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The Confusing Costs of Crowd-funding Campaigns

When Shenmue 3 was announced at E3 this year, the fan response was overwhelming. The game’s Kickstarter campaign was the fastest thus far to reach the $1 million mark, and the $6.3 million it ultimately raked in well exceeded its $2 million goal. However, it seems this sizable sum is not quite enough for series creator Yu Suzuki’s liking. In a recent announcement, he expressed a desire for more money to achieve his true vision for the long-awaited successor to Shenmue 2. More money? Isn’t $6 million enough?

No, it’s not. Compare it to what the first two Shenmue games cost a decade and a half ago. The original Shenmue exhausted an unprecedented $47 million. That figure reportedly covered some of Shenmue 2’s development as well, with conservative estimates placing the sequel’s budget around $23 million. Factoring in inflation, those figures comes out as $63 million and $30 million respectively - that’s a whole lot of money for games that by today’s standards would be considered ugly, clunky messes. There’s no question that current fans expect Shenmue 3 to be bigger, bolder, and more beautiful than its forebears, yet it’s supposed to achieve this with a budget 1/5th the size? The cost of development tools might have come down over the years, but the same cannot be said for personnel costs like voice acting, graphical design, and music composition. We gamers expect more now, so it’s not surprising that games like GTA and Destiny require hundreds of millions of dollars to flesh out their highly-detailed worlds.


With the Shenmue games being renowned for their scope and freedom, it’s understandable that Yu Suzuki feels he needs more money to do the series justice. But if that’s the case, why was the funding goal for Shenmue 3 set so low? The answer here is similarly clear: most gamers simply don’t know how much games cost to make. Thanks to Kickstarter and its ilk, we have no shortage of numbers to inform us: FTL took in $200,000; Strike Suit Zero raised $174,000; The Banner Saga garnered $723,000. But these figures are misleading. All they represent is the amount pledged by backers; investor support, academic funds government and grants, and out-of-pocket expenses are ignored entirely. The well-known example of Broken Age - aka Double Fine Adventure - pulled in $3.3 million, quite the icing on its $400,000 target. Yet developer Double Fine was forced to repeatedly cut costs, squeeze every penny it had to its name, and eventually release the first half of Broken Age early in order to generate sufficient income to finish the rest.

Broken Age is hardly an anomaly. Shovel Knight, the highly-acclaimed 2D retro-inspired platformer, raised just over $300,000 from its Kickstarter campaign. In truth, that figure was peanuts compared to the true cost of development. Prior to the campaign, developer Yacht Club Games estimated its costs at closer to $1.5 million, but it knew that such a steep goal would be hard to hit. Instead, YCG chose to scrape by on reduced wages, cutting salaries in half and eventually working gratis for five months just to get the game out the door. The $300,000 figure omits all the suffering and sacrifice that made the game possible.

If only crowd-funding campaigns were more open and honest about their budgets, a lot of stress and confusion could be avoided. Take Lab Zero Games, for example. After the release of its 2D fighting game Skullgirls, the studio launched an Indiegogo campaign to add a new fighter to the game’s roster. The pitch made no bones about the true cost of the endeavour: $150,000 for a single new character. Many people baulked at Lab Zero’s audacity, citing entire games that had been built for less. Their outrage was futile: the campaign brought in over $800,000, funding a number of extra characters and stages to boot.


What made the campaign so successful? For one, Lab Zero provided a clear breakdown of the calculations that comprised the $150,000 figure. Staff salaries, QA testing, certification, payment processing fees; a slew of oft-overlooked expenses were exposed in all their naked glory. Fans saw exactly what their money would be going towards, and just how important their support was. This honesty engendered trust and helped backers feel more involved in the development process.

Buoyed by its success the first time around, Lab Zero has returned to IndieGogo for its new game, Indivisible. This time, it’s the whole game that needs support, and Lab Zero has again laid all its cards on the table. The campaign goal is $1.5 million, but that’s not the game’s budget. Publisher 505 Games will chip in an extra $2 million if backers hit the target, a vital injection the game can’t be made without. Should any stretch goals be met, the extra content they promise will be delivered as post-release DLC, to keep from delaying the core game.


505 Games’ involvement is addressed as a crucial advantage, allowing Lab Zero to focus solely on development while 505 takes care of production concerns like QA testing, localisation, and the dreaded PR. And finally, to top it all off, a free prototype of the game is available for anyone to download. The prototype alone cost Lab Zero $250,000 to build, an expense the studio felt was necessary to ensure backers knew exactly what they were buying into.


I may not be the biggest fighting-game fan, but Skullgirls’ art design sure is pretty.

Sadly, Lab Zero is an outlier in its transparency. As it stands, there are too many cases like Red Ash where funding goals are set deceptively low to guarantee the target is met, regardless of whether the game can be made for so little. Or cases where the campaign is used purely as a barometer of interest to earn investor support, rather than a legitimate source of fund-raising. All this deception makes the truth nigh impossible to glean. Why does something like Thimbleweed Park, a point-and-click adventure game that looks like something from the 90s, need as much funding as Republique, a much fancier, flashier, and far more modern take on the same genre?


The truth requires a little digging. Ron Gilbert, co-creator of Thimbleweed Park, released a budget template intended to combat the Kickstarter cost conundrum. Looking at the template, it’s clear that the $500,000 the studio raised isn’t as big as it sounds. In fact, the numbers reveal that Gilbert and his team are sacrificing huge chunks of their salaries just to ensure the game can be made within budget. Much like Shovel Knight, it’s plain to see that Thimbleweed Park is a labour of love rather than pursuit of profit.

While similar data do not exist for Republique, the explanation for its cheaper, yet grander scope isn’t too hard to find. Down at the very bottom of its Kickstarter pitch, developer Camouflaj reveals that the campaign’s purpose is to prove to third-party investors that a sufficient demographic exists in order to secure the full funding necessary to bring Republique to life. That true budget was upwards of $1 million, over twice the Kickstarter target. Only by reading through the entire spiel is it clear that judging Republique and Thimbleweed Park by the same metrics is unfair. The number at the top of the page is a lie, and too many of us are buying into it.


Thimbleweed Park might not be quite as pretty as Skullgirls, but any game where you can use a balloon animal on a dead body has my attention.


Kickstarter, along with its contemporaries, needs to push for greater transparency in its projects. The risk involved in pledging is poorly communicated, and the lack of strict accountability leaves backers at a significant disadvantage should something go wrong. A successful economy cannot survive this way. To prevent the bad apples spoiling the bunch, developers must be encouraged to embrace the open and honest approach. Doing so fosters a stronger connection with backers and helps them to feel invested in the projects they support. At the same time, they will have a better chance of spotting scams and doomed ambitions in advance. Just as many of us like to know where the money we spend on food and clothing ultimately goes, seeing clearly how our contributions will be turned into fully-fledged games would promote a level of critique the crowd-funding scene sorely needs.

Crowd-funding is a powerful tool with plenty of room to grow. Let’s make sure it grows up right.

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