I was kind of obsessed with Kickstarter for a few months last year. The prospect of funding projects deemed too niche that might never see the light of day was novel. I backed sauces (even one that faced a full product recall after it was shipped) and more than a few board games I’ve barely touched but today, I got two e-mails within hours of each other that made me question why I ever put any money into Kickstarter projects. Ladies and gentlemen, I am a backer of two “bad” Kickstarter projects, projects that both sent significant “I’m Sorry” updates today: the Instacube from D2M and Broken Age from Double Fine.
Here are the facts:
|Funding Close Date||March 13th, 2012||August 21st, 2012|
|Initial Funding Goal||$400,000.00||$250,000.00|
|Total Project Funding||$3,336,371.00||$621,049.00|
|Number of Backers||87,142||3,434|
During both of these similar updates, the companies wrote (and in Double Fine’s case, documented in video form) about how their projects would miss yet another milestone. Sure, I’m disappointed, but there are two essential differences between the projects that one harder to swallow.
1) Transparency: After seeing the first episode of the amazing documentary that 2 Player Productions put together, I knew that I would already be getting my money’s worth. Not a lot of developers let the public know about the internal struggles of game development, but we’ve seen it all through Double Fine’s documentary (spoilers – most of their problems are related to money). Here’s a snippet from DFA Update 24 released today:
I think I just have an idea in my head about how big an adventure game should be, so it’s hard for me to design one that’s much smaller than Grim Fandango or Full Throttle. There’s just a certain amount of scope needed to create a complex puzzle space and to develop a real story. At least with my brain, there is.
So we have been looking for ways to improve our project’s efficiency while reducing scope where we could along the way. All while looking for additional funds from bundle revenue, ports, etc. But when we finished the final in-depth schedule recently it was clear that these opportunistic methods weren’t going to be enough.
We looked into what it would take to finish just first half of our game—Act 1. And the numbers showed it coming in July of next year. Not this July, but July 2014. For just the first half. The full game was looking like 2015! My jaw hit the floor.
This was a huge wake-up call for all of us. If this were true, we weren’t going to have to cut the game in half, we were going to have to cut it down by 75%! What would be left? How would we even cut it down that far? Just polish up the rooms we had and ship those? Reboot the art style with a dramatically simpler look? Remove the Boy or Girl from the story? Yikes! Sad faces all around.
Would we, instead, try to find more money? You guys have been been very generous in the tip jar (thanks!) but this is a larger sum of money we were talking about. Asking a publisher for the money was out of the question because it would violate the spirit of the Kickstarter, and also, publishers. Going back to Kickstarter for it seemed wrong. Clearly, any overages were going to have to be paid by Double Fine, with our own money from the sales of our other games. That actually makes a lot of sense and we feel good about it. We have been making more money since we began self-publishing our games, but unfortunately it still would not be enough.
Then we had a strange idea. What if we made some modest cuts in order to finish the first half of the game by January instead of July, and then released that finished, polished half of the game on Steam Early Access? Backers would still have the option of not looking at it, of course, but those who were sick of waiting wouldn’t have to wait any more. They could play the first half of the game in January!
We were always planning to release the beta on Steam, but in addition to that we now have Steam Early Access, which is a new opportunity that actually lets you charge money for pre-release content. That means we could actually sell this early access version of the game to the public at large, and use that money to fund the remaining game development. The second part of the game would come in a free update a few months down the road, closer to April-May.
So, everybody gets to play the game sooner, and we don’t have to cut the game down drastically. Backers still get the whole game this way—nobody has to pay again for the second half.
And whatever date we start selling the early release, backers still have exclusive beta access before that, as promised in the Kickstarter.
I want to point out that Broken Age’s schedule changes have nothing to do with the team working slowly. They have been kicking ass and the game looks, plays, and sounds amazing. It’s just taking a while because I designed too much game, as I pretty much always do. But we’re pulling it in, and the good news is that the game’s design is now 100% done, so most of the unknowns are now gone and it’s not going to get any bigger.
With this shipping solution I think we’re balancing the size of the game and the realities of funding it pretty well. We are still working out the details and exact dates, but we’d love to hear your thoughts. This project has always been something we go through together and the ultimate solution needs to be something we all feel good about.
In the meantime, I’m hoping you are enjoying the documentary and like the progress you’re seeing on Broken Age. I’m really exciting about how it’s coming together, I can’t wait for you to see more of it, and I feel good about finally having a solid plan on how to ship it!
Source: Double Fine’s For Backers Only Post: “Episode 10: Part One of Something Great” (you will not be able to view the update if you are not a backer)
D2M, the company behind the Instacube has posted a total of 23 updates. During these updates, they’ve switched manufacturers from Hong Kong to China, formed a new company (to shield themselves from liability, I’m sure) and changed delivery dates at least twice. The difference is that the updates have been fewer and more spaced out with less details as time has gone on. Just today, for the first time, they have shown some shreds of honesty and true empathy. Here are the highlights (pulled from Update 23 of D2m’s Kickstarter page):
Money. Where did it go and how was it spent?
Right now, the Instacube project is on hold because we need to raise more funds and we need to lock in a new manufacturing partner.
This project was incubated internally at D2M and we started to invest our own time and money into Instacube months before the Kickstarter campaign. We then spent the net funds we received from Kickstarter in the following areas:
– Full-time design, engineering and manufacturing staff (Industrial Designer, Packaging Designer, Mechanical Engineers, Electrical Engineers, Firmware Engineers, Software Engineers, Supply Chain/Sourcing Manager, Quality Engineer, Project Manager, Social Media Manager, Administration);
– Manufacturing tooling;
– Manufacturing testing;
– Travel to factories and suppliers, and
– Prototypes, samples, materials, misc.
By far the biggest category of expense was paying the wages and overhead for professional staff who worked part-time on the project throughout the program. Most of the staff were in-house resources and we paid salaries for all the people that worked on the project as well as a few contractors.
D2M, post Kickstarter, has continued to invest its own available time and monies to advance the project. When we launched Kickstarter we expected that we could self-fund financial requirements above and beyond the Kickstarter funds from our own profit streams. The reality is that developing a product is tremendously expensive and takes a large team. Here, we underestimated the time and budget required. In hindsight, we also made overly optimistic assumptions about being able to self-fund. When we realized that this plan was not viable we formed a separate company, NuMatter, in order to raise additional funds. Again, we were optimistic about raising capital in parallel to development, but the lack of funding stalled us.
So what’s next? We are out actively speaking to investors and financing partners to raise sufficient funding to complete the project and get Instacube launched. We are targeting $250,000 to $350,000 for development and about $600,000 for the first production run.
Difficulties and Changes. What were the critical issues and setbacks that hit us?
Due to the financial difficulties described above, our project timeline slipped. We shifted our manufacturing strategy to negotiate with a new factory partner who offered us more favorable financing terms. This was specifically to help us get through to production.
Selection and negotiation with any factory partner with the right experience, capabilities, financial health, equipment, process, supply chain and quality is a critical step and this takes a lot of time.
We thought we found a good new partner who was eager to work with us, who wanted to support our financing, and who had the right experience and supply chain. We negotiated in good faith with that factory and agreed to key business, payment and manufacturing terms. Regrettably, the factory pulled out at the last minute, reneged on supporting us, and left us without a compatible partner. Does this happen often? No, it seldom happens at that late stage, but we got caught off guard.
Refunds. Can I get one?
The short answer is yes, we plan to issue refunds. But, we will issue refunds only after the Instacube starts to ship when we are able to sell your unit.
Source: D2M’s “Open Letter” HERE.
2) Reputation: Double Fine is a company that I know and love (I have a coffee mug that I drink out of every day). They’re innovative, their developers are in the public eye and they just seem like a great group of people. Psychonauts is one of my favourite games. Costume Quest was super charming. Middle Manager of Justice oozed charm and when I get around to playing Brutal Legend, The Cave, Iron Brigade (almost called it Trenched) and Stacking, I’m sure I’ll love those too. D2M is a company that I don’t know and even though they claim to have created around a dozen projects, I don’t know any of them. Their website looks amateur, they haven’t posted a thing in a little over a year on their blog and although I’m likely being overly harsh by comparison, they just aren’t the type of folk I should have “went into business” with.
I think you can tell which Kickstarter I’m actually okay with and which one I’m calling my credit card company about after I finish writing. Double Fine is company that has been extremely forthright about their difficulties and since Tim Schafer is someone who has delivered time and time again – I trust that they’ll get their game out eventually. Plus, their update today was very remorseful and Tim owned up to his mistakes. Sure, I’m disappointed that the game is being split into two pieces and that the game was delayed over a year but I trust that it’ll be good when it finally see the light of day. I don’t know if I’ll ever see an Instacube (even though I don’t want it anymore) or my $99 back.
From this day forward, use the two rules I have been using for Kickstarter backing:
- Do I want the product/service being offered by the Kickstarter on day one?
- Do I trust and want to support the project owner?
If the answer is “yes” to both, I fund (although in Jeff Cannata and Drake’s case, it was a dollar and I just wanted to support their project). I hope you have learned one thing from reading this… you would be wise to have your own Kickstarter code of funding.
One last thing. Someone should really get Jamie Oliver on the phone and see how he feels about the Instacube. You know… the one he’s “endorsing”.