The crowdfunding model is showing its cracks -- and James says it's time to stop throwing good money after bad.
By James Pinnell on May 13, 2014 at 2:52 pm
It’s easy to understand the appeal of crowdfunding, at least on paper — being able to pick and choose the projects that the community feels need direct support, and ensuring that they get a decent chance at completion. The reality, however, is much more fractious and complex. I’ve made it fairly clear over a number of features and editorials on this wonderful website, that crowdfunding of titles and the new regime of pre-funding development isn’t something I feel is a great idea.
There are no guarantees that the money sunk into many of these ventures — even the most promising and overfunded, will ever see the light of day, nor that the developer will be able to stay in the black. On the other end of the stick we have Early Access titles, which rely on the faith of the buyer that development will continue to completion. This model too is showing cracks in its armour — something that was brought to light recently with the high profile failure of Towns, where the developers decided to halt development due to an apparent lack of sales in order to cover day to day costs. Then there are the obvious issues with expectations, quality and transparency.
It’s easy to assume that I’m being selective with my observations, targeting the bad fruit that falls off the tree instead of the good stuff that’s picked when ripe. I haven’t forgotten about Broken Age: Act 1, The Banner Saga, Planetary Annihilation, and Prison Architect — I own all of them and I have thoroughly enjoyed playing through the various builds of each. The same goes with the promising continued development of games like Star Citizen and Elite: Dangerous — both titles have clear roadmaps to meeting their goals with talented, dedicated teams of experienced developers behind them. But this is the key — these titles are being developed by studios full of industry vets, well aware of their need to be fully transparent with updates, and a tight handle on the public purse.
It takes more than a simple concept to succeed in creating an amazing game, and I’m sure I’m not alone when I say that far too many of these concepts are nothing but that — pipe dreams with little more than a three-minute reel of art and renders. Data mining blogger “Evil as a Hobby” crunched the numbers on all of the 366 successfully funded projects between 2009 and 2012, and found that a staggering 63% had not as yet fully delivered their title to backers. This drops to 50% if you take into account whether a game offered a “part one” or a mini-game to console angry and frustrated backers, but still leaves a whopping 183 funded projects without any sort of delivery.
In terms of monetary value, almost $21.6 million dollars has been dropped into a pit of great ideas and essentially been flushed away — arguably not what many expected when they chipped in $20 or $30 to be on the ground floor of the next great RPG. But what if we take into account delays — many of these titles are not actively cancelled, but have been given delays of up to a year in some cases. Sealark, one of only two Kickstarters I’ve funded, was scheduled for a July 2013 release, and is no closer to release now. The developer has also not released an update since March.
Then there’s the argument that if anything is put out, at all, then that’s akin to a success. “Hey James”, you may be noting right now, “Minecraft wasn’t finished for years after its alpha!”. This is true. But Minecraft, like Prison Architect and Planetary Annihilation, had its core gameplay already baked in before the first build was even released. They were fun because they allowed for play that was fundamentally completed, just missing much of the trimmings — like a steak dinner without the baked potato and carrots. Then there’s the issue of community support dying out after the first few builds come and go — gamers have been trained for the last 20 years to play the hell out of whatever turns up in their hands. If that’s a buggy, barely functional mess, then sure – maybe they’ll work at it to bang out a few days worth of play, but then they’re already done. Will they go back and play the 27th build? Probably not. I haven’t touched either Prison Architect or Planetary Annihilation for months, because, frankly, that initial excitement has come and gone.
This has created a brand spanking new category of MIA titles,an effective graveyard of games that are either unfinished or in perpetual development. Strangely, many of the developers praise this situation, claiming their game will “never be finished” because as long as they have support, they will continue to add features. I was worried about this and wrote about my concerns about a year ago, and it’s distressing to see how little has changed on this front. A lot of developers still don’t understand the concept of Early Access – they shouldn’t be relying on the funding they receive from it to make their game. How many titles they sell should not dictate the speed or duration of their process. The second you make the decision to open up your title to paid entry, you have effectively committed yourself to an end date. This is not an interest free loan from the bank — it’s a full priced entry to a process that must be seen to completion.
But really, it’s too late — the power has shifted. Where once developers lived and died by their own ability to source capital, to handle the risk and deliver for their creditors, their only worry now is being hounded by emails wondering where they have vanished to.
Supporters of crowd funding platforms point to the original ethos of Kickstarter, claiming that the money is not for a finished product, but instead something more akin to a donation to an idea. This may have been the case back when crowd funding was more focused around making a 3 song EP, popup art gallery or portfolio, but the situation has evolved into something far bigger. I don’t think that there is ever a valid situation — ethically at least, if not legally — where someone can be handed $100,000 to create something and then six months later simply turn around to their supporters and shrug their shoulders. If there is no element of risk or retribution, then where does the motivation or drive to meet goals come from? Our entire economy works on the idea that unless you work to complete objectives, you get nothing. If you buy a house with a loan from a bank, your motivation is to keep working so you can keep that house. There are probably hundreds if not thousands of reasons that $21 million dollars in funding disappeared into a black hole, but I daresay if there were benchmarks or creditors involved, those losses would be much smaller.
So what’s the solution? I personally haven’t funded a single thing since Star Citizen because I have yet to find a project I have faith in. The internet as a collective mass loves a good cause and this is the reason crowd funding blew up to be so “successful” in the first place — we assume good in everyone, and that self-motivation to a group of anonymous benefactors is enough for people to do that they claim. This is a fallacy. If we want to increase the rate of success then we can’t let project owners off the hook, nor should we simply gift them such enormous amounts of money based on little more than a promise. I feel reform should include a compulsory business plan that details things like staffing costs, work hours, and timelines for completion benchmarks. Or money being drip-fed over a space of time, say x per month, based on this plan, or maybe even linked to meeting goals preset by the developer themselves. After all, we generally have no idea where the funds actually go — are they struggling in the basement of their parents’ house or spending their investment attempting cover their own personal debts?
Neither of these ideas are outlandish or even that difficult to enforce. Sure, it would take some moderation on behalf of a third party, but there’s a reason 10-15% of the final amount goes to the website that facilitates the deal. The biggest hurdle, however, is that there is generally still a lot of denial that anything is wrong, and far too many players making bank on the status quo. We generally need to stop thinking about this as a $20 or $30 problem. This isn’t about the individual, it’s the investment as a group — the crux of all this is that I want to see more games funded. The bubble is going to pop sooner or later, the telling part will be whether there’s still an industry for crowdfunded titles on the other side of it.