post a project to a site like Kickstarter unless and until
you have had the financial model for your project verified by those best-
qualified to do so.

------
wilfra
Ignoring the suspiciously round numbers and the fact that they grossly
overpaid for basically everything as an indie dev on a tight budget, here is
what they raised money for:

"Hire extra talent for things like music, sound effects and additional
platform development like Android

Promote and market to help sell the game and fund future expansions and
possible sequels

Localize the game to other regions like Europe and Asia"

Several of the things they spent money on have nothing to do with any of those
and thus the money they spent on them should not come from the money they
raised on Kickstarter. IMO.

~~~
FuzzyDunlop
_"Promote and market to help sell the game and fund future expansions and
possible sequels"_

Funding the game in development may have been more prudent.

