On Education, Experience, and Crowdfunding in the Game Industry

So, let me start with this: My industry opinions are based purely on my experience. I don’t have a writing degree, business degree, or any college degree. I barely passed High School. I lack any certifications or formal training. My only claim to knowing what I am doing is that I keep getting paid to do it. What I do know, I learned over 25+ years being in the industry, doing dumb stuff that taught me not to, and listening to people who were smarter, better educated, and more experienced than I am.

That’s often meant watching changes impact the tabletop game industry, and trying to figure out what they mean as they happen. A great example of that is crowdfunding. While there were forms of crowdfunding when I first got into the industry in the 1990s, it was far less common, successful, or sophisticated than it is today. This often leads people to wonder, why do companies insist on crowdfunding games now, when they didn’t used to have to? In my experience, the biggest reasons for the change toward using crowdfunding are threefold.

First, pre-orders basically do not exist anymore. In the 80s and 90s, you could solicit a game product through the three-tiered distribution channel, and get pre-orders that both paid you for a chunk of your total print run months before you had to make them (especially before you had to pay the printer’s bill), and gave you some idea what the total demand for that product might be. If you were thinking of printing 10,000 copies, and pre-orders were 500, you knew you had way overshot the level of interest. If orders were 9,5000, you knew you should print more.

This allowed you to make s big a print run as you could, driving down per-unit costs, without a serious risk of overprinting. This made products overall more profitable. The profit on selling 100,000 units is very different between one 100k print run, and five 20k print runs.

(As an important aside: Knowing how many copies of a gamebook sold doesn’t tell you how profitable it was. How many copies were in pdf or some other electronic format? How many were direct sales? How many foreign sales? How many print runs did it take to produce the volume sold, and at what economy of scale? Was it priced right to begin with? This, by the way, is one reason some things that were popular and sold out don’t get reprinted. If you needed a print run of 20k to make a reasonable profit, and it took 3 years to sell through, and 90% of your sales were in the first 90 days, you likely don’t want to reprint. Because if you print less than 20k more units, you won’t make enough profit, and if it takes 6 years to sell through another 20k at the post-first-release sale rate, your money is tied up in the print run (and warehousing costs), instead of new things that sell faster. Of course, this can be another place where crowdfunding can be helpful. I suspect it won’t be long before it’s typical for game companies to crowdfund reprints. They can set a minimum level to make a profit, and only reprint if they hit that. That’s win-win for consumers and biz.)

Second, crowdfunding a project creates an opportunity for a major marketing push. There used to be multiple tabletop game magazines. You could buy an ad in Dragon, Dungeon, White Dwarf, Pyramid, (or any of a dozen other options depending on timeframe and market) and put your product in front of tens of thousands of eyeballs. There’s no one great place, or half-dozen good places, to do that anymore. And even if there were, without strong preoders, it’s hard to create a useful call to action for a product that brings in a lot of money for the creator when they need it.

But crowdfunding sites allow you to use mailing lists from old projects to contact new people, and multiple different game sites report on new crowdfunding projects getting you much more attention at no cost. (And if you use Backerkit and similar crowdfunding support sites, you can pay for ads to be put in front of large groups of market-appropriate consumers.)

Third, there’s not much widespread evidence to suggest sales during a crowdfunding campaign reduce sales made later through normal venues. Selling 2k extra copies during a crowdfunding campaign doesn’t seem to mean fewer sales over the life of the product in stores. (There are people who disagree with this claim, and that’s fair. And for a specific store, region, or market, it might not be accurate. But my experience from publisher-side observations is enough to convince me that, as a broad trend, this is true.) And crowdfunding sometimes sells 20k copies (or even 200k rarely) of products that similar ones without crowdfunding sell 2,000.

And, of course, game prices have not kept up with inflation. The vast majority of game companies are strapped for cash. This was true even before the pandemic, and the “Extinction-Level Events” that have come with it. So, maximizing the potential for income while minimizing the risks is not just attractive or an effort to money-grab, in many cases it’s an effort to avoid bankruptcy and having games disappear off the shelves entirely.

Supporting This Blog
I’m absolutely not immune to the money crunch in the game industry, so if you want to help ensure blog posts like this keep getting produced, please consider supporting my efforts through my Patreon campaign, or dropping a cup of coffee worth of support at my Ko-Fi (which is also filled with pics of my roommate’s cat).

About okcstephens

Owen K.C. Stephens Owen Kirker Clifford Stephens is the Starfinder Design Lead for Paizo Publishing, the Freeport and Pathfinder RPG developer for Green Ronin, a developer for Rite Publishing, and the publisher and lead genius of Rogue Genius Games. Owen has written game material for numerous other companies, including Wizards of the Coast, Kobold Press, White Wolf, Steve Jackson Games and Upper Deck. He also consults, freelances, and in the off season, sleeps.

Posted on February 28, 2022, in Business of Games, Musings, Retrospective and tagged , . Bookmark the permalink. Leave a comment.

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