2 October 2017
Would Batman use Kickstarter…and only Kickstarter?
Stonemaier Games’ final Kickstarter campaign was nearly 2 years ago. We now only sell our games to distributors, and they sell to retailers, and retailers sell to consumers. This is the traditional model of game publishing.
However, the polar opposite of this method has been used with great success by a few companies who only sell directly to consumers via Kickstarter (or their websites/Amazon). A recent example of this is the reprint/expansion campaign for The 7th Continent, which has already raised $2.2 million in 1 week on Kickstarter.
On Friday, Tabletopgaming.co.uk reported that Monolith Edition, the studio that burst onto the scene with a $3.3 million Kickstarter campaign for their Conan game, has decided to limit sales of their upcoming Batman game to Kickstarter. After reading and participating in a few threads about the topic on Facebook, I reached out to Monolith to get some details, and I appreciate their quick response. Here’s what’s happening (this is directly from Monolith, not the Tabletopgaming article):
- Batman: The Boardgame really will be exclusive to Kickstarter. That is, Monolith won’t be selling it to anyone off of Kickstarter, though their hope is to follow up the first campaign with a reprint/expansion campaign in the future.
- The primary reason for their decision is related to the business model of traditional publishing and their desire to maintain a high level of quality. More on this in a minute.
- The rumors that their Batman license limits them to crowdfunding are NOT true.
- Monolith doesn’t plan to offer a retailer reward on their Batman Kickstarter campaign.
So let’s get to the heart of this. Why would a publisher choose to limit themselves to Kickstarter or direct orders? While it’s very different than what Stonemaier does, there are some valid reasons motivating this strategy:
- Quality/Price: These two are intrinsically tied together. Say I have a game that costs $40 to make. That’s a really high manufacturing cost, but I want it to have an abundance supremely beautiful components. To sell it via the traditional model, this game would require at least a $200 MSRP because distributors will buy it from me at a 60-65% discount ($80 or $70). That may seem like a nice profit margin, but if I want to reprint the game, at best I break even (until I eventually decide not to reprint the game). And this doesn’t even factor in sunk costs like art, graphic design, 3D modeling, licensing fees, etc. By selling directly to consumers, it allows Monolith to create a KS MSRP that is more appealing to consumers than a retail MSRP, and they don’t have to sacrifice quality.
- Risk Mitigation and Demand: The numbers I mentioned above for the traditional publishing model apply for any type of game, not just super expensive games. However, several levels of risk are amplified when you’re making a game with a $40 manufacturing cost versus a $5 game. If you make 5,000 extra games for distribution and they don’t sell, you’re losing $200,000 instead of $25,000. This is why Kickstarter is so helpful for determining the demand.
- Retailer Cash Flow and Liquidation: Eric H on Facebook translated a story shared by Monolith on Tric Trac about their experiences releasing Conan via traditional distribution. Here’s what he said: “They tried to sell some through distribution and retail at cost because distribution and retailers asked for it, and not only did they lose some money on these copies, some retailers thought it was selling too slow and cut prices to liquidate it. This hurt the whole market, and burned retailers, distributors and Monolith in the end.” Retailers must sell games to have the cash flow to buy more games and pay their bills. So if an expensive game is sitting on a shelf for months (or if they over-order a game), they need to figure out a way to turn that game into cash. If a retailer invests $100 to stock a $200 game, that’s a high-risk proposition–if it doesn’t sell quickly, the actions they may need to take could adversely affect everyone involved.
Even though Monolith is getting a lot of attention about their choice to only sell direct, they’re far from the first company to do this. There’s The 7th Continent, Kingdom Death: Monster, Mechs vs. Minions, and Fowers Games (which has a number of smaller games, though he does sell directly to retailers too if they contact him).
As I told Monolith, I respect their decision, even though it’s very different than my methods (I’d much rather sell 1,000 each to 10 distributors than coordinate everything that goes into selling, managing, and shipping 10,000 copies to 10,000 people…I’ve tried it, and it’s not for me).
However, the one reason I’d ever consider returning to Kickstarter would be if I had a game that cost $30-$40 to make. I would have a really hard time asking people to spend $150-$200 on a game via retail when I could sell it to them directly for $99 + shipping.
I would do some things a little differently than Monolith, though. Here’s how I’d do it:
- I would offer retailers the opportunity to pledge a little lower than the individual consumer price, as I wouldn’t want to alienate retailers for my other product lines.
- I would be very clear that the product is not exclusive to Kickstarter, for one simple reason: excess inventory. If I have 10,000 backers and I make exactly 10,000 games, I’m screwed, because at least some of those games are going to be lost, stolen, or damaged during the fulfillment process. I would probably make 11,000 games instead. But when fulfillment is complete, I’ll probably have some extra games, and I’d like the opportunity to sell them (if I told backers the game is KS exclusive, I would be breaking that pact by selling those excess games).
- I’d run a reprint campaign about a month after the game is delivered to backers. This is exactly what The 7th Continent did: After they fulfilled their first campaign, backers started playing the game and talking about it, and other people realized that they wanted a copy too. Since the game isn’t in retail, there’s no way to get it…but because of the reprint campaign, people have the chance to get a copy of their own.
As I’ve seen on Facebook, this is a divisive topic. I’d love to hear your thoughts in the comments, but please be respectful to anyone who chooses to engage in this conversation. For my fellow creators: Are there certain types of products that you would limit to Kickstarter despite having a traditional retail strategy for other products? For my fellow backers: How does this strategy make you feel?