Is $4M enough?

[HungryHungryOuroboros]

I just never understood what a publisher was, what a developer did, etc. I just knew Best Buy sold games that I liked. I also knew that these games were getting more and more expensive every year.

 

Depending on the kinds of games you like, you could find yourself very comfortable in indie game communities. There's a lot of really good works of passion in there, and it has been a big thing since....I'd say Darwinia in 2005, though a lot of people would say later. Buying from Best Buy really limits the kinds of games you have access to.

 

I'm not seeing anywhere that Veeno stated final retail sales indicates any upper limits for the kickstarter model...if it was stated somewhere, I must have missed that.

It makes sense that you'd miss it, it was WAAAAY back on page 2:

 

I have read several articles that were written lately about the crowd funding success of PE, and in a few of them they have interviewed an industry "expert", "insider", or "analyst". The message that these people seem to convey is that while the funding campaigns were exciting and successful, "true" Triple A titles often have budgets of $20M+ and they don't really see this new form of funding as a significant paradigm change in Video game production.

 

I've just realised another incredibly obvious reason why this argument makes absolutely no sense whatsoever.

 

They're saying that you could never achieve a budget such as 20 million dollars via crowdfunding.

 

On the other hand, they invest 20+ million dollars in the development of a game and expect to get more than that amount of money back from the sales of the game (and they usually do).

 

Where does that money they get back come from?

 

From the players, of course - those same ones who participate in crowdfunding.

 

If they invest 20+ million dollars into a game and expect to get even MORE than that back from the players, how can they claim that those same players could never give that amount of money directly to the developer?

[Darth Trethon]

They may build the basic frame for it in 3d but they do not fully flesh it out at that level. That would take a lot more time an money.

 

They do some touch-up in a photo-editing suite (like photoshop) but all of the heavy lifting is done in a 3D modeling environment.

PE itself will be 2d with 3d characters....so the npcs and such will be 3d while the world will be a far better looking 2d environment much like the IE games....Obsidian has said as much in Q&As. The big budgets for AAA games mostly goes in polishing 3d environments and fixing bugs for them.

 

The engine isn't as important as what's being done with it. A graphic calculator can be used for calculus, trigonometry or basic arithmetic. Likewise the game engine is used to create a simpler 2d world that looks beautiful and stunning without the huge budgets tied to newer games that use 3d environments.

[RaccoonTOF]

I'm not seeing anywhere that Veeno stated final retail sales indicates any upper limits for the kickstarter model...if it was stated somewhere, I must have missed that.

It makes sense that you'd miss it, it was WAAAAY back on page 2:

*snip*

 

Ah...I had read that post actually, but I didn't (and for that matter still don't) see how it imposes an UPPER limit on the potential for kickstarter funding. I don't think that the argument was ever that kickstarter funding had the potential to match final SALES, but that it had the potential to at least match the development budget, in part by the lowering of the budgets due to removing a lot of the "middlemen" with the traditional publishing model. And as far as that last part goes, it is very "economically logical" and to claim otherwise just shows a lack of understanding of the economics oneself.

 

Personally, my main gripe is the changing standard of what has to be included to be considered an "AAA" title. Originally (from my best recollection) the terminology referred to games which got positive reviews, both from "formal" sources and periodicals and from players/communities, after the game came out - regardless of platform or specific content. Noone ever tried to claim (that I know of) that an RTS wasn't an AAA RTS because it didn't include deep characterization, or was PC-only. They evaluated the games for what they were, what "role" they filled, and how good of a game they were overall - not forcing specific feature sets (again, for the most part).

 

Now, modern definitions of AAA titles, from both gaming sources as well as financial sources (including such places as Forbes) seem to require a game to be released on PC, Mac, PS3, and XBox at the very least to even be considered - no matter HOW good the core game is. Likewise with being "fully voiced" etc. In my eyes those may be things that are commonly found in AAA titles - but they should not be requirements to be considered an AAA game, nor should they automatically make something an AAA game just because it has all the right "ingredients" if the cooks burned the results. In other words - nothing should ever be able to be an "AAA game" prior to release, and upon release its rating as an AAA game should be dependent on its quality as a game, not on the market share that it reaches.

Edited October 20, 2012 by RaccoonTOF

[qstoffe]

If a AAA title gets you a game like Dragon Age and 4$ million dollars get you a game like BG2, what would you choose?

[HungryHungryOuroboros]

Ah...I had read that post actually, but I didn't (and for that matter still don't) see how it imposes an UPPER limit on the potential for kickstarter funding. I don't think that the argument was ever that kickstarter funding had the potential to match final SALES, but that it had the potential to at least match the development budget, in part by the lowering of the budgets due to removing a lot of the "middlemen" with the traditional publishing model. And as far as that last part goes, it is very "economically logical" and to claim otherwise just shows a lack of understanding of the economics oneself.

Not "imposes", if anything it "raises" the potential bar to ridiculous heights. Retail sales can't be considered potential Kickstarter dollars. There are people who would walk into a store, see KOTOR II on the shelf, see the LucasArts logo and go "Oh, this must be by the guys who made Force Unleashed. I liked that. I should get this." This person's dollars are not, and never will be, potential Kickstarter dollars. If you've ever worked in retail, you'd know that this kind of customer makes up a really big portion of retail sales.

 

Look, consumer product sales may not be my area of focus, but I *am* an Economics major. There are, by necessity, far more dollars in the retail space than there are in the Kickstarter space. You're not going to see a Kickstarter reach $20 million+. You aren't going to see publishers disappear. Kickstarter only works at relatively smaller levels. The audience and inncentives are simply not there for $20 million+. It doesn't exist. It's not going to happen. There is a space between $4 million and $20 million and we don't know how much we can grow from here, but we simply are not going to make anywhere close to enough to make a Dragon Age or Mass Effect through Kickstarter. The concept that we will see a AAA budget come out of crowdfunding is simply ridiculous. It's not going to happen.

 

Now, modern definitions of AAA titles

When someone in the video game industry uses "AAA", they are *always* referring to production budget. It never has anything to do with whether or not the game is good or bad. If someone in the industry says a game is "AAA", they are are saying it's a big game with a large budget, probably across multiple platforms and backed by a major publisher. I've seen fans and gamers use the "really good" definition, but I've always thought that's entirely a fabrication by people who just lacked reading comprehension.

Edited October 20, 2012 by HungryHungryOuroboros

[Loranc]

 

For some reason this came to mind about this talk of AAA titles vs Obsidian.

[Chr1s]

4 millions is nothing compared to triple A titles but i think we have seen more than enough of triples A that turn out being mediocre or overrated and that budget isn't everything just look at Max Payne 3 (riddled with super long cutscenes and if i wanted to watch it i would have bought a movie instead i want to play dammit and that costs a LOT, story was still average and lots of others), Diablo 3 full of flawed design choices, cutscenes again and Mass Effect 3 same here so the point is PE don't need those cutscenes, let us play instead and cutscenes don't necessarily make the story better, Pricy Voice actors, you can find good ones without having pay for the most well known and engine unity may not be the best or most expensive but it is more than good enough so here Obsidian can save a lot of money sure there are other stuff they an save money on too but this is already long enough.

Edited October 20, 2012 by BerZeeerK

[Loranc]

Want to know where most of the money goes for triple A games, then check this out.

 

So how much are these actors being paid to lend their real-world pipes to virtual heroes? According to Screen Actors Guild rules, voice actors can expect to be compensated $760 for one four-hour recording session, reports the Reuters news service . For celebrity voice talent, though, that number can spike exponentially. Speaking to Reuters, Blindlight production company general manager Lev Chapelsky said that some stars have demanded $750,000 for an hour's worth of work, and one voice actor actually received $500,000 for a single session. Chapelsky told Reuters that top talent commonly receives "in the high five figures for a single session."

"It has been a problem lately," Chapelsky continued. "Agents are under the misconception that there's a ton of money to be had for their clients. In a game, the entertainment is about the gameplay. The actor's contribution isn't as important as the gameplay." http://www.gamespot.com/news/mystery-actor-scores-500k-for-game-voice-over-6235172

[C2B]

From Marceror's Interview

 

[Marceror] Will those games likely use the Kickstarter model for funding?

 

[Adam] It really depends on how popular the product ends up being. We really want this game to be a big success. If it’s popular enough we won’t need to use Kickstarter to fund the sequels.

 

 

[Marceror] Might you try to go back to the traditional publisher funding model, if you can prove that this game style has the profit potential to lure a big publisher into supporting it?

 

[Adam] More likely we’ll try to self-publish it, using the profits that we make from selling Project Eternity. If it’s that successful we can make enough money to fund the next title. That’s kind of what we’re planning on doing for the expansion. We’d prefer to self-fund rather than go through the Kickstarter. I think fans enjoy doing it, but it’s a risk to them since they don’t know if the game is going to get made or not. It’s also a lot of work on our end to manage a Kickstarter campaign. So we’d rather be able to self-fund our projects.

Edited October 20, 2012 by C2B

[Veeno]

I'm not seeing anywhere that Veeno stated final retail sales indicates any upper limits for the kickstarter model...if it was stated somewhere, I must have missed that.

It makes sense that you'd miss it, it was WAAAAY back on page 2:

 

<snip>

 

I never mention upper limits anywhere in there.

[Veeno]

My point also relies on budget vs. money people pay for a game.

 

How much of the money people pay for the game gets to the publisher? The price of a brand new "AAA" game is 50 $/€. How much of the 50 $/€ I pay gets to the publisher? Some of it goes to the retailer/distributor, some of it goes to the developers, and some of it goes back to the publisher. How much is that - about 60% or so? (Yes, the developers get only crumbs.)

 

So they invest let's say 20 million dollars. From retail sales, they get back let's say 30 million dollars - a profit of 10 million dollars. Estimating that those 30 million dollars is only 60% of what the gamers all together actually spent on buying the game, the actual total amount the gamers have all together spent on buying the game is 50 million dollars. And I'm not suggesting that Kickstarter could achieve that amount of budget (although I'm not saying that it couldn't, but that is completely beside the point now), but those initial 20 million dollars the publisher invested.

 

The average pledged amount per backer for Project Eternity is 54$ - already over your usual full price of a brand new AAA game. That means that Obsidian got more money from each backer on average than publishers get from each retail sale (even when you take into account some of it going to Kickstarter and Amazon). Much more. From that, the number of backers obviously doesn't need to get as big as the number of people who buy retail games in order to achieve the same amount of budget.

Edited October 20, 2012 by Veeno

[Sensuki]

Well over here it's less than we pay for a retail game. Over the last few years I've gone to dodgy CD-key sites as they are the cheapest option. Even then I've still been bummed out on some of my purchases (Mass Effect 3, Diablo 3, Red Orchestra 2, CS:GO)

Edited October 20, 2012 by Sensuki

[Veeno]

Well over here it's less than we pay for a retail game. Over the last few years I've gone to dodgy CD-key sites as they are the cheapest option. Even then I've still been bummed out on some of my purchases (Mass Effect 3, Diablo 3, Red Orchestra 2, CS:GO)

 

Ah, Aussie.

 

Well yeah, that sucks for you guys.

[Sensuki]

Only if you don't have a credit card

 

Zero point buying a boxed game. You don't even get a jewelled-case anymore.

Edited October 20, 2012 by Sensuki

[Veeno]

The average pledged amount per backer for Project Eternity is 54$ - already over your usual full price of a brand new AAA game. That means that Obsidian got more money from each backer on average than publishers get from each retail sale (even when you take into account some of it going to Kickstarter and Amazon). Much more.

 

By the way, this calculation even takes the assumption that the 30 million $ the publisher got back comes from people who bought the game at full retail price. When you take into account sale discounts and over-the-time price drops, the average amount of money the publisher gets from each retail sale drops even further.

Edited October 20, 2012 by Veeno

[RaccoonTOF]

Not "imposes", if anything it "raises" the potential bar to ridiculous heights. Retail sales can't be considered potential Kickstarter dollars. There are people who would walk into a store, see KOTOR II on the shelf, see the LucasArts logo and go "Oh, this must be by the guys who made Force Unleashed. I liked that. I should get this." This person's dollars are not, and never will be, potential Kickstarter dollars. If you've ever worked in retail, you'd know that this kind of customer makes up a really big portion of retail sales.

 

Look, consumer product sales may not be my area of focus, but I *am* an Economics major. There are, by necessity, far more dollars in the retail space than there are in the Kickstarter space. You're not going to see a Kickstarter reach $20 million+. You aren't going to see publishers disappear. Kickstarter only works at relatively smaller levels. The audience and inncentives are simply not there for $20 million+. It doesn't exist. It's not going to happen. There is a space between $4 million and $20 million and we don't know how much we can grow from here, but we simply are not going to make anywhere close to enough to make a Dragon Age or Mass Effect through Kickstarter. The concept that we will see a AAA budget come out of crowdfunding is simply ridiculous. It's not going to happen.

I'm not arguing that retail sales are not going to be drastically larger than kickstarter funding. Quite the opposite in fact. However, that $20M is not discussing retail sales either - it is referencing the production BUDGET of those AAA titles. And that budget does include the traditional publishing costs, and the markup involved. Therefore, assuming that the same game can be made on a lower budget by removing a third-party publisher (which most every economic model would suggest is possible - cutting out "middle-men" almost always reduces costs and increases per-unit profits) then it follows that the kickstarter funded title could have just as large of a sales volume on a lower initial budget - aka more profit - or, at the least, an equivalent overall profit at a lower sales volume, for the same DEVELOPMENT budget costs.

 

Now, modern definitions of AAA titles

When someone in the video game industry uses "AAA", they are *always* referring to production budget. It never has anything to do with whether or not the game is good or bad. If someone in the industry says a game is "AAA", they are are saying it's a big game with a large budget, probably across multiple platforms and backed by a major publisher. I've seen fans and gamers use the "really good" definition, but I've always thought that's entirely a fabrication by people who just lacked reading comprehension.

Actually - considering that those people in the "video game industry" include reviewers as well as publishers, developers, etc - they are most certainly not ALWAYS referring to the production budget. Or rather, it has not always been so. And it is this difference - that of what it "used to mean" and what it "means today" that I don't understand / disagree with. The whole origination of the term "AAA" was based on ratings - like letter grades in school - not anything to do with how much money went into a production. Yes, on average, those games with bigger budgets tended to get more sales and higher ratings - but it was not a direct result of the extra money, nor a defining aspect of the "category". Somehow, it has become so now, with the result that now cross-platform, extensive voice acting, orchestral scores, etc (things which cost more money) automatically "bump up" the category of a game - and even to the extent of causing a game to lose in the actual ratings if it does not have them, regardless of how well the game is created without those elements.

[Joukehainen]

None the less, for my part, I am pretty confident that a small but talented group of developers like Obsidian, excited to be working on an IP that they OWN, with ambition and efficiency should be able to squeeze every last ounce of value out of that $4M to deliver a fantastic game. However, I believe I still have to be mindful that $4M may be considered a "limited" budget and actively manage my expectations. What do you think?

 

I think we'll get a great game. High budgets don't make for good gameplay - most of my absolute favourite games were made on small budgets (even adjusting for inflation) by today's standards. Sure, there won't be motioncap CGI sequences with oscillating boobs and explosions, but we've already got plenty of sources for that, anyhow.

 

Since we know it's going to be in a BG/PS:T/IWD style, that is, isometric, dialogue-heavy and with tactical top-down view strategic combat, I think we can rest assured that the devs asked for an original sum they thought both plausible for getting funded and what they would require for making the game they envisioned.

 

At almost 4 times that original funding goal, I'm sure they've got lots to work with. Hey, they might not even be sure how the spend the over-funding, yet!

[Andwit25]

Is 4 millions enough ?

 

To make a good game ? Yes defiantly.

To make a triple A RPG game by todays standard ? Defiantly not.

 

And this is a good thing. Nowadays many developers and publishers think that a game can be improved by superlatives. Like the best graphic, the most famous voice actors, ... .

One thing that many big games, especially those in the triple A category, today are missing is a soul since you can´t buy it.

But working with a limited budget, forces a ( good ) developer to focus on what they can do, and not waste time and other resources on superficial stuff like extra shiny graphics and so on.

Often such games are far more rewarding to the player and I really hope that Obsidian will live up to the trust many have put in them and will deliver something that might not look as good as it´s more expensive siblings but will be of much greater worth.

[HereticSaint]

I think anyone who would despoil what happened with this Kickstarter has ulterior motives.

 

Sure, 4 million may not be ground breaking comparative to, "triple A" titles, but it isn't entirely devoid of benefits. I realize people already know this but -- http://www.alteredgamer.com/pc-gaming/49397-what-is-the-difference-between-developers-and-publishers/ is a great example of being free of the bonds of publishers. On top of that, Kickstarter in of itself was good marketing for the game. Also, honestly, who purchases a game now a days based on commercials on T.V.? Sure, publishers may explore other avenues but there's a lot to be said about watching gameplay reviews (On YouTube, for example), as well as other free avenues of advertisement.

 

Looking forward a platform like Kickstarter will only get larger too. I personally absolutely hate social networking such as Facebook, but something like Kickstarter could easily get that huge. A Facebook where people get to fund things that they want and not just accept the closest reasonable compromise provided.

[scipioafricanus]

i think that crowdfunding games ie kickstarter could grow in popularity. For example, if in 2 years time Project eternity is made and its (of course) excellent and brings in a whole load more people and makes 2 million sales. The if Obsidian then announced they were going to make another RPG based on a pirate theme/ancient rome/alien world then the next kickstarter project might well bring in more people and pledges, so it could make $10 million dollars. I was new to this, and I really think it was an excellent idea to cut out the publisher on this one.

[Andwit25]

Looking forward a platform like Kickstarter will only get larger too. I personally absolutely hate social networking such as Facebook, but something like Kickstarter could easily get that huge. A Facebook where people get to fund things that they want and not just accept the closest reasonable compromise provided.

Kickstarter is a bubble. A temporal abnormality that will either burst or fade. Right now it is still a novelty but in a few months when the sensation of newness fades and the first mayor setbacks, like failed and disappointing projects, have occurred the readiness to trade money for glass baubles will fade.

Even today you really need big names or tons of luck to get enough money together and this will not improve with the years.

[Doxy]

Was just wondering the same other day. Is 4m enough to make PE into top notch RPG.

My guess is if a project is successful on Kstarter, they then can show investors that people actually interested in that kind of game and ask for even more money, to finish their game.

[Carlitus]

I don't know if 4$ million is enough. But i think most "triple A games" budget goes to:

 

- CGI. Lots of them.

- Expensive game engines and Middlewares.

- Sub contracting (other compannies works).

- Famous people. Famous actors for voices, musicians like Hans Zimmer.

- "Executives" which takes lots of money and does nothing except talking to media sites like IGN saying "I think my game is one of the best experiences in last years".

- Marketing. I guess a proper AAA game will spend more than 4$ million in propaganda.

- Bad planning.

- New resources (hardware)

- Bad human resources management.

- Charge-off of other corporation projects and resources...

[HereticSaint]

Looking forward a platform like Kickstarter will only get larger too. I personally absolutely hate social networking such as Facebook, but something like Kickstarter could easily get that huge. A Facebook where people get to fund things that they want and not just accept the closest reasonable compromise provided.

Kickstarter is a bubble. A temporal abnormality that will either burst or fade. Right now it is still a novelty but in a few months when the sensation of newness fades and the first mayor setbacks, like failed and disappointing projects, have occurred the readiness to trade money for glass baubles will fade.

Even today you really need big names or tons of luck to get enough money together and this will not improve with the years.

 

This is essentially how Steam is helping indie games. It might not be exactly the same but I'd hardly say it's something that will just, "burst".

[meomao]

I don't know what the future will bring to the game industry: publisher, kickstarter. etc. Who knows? For sure if we look at the music and film business we can guess that beside the big names and the big budgets, internet will make the life easier for the indie cutting the middle man and favouring a direct relationship between customers and developers. The two models will coexist and follow different priorities. Crowdfunding will grow, change and mature: KS in 3 or 4 or 5 years won't be the same anymore. But it could easily estabilish itself as the best tool for middle tier and indie games. Both models will influence each other in one way or the other.

 

Will we be able to finance a so called AAA game with KS? I don't know and honestly I don't even see the point. If you have a good idea for a AAA game, you should not have a lot trouble financing yourself with a publisher (or trying to publish yourself).

 

I just know that Obsidian KS was funded and that they have received nearly 4 time the amount of money they asked as a mean to develop a spiritual successor to the IE games. In a couple of years we hope to get that game.PE has been the most succesfull kickstarter drive to date and that say just one thing: even if we are a niche (and we are) there is money to be made with us and we are enough to deserve a good game.

 

That's incredible in itself if you just stop for a moment and think about it.

Edited October 20, 2012 by meomao