Is Crowdfunding Bad? - General Editorials

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Is Crowdfunding Bad? - General Editorials

As more crowdfunded games reach launch, it’s a good time to take a look at the process of getting from funded to finished. When it surged in popularity, we didn’t know if crowdfunding was a good idea or not. Now that the process has been tested a few times, we have more information available on which to base an informed opinion.

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JamesGoblin

It's like fire - not good or bad, it's what you do with it.

There is a very wide range from, say, Mark Jacobs all the way down to Richard Garriott or Jason Appleton.

Slapshot1188

Crowdfunding could be a good tool in the right situation. Unfortunately the tool has been misused (either intentionally or by incompetence) and thus has poisoned the well.

Megosh

Crowdfunding is a good concept, but people are greedy so it never turns out well.

Sovrath

DMKano said:

When it comes to MMOs, crowdfunding is simply a way to market the game and get like 5% of the funds needed for the entire game.



The reality is - a successful crowdfunding campaign means little as far as MMOs getting completed - so as long as everyone is aware of that and sets expectations accordingly, I dont see a problem with it.


Its only bad when people expect a guaranteed result from their donation.

"pretty much" your last paragraph.

This should be tattooed on every gamer/player's head.

Wellspring

"...you need to remember that you’re not making a purchase. You’re making a donation."

I think we have much different definitions of the word "donation".

Donation:
: the act or an instance of donating: such as
a : the making of a gift especially to a charity or public institution
b : a free contribution : gift

The ONLY "donation" tiers are the ones with 0 rewards. Such as the $5 virtual high-five tier that some projects have. If there is a reward given in return, by definition it's no longer a donation (a.k.a. "a free contribution" or "gift").

Kickstarter uses the word "Pledge" for their packages.

Pledge:
1 : to make a pledge of; especially : pawn
2 : to drink to the health of
3 : to bind by a pledge
4 : to promise the performance of by a pledge

A pledge is basically a promise, between two parties. In the case of Kickstarter, it's that the creator will fulfill a reward in a given time period, in exchange for money.

I'm sick of people trying to say that game studios who used Kickstarter, were paid in donations. They were not. I have yet to see a single MMORPG KS use the word "donation" in their KS campaign. They all use the word "pledge".

Sandmanjw

Short answer is for some people...yes. And others..no.

Look at it like a throw of the dice on a vacation to a casino...you may win you may lose...but there is no sure things, and do not play if you can not afford to throw the money away.

Scot

Megosh said:

Crowdfunding is a good concept, but people are greedy so it never turns out well.

Welcome to the boards!

Panther2103

Crowdfunding in theory works. If the developer is competent, and able to provide realistic goals and rewards then it can turn out.

As with anything that can turn a profit, it has been negatively impacted by scammers, people who go way over their skillset, and people who don't know how to run a business. If you look at what has happened with a lot of the failed kickstarters (at least the ones with promise not the ones with 2 backers and 15 dollars) you can see patterns of what to look out for like buzzwords and "just enough" information to get people interested.

There are some things that have turned out positive though like :

Superhot
Yooka-Laylee (I enjoyed it while a lot of people didn't)
The Banner Saga
Darkest Dungeon
Shovel Knight
FTL

All in all crowdfunding isn't bad, it's just some bad people or decisions that turn it negative for a lot of people.

Red_Thomas

DMKano said:

When it comes to MMOs, crowdfunding is simply a way to market the game and get like 5% of the funds needed for the entire game.



The reality is - a successful crowdfunding campaign means little as far as MMOs getting completed - so as long as everyone is aware of that and sets expectations accordingly, I dont see a problem with it.


Its only bad when people expect a guaranteed result from their donation.

I don't take issue with the general idea of what you're saying, but it's not totally true. MMOs are not going to get enough from a crowdfunding campaign to develop the whole game, that's absolutely true. It's also in part a marketing move, but definitely not completely.

MMOs that use crowdfunding, and frankly most other games, are actually using it in place of an early seed round. They're getting capital together to move to that next step. Typically by the time they crowdfund, they've roughed together a proof of concept and some early design. The campaign gives them the capital to expand the team and actually get started on the project.

If that second (crowdfunded) phase is successful, they collect additional capital from another source. Additional investor rounds as Crowfall's done, a cash shop as Shroud and several other games have done, or daily deliveries on the hype train as Star Citizen has done.

So the crowdfunding does go into a specific step in the process. It's not just a portion of this total budget, from what I've seen. It's to raise money to get to that next phase in the model where revenue can come in from other places. The problem is that the restraints imposed by crowdfunding are around long after the funds have done their work.

Phaserlight

Nice article. I personally hope crowdfunding falls out of favor.

I was in an accounting class years ago while pursuing a master's degree and the topic of crowdfunding came up. The prof stated his opinion that it was a fad. He may be right, he may be wrong, but there's just something... kitsch about it.

If you ever want a good laugh, check out the blog "Your Kickstarter Sucks":

http://yourkickstartersucks.tumblr.com/

Amathe

I think we need to see more games make it using this model before I could offer any opinion on it.

Theocritus

Megosh said:

Crowdfunding is a good concept, but people are greedy so it never turns out well.

As an investor I think its an awful concept...They want us to pay for the development of their game and we often get nothing in return...Early access is the best they have to offer.....UI'd rather give the kids selling lemonade $20 than donate it to a kickstarter.

Sovrath

Wellspring said:

"...you need to remember that you’re not making a purchase. You’re making a donation."



I think we have much different definitions of the word "donation".



Donation:

: the act or an instance of donating: such as

a : the making of a gift especially to a charity or public institution

b : a free contribution : gift



The ONLY "donation" tiers are the ones with 0 rewards. Such as the $5 virtual high-five tier that some projects have. If there is a reward given in return, by definition it's no longer a donation (a.k.a. "a free contribution" or "gift").



Kickstarter uses the word "Pledge" for their packages.



Pledge:

1 : to make a pledge of; especially : pawn

2 : to drink to the health of

3 : to bind by a pledge

4 : to promise the performance of by a pledge



A pledge is basically a promise, between two parties. In the case of Kickstarter, it's that the creator will fulfill a reward in a given time period, in exchange for money.



I'm sick of people trying to say that game studios who used Kickstarter, were paid in donations. They were not. I have yet to see a single MMORPG KS use the word "donation" in their KS campaign. They all use the word "pledge".

You are being too literal. No surprise there as it seems that is par for the course for many gamers.

Words like "donation" or "invested" can be used in multiple ways in every day language.

And does it really matter? Because I think the answer is "no, no it doesn't matter."

If I use the word "invested" then I'm investing in "the possibility of a game." If I use the word donate then I'm "donating money with the idea that I might get something out of it or at least help support a project."

MaxBacon

Crowdfunding doesn't really fit the MMO genre, it fits smaller titles.

MMOs are not easy to pull off and we see the same problems in pretty much all of them, they should be undertaken by larger development teams not indies (as it usually ends up being) with secure budgets; the colossal underestimation by developers pushing MMO's that lead to the usual delays of years.

The thing that makes it turn into crowdfunding, and we just see the current MMO reality most MMO's people are wanting to play are indeed crowdfunded, it shows where the offer is, it's those without the resources that are creating the MMO titles people are wanting to play, not the larger studios/publishers.

Gruug

I do not do crowd funding myself. Why? Because I am unwilling to donate money to a project to which I will get nothing back from in return. By that I mean, I will not get a return on investment. Sure, they may offer something "free" if I donated, but that is not the same as making a solid investment where I get cash if the project is a success. It is a very personal thing to me to part with my hard earned money without an roe.

MadFrenchie

Sovrath said:

Wellspring said:

"...you need to remember that you’re not making a purchase. You’re making a donation."





I think we have much different definitions of the word "donation".





Donation:


: the act or an instance of donating: such as


a : the making of a gift especially to a charity or public institution


b : a free contribution : gift





The ONLY "donation" tiers are the ones with 0 rewards. Such as the $5 virtual high-five tier that some projects have. If there is a reward given in return, by definition it's no longer a donation (a.k.a. "a free contribution" or "gift").





Kickstarter uses the word "Pledge" for their packages.





Pledge:


1 : to make a pledge of; especially : pawn


2 : to drink to the health of


3 : to bind by a pledge


4 : to promise the performance of by a pledge





A pledge is basically a promise, between two parties. In the case of Kickstarter, it's that the creator will fulfill a reward in a given time period, in exchange for money.





I'm sick of people trying to say that game studios who used Kickstarter, were paid in donations. They were not. I have yet to see a single MMORPG KS use the word "donation" in their KS campaign. They all use the word "pledge".

You are being too literal. No surprise there as it seems that is par for the course for many gamers.



Words like "donation" or "invested" can be used in multiple ways in every day language.



And does it really matter? Because I think the answer is "no, no it doesn't matter."



If I use the word "invested" then I'm investing in "the possibility of a game." If I use the word donate then I'm "donating money with the idea that I might get something out of it or at least help support a project."

No, that's the point, consumers aren't performing etymological research on terms being used by these developers. To expect them to is, quite frankly, ignorant.

You can talk all day about what gamers should do (in this case, not actually take the word pledge literally for what it is defined as, but what you and the devs feel it should mean in the context of a crowdfunding campaign), but it doesn't change the reality of what they will do. Idealism is only useful when it doesn't cause us to ignore reality.

Making decisions or offering advice based on such idealism is largely useless and ineffective.  If you can't look at the reality of things, any opinion you give on what "should" happen is fatally flawed.


At the very least, these large Kickstarter projects should be offering backers a more realistic, less hyped review of the realities of the project.  They won't do that though, because it would dispel the dreams they encourage in the backers to get them to open their wallets.  Coupled with the fact that software development, especially at the stage in which these devs seek crowdfunding, is an incredibly complex and nebulous process, and the campaign is highly prejudiced against backers making a rational decision instead of an emotional one.

Wellspring

Sovrath said:

Wellspring said:

"...you need to remember that you’re not making a purchase. You’re making a donation."



I think we have much different definitions of the word "donation".



Donation:

: the act or an instance of donating: such as

a : the making of a gift especially to a charity or public institution

b : a free contribution : gift



The ONLY "donation" tiers are the ones with 0 rewards. Such as the $5 virtual high-five tier that some projects have. If there is a reward given in return, by definition it's no longer a donation (a.k.a. "a free contribution" or "gift").



Kickstarter uses the word "Pledge" for their packages.



Pledge:

1 : to make a pledge of; especially : pawn

2 : to drink to the health of

3 : to bind by a pledge

4 : to promise the performance of by a pledge



A pledge is basically a promise, between two parties. In the case of Kickstarter, it's that the creator will fulfill a reward in a given time period, in exchange for money.



I'm sick of people trying to say that game studios who used Kickstarter, were paid in donations. They were not. I have yet to see a single MMORPG KS use the word "donation" in their KS campaign. They all use the word "pledge".

You are being too literal. No surprise there as it seems that is par for the course for many gamers.

Words like "donation" or "invested" can be used in multiple ways in every day language.

And does it really matter? Because I think the answer is "no, no it doesn't matter."

If I use the word "invested" then I'm investing in "the possibility of a game." If I use the word donate then I'm "donating money with the idea that I might get something out of it or at least help support a project."

It does matter.

When creators are able to misconstrue funds received via Kickstarter as "donations", it leads them to believe they have no obligation to keep to their end of the pledge agreement. After all, one can't expect anything in return from a simple donation (a.k.a. "a free contribution" or "gift").

If they are to really be "donations", then call them that in the KS campaign -- big bold letters, upfront.

Yet, no MMORPG KS even mentions the word "donation" on their crowdfunding campaign page. Then, after the funds are collected and KS is over, they're now retroactively called "donations"?

It happened first-hand with CoE. It's shady and the ends don't justify the means.

[Deleted User]

The user and all related content has been deleted.

Dauzqul

We all know that most players who donate are only doing it for the exclusive items. Everyone wants to stand out, e.g., "I have something you don't have. Neah neah neah neah neah!"

Once a Kickstarter campaign starts offering packages, then purchases shouldn't be considered donations; they should be considered pre-orders. Buyers should have recourse.

Amathe

blueturtle13 said:

Some of my favorite games of the last 5 years have been a product of crowdfunding, so no I don't think it is a bad thing at all. 

That's cool. Which ones, if I may ask?

Sovrath

Wellspring said:

Sovrath said:

You are being too literal. No surprise there as it seems that is par for the course for many gamers.

Words like "donation" or "invested" can be used in multiple ways in every day language.

And does it really matter? Because I think the answer is "no, no it doesn't matter."

If I use the word "invested" then I'm investing in "the possibility of a game." If I use the word donate then I'm "donating money with the idea that I might get something out of it or at least help support a project."

It does matter.

When creators are able to misconstrue funds received via Kickstarter as "donations", it leads them to believe they have no obligation to keep to their end of the pledge agreement. After all, one can't expect anything in return from a simple donation (a.k.a. "a free contribution" or "gift").

If they are to really be "donations", then call them that in the KS campaign -- big bold letters, upfront.

Yet, no MMORPG KS even mentions the word "donation" on their crowdfunding campaign page. Then, after the funds are collected and KS is over, they're now retroactively called "donations"?

It happened first-hand with CoE. It's shady and the ends don't justify the means.

It's pretty cut and dried. No matter what you call it you are giving money and you "may or may not" get something out of it.

That's all people need to understand. It really is a "let the buyer beware!"

The problem is that people want guarantees when there are no guarantees. I'm not sure why this was ever hard but it is.

MadFrenchie

Sovrath said:

Wellspring said:

Sovrath said:

You are being too literal. No surprise there as it seems that is par for the course for many gamers.

Words like "donation" or "invested" can be used in multiple ways in every day language.

And does it really matter? Because I think the answer is "no, no it doesn't matter."

If I use the word "invested" then I'm investing in "the possibility of a game." If I use the word donate then I'm "donating money with the idea that I might get something out of it or at least help support a project."

It does matter.

When creators are able to misconstrue funds received via Kickstarter as "donations", it leads them to believe they have no obligation to keep to their end of the pledge agreement. After all, one can't expect anything in return from a simple donation (a.k.a. "a free contribution" or "gift").

If they are to really be "donations", then call them that in the KS campaign -- big bold letters, upfront.

Yet, no MMORPG KS even mentions the word "donation" on their crowdfunding campaign page. Then, after the funds are collected and KS is over, they're now retroactively called "donations"?

It happened first-hand with CoE. It's shady and the ends don't justify the means.

It's pretty cut and dried. No matter what you call it you are giving money and you "may or may not" get something out of it.

That's all people need to understand. It really is a "let the buyer beware!"

The problem is that people want guarantees when there are no guarantees. I'm not sure why this was ever hard but it is.

Because the purchase is advertised that way, whether you want to admit it or not.

You're not going to change the crowd's mindset here by waxing poetic.  And they aren't the ones attempting to benefit financially from the transaction anyways, so approaching it by reprimanding them is asinine in the first place.

Phaserlight

blueturtle13 said:

Some of my favorite games of the last 5 years have been a product of crowdfunding, so no I don't think it is a bad thing at all. 

There have been some really great ones. At least one (Massive Chalice) is on my list of 100 greatest video games ever. 

The problem is when developers use crowd funding as yet another aggressive monetization model.

Slapshot1188

blueturtle13 said:

Some of my favorite games of the last 5 years have been a product of crowdfunding, so no I don't think it is a bad thing at all. 

Crowdfunding is a tool.  Not all tools are matched to all jobs. How many of those favorite games you Crowdfunded were MMORPGs?

Red_Thomas

Wellspring said:

I'm sick of people trying to say that game studios who used Kickstarter, were paid in donations. They were not. I have yet to see a single MMORPG KS use the word "donation" in their KS campaign. They all use the word "pledge".

Then, I'm afraid you don't really understand what you're getting into, and are a prime example of why crowdfunding can be bad.

There are promises of rewards for backing, though I think physical rewards are the only ones that have any form of enforcement attached. Otherwise you ARE effectively making a donation. There is no legal requirement for the crowdfunded project to deliver on anything. You're getting digital goods in exchange for a financial transaction IF the game successfully launches.

It's not an investment in the traditional sense, because you have no equity attached. It's not a purchase, because there's no actual exchange of goods and you have no recourse on failed delivery. It's not a loan because you're not getting your money back at any point. You're donating to the project because you want to see it move forward. In exchange, they're thanking you by giving you some unique digital stuff if they're successful.

The fact that folks don't understand that Kickstarter, just like Patreon and GoFundMe, is a donation is part of the problem. You can play with the literal definition of donation all you want, but that doesn't defeat the point that in context, crowdfunding is a donation.