Obsidian's ideas for a new Kickstarter (3rd Part RPS interview)

[rjshae]

Feargus' comments don't really bother me much.  Personally, I've never viewed Kickstarter as a viable, long-term solution for financing games.  I think if you are Kickstarting all of your games, that means your company has a real weakness when it comes to sustaining a business model.  

 

I'm not following your logic. If you, say, use Kickstarter to finance games that then sells like hot cakes and makes a profit, how is that a problem sustaining a business model? Magazines use subscriptions (and advertisements) to fund their publications and, as a business model, it worked fine for many decades.

[Darth Trethon]

 

Feargus' comments don't really bother me much.  Personally, I've never viewed Kickstarter as a viable, long-term solution for financing games.  I think if you are Kickstarting all of your games, that means your company has a real weakness when it comes to sustaining a business model.  

 

I'm not following your logic. If you, say, use Kickstarter to finance games that then sells like hot cakes and makes a profit, how is that a problem sustaining a business model? Magazines use subscriptions (and advertisements) to fund their publications and, as a business model, it worked fine for many decades.

 

If they need it and they deliver I'll keep supporting them on Kickstarter but I think I see his point....or at least part of it. With Kickstarter based games Obsidian will be able to keep the profits from individual sales for what is likely the first time.....I very much hope to see them reach unprecedented success once the game releases. This success would ideally bring them very healthy profits so that they can continue to make games on their own independent of publishers and without needing the help of Kickstarter anymore.

 

Nonetheless as I mentioned above, as long as the games are good they'll have my support on Kickstarter as well if they need it.

[Lephys]

^^ It's hardly any different from the amount of importance now placed on pre-orders for games. It's not quite the same thing as a Kickstarter (in which the game is either funded, or the development doesn't really officially begin, pretty much), but, still. It's really no different from securing the funds for any project. It's just from a different source. I mean, when publishers make a game, they don't just start with no money and hope the game sells well after it's done so they can pay for its development. And, with Kickstarter, the people initially funding the game are the same people to which the game has been targeted, instead of just some random people who might have no interest in gaming whatsoever, but are interested in funding a business venture. So, it's kind of a win-win, there. "Sure, I'll give you $60. I was going to do that later to buy the game and play it anyway."

 

Not really so strange of a business model.

Edited December 19, 2013 by Lephys

[talharbash]

I already posted about how I won't back episodic content but I wanted to chime in with one more thought.

 

Why change something that's very clearly working for you? You raised almost four million dollars. I realize from your other thread about raising more funds for a stretch goal that since:

 

(1) People appear to expect more out of this project in terms of wilderness areas and companions.

(2) You had some difficulty budgeting.

 

Instead of changing your funding model, which frankly is working, why not change the way you budget, your tools and pipelines to be leaner? I'll happily back more if I thought you delivered on time and on budget. I'm willing to live with a slightly smaller world and story this time around. I figure most people would.

 

Going episodic is changing your funding model. It seems to me, and I know this is bold, that you want to squeeze blood from a stone.

[decado]

 

Feargus' comments don't really bother me much.  Personally, I've never viewed Kickstarter as a viable, long-term solution for financing games.  I think if you are Kickstarting all of your games, that means your company has a real weakness when it comes to sustaining a business model.  

 

I'm not following your logic. If you, say, use Kickstarter to finance games that then sells like hot cakes and makes a profit, how is that a problem sustaining a business model? Magazines use subscriptions (and advertisements) to fund their publications and, as a business model, it worked fine for many decades.

 

 

Sort of.  Actually, subscription costs in many cases don't bring in much revenue.  What generates money for magazines is selling advertising space.  Magazines don't want you to subscribe because you are a guaranteed source of income (though you are).  They want subscriptions so they can tell advertisers "This is how many eyeballs are on our magazine every month/week/quarter!"  In the long run, subscriptions earn many magazines only a modest amount of revenue.  One of the greatest magazines of the 20th century, Life Magazine, went broke not because they didn't have subscribers -- they were the most popular magazine in the world, at one point! -- but because the magazine was designed to appeal to so many different demographics. Advertisers eventually stopped buying ad space for fear that their ads were not going to the right targets.  Marketing is all about targeting your ads towards a chosen demographic, and "everyone!" is not a demographic.  Hence, Life magazine went down the drain as advertisers chose to buy space in more specific venues.  

 

Anyways, that's kind of a good segue into my larger point.  The pay-up-front model doesn't necessarily always work.  And when it comes to products like games, I'm pretty sure the shine will wear off eventually, and people will get tired of fronting projects.  The other thing to consider is that if the studio wants to grow (and it should!) they will need to look to alternative sources of funding -- whether bringing in investors, or simply hitting it big time with a monstrosity like Blizzard did with WoW.  That source of funding can't be Kickstarter money.  It is not reliable enough, and further it doesn't seem to leave much cash in the bank.  That is a dangerous way to operate.

Edited December 19, 2013 by decado

[Lephys]

The problem with investors is, for every dollar you get up-front from an investor, you've got to earn that much more money above your margin just to make them happy. i.e. if you get 30 million from investors, well... you can't just make a 30-million-dollar quality game instead of a 4-million-dollar quality one. You've got to make a game that earns you enough money to get them back their money PLUS profits, and for there to be money left over for you to have your profits, too. If PoE ends up making 7 million dollars, then that's 3 million above the 4-million cost of making it. Whereas, if they'd gotten investors, who couldn't care less about the game, as long as it makes profits and they get back more than they put in, they'd owe back money.

 

Basically, this causes a problem at some point, for certain games, because, there are only so many people who want to play a particular type of game. Take Civilization. If you spend 50-million dollars making Civilization, you've got to sell so many copies of the game that you earn much more than 50 million in revenue, so that you can pay your investors' returns, THEN still have made a profit yourself. Meanwhile, only so many people in the world are going to buy Civilization. Doesn't matter how good of quality it is.

 

And, as for the shine wearing off... If the shine wears off, then the Kickstarter isn't successful, and development doesn't even properly begin, and you move on to some other option. If they just-plain can't make, for example, isometric-style party-based RPGs anymore, then they can't. If there's no demand, there's no demand. Getting a bunch of investors doesn't help that. Because, if enough people don't want to Kickstart a game, there probably aren't enough people out there to want to buy it if it was funded any other way (again, to satisfy investors AND developer profits). It's not 1:1, obviously, but out of the total number of people interested in paying money for a given product (that's not even a necessary product, mind you), some percentage of them is going to be willing to fund it up front to prevent it from never being created.

 

Here's an experiment: Put the next Call of Duty game on Kickstarter, and tell the populous "If you don't help us hit 100 million dollars, there won't be another Call of Duty game" and see how many people fund it.

[Darth Trethon]

The problem with investors is, for every dollar you get up-front from an investor, you've got to earn that much more money above your margin just to make them happy. i.e. if you get 30 million from investors, well... you can't just make a 30-million-dollar quality game instead of a 4-million-dollar quality one. You've got to make a game that earns you enough money to get them back their money PLUS profits, and for there to be money left over for you to have your profits, too. If PoE ends up making 7 million dollars, then that's 3 million above the 4-million cost of making it. Whereas, if they'd gotten investors, who couldn't care less about the game, as long as it makes profits and they get back more than they put in, they'd owe back money.

 

Basically, this causes a problem at some point, for certain games, because, there are only so many people who want to play a particular type of game. Take Civilization. If you spend 50-million dollars making Civilization, you've got to sell so many copies of the game that you earn much more than 50 million in revenue, so that you can pay your investors' returns, THEN still have made a profit yourself. Meanwhile, only so many people in the world are going to buy Civilization. Doesn't matter how good of quality it is.

 

And, as for the shine wearing off... If the shine wears off, then the Kickstarter isn't successful, and development doesn't even properly begin, and you move on to some other option. If they just-plain can't make, for example, isometric-style party-based RPGs anymore, then they can't. If there's no demand, there's no demand. Getting a bunch of investors doesn't help that. Because, if enough people don't want to Kickstart a game, there probably aren't enough people out there to want to buy it if it was funded any other way (again, to satisfy investors AND developer profits). It's not 1:1, obviously, but out of the total number of people interested in paying money for a given product (that's not even a necessary product, mind you), some percentage of them is going to be willing to fund it up front to prevent it from never being created.

 

Here's an experiment: Put the next Call of Duty game on Kickstarter, and tell the populous "If you don't help us hit 100 million dollars, there won't be another Call of Duty game" and see how many people fund it.

No, you got this one wrong. The profits off a game don't go to the developer if a publisher is involved. The publisher hires or contracts the studio to make the game so the publisher pays them the salaries and additional costs they agree on and that's it. When the game is released, however good/bad it does, it's all on the publisher.....if the publisher spent 20 mil on the game and it makes 100 mil in profits they keep the profits while if the game goes bust the publisher is left with the financial loss but the studio that actually made the game won't be shut down(unless it's owned by the publisher in which case it could be, for example EA could choose to shut down BioWare) although their reputation may be damaged preventing other publishers from hiring them....but they never pay anything back to the publisher regardless. If the actual developer ever sees any of the profits it's only a tiny amount in the form of a bonus or a small percentage of the profit.

 

Kickstarter allows the developers to keep their intellectual properties and all the profits a game makes so they are properly awarded for their efforts and if a game does really bad then they can try to return back to kickstarter but it largely depends on how well they pleased their backers and if they damaged their trust and reputation with the game that didn't do so well. So generally speaking everyone will be much happier when funded projects go well. Honest and skilled developers will really succeed through Kickstarter I think.....I am really happy with both Obsidian and inXile right now and for the foreseeable future they sure have my support.

Edited December 19, 2013 by Darth Trethon

[Karkarov]

Here's an experiment: Put the next Call of Duty game on Kickstarter, and tell the populous "If you don't help us hit 100 million dollars, there won't be another Call of Duty game" and see how many people fund it.

Just as an aside if this happened the game would get made, but not because of kickstarter.  Most people would see that and call "BS" (because it is) and not back it since they know that game will be made regardless.

 

That said Kickstarter is not where you want to stay.  The gaming community only has so much money, and while Eternity got 4 mil that is literally a drop in the bucket compared to the budget of a game like Skyrim.  Heck I am willing to bet the South Park Stick of Truth game probably has a higher budget too.  You also need to be aware that 70+ backers probably already own the game.  Some may buy it again at release to be extra special helpful, but they will be the exception not the rule.  As my badge indicates I have already dropped over 100 on Eternity, I am not buying a retail copy at release. So also consider that fact.... around 70k potential buyers probably won't be buying at release because they already own it.

 

To throw this out there Baldur's Gate 2 has sold over 2 mil copies lifetime supposedly...  But that's over how many years now?  70k is actually 3.5% of 2 mil.  They don't need sales in 10 years they need sales in the first 6 months.  70k will likely be a noticeable piece of the pie unless this game vastly out performs all the IE games.  Kickerstarter is very very risky and if Obsidian can afford to not use it on their next Eternity release than they would be insane not to self fund. 

 

Food for thought... 70k sales at 59.99 (the asking price for the wasteland 2 beta on steam) = 4.1 million dollars.  That's not even close to the total number of backers either since it doesn't include paypal and I am even rounding kickstarter down.

[Wolfenbarg]

I hope these games aren't going to be full price at release. I can't imagine the average user spending 60 dollars on a throwback game. 

 

I also wouldn't call Kickstarter totally viable because it prevents a studio from taking risks. Transparency can be a lot of fun, but it can potentially be a ruining factor. Remember when elements of Half Life 2 were leaked on the internet in an unfinished state and the game was totally blasted by players despite not even being finished? Valve ended up scrapping a lot of that material and remains resentful of the event to this day. Similarly, we have seen a few elements of this game that were outside of our comfort zone and saw some vocal elements of the community get very angry about said details. If future games are self financed, we won't have to see them defend themselves over unfinished material and just enjoy games they wanted to make. I think that's a much more desirable end goal than seeing them rely on the community for years to come. We'll likely never see anything BUT Black Isle throwback games if that's the case.

[Darth Trethon]

I hope these games aren't going to be full price at release. I can't imagine the average user spending 60 dollars on a throwback game. 

 

I also wouldn't call Kickstarter totally viable because it prevents a studio from taking risks. Transparency can be a lot of fun, but it can potentially be a ruining factor. Remember when elements of Half Life 2 were leaked on the internet in an unfinished state and the game was totally blasted by players despite not even being finished? Valve ended up scrapping a lot of that material and remains resentful of the event to this day. Similarly, we have seen a few elements of this game that were outside of our comfort zone and saw some vocal elements of the community get very angry about said details. If future games are self financed, we won't have to see them defend themselves over unfinished material and just enjoy games they wanted to make. I think that's a much more desirable end goal than seeing them rely on the community for years to come. We'll likely never see anything BUT Black Isle throwback games if that's the case.

These "throwback" games are far more exciting than anything I've seen come out of the AAA industry for a very long time. Just watching the Wasteland 2 beta gameplay on youtube it seems quite clear these games will be A LOT better than any grand-selling title we'll see for a long time. Don't get me wrong I love games like The Last of Us, GTA V, Assassins Creed IV and so on as much as anyone else but they just don't provide the amazing feeling of exploration of games like these ones. Torment, PoE and Wasteland 2 go far beyond anything I'd expect of a AAA game.

 

The main reason why they aren't $60 is because they'll mainly be digital releases only outside of the KS backers and slacker backers that get physical versions before release.

[Epic Nick]

So the idea behind pushing size and scope I like that. I feel that is what DA:O could have moved towards. Then my heart was ripped out because someone decided (and I took this quote from the link in the original post) " “We have other ideas too,” he enthuses. “Like Eternity has a big party size, but what happens if we render in close and have a smaller party? Make it more about the characters and less about the tactics? " That is the idea behind DA2 and Inquisition. PLEASE do not do that to these epic and long standing games.

[Gyges]

I want ma expansion pack first.

[Lephys]

You guys take everything I say so far out of context.

 

@Darth Trethon:

 

Nowhere in any of my examples was there a publisher. A publisher is functionally (among other things) an investor. They supply a lot of money and resources for the game to get developed, and then get a bunch of extra money when it makes a profit. So, you're right, except in that I was somehow wrong about publishers, as I wasn't even talking about them. Otherwise, correct.

 

@Karkarov:

 

Perhaps this was my fault for not being specific enough (but, I just try to keep my word count at least under 2,000 per post, haha), but, by "you" I meant "the people actually making Call of Duty." I meant, hypothetically, Kickstart the next Call of Duty game, and really, truly, actually, don't make it if it doesn't get funded Not "one of us in here, pretend the next Call of Duty game is going to be Kickstarted and won't get made if it doesn't reach its Kickstarter goal." Whether or not people believe it is irrelevant to the point of that. IF you put it on Kickstarter and funded it up front or didn't make it at all, and IF everyone knew that and that's just how it was done, then it wouldn't just start failing sheerly because of the process.

 

The argument was that Kickstarter isn't a legitimate, long-term business model for a series of products from the same developer. So, my comparison was to the process itself. If people knew they needed to fund Call of Duty up front for it to get made, then I bet you money they'd all jump onto Kickstarter and fund the crap out of it. That was the point.

Edited December 20, 2013 by Lephys

[rustypup]

The gaming community only has so much money, and while Eternity got 4 mil that is literally a drop in the bucket compared to the budget of a game like Skyrim. 

 

Wait. Wait. Wait.

 

If the "gaming community" isn't buying the games, who is?  

[Silent Winter]

 

The gaming community only has so much money, and while Eternity got 4 mil that is literally a drop in the bucket compared to the budget of a game like Skyrim. 

 

Wait. Wait. Wait.

 

If the "gaming community" isn't buying the games, who is?  

 

Well, Santa Claus better be buying me a gold-box, GOTY, double-platinum, box copy of PE or there'll be no sherry&mince-pie next year

[Mor]

The argument was that Kickstarter isn't a legitimate, long-term business model for a series of products from the same developer.

I completely agree, I'll go even further and say it's also unwelcome model. Although it might not be the best place to discuss why, though shall not bite the hand that feeds

[Lephys]

 

The argument was that Kickstarter isn't a legitimate, long-term business model for a series of products from the same developer.

I completely agree, I'll go even further and say it's also unwelcome model. Although it might not be the best place to discuss why, though shall not bite the hand that feeds

 

 

I'm confused now. Do you agree with me AGAINST that argument, or do you agree WITH that argument? I might've been too vague when I didn't specify that "the argument" was the one I was arguing against. 8P

[Mor]

Opps, I completely agree with that argument, and as it turns out I complete disagree with you

Edited December 20, 2013 by Mor

[decado]

 

The gaming community only has so much money, and while Eternity got 4 mil that is literally a drop in the bucket compared to the budget of a game like Skyrim.

 

Wait. Wait. Wait.

 

If the "gaming community" isn't buying the games, who is?

 

Terms like "the gaming community" probably need to go away, as they are needlessly divisive. We never talk about "the book reading community" or the "movie going community" as if they are these separate groups of people who do things different from the rest of us. I read books and go to the movies, but I don't feel like I'm part of either "community."

 

A lot of people play games nowadays, and the spectrum of games that people do play is only getting broader. I think it is a mistake to assume that a game like PoE -- even though it is a "niche" product -- is not going to have more mainstream appeal. I think it will. In fact, it probably has to, if Obsidian wants to make any real money.

Edited December 20, 2013 by decado

[Lephys]

Opps, I completely agree with that argument, and as it turns out I complete disagree with you

 

No worries. I could've made it clearer that "the argument" I was referring to was actually the one I was arguing against.

 

As for the argument, I'm not going to say it's totally definitely 100% going to work if they were to just use Kickstarter for the next 10 years to make games, but, I honestly don't see why the sheer process of making them like that is any less feasible than the "get a bunch of non-crowd-funder investment capital to make our game, then sell as much of it as possible after it's done to make all our money and make this project worth it" model that's used most today.

[Mor]

As for the argument, I'm not going to say it's totally definitely 100% going to work if they were to just use Kickstarter for the next 10 years to make games, but, I honestly don't see why the sheer process of making them like that is any less feasible than the "get a bunch of non-crowd-funder investment capital to make our game, then sell as much of it as possible after it's done to make all our money and make this project worth it" model that's used most today.

I agree that compared to going the publisher way, kickstarter is great funding method for the developers, in fact its a low risk gold mine. However, from the consumer side its worst case of pre-orders, which I am not happy about and skeptical that they can maintain the same level of funding with only those "premiums" for long. Lets leave it at that Edited December 21, 2013 by Mor

[Lephys]

I agree that compared to going the publisher way, kickstarter is great funding method for the developers, in fact its a low risk gold mine. However, from the consumer side its worst case of pre-orders, which I am not happy about and skeptical that they can maintain the same level of funding with only those "premiums" for long. Lets leave it at that

I appreciate the elaboration, and... well, fair enough.