Saturday, September 28, 2013

4 Reasons We May Not Carry Your Kickstarted Game

 Two points need clarification:  1)  This is written from a retailer's not a consumer's point of view.  I have backed Kickstarters as both a consumer and a retailer.  this is why I am loath to back them as a retailer in the future.  2) We sell tabletop boardgames and RPGS. Video and online games are an entirely different animal.

Though not as hot as it was about a year ago, Kickstarter is still used by a lot of independent companies in the gaming industry, primarily independent and small press publishers, to publish new releases.  Top tier publishers, such as Paizo, WOTC, Fantasy Flight, Konami, Bushyroad, etc., don't use Kickstarter or other crowdfunding sites to crowdfund new releases as their cashflow is strong enough to not need to do so.

Unfortunately, there are four major reasons why stores, including outs, don't like to carry crowdsourced games.

1)  Crowded marketplace.  When I checked earlier today, there are 386 game projects listed on Kickstarter alone. While we have a strong customer base here, there is no way we, or most stores for that matter, have the market to absorb that quantity of new releases, must of which will fund in the next 30 days but not arrive for six months to a year after the backing period ends.  this leads to #2.

2)  Cash flow.  Just like publishers, retailers struggle with cash flow as well.  In the publisher's case, however,  they get the the money up front and they spend it to produce the product.  In the retailers case, if we fund a product, we front the money now, tying it up for several months until the product ships, removing cash from our accounts for six months or better, until we, and everyone else receive it, which leads to #3.

3)  Lateness.  There is a better than average chance that the publisher will not meet their projected shipping date.  An analysis by Ethan Mollick of the Wharton School of Business of  over 48,000 projects funded by Kickstarter found that over 75% of  publishers missed their release dates.  To cite one familiar example, Steve Jackson Games, which has a great track record of meeting release dates for their Munchkin game and other non-Kickstarter releases, used Kickstarter to fund a designer's edition of Ogre. Funding for this ended in May of 2102, with a projected release date of November 2012.  It is now September 2013 and the 5500+ backers still have not received Ogre.  In a way, this leads to #4.

4)  Market saturation.  Aldo Ghiozzi of Impressions Game Distribution Services, who has worked with small press game publishers for a number of years, is one of the most knowledgeable people I know in the field of independent gaming distribution.  According to Ghiozzi, the average RPG release, either via Kickstarter or some other method, will sell between 150-250 copies ( A year ago or so, Kickstarter had a halo effect whereby RPGs published through it might sell up to double the amount they would if sold stright into distribution.  This effect appears to have subsided though) with maybe another hundred sold direct through the company's website or at conventions.and a boardgame about 600 to 700 copies, 1000 or more copies only if a runaway success pulling in over $300,000.  Ergo, if a company's RPG Kickstarter pulls 300 backers or a boardgame does 600, that pretty much saturates the expected market for that particular product.  Only if the product proves that rare runaway success (Cards Against Humanity, FATE, 13th Age), would a store expect to see more than the publisher already has.