A Question of Revenue

[Natusake]

There is something very important that I would like to address, and I have yet to see anyone else mention this. We know that a niche group of people want cRPG's like this, and Torment, and Wasteland 2 and the like. They will pay dearly for them as we have seen, but thus remains the problem, as I see it. Usually, when one aspires to make a game, they get money from publishers, which goes into the game, the game then making revenue for the publishers, and the developers. That is, publishers give money, developers use money for game, people give money for game.

 

However, when a game is crowd funded, things are pretty much in reverse, except without the publisher. That is, people give money for game, developers use money for game, and again, people give money for game. But let us remember that this is a niche audience. For the sake of argument, let us assume that most of the people who wanted PE have already paid for it by backing it. Since one of the backer rewards is the game itself, and this reward is the most common out of all the rewards, then we can assume that the sales for this game will be very, very poor.

 

Of course, this is making hugely dubious assumptions. The question, however, still stands. Given a kickstarter game with a niche audience, wont the sales of said game be poor because most of the people who would buy the game have back the game already?

[Valmy]

Possibly.  But at least they can be assured to at least break even.

[Marky]

I think it will sell well, assuming Pillars of Eternity gets well received. After all, other kickstarted games like FTL have been very successful.

[rjshae]

In a certain sense it's like an investment; Obsidian will own an entirely new IP that they can continue to use to generate revenue in the future, and which we can hopefully enjoy as gamers.

[bonarbill]

It will sell well enough, even though the people who were interested in the game already invested.  Take at look at the current  #1 game on the Steam top sellers list.  Divinity: Original Sin is another niche indie kickstarter RPG that is selling well enough even after the initial investment. 

Edited June 30, 2014 by bonarbill

[Quadrone]

 For the sake of argument, let us assume that most of the people who wanted PE have already paid for it by backing it. Since one of the backer rewards is the game itself, and this reward is the most common out of all the rewards, then we can assume that the sales for this game will be very, very poor.

 

Of course, this is making hugely dubious assumptions. The question, however, still stands. Given a kickstarter game with a niche audience, wont the sales of said game be poor because most of the people who would buy the game have back the game already?

 

Hahaha, no.

Just because a bunch of turbo nerds like us have head about PoE during the Kickstarter phase doesn't mean the average Steam buyer has ever heard of PoE before.

Wasteland 2 got in the Top 10 (or was it Top 5?) of Steam sales for a while when it went on early access and with the actual release, daily sales and bundles there is still a big sales potential for them there. I know several forums where it seems abundantly clear that on Steam (and GoG too) there are huge numbers of people who almost compulsively buy new games / games that are on sale.

[Sad Panda]

Tend to agree that us backers don't represent the whole of the people who'd potentially be interested in PoE -- just the ones that a) are familiar enough with old IE games to know what exactly was being offered in the kickstarter, and b) are willing to put cash up front. I imagine a lot of the backers are already familiar with Obsidian's other games, as well as their history, making it more convincing to them that the company can actually deliver what it promises -- many others who are interested rather wait and see the final product before purchasing.

 

Meanwhile, there's a whole generation of gamers who have never played the old IE games, and may on casual inspection expect PoE to be a hack-n-slash dungeon crawler, as games dubbed as isometric RPGs have of late been. So far the buzz has mostly been limited to the RPG-enthusiast circles, but once the game is released and word-of-mouth of what it's actually like -- as opposed to pre-release hearsay, which a lot of people quite sensibly pay little heed to -- I'm confident a lot of more casual gamers will pick up PoE, as well. I don't think it will be a smash hit, mind you, but that it will sell at least decently. And as has been pointed out, every bit after the release is net gain that Obsidian can use to fund firther games.

Edited June 30, 2014 by Sad Panda

[Lephys]

Go look at numbers on Steam for purchases of Early Access games, versus the number of purchases after the game has "gone gold," then try to assume everyone who ever wants a game is surely going to give the developers their 30+ dollars 1.5 years ahead of time.

[Kjaamor]

This game is niche and shall sell comparitively poorly, but Obsidian should do quite well out PoE2, which will be an on-rails cover-based shooter.

[Sarex]

I'm still holding at 200k in sales.

[BruceVC]

There is something very important that I would like to address, and I have yet to see anyone else mention this. We know that a niche group of people want cRPG's like this, and Torment, and Wasteland 2 and the like. They will pay dearly for them as we have seen, but thus remains the problem, as I see it. Usually, when one aspires to make a game, they get money from publishers, which goes into the game, the game then making revenue for the publishers, and the developers. That is, publishers give money, developers use money for game, people give money for game.

 

However, when a game is crowd funded, things are pretty much in reverse, except without the publisher. That is, people give money for game, developers use money for game, and again, people give money for game. But let us remember that this is a niche audience. For the sake of argument, let us assume that most of the people who wanted PE have already paid for it by backing it. Since one of the backer rewards is the game itself, and this reward is the most common out of all the rewards, then we can assume that the sales for this game will be very, very poor.

 

Of course, this is making hugely dubious assumptions. The question, however, still stands. Given a kickstarter game with a niche audience, wont the sales of said game be poor because most of the people who would buy the game have back the game already?

 

This is a valid concern and hopefully unfounded

 

If PoE only attracts the KS fans and other people who have basically already bought the game through other pledging systems  then you are right. It would be a financial disaster for Obsidian because there profit would be almost nothing and the whole IP around this new fantasy world would die an early and unfortunate death

 

Buts that's highly unlikely as mentioned by others. The Obsidian marketing engine is alive and well and there is loads of awareness around PoE.  So the real revenue generation will come from new purchases of the game when its released. Despite the fact its a "niche " game many people who love fantasy RPG will buy this game. I am confident about the sustained future of PoE

 

But lets be clear, despite what some people think of course Obsidian wants to make decent revenue on new sales. This is in  fact mandatory. Why wouldn't any company not want to do that?

[teknoman2]

In a certain sense it's like an investment; Obsidian will own an entirely new IP that they can continue to use to generate revenue in the future, and which we can hopefully enjoy as gamers.

and this is the most important part. by having an IP of their own, they can use it to make any kind of game they want within that setting (with proper adjustments even a AAA multiplatform game)

[Infiltrator_SF]

(with proper adjustments even a AAA multiplatform game)

 

Reading those words, I'm struck with an irrefutable sense of dread.

Edited July 1, 2014 by Infiltrator_SF

[dukeofwhales]

Grimrock did 600k in sales (admittedly, some of them were heavily discounted).  PoE, a self-professed Baldur's Gate successor, is considerably less niche than Grimrock, so I think it will be fine.  I think sales will be 1 million after a year on the market, but if they're half, or even a quarter that it is still more than enough to fund a sequel.

Edited July 1, 2014 by dukeofwhales

[BruceVC]

Grimrock did 600k in sales (admittedly, some of them were heavily discounted).  PoE, a self-professed Baldur's Gate successor, is considerably less niche than Grimrock, so I think it will be fine.  I think sales will be 1 million after a year on the market, but if they're half, or even a quarter that it is still more than enough to fund a sequel.

 

Yeah, I'm going to be cautiously optimistic and say a year after release I also  expect 1000k sales ( 1 million). I am basing this on your sales numbers for Legends of Grimrock which really is a niche game in the fantasy genre

 

Of course this is very dependent on PoE  being a good game and receiving favourable reviews from the prominent gaming websites

[Elzarath]

I'm interested in the game and frequently visit these forums but haven't backed it yet. Same with Wasteland 2. No doubt there's others like me. I don't think you can accurately predict how much a game will sell based on the number of backers.

[BruceVC]

I'm interested in the game and frequently visit these forums but haven't backed it yet. Same with Wasteland 2. No doubt there's others like me. I don't think you can accurately predict how much a game will sell based on the number of backers.

 

No you absolutely can't and I don't think anyone is suggesting that. I'm in the same boat with W2, I didn't back the game but I will be buying the  final released product

[Karkarov]

Let's assume for a minute the game does sell poorly.

 

So what?

 

Obsidian didn't have to fund the game.  You have to remember in the publisher model it is important a game sells a lot.  Not because it makes the developer a ton of money... because it makes the publisher a ton of money.  The publisher then uses these profits to fund your sequel.  No profits, no sequel, and maybe no more publisher deals at all.

 

With Kickstarter Obsidian doesn't have to pay anyone back.  Every single post release sale is automatic profit.  They don't need to sell 1mil copies to recoup their investment, they didn't invest anything.  (well they did but we don't know how much and it isn't the point )  Even if it only sells 100k copies (it will sell more than that) at say... 40 bucks a copy (low ball for these days) that is 4 million dollars.  You know... what the kickstarter made in the first place?

 

Just trust me, they don't need maybe... 200-300k copies to be sold post launch and they will be capable of self funding the sequel.  So unless the games sales totally tank they are in very little danger.  Worst case scenario they (god forbid) have to go back to kickstarter for part 2.  Just remember... the goal for a developer isn't to become their own publisher, it is to wake up tomorrow and have another game to develop and the money to do it so they can pay their checks.  No matter how this plays out Obsidian will have the money for Eternity 2 one way or the other.

Edited July 1, 2014 by Karkarov

[Blarghagh]

 

I'm interested in the game and frequently visit these forums but haven't backed it yet. Same with Wasteland 2. No doubt there's others like me. I don't think you can accurately predict how much a game will sell based on the number of backers.

 

No you absolutely can't and I don't think anyone is suggesting that. I'm in the same boat with W2, I didn't back the game but I will be buying the  final released product

 

 

I have this for PoE - when I woke up the night after the kickstarted opened, it already reached its goal. They didn't need my meager amount of available funds backing it to make it, so I decided I would buy it when it gets released so they'll make a profit out of it.

[Natusake]

My main concern is not that Obsidian will lose money, just that they will not get enough money to make another game as great as the original (if it does turn out to be great, which I surely hope it will). If Obsidian breaks even, it would be impossible to continue the franchise on account of the lack of revenue. Only if a publisher gets involved will they be able to make a second game if this is true. But of course, problems with publishers abound.

 

Still, I'm glad people have a positive outlook; I hope I'm completely wrong. I'm really excited for this game, so hopefully Obsidian will get the money they need to make more games. There are very great things on the horizon. With inXile and Obsidian, we are seeing a renaissance of cRPGs. If these games succeed, then think of the future. Think at the different viewpoint publishers are going to look at these games. Think of all the new amazing things coming out.

 

It tingles my bones, but, will it happen?

[Lioness]

There is something very important that I would like to address, and I have yet to see anyone else mention this. We know that a niche group of people want cRPG's like this, and Torment, and Wasteland 2 and the like.

 

I am unsure about the "niche" thing.

 

"Divinity: Original Sin", a similar cRPG or at least one that could appeal to the same demographics seems quite popular. For example there was 3 threads on the front page of /s/games, talking about that game yesterday, and the gamer population of that subreddit is quite diverse.

[Karkarov]

My main concern is not that Obsidian will lose money, just that they will not get enough money to make another game as great as the original (if it does turn out to be great, which I surely hope it will). If Obsidian breaks even, it would be impossible to continue the franchise on account of the lack of revenue. Only if a publisher gets involved will they be able to make a second game if this is true. But of course, problems with publishers abound.

Uh.... you understand it is impossible for them to break even right?  They didn't fund the game, it was done through donations.  Even if it flops and only sells 5 copies they still lost nothing.  All they need is one copy to sell post release and they have made profit.  Also... it is going to sell plenty of copies.

[Osvir]

This is the steam chart for Divinity: Original Sin, it got a full release yesterday (June 30th)
http://steamcharts.com/app/230230

It is also the best seller on Steam currently.

Edited July 1, 2014 by Osvir

[Hiro Protagonist II]

I think KS is a great way for Obsidian to create new IPs. Obsidian creates new IP and presents on KS and the backers help fund that IP. Obsidian now has a fully realised IP that they own and can do anything with. I would've thought Obsidian would have a string of new IPs that they'd like to see come to fruition that never got picked up from Publishers. I really like that Sci-Fi IP they had. It sounded pretty cool.

 

Just as long as they don't sell the movie rights to Uwe Boll, then I'm all good.

Edited July 1, 2014 by Hiro Protagonist II

[TMZuk]

I don't understand the question.

 

Obviously, the crowd funding is done for two reasons:

 

One: To see if people have an interest in purchasing such games, and

 

Two: To make certain that enough money is available to actually develop the game without suffering a huge loss.

 

Of course, Obsidian hopes that the word will spread and more copies will be sold. Consider that if Obsidian sets a retail price of 30 $, the money they have gathered is equivalent of perhaps 150.000 - 200.000 copies sold, including taxes and distribution. If they game is well received, it's not unreasonable to expect that it sells another 200.000 copies. That's revenue. But in all likelihood, if the game is a success, they will launch another kick-starter campaign. It's not so different from the common publisher model, except that the backers are the publisher.

 

Baldur's Gate 2 sold more than 2.000.000 copies and is actually still being sold. While it's unlikely that PoE will reach such numbers, I believe that 500.000 copies is a reasonable goal to aim for.