While Kickstarter supports all forms of business ventures, it is most popular with videogames. Video games have the highest number of successfully backed projects worth over $1 million dollars. It has been great for any worthwhile creative project but there have been hiccups along the way. The main issue is a successfully funded project which fails to deliver on its promise. Either the game is less than stellar or it’s abandoned completely.
You don’t have to look long and hard to find high profile Kickstarter failures. However, Kickstarter allowed the funding of some great and interesting games. (Divinity: Original Sin, Faster than Light, and Pillars of Eternity as an example.) In some sense, Kickstarter lets non-investors act like investors (sort of).
When a project fails, the backers feel slighted that they did not receive a product they paid for. Kickstarter has tried to alleviate this by making the delivery of backer goals mandatory whether the creator completed the project or not. Although this might be a small consolation, it is not a substitute for a finished game. Additionally, it is quite common for the studios to go (further) in-debt trying to fulfill these goals. Then you have a vocal group of people who will demand their money back and bad-mouth the developers on the Internet. It might be the developers’ fault that the project failed, but they are not responsible for your monetary loss.
If you are considering backing a game, it is important to know that Kickstarter is not a store. You are not browsing products to purchase. Backing a project is like investing, and your potential return is the finished product. As in all investments, returns are not guaranteed. You are not obligated to receive a finished product just like you do not have the right to demand your money back if the project fails.
So why not wait until the game is finished and then buy it? When you fund a project on Kickstarter, you are taking a chance to enable a game to become reality. If you don’t take that chance, if no one takes that chance, then the game will never be made. You might just waste your hard earned money and you should be comfortable with that before you make a pledge.
Hedging Your Bets on Kickstarter
There are a few things you can do to minimize the risk.
First, research the developers, find out what they have done before. The more experienced they are, the less likely it is that the project will fail. Of course, this is not always the case.
Second, look at their backer rewards. Often, creators will promise expensive backer rewards as a way to entice people to invest. Unfortunately, creators also grossly underestimate the costs and shipping of backer rewards. Do the rewards look more expensive than the tier they belong to? If the reward looks to cost more to make and ship than the backer tier, that is a bad sign. Either they are planning on getting more than they are pledging or that they have not planned how they are spending the money they receive.
Thirdly, look at what their target is. To drum up support, some companies will set an artificially low target goal. Potential backers will have more confidence that the creators will will finish the game if the goal is low. An easy goal means it is more likely to happen. If the goal seems low and they are not getting funding outside of Kickstarter, it should be a warning sign. For an idea, the average C# developer salary in the US is around $90,000 a year. If what they are asking for is not enough to support the developers for a minimum of one year, then they are not asking for enough money and will most likely run out.
If you can afford to lose the money and there is a project you feel very strongly about, then by all means back it. If the creator doesn’t finish the game, remember that you made an investment and sometimes they don’t work out. You have no right to get mad because you assumed the risk from the start.
Now go and make dreams happen.
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