Ogre...Kickstarter...you in?

Dukester, why the rant up top, man? My statement isn't overly grandiose. Let me put it like this.

If you look at the direction that all the companies are going, it's toward Kickstarter. It started with indie companies and now it's Queen, MayDay, and now, one of the oldest and most established companies EVER, Steve Jackson Games.

It's because they're not stupid. Why should they stick their necks out and drop 50K up front to make X margin, less warehousing and labor when they can simply tell everyone to pay up front, wait 6 months, and POOF, it's sold out?

There isn't a problem with that on its face. It's supply/demand at its finest. But what it does is encourage companies to start pushing the risk onto the consumer. Which also means that the consumer is the one who is going to get slaughtered when the product isn't any good.

There is no risk to the company other than reputation, and in the world of boardgames it's not hard for a company to say on the NEXT Kickstarter campaign "We sold 2,000 games in the FIRST WEEK!" or "30K funded in 2 days" to create a cycle of buzz.

Worst part is that it cuts out distribution completely, which in turn cuts out brick and mortars completely. I've heard much lamenting, handwringing, and gnashing of teeth about the beloved FLGSs taking it in the shorts and closing down, leaving the unwashed masses* nowhere to play anymore.

So, it DOES change things. It changes the entire model. There's no risk on the part of the developers, it undercuts the grassroots level of the business, and the most important thing is that (if you didn't notice) companies that go the Kickstart route charge the same money for a copy of a game as they otherwise would, BUT MAKE MORE MONEY! They don't pass savings onto consumers, and I know for a fact that if you buy 5000 copies of a game from Panda it's going to run you about 12.00-15.00 a game. Add shipping on discount, they're making 100-120% profit on a 40$ game.

You asked about risk? Go look up a Geeklist: "MayDay: A Cautionary Tale". There's plenty of examples right there. But there's also plenty more where companies shipped late, people got retail copies before the Kickstart people got theirs (and paid more)...and all kinds of other risk.

Consider this a risk as well: Company offers "exclusive" stuff. This adds value. Then, they give the same stuff away at GenCon (Alien Frontiers, Eminent Domain...). It just lowered the value of that "exclusive item". How about if you spend 50$ on a game and then it's sold at an OLGS (if they print more than the kickstarted quantity) for 35$. You paid to get it printed, and someone else got the discount.

So, there's a lot of risky things in all of these. I mean, why, with 1,000,000$ in new sales (THAT'S A LOT OF MUNCHKIN), with a net profit (Assumed) of 10% or 100,000, are they not paying for this themselves? Seriously? Because it's in THEIR interests to do so. The House at a casino has the odds stacked in their favor for a reason, just like we all do in every business we are in, collectively. So, you cannot argue to me with a straight face that Kickstarting a project isn't in a publisher's best interest at our expense...because they're DOING IT!


(*Gamers are one of the few groups that this much-used phrase actually applies to)

VonTush wrote:

Bullwinkle wrote:

VonTush wrote: I'd bet the farm that more often than not a P500 program does generate a loan.

I have no idea if this is true; I'd actually be surprised if it was. But even if it is true, the loan is the company's obligation, not the customer's. They're still risking their own capital.

I'll stand by my betting of my hypothetical farm as say this is true. Companies receive lines of credit from banks. The amount of the credit line is largely determined by receivables. That's why you get issued a receipt with an order number and dollar amount. So unless I'm missing some GAAP rule a company could count that as receivables to expand their line of credit. And lines of credit are used to be able to pay large upfront costs for something (like a print run) where you won't receive payments for some weeks or months, but also don't disrupt payroll or day to day expenses.

Whoa whoa whoa -- don't miss his point. He's talking about the company borrowing money from the customer. That's what Kickstarter amounts to. Getting a loan from a bank or anyone else is a different matter entirely because it's collateralized in some fashion or another, money or otherwise.

If someone wants to micro-VC a no-name publisher (or worse an LLC that can declare bankruptcy and fold overnight) that's their business. Fundamentally your business survives on your reputation, and I have no doubt that businesses can develop a sterling reputation on Kickstarter. They can do it other ways, but Kickstarter is no different. Frankly, it's going to be a pretty solid piece of additional tchach to get me to sign on, but I won't rule it out.

I'll tell you where the real risky money is -- Kickstarter's IPO when it appears at some point in the future. These guys could be put out of business overnight by Amazon or eBay. My guess is they're hoping for an offer because there's just not a lot of tech (patentable or otherwise) in changing the pay structure on what essentially is a subcontracted P500.

S.

About that "reputation" thing...if there's one thing I've learned in 20 years of business, it's that tenacity in denial can get you past a whole lot of bad press. I've watched some of my competitors lie through their fucking teeth while I was standing 10 feet from them, and would deny, deny, deny. And it works if the sales guy is slick enough.

I lost a 2MM dollar deal to a Toyota subcontractor (who is now out of business! SHOCKER!) because the sales guy baffled them with BS. The equipment was a month late, took 7 months to get working, and every time I asked the service guy what the problem was, his excuse was the same: "These guys don't want to take 'ownership' of the project" (read: customer needs handholding), which I knew was bullll-lll-lllshit from dealing with them for years.

So, Toyota pulled the plug, and so did Ford. And now your tire pressure sensors are made in Mexico instead of Zanesville, OH.

Just look at those pukes at MayDay. They are the poster child for habitual bad actors. Yet there they are, and there they shall remain.

Oh, I didn't miss his point. I understand and agree with the point and didn't feel like it needed any further commentary. I was just clarifying why I felt the way that I did that PXXX amounts to a loan for a company via a line of credit.

Most P500s don't bill until they ship. That's not a loan in my opinion since the product hits the mail the day they charge your card (or try to, and then spend the next three weeks trying to contact you for a revised expiration date.) Their up-front money (if they need it) needs to come from another source.

I believe Kickstarter bills when they hit their deadline? Is that correct?

S.

SuperflyTNT wrote: You asked about risk? Go look up a Geeklist: "MayDay: A Cautionary Tale". There's plenty of examples right there. But there's also plenty more where companies shipped late, people got retail copies before the Kickstart people got theirs (and paid more)...and all kinds of other risk.

Good post, Pete, and here's a part I wanted to highlight. I'd still argue that my risk is very low (non-existent, really; it's not like SJG is going to suddenly flake out after 32 years of business) and that MayDay is an extreme outlier for Severe Douchebaggery.

Or, put another way: KS is just about the ultimate example of caveat emptor (arguably, that title might still got to eBay). I mean, would anybody seriously disagree with that? So, in the Ogre scenario (yuk-yuk), I think you get a lot of people like me who are A) wimpy, more or less; not always flush with cash, and C) comfortable seeing an old, familiar name to order from. We don't need to beware that much, as we're not ordering from that hypothetical punk band I mentioned ... or buying poetry from a slob who hasn't worked in 15 years ... or taking a flyer on backing proven thieves like Mayday. We're going with a familiar face; it's comfortable.

+++++

One thing I just realized, and I don't think it's been brought up yet: it's not like SJG is switching its business model or anything. Right now, this very minute, you could order how many in-print products through their normal channels? Forty, maybe? And how many game-related PDFs do they have up at their e23 store? Three hundred? More?

And how many SJG items are available through KS? ONE. Yet it's generating all this hysteria, including accusations of a lack of integrity and professionalism. Maybe it's time for a deep fucking breath here ...

Sagrilarus wrote: I believe Kickstarter bills when they hit their deadline? Is that correct?

Right. "Funded" they call it. The money transfer happens then, all at once. Or nothing happens if the goal wasn't reached.

Sag - I can't answer the KS payment timeline.

I agree with you. The loan money (if needed) comes from another source...I never said that the loan came from the customer pre-ordering direct. Add "from the bank" to my last line in my last post and it should make more sense.

Granted, Duke, I totally get what you're saying. Caveat Emptor is king in the uncharted desert that is Kickstarter.

But what I am saying is that the tide is turning. Last year it was Clever Mojo and Tasty Minstrel and other cleverly named indie companies. Now it's Queen and MayDay (they are slime, but established slime) and Steve Jackson.

The question is if tomorrow, FFG, MayFair, Rio Grande or other large companies will start realizing the miraculous benefits that the tremendous shift of the burden of the COST of doing business to the customer offers.

If I could do this shit, I'd do it in a New York Minute. Get a $20,000 unsecured line of credit to start a business based on.... A VIDEO THAT I PAY TOM VASEL TO MAKE?

It's magical.

If only I could figure out how to segue "have you ever wanted to play 'Mine A Million' for real? Well now you can!" into "Send me 50$ and you can get one silver-bearing* solder alloy ingot stamped with your own name!"

*Silver concentration may be between 0.0004-60%, depending on market value.

Sagrilarus wrote: I'll tell you where the real risky money is -- Kickstarter's IPO when it appears at some point in the future. These guys could be put out of business overnight by Amazon or eBay. My guess is they're hoping for an offer because there's just not a lot of tech (patentable or otherwise) in changing the pay structure on what essentially is a subcontracted P500.

S.

This could be very interesting, and after seeing the Groupon & LinkedIn IPO's hit:
Groupon's epic slide into chapter 11 is all but confirmed ($26.11 original open to $12.04 close today) while LinkedIn's rollercoaster run($94.25 original open to $105.00 close today and a 52 wk low of $55.98)shows that no one is truly sold on the concept.
Looking forward to seeing how many greater fools jump on the FB IPO(May 16-24), the shiny new Instagram addition will increase the original $5B estimate.

It's mildly interesting, seeing people flounder when they try to grasp what Kickstarter is. 'It's an investment!' Well, no, it isn't - the 'investors' often aren't expecting anything back, and when they are, it's almost invariably a discounted product. 'It's a loan!' Well, no, it fucking well isn't - loans must be paid back. I mean, that's the very definition of a loan, right?

The basic economic system has become so naturalized that it's not only become impossible to think outside the box, people can't even imagine a slightly different box. We have people trying to argue that, because reputation can at times be a flawed economic model, that reputation doesn't matter (can we apply the same rules to the basic consumerist model?). Or Barnes arguing that because those one people that one time fucked up their business plan a little that the whole KS enterprise is doomed (because, in the history of traditional capitalistic enterprise, that's never happened before). KS undercutting grassroots anything? Really, gentlemen? Really?

The notion that this is a threat to FLGSs is more on-point, but honestly, there isn't much that isn't a threat to traditional retail nowadays. In major first-world cities, many, if not most, B&M stores cannot compete on price and convenience. They need (much like artists in the digital age) to offer more to stay afloat, and those that survive are going to be the ones who adapt. KS is such a small factor in all of that compared to, say, Amazon.

Kickstarter is the very tip of something quite new, or (if you consider it crowdsourced patronage) new again, and it's very much in flux right now. Is it a way to fund cool things you wish would happen but have no direct benefit from? A way to fund art and artists? A way to encourage the creation of media forms whose fans are current being under-served? A way for entrepeneurs and inventors a chance to receive seed funds? And, just recently, a way for established companies to float more risky ventures? The answer to all of this is 'Yes.' Will there be bumps, pitfalls, false-starts, will KS be more and less what we thought it was? Also, yes. Welcome the future.

Personally, I'm loving it. I've helped fun three video games that the gatekeepers in the hobby decided shouldn't be made because they wouldn't sell 2 million copies. I've funded a film, and an LP. I've helped Locus Magazine archive their collection. And in all cases, my own personal liability has been 1-2 trips to McDonalds. Fucking brilliant.

Kickstarter and P500 is chalk and cheese.

Both are expressions of interest. However P500 I pay for the house after it's been built. Kickstarter I pay for the house off the plan.

I think kickstarter is great for things like Realmcoins - simple, uncomplex projects where someone has an idea, knows how to do it, but needs a mass of orders in order to make it financially viable. That's what kickstarter is great for.
But games? Really? No fucking way I'd back that. Why would I? I must work harder for my money than you guys obviously.

Anyway good luck to kickstarter but I don't see it lasting. Fact is beyond some feel good bullshit - which won't last once the newness/hipness wears off - kickstarter offers nothing to the end consumer. Once a couple of high profile collapses happen (pretty much a certainty with the video game projects especially) people will sour off it.

wolvendancer wrote: Kickstarter is the very tip of something quite new, or (if you consider it crowdsourced patronage) new again, and it's very much in flux right now. Is it a way to fund cool things you wish would happen but have no direct benefit from? A way to fund art and artists? A way to encourage the creation of media forms whose fans are current being under-served? A way for entrepeneurs and inventors a chance to receive seed funds? And, just recently, a way for established companies to float more risky ventures? The answer to all of this is 'Yes.' Will there be bumps, pitfalls, false-starts, will KS be more and less what we thought it was? Also, yes. Welcome the future.

Personally, I'm loving it. I've helped fun three video games that the gatekeepers in the hobby decided shouldn't be made because they wouldn't sell 2 million copies. I've funded a film, and an LP. I've helped Locus Magazine archive their collection. And in all cases, my own personal liability has been 1-2 trips to McDonalds. Fucking brilliant.

Microloans in India have been big for a long time, and it's the same model. Those cats are building a fucking nation on this concept.

But I digress. I think the idea of kickstarting for altruistic reasons as you've noted..that's the magic here. Becoming the gatekeepers. Giving consumers the power.

The problem, as I see it, is when the large companies start attempting to take advantage of this emerging model, because it clearly IS in their interests, that's when it chaps my ass a little. They have the means to go traditional routes, and them using crowdsourcing to simply reap more profit while potentially fucking over the very people they're relying on to crowdsource the project (such as selling at X to early adopters, then selling through normal channels afterward at a discounted rate, as noted earlier) pisses me off.

Damn DP.

Funding a Steve Jackson Kickstarter project is a pretty safe bet compared to most, but I'm startled by the high price that people are willing to pay for a stagnant old game that will be fancied up with a bunch of cardboard. I bought Ogre first edition and played it about three times before I got bored, and I was a huge Steve Jackson fan back then. I think that Secret Service raid broke something inside Jackson, destroying his creativity and reducing him to churning out Munchkins expansions like bags of Cheetos.

I see a link betweeen this Kickstarter thing and the vapid reviews that are so popular over at BGG. The hobby has changed, and not for the better. The Cult of the New is focused on shallow novelty, and the Cultists are happy to buy a new game after simply looking at pictures of components and skimming a summary of the rules. It doesn't really matter if a new game is good or not to the Cult, because they are only going to play it about twice before moving onto the next new game.