25 October 2018 | 42 Comments
After Monday’s post in which I discussed how some backers view their pledge as an interest-free loan–an opinion with which I respectfully disagree–I had an unexpected idea.
The idea stemmed from a comment I read on the corresponding thread on the Stonemaier Games Facebook page. The comment was about how it’s quite common for Kickstarter projects to deliver after the estimated delivery date, resulting in the backer’s money being tied up in something for an indeterminable amount of time.
In truth, I think this is a bit of a problem on Kickstarter. It’s one thing if I pay $50 and receive my reward within a few months of the estimated date. But it really does start to feel like a loan for the many projects that stretch that delivery date to 4-6 months later, and even more so for the (admittedly few) projects that take years to deliver.
So I have a solution I’d like to propose. It has both pros and cons, but it might have potential for the right creators, and I’d love to hear your thoughts.
For a company that doesn’t necessarily need a wave of up-front funding, what if backers could place a very small pledge to reserve a special copy of the game, and then they would pay the majority of their pledge through a pledge manager when the game is fully produced and ready to ship from the manufacturer?
Basically, the project would have one reward level that would read something like, “$9 – Reserve 1 copy of the game with all stretch goals. Purchase will be completed at the special Kickstarter backer price via the pledge manager when production is complete. Also receive access to the full print-and-play files when the campaign ends. Add $9/game to reserve up to 4 total games.”
To avoid confusion, the “Kickstarter backer price” would be printed on the page, not the reward, showing that if the KS price is $69, you would only pay $60 + shipping via the pledge manager (shipping would be clearly defined on the project page so there are no surprises). Refunds on the $9 would not be an option after the publisher disseminates the print-and-play files.
Stretch goals would work the same as normal, except that the thresholds would be much lower than what we normally see.
It’s not all that dissimilar to how some companies use pledge managers, except (a) a $1 pledge isn’t necessarily indicative of backer demand for the game, as it’s not enough of a sunk cost and (b) those projects always include a full reward level too. Would it be all that bad to include a full-price reward? Possibly not, though if you did, you’re essentially creating the problem that this solution is attempting to solve.
It’s also very similar to what some creators offer to retailers, who are much more likely to back a project if it has a lower impact on their current cash flow. I tried this with Scythe, and out of 106 retail backers, I think only 2 of them didn’t follow through with their commitment.
I talked to Joe at BackerKit to see if this approach is feasible through their system, and he echoed the sentiment about how many projects use the $1 reward level–they’re set up to handle upgraded pledges. He did say that they might have to make a small tweak to their system to ensure that a person who reserved 1 copy of the game doesn’t try to buy 3 copies, given that they’ll be buying from a limited pool of already-produced games at the point in time when they finalize their payment.
If you had multiple reward levels, you could have $5 and a $9 rewards, though I’d worry about $5 backers being frustrated later that they didn’t reserve a deluxe copy (at which point it would be too late, as you would have already made a specific quantity of each type of reward). I think this system may work best when there is only 1 reward.
Backers can have all the excitement and fun of a Kickstarter–including improving the product with stretch goals and getting a special version of it–without fronting a lot of money, given the uncertain delivery date.
The publisher benefits from the buzz of Kickstarter and the demand they gauge from backer pledges. They might attract more backers, as $9 is a much better foot-in-the-door price than $69 + shipping. Also, they may have to deal with less of the negativity that stems from a combination of backer impatience (which is often justifiable) and passion (which is great until it transforms into beast mode), as $9 isn’t enough to stress out about.
Oh, and here’s a fun perk: Kickstarter charges 5%, right? (I’m excluding credit card fees, as the publisher will pay them either way.) BackerKit charges 0% of funds raised in BackerKit. Even if they decided to charge 1% for a special project like this, that could be a monumental difference for a big project.
There are definitely some downsides to this approach:
- The idea of accurately gauging demand is absolutely crucial to any Kickstarter. Using this solution, a publisher could be in big trouble if they had 10,000 backers but only 5,000 of them decided to complete their pledge. However, since you’d be presenting backers with a finished, fully realized game instead of an in-progress concept, you’d probably have most backers increasing their pledge. There’s also the sunk-cost fallacy in effect.
- It requires the publisher to have a potentially significant amount of cash on hand to afford the first 50% of the manufacturing cost. Though it may not be as bad as you think: For 10,000 games that cost $15 each, you’d pay half ($75,000) up front, which would actually be covered by 10,000 pledges at $9 each (plus some extra cash for art, graphic design, moulds, etc).
- Backers might be confused by the method, as it’s always risky to try something new. It requires you to educate backers on something they’re not familiar with, and you might have some backers who think they’re entitled to the entire game for just $9.
- The funding total might look relatively small, which could matter to potential backers who visit the project without fulling understanding how it works. It would not be a million-dollar project, at least not on the Kickstarter page.
What do you think about this idea? Is there a key element to human psychology I’m not accounting for? I’ve posted a poll below to help provide some level of quantitative data.
If you answered $69 today, I’d love to know why in the comments.
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