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Op Ed

Gamasutra - How long before the Kickstarter bubble bursts?
We are still in the early days of our Kickstarter relationship, the early days of falling in love. Everything our partner does is wonderful. We gloss over the risks, we ignore the downsides, because the glory of falling in love is everything.

I think we have about six months left of that period. Towards the end of this year, some Kickstarter projects are going to start slipping. Some will see their teams collapse amidst bicker recriminations. Some pledgers are going to start getting very angry.

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55. Re: Op Ed May 8, 2012, 15:47 Tumbler
 
Now everyone go give their money to the Space Quest devs DAMMIT!!!!

DONE!!!!! I find it difficult to stop myself from spending too much money on these projects. $15 is fine, but then I have to go look, what if I spend $30? Oh I don't really need that...what if I spend $50! Hmm I don't really need this...but why do I WANT to spend so much more!!!
 
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54. Re: Op Ed May 8, 2012, 15:42 Beamer
 
Eberron wrote on May 8, 2012, 14:47:
Beamer wrote on May 8, 2012, 14:38:
There's a difference between failing to launch and failing to fulfill. I'm talking more something like Zeyez. These guys got completely overwhelmed, ironically in large part due to how many orders they got.

And that is the difference between being a backer and being a customer. You are paying to help them launch, not necessarily to fulfill. People who don't understand that should stay away from Kickstarter. There is a legitimate demand from gamers like myself to help launch certain projects just to see what the developers can do.

Honestly, there is a demented side of me that wants to see a couple of developers fail just to watch the drama unfold. Isn't that worth $15? The whole process is a game in and of itself.

But most people aren't looking at Kickstarter that way. Are the people giving Pebble $300 saying "I'm backing this company?" No, they're preordering a cool watch.

I'm not sure why so many people are splitting hairs here. Do people here really think the 9 million going to Pebble isn't stupid? Do people here really think someone running out and spending $60 on Dragon Age 2, when reviews are out there saying it's terrible and when word of mouth is there and when they can watch gameplay videos on YouTube is a similar risk to spending $15+ on a product with no track record and no gameplay videos that is barely in prototype stages and may never be released?

Some of you are so swept up by this that you aren't even admitting that there will be failures and that people are throwing money in excitement thinking they'll definitely get things that meet expectations. I don't even want to compare this to modern publishers, as I don't care in this regard, all I'm saying is that people are going to get burnt and then money will slow down. I am not saying it will disappear, or nothing will ever get funded again, I'm saying that right now it's a crazy gold rush and that will not last forever. We've already had several companies come out and say they did not plan properly and are struggling. How many others aren't being public about it?



And, for the record, pretty much everyone in the mortgage industry knew that they were giving money out very stupidly. No one knew the extent of the crash that would happen, but the people on the front line actually selling the mortgages knew they were shady.
 
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53. Re: Op Ed May 8, 2012, 15:34 Flatline
 
Prez wrote on May 8, 2012, 14:10:
There's no evidence that there's a bubble to burst at all - it's only people wishing and hoping it is a bubble because this threatens the stranglehold the greed-driven, creativity-crushing powers-that-be currently hold. Them and the arrogant know-it-all's who believe people shouldn't be given what they want because they are too stupid to figure out what it is they want on their own (One of them is posting in this thread right now, but thankfully I have him on ignore so I am spared his self- important, idiotic blathering).

There will be some failures and setbacks, maybe even some spectacular ones, but all it will take is one high-profile project like the Tim Schafer one or Wasteland to be released and be great and I think people will be sold on kickstarters. The failures will make people wary, but the successes (assuming they eventually come) will win out in the long run.

Kickstarter for videogames may not have a bubble but there are bubbles within kickstarter. Board games, for example, caught fire about 2 years ago on KS. A couple *really* high quality games came out via KS, and now there's hundreds of boardgames you can back.

The problem is that even when a "professional" company kickstarts a game, there's not just delays, there's huge f*cking delays. I've kickstarted maybe a dozen projects (most of which are boardgames) and the only ones that have actually delivered anywhere near close to on time are small indie developers amusingly enough. I picked up the deluxe reprint of Glory to Rome, a frickin card game, who had completed art, developed rules, it just needed to be *printed* and *shipped* back in August, and they're now telling us that July or August is the soonest we're going to see it, after an initial ship date of like October.

So over on the board game side of things, the honeymoon period for KS is starting to wear off. It'll be interesting to see what happens with videogames.
 
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52. Re: Op Ed May 8, 2012, 15:33 nin
 
Eberron wrote on May 8, 2012, 15:29:
Starflight? I would love to see a remake.

Starlight Inception? I think people were turned off by the fact it is a PSP Vita title.

(Also I like Order of the Stick, and I do have bad taste. So what?)

They did several things wrong (low/questionable budget for two systems, DLC, models that didn't look that great, etc) and yet they're only like 20K away from their goal, with 8 hours left. I'd be surprised if they made it (based on the history of the project), but they've close...

Now everyone go give their money to the Space Quest devs DAMMIT!!!!


 
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51. Re: Op Ed May 8, 2012, 15:29 Eberron
 
Starflight? I would love to see a remake.

Starlight Inception? I think people were turned off by the fact it is a PSP Vita title.

(Also I like Order of the Stick, and I do have bad taste. So what?)
 
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50. Re: Op Ed May 8, 2012, 15:29 briktal
 
Prez wrote on May 8, 2012, 14:57:
Tumbler wrote on May 8, 2012, 14:47:
Here's the test for a bubble:
1) Are people spending lots of money?
2) Is the money being spent someone foolishly, without much due diligence or regard for how reasonable the promised returns are?
3) If the promises don't come true, will people become much stingier?

Again, two sides of the coin.

For Kickstarter stuff:
1) No.
2) No.
3) Maybe.

For AAA $60 stuff:
1) Yes.
2) Yes.
3) Yes.

I don't know how many kickstarter projects have fan boys but a lot of the companies that make AAA games do and I'm pretty sure those guys don't do a lot of due diligence before they run in screaming, "TAKE MY MONEY!"

Exactly. The vast majority of kickstarter backers are risking only a fraction of what they blew on Dragon Age 2 before finding out it was crap. Yet according to the kickstarter phenomenon naysayers, we're in for some terrible cataclysmic loss if a few ill-conceived projects fall on their face as if there's no risk in buying at retail. The sky isn't falling if you lose 15 or 20 bucks on a bad project or two any more than it is when you buy a $60 "AAA" game and finish it after 5 mediocre hours. A bit of perspective is in order.

I think the number of people paying into the higher tiers might drop off in the future of Kickstarter though.
 
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49. Re: Op Ed May 8, 2012, 15:13 shinchan0s
 
Eberron wrote on May 8, 2012, 14:28:
Beamer wrote on May 8, 2012, 14:18:
Yeah, and most restaurants fail, too. Most bands fail. Most movie production houses fail. So long as some make it big people will keep trying.

Most Kickstarters also fail. I would say it's much higher than 40%. Here's one struggling right now:

http://www.kickstarter.com/projects/732317316/starlight-inceptiontm

Eh... put me in the camp that is skeptical of Kickstarter funded projects. I do think games financed by gamers is a workable alternative to traditional publishing (I gave $10 to get into Mount and Blade beta), but I also think it will always remain a niche alternative.

Besides, I doubt you'll see the kinds of games you guys want financed through Kickstarter. You'll just end up with sequels and SNES-style RPG's with anime characters.

The Starflight project, meanwhile, seems like the ideal candidate for this kind of funding since it's a spacesim, a genre that lacks mass appeal and is cheap to produce. The development team also has a plan, a strong professional background, and a working prototype.

Unfortunately, no, the masses have spoken and they want more of this.

Kickstarter doesn't seem to work for projects that we like to think should benefit the most from this kind of financing - innovative games made by the true Indie developer. Why? Cuz gamers are retarded and have bad taste.
 
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48. Re: Op Ed May 8, 2012, 15:02 ASeven
 
Prez wrote on May 8, 2012, 14:57:
Exactly. The vast majority of kickstarter backers are risking only a fraction of what they blew on Dragon Age 2 before finding out it was crap. Yet according to the kickstarter phenomenon naysayers, we're in for some terrible cataclysmic loss if a few ill-conceived projects fall on their face as if there's no risk in buying at retail. The sky isn't falling if you lose 15 or 20 bucks on a bad project or two any more than it is when you buy a $60 "AAA" game and finish it after 5 mediocre hours. A bit of perspective is in order.

Funny these people don't see anything wrong in the gaming industry though yet the sky will fall for KS, talk about being blind as a mule. Even when EA stocks hit 1999 levels.

EDIT: Oh and this too.
 
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47. Re: Op Ed May 8, 2012, 15:00 ASeven
 
NKD wrote on May 8, 2012, 14:54:
ASeven wrote on May 8, 2012, 14:47:
Exactly, people are making the mistake that putting money into a Kickstarter project is investing in that project. Wrong. Putting money into a Ks project means you're buying the finished project when and if it happens, nothing more and nothing less.

That's not entirely true either, because if you are buying a product, then you are obligated to receive that product or receive a refund. Kickstarter doesn't have refunds unless you want to dispute the charge or file a lawsuit that will probably go nowhere.

But an investment may or may not get you anything. A investor can and does end up making investments that earn them nothing. You have recourse when purchasing a product that is not delivered, with an investment you have no recourse if you do not get the expected return.

Yes but when you put down your money on a KS project, regardless of what you put it, you don't expect to receive anything else other than what's on your reward tier. An investment is more complex and organic than that and in fact receiving what is described for you when you pay is exactly what a purchase is. I would define KS projects better as a purchase with an element of risk, the project you backed may or may not be completed even if the funding was successful. A good example of a risky purchase is buying a lottery, for instance. You don't get refunds and it's a risk getting one yet it's still a purchase you made, not an investment in the economic sense of it.

Of course, the problem here is the lack of refunds from failed projects or outright scams that manage to get enough backing to go on. I think that it will be inevitable for KS to start putting policies into their ToS to protect people from those. To be honest there's really not that much more KS can do.
 
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46. Re: Op Ed May 8, 2012, 14:57 Prez
 
Tumbler wrote on May 8, 2012, 14:47:
Here's the test for a bubble:
1) Are people spending lots of money?
2) Is the money being spent someone foolishly, without much due diligence or regard for how reasonable the promised returns are?
3) If the promises don't come true, will people become much stingier?

Again, two sides of the coin.

For Kickstarter stuff:
1) No.
2) No.
3) Maybe.

For AAA $60 stuff:
1) Yes.
2) Yes.
3) Yes.

I don't know how many kickstarter projects have fan boys but a lot of the companies that make AAA games do and I'm pretty sure those guys don't do a lot of due diligence before they run in screaming, "TAKE MY MONEY!"

Exactly. The vast majority of kickstarter backers are risking only a fraction of what they blew on Dragon Age 2 before finding out it was crap. Yet according to the kickstarter phenomenon naysayers, we're in for some terrible cataclysmic loss if a few ill-conceived projects fall on their face as if there's no risk in buying at retail. The sky isn't falling if you lose 15 or 20 bucks on a bad project or two any more than it is when you buy a $60 "AAA" game and finish it after 5 mediocre hours. A bit of perspective is in order.
 
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45. Re: Op Ed May 8, 2012, 14:54 NKD
 
ASeven wrote on May 8, 2012, 14:47:
Exactly, people are making the mistake that putting money into a Kickstarter project is investing in that project. Wrong. Putting money into a Ks project means you're buying the finished project when and if it happens, nothing more and nothing less.

That's not entirely true either, because if you are buying a product, then you are obligated to receive that product or receive a refund. Kickstarter doesn't have refunds unless you want to dispute the charge or file a lawsuit that will probably go nowhere.

But an investment may or may not get you anything. A investor can and does end up making investments that earn them nothing. You have recourse when purchasing a product that is not delivered, with an investment you have no recourse if you do not get the expected return.

People viewing Kickstarter as a way to get a cheap preorder are going to be disappointed when many of these projects don't happen.
 
Avatar 43041
 
If you don't like where gaming is heading, stop giving your money to the people who are taking it in that direction.
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44. Re: Op Ed May 8, 2012, 14:47 Eberron
 
Beamer wrote on May 8, 2012, 14:38:
There's a difference between failing to launch and failing to fulfill. I'm talking more something like Zeyez. These guys got completely overwhelmed, ironically in large part due to how many orders they got.

And that is the difference between being a backer and being a customer. You are paying to help them launch, not necessarily to fulfill. People who don't understand that should stay away from Kickstarter. There is a legitimate demand from gamers like myself to help launch certain projects just to see what the developers can do.

Honestly, there is a demented side of me that wants to see a couple of developers fail just to watch the drama unfold. Isn't that worth $15? The whole process is a game in and of itself.
 
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43. Re: Op Ed May 8, 2012, 14:47 Tumbler
 
Here's the test for a bubble:
1) Are people spending lots of money?
2) Is the money being spent someone foolishly, without much due diligence or regard for how reasonable the promised returns are?
3) If the promises don't come true, will people become much stingier?

Again, two sides of the coin.

For Kickstarter stuff:
1) No.
2) No.
3) Maybe.

For AAA $60 stuff:
1) Yes.
2) Yes.
3) Yes.

I don't know how many kickstarter projects have fan boys but a lot of the companies that make AAA games do and I'm pretty sure those guys don't do a lot of due diligence before they run in screaming, "TAKE MY MONEY!"
 
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42. Re: Op Ed May 8, 2012, 14:47 ASeven
 
Eberron wrote on May 8, 2012, 14:41:
Beamer wrote on May 8, 2012, 14:33:
Like that guy that just spent $10k to be a villain in Carmageddon. Honestly, does anyone have much faith in Stainless being able to go from 10 years of horrible crapware to a fun game? Someone bet $10k they will.

That is the main difference. This guy isn't 'investing' $10K.

People invest in stocks. People invest in real estate. They aren't doing it for fun. They want money to return. If it doesn't return then the bubble is burst.

Some people have fun simply because they can waste so much money. If you can afford upper tiers then it's probably more for vanity and the fun of flying out and hob nobbing with developers and feeling "important". People spend $10K on vacations all the time that turn to shit but that doesn't stop them from going on another one the next chance they get.

Exactly, people are making the mistake that putting money into a Kickstarter project is investing in that project. Wrong. Putting money into a Ks project means you're buying the finished project when and if it happens, nothing more and nothing less. There's no expectations of making a ROI in Kickstarter, just the expectation that the money you spent translates into a great game, or watch, or movie, or whatever.

The biggest fallacy in all of this KS bubble talk is assuming KS projects are investments. They are not, not for the public putting money into them at least.
 
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41. Re: Op Ed May 8, 2012, 14:44 ASeven
 
Beamer wrote on May 8, 2012, 14:33:


Here's the test for a bubble:
1) Are people spending lots of money?
2) Is the money being spent someone foolishly, without much due diligence or regard for how reasonable the promised returns are?
3) If the promises don't come true, will people become much stingier?


In the dot com bubble all of this was true. People threw stupid amounts of money at companies that had little chance of a return, and when those companies started failing people got gunshy and stopped giving money to anyone, causing even good companies to fail.
In the mortgage crisis all of this was true. People threw stupid amounts of money at mortgagees that had little chance of making their monthly payments, and when those people started defaulting the lenders got gunshy and stopped giving money to anyone, even those that could clearly afford it.

And this would have been true if not for the banks and rating companies and analysts saying that those investments weren't toxic. We now have the ability of hindsight but back in those times before the bubble burst if you said that the dotcom or housing bubbles were indeed bubbles you would be laughed at by all the people in power. Banks and analysts would say the investment had 0% risk or a minimal risk to make it all worthwhile. Saying people were spending stupidly back then is the same as saying publishers are about to fall and the gaming industry crash, people will laugh and say it will never happen and things will go on and The sky is falling and all that, and then it happens.

Pretty much how you do when I speak of a gaming industry crash come to think of it. Funny how things work, eh? Sometimes the doom prophets happen to be 100% right like the ones that warned of the DotCom bubble, or the Housing bubble and subsequent 2008 recession, or the present Grant bubble affecting pretty much almost all governments worldwide.
 
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40. Re: Op Ed May 8, 2012, 14:44 nin
 
Two guys!

And they got Ellen McLain...


 
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39. Re: Op Ed May 8, 2012, 14:41 Eberron
 
Beamer wrote on May 8, 2012, 14:33:
Like that guy that just spent $10k to be a villain in Carmageddon. Honestly, does anyone have much faith in Stainless being able to go from 10 years of horrible crapware to a fun game? Someone bet $10k they will.

That is the main difference. This guy isn't 'investing' $10K.

People invest in stocks. People invest in real estate. They aren't doing it for fun. They want money to return. If it doesn't return then the bubble is burst.

Some people have fun simply because they can waste so much money. If you can afford upper tiers then it's probably more for vanity and the fun of flying out and hob nobbing with developers and feeling "important". People spend $10K on vacations all the time that turn to shit but that doesn't stop them from going on another one the next chance they get.
 
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38. Re: Op Ed May 8, 2012, 14:39 ASeven
 
The 83 Gaming Industry crash was due to simply an oversupply of games that didn't meet enough demand to cover the costs. The inevitable crash happened.

The 2000 DotCom bubble was due to people and investors injecting a lot of money into projects that had no substance behind them. Basically they were investing money into a sector that could not and did not have an ability to make a ROI, a sector that was hyped by analysts in order to move money around. People's expectations were high and then reality crashed and it all came down as a house of cards.

The 2008 Real Estate crash and the subsequent recession was mainly due to Fannie Mae and Bernie Mac and banks giving loans as if they were a 0% risk investment. And then banks started to loan in order to back up more loans. The price of housing was artificially being increased and banks thought that loaning to people so they could buy a house and then sell it a year later and strike a profit was a no risk investment. Banks didn't even admitted that the housing prices would crash. And when it did banks found themselves with a lot of unpaid loans that could never be paid because houses were now 1/10 of the original value and people couldn't and wouldn't repay a loan for something that was now worth a lot less. And when banks got their hands on the houses they weren't even worth a fraction of the original loan they gave.

Putting the three bubbles into oversimplified terms, this is what pretty much happened in the three occasions. Bubbles are not identical and comparing a bubble to another is a stupid thing to make from an economic point of view. Bubbles are all different, have different causes and different consequences and never work the same way.
 
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37. Re: Op Ed May 8, 2012, 14:38 Beamer
 
Eberron wrote on May 8, 2012, 14:28:
Beamer wrote on May 8, 2012, 14:18:
Yeah, and most restaurants fail, too. Most bands fail. Most movie production houses fail. So long as some make it big people will keep trying.

Most Kickstarters also fail. I would say it's much higher than 40%. Here's one struggling right now:

http://www.kickstarter.com/projects/732317316/starlight-inceptiontm

There's a difference between failing to launch and failing to fulfill. I'm talking more something like Zeyez. These guys got completely overwhelmed, ironically in large part due to how many orders they got.
 
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36. Re: Op Ed May 8, 2012, 14:33 Prez
 
Creston wrote on May 8, 2012, 14:29:
Prez wrote on May 8, 2012, 14:23:
Joking aside, who wouldn't want another REAL Bioware game? As in Baldur's Gate 3, not Dragon Age 2. Kickstarters make that a real possibility - enough Bioware employees (former and current) get tired of denying the obvious fact the EA has all but destroyed the Bioware brand and start their own project. I would love to see it myself.

It'd take a systemic amount of failures to deliver before I lose hope in the entire system.

For you, me, and I'd wager a whole lot of other people.

Isn't that being talked about? I'm sure I've seen the BG3 name pop up here and there in the last few weeks.

Creston

I think it was now that you mentioned it, but I don't know if it was by the right people (the original designers or dev's who share their vision). It would have to be a spiritual successor I'm sure, but so long as it is a true sequel, it will hardly matter. As long as there is an alternate route for people who don't want to live in Beamer's gaming utopia where clueless suits dictate to the very masses they disdain what they can and can't have, I want to be a part of it.

This comment was edited on May 8, 2012, 14:39.
 
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Goodbye my Monte boy. May you rest in the peace you never knew in life.
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