Category Archives: Iterative Games

Post-Kickstarter Finance By The Numbers; A One-Man Studio Postmortem

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Full disclosure is the primary purpose of this post. The backstory – in March of 2013, I ran a 30 day Kickstarter for my cyberpunk 2d shooter ‘Contract Work’; it finished just over it’s goal of $5000 with 110 backers. Although the campaign was a success, the initial public release was a dismal failure, selling only 3 copies (though many more people did play the game). This is a breakdown of the money numbers and thoughts on what worked, what didn’t, and what happens now.

Final Kickstarter Total: $5086

Cost from Kickstarter/Amazon/failed pledges: $4627 (-$459)

Taxes (rough estimate after deductions applied): -$500

Personal Development Costs (I only count costs for 2 months @$1000 a month for living expenses, see note below): -$2000

Material Costs, broken down as follows:

  • Subscription to GameTextures.com (7 mo at $20/month): -$140
  • Asset purchases from GameDevMarket.com: -$40
  • MediaLoot & TextFX licenses (GUI assets): -$70
  • Replacement Video Card: -$110

Hosting (dreamhost.com at $13/mo): -$234

Marketing (hiring a marketing firm, at discount): -$1440

Customer Acquisition (via Facebook): -$647

Freelance Artwork (multiple pieces): -$300

Freelance Content Creation (LetsPlay video): -$50

Total Cost through Sept, 2014: $5990

Total Revenue Post Kickstarter: $9.99

Note –  I only count April & May of 2013 as time I spent working full-time on Contract Work while funded. I was laid off in Jan of 2013 and besides a little freelance work (~$1000 worth) I paid all my development & living costs out of pocket while planning & executing the Kickstarter. At the end of May 2013 with I started contracting which turned into a full-time job. I don’t the cost of my developing Contract Work while working full time (there is probably some associated opportunity cost).

The $1000/month figure for cost of living is very conservative. My rent alone is more than $1000, but I admit that I could have found cheaper lodgings (it would have taken time & money, and I hate moving). For that reason I feel that taking $1000 as my own ‘salary’ while using the Kickstarter funds is reasonable (the rest of my costs being paid out of pocket).

What Didn’t Work

Let’s start with the unhappy stuff. First the obvious – the marketing spend and customer acquisition didn’t result in the sales I was looking for. Importantly, I don’t blame the company I hired for my marketing campaign; they really did their best to raise awareness, even getting several articles published on bigger sites. But there was some serious cart-before-horse syndrome, as the game I was selling didn’t have good marketable points. Graphics? Meh. Concept and environment? Fuzzy at best. Gameplay? Disjointed, confusing at times.

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Good marketing won’t save a half-baked title (in retrospect, the game really needed another 6-9 months of development time to shine). Ultimately I think the unreasonable time frame I set for myself (zero to commercial product in 9 months) doomed the marketing campaign from the start. Given the knowledge I have now, I would have avoided a traditional marketing campaign altogether.

The customer acquisition is more interesting. First, the Contract Work page has over 1,300 likes, which is not a bad for the spend ($0.50 per like). However, the likes have not translated to engagement or sales; it’s hard to determine whether that’s due to the quality of the fans or the quality of the game. The same goes for sales – the game has a decent number of plays, so the issue with converting plays to sales may lie more in the game/ purchase process than the quantity or type of player being directed to the site.

This has also created a standing community, albeit a quiet one. I remain hopeful that users can be engaged through quality content sharing and outreach, and am planning to try expand the community in the future through organic and paid ads. Another upside is that I’ve collected an e-mail list of about 300 addresses from players of the game that I hope to engage as well. There is definitely potential.

If I could do it all again, I’d wait until the game was in better shape to start my community, then spend a lot of time refining the purchase process before asking people to buy the game. I always feel the first part of good marketing comes from having a good product to sell.

A last note on some of the unhappy realities of Kickstarter – it sucks seeing 9-10% disappear instantly, but worse is not accounting for the taxes on the money later. I believe just about every state Kickstarter counts as personal income for tax purposes, so plan as such.

What Worked

In terms of ‘bang for buck’, the clear winners were artwork & assets. This will differ from team to team, but my skillset is primarily programming with some knowledge of art. Good art takes me a long time to create and therefore it’s almost always worth it for me to pay for art and focus on development. I feel I’m lucky in this regard – I can always move forward with placeholder art, while it might be more difficult to make progress without a reliable coding resource.

The GameDevMarket assets were the best value, but I’ve utilized the most assets (in term of raw numbers) from GameTextures. Both GameTextures and GameDevMarket are new resources that (to the best of my knowledge) did not exist when I finished my Kickstarter, but I’d expect more sites like them in the future.

My collaboration with a couple great art contractors (Pui Che and Tyler Johnson) has been nothing but delightful. Not only does it save me time but boosts my motivation every time they deliver a cool new asset. Many thanks to Robert Lockhart for referring me to these talented folks; obviously not everyone will be as good as these guys, but I feel that using personal recommendations goes a long way to finding like minded and talented people you want to work with.

The final combination of purchased & contracted art assets - much prettier than what I could do!

The final combination of purchased & contracted art assets.

I’ve also just started contracting with the talented team at P1PR to start generating content. They’ve finish an excellent first look ‘LetsPlay‘ video which has gotten good responses. Again, this is an area that requires a lot of effort and time on my part to generate quality content, so it’s a good investment in my opinion.

In general – figure out your weaknesses and use your resources to counteract them. For me the biggest time sink was art; investing more early could have saved me a lot of time and effort in the long run.

What Now?

I’m working on fulfilling my backer rewards now. Even though I didn’t offer any physical rewards, I did not budget enough time to finish the rewards in my original plan. I’ll also be co-ordinating with my contractors for the artwork tied to these rewards, so expect the cost for contract artwork to continue to rise. I’ll continue to utilize my team at P1PR to generate quality content to try engage my existing community, and use some ad spend to grow. Long term I plan to work on getting the game on Steam Early Access/Greenlight (if it still exists) as well as additional portals for distribution. But, as I’ve learned, it’s important not to get ahead of myself; the primary goal right now is to make Contract Work a great game to play.

I’ve had the enormous luxury to be able to get a head start on my game through Kickstarter funding and survive a bad launch by having a full time job. The time commitment sucks, but it has given the runway and resources to put the game into a state where it has a better chance to succeed. I also feel fortunate that I planned this as a one man endeavor; no one else was ruined by a terrible launch or bad planning. On the bad days I don’t have to worry about a crazy high burn rate. It can get lonely, but I know that as long as I stay motivated that Iterative Games won’t die.

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Winston Churchill is quoted as once saying “Success is going from failure to failure without the loss of enthusiasm”. I might add that includes going from failure to failure without bankrupting yourself (too badly). So at the end of the day, even if I didn’t make a cent from my first release – Contact Work is still alive, I’m still getting the chance to do what I love, and I really can’t ask for more.

Many thanks again to my loyal and patient backers. I wouldn’t be here without you.

Asking Why

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In Simon Sineks now famous TED Talk, he reveals a pattern among great organizations and leaders (if you haven’t seen it, it’s certainly worth the watch). He states that most people operate from the outside in – we have a clear idea of what we do, some idea of how we do it, but few can articulate why.

“But the inspired leaders, the inspired organizations, regardless of size or industry, act from the inside out…They know beyond a shadow of a doubt their purpose, their cause, why they get out of bed in the morning.”

This lead to the big insight – “People don’t buy WHAT you do, they buy WHY you do it.” The competitors may be just as qualified, but we choose the inspired companies because they inspire us.

It’s worth repeating. People don’t buy WHAT you do, they buy WHY you do it. Why this is so important for indies? Look at the market right now – most will agree we are at the end of the Indie Bubble (thoughts from people smarter than myself @spiderwebsoft, @tiedtiger, @gamesbrief).

The easy routes are gone – if your WHY was to make boatloads of fast money, stop reading and get out now. The indie game scene has grown into a market with hundreds of competitors, just like other industries. It’s not enough just to be an indie anymore – you need to convince your customers that you are the indie company they want to support.

Transistor from Supergiant Games

So how does WHY work? Let’s consider an indie success story, Supergiant Games. Compare these two pitches for their title Transistor:

1. “Play a sci-fi themed action RPG that invites players to wield an extraordinary weapon of unknown origin as they fight through a stunning futuristic city.”

2. “We’re Supergiant Games, a small company of artists that creates beautiful, soulful titles. We craft our games to be as stunning and unique as any painting. We believe in powerful audio and spare no expense in creating amazing narrative and music. Play our sci-fi themed action RPG…”

They’re both the same product, but that 2nd pitch is the one that grabs you, right? The first pitch could be a random title on the Steam Store. The reason you chose Transistor isn’t the description or price; it’s because Bastion, because of that trailer, because of that music! Other companies can make sci-fi themed action rpgs that are longer/cheaper/use more pixels. But you pick Supergiant because of their WHY.

CodemancerSample

Codemancer, from ImportantLittleGames

But what if you aren’t an established brand? Take look at my friend & colleague Robert Lockharts Kickstarter for his first independent title, Codemancer. Again, compare these pitches:

‘Codemancer’ is an educational game, set in a fantasy world, designed for 9 to 14-year-olds. Players will code their way through a fantasy world full of rival sorcerers and their minions. It will be available for PC, Mac, iPad and Android Tablets.

I’m Rob Lockhart, and I’m building a game to teach the magic of programming to children.The goal of the game is to be as broad and inclusive as possible. A gender-neutral fantasy setting, a female protagonist, a narrative backbone, and a language designed for accessibility; these are all ways to knock down barriers that prevent some kids from engaging with programming.’Codemancer’ is an educational game, set in a fantasy world, designed for 9 to 14-year-olds…

Rob knows his WHY and communicated it effectively. I’m happy to report his campaign was featured by Kickstarter and finished at over 4x the original goal (you can support it as well by pre-ordering the game here).

This isn’t a good long term strategy

Could you just make up a WHY as a marketing pitch? Yes, but it won’t have any lasting power. It’s manipulation instead of inspiration. Being an indie success is no longer winning the Steam/iTunes lottery; you are competing in a market of experienced, perhaps jaded consumers that have many, many options. Manipulative sales tactics – forced virality, exploitative micro-transactions, price slashing – are becoming less effective. Inspiration is becoming more important, especially with technology (Facebook, Twitter, Youtube) that makes your fans your biggest advocates. Inspire people to follow, support and love your company.

WHY isn’t just about selling; it’s a powerful tool for your own decision making and motivation. Having a problem deciding which idea to work on? Pick the project that fits your WHY the best. Not sure about using that partner or publisher? Learn their WHY is and see if it matches up. Wondering who you should connect with at a conference? Pick people who have a powerful WHY that is similar to your own.

Perhaps more importantly, WHY makes you look in the mirror and decide if indie gaming is where you want to be. If you don’t have an intrinsic love for game development & design, you’re probably in the wrong industry. If you don’t have a desire to build a unique brand and message, you’re probably better off joining an established studio. And if you’re just looking for a quick buck, there are much better places for that.

Consider your WHY

I’ll be honest – when I started working on building Iterative Games, I didn’t take the time to sit down and figure out my WHY. I had a nebulous idea that I wanted to do games, that I wanted to start my own company, but there was nothing unique I could articulate. From my personal experience – it doesn’t become easier to figure your why when you’re knee deep in development and marketing. And if you don’t figure it out, it’s easy to get lost. You make mistakes. You become unsure if the work and the opportunity cost are worth it.

It will take some serious time and effort, but it’s worth it; that is why I’m taking the time, finally, to write and share the WHY of Iterative Games:

Iterative Games – Better games, better lives, to share with the world

Better Games

We are a company of innovators that push the limits of game design and user interaction. We see gaming as a dynamic and interactive medium, distinct from cinema or literature. Our titles seek to increase player agency, create emergent narrative and support user expression. Our games will always create value for players and the development community through implementing new ideas or by improving & combining existing ones.

Better Lives

We believe we can make amazing games and improve the quality of life for all our employees and partners.  We respect our people and place them before profits. We will pay a fair wage, we will not crunch and we will do everything we can to earn respect and trust. We know that happy and healthy employees produce better games. We understand technology has fundamentally changed the way we work and support innovations such as remote work, third party collaboration and employee-entrepreneurship.

To share with the world

Whenever possible, we will build our games to be inclusive; to utilize technology as a tool to enable, not deny, access to our products. We seek to design and create games that do not discriminate against any gender, race or creed. We will share our ideas, experiences and innovations with as many people as possible through transparent development, early access and releasing open source. Finally, we support efforts to utilize game development as a tool to inspire, educate and empower people around the world.

Thanks for listening. I can tell you already that I’m not always going to get it right. I’m also certain I’m not going to be making a lot of money; I don’t know if it will ever be enough to quit my day job (I do hope it is, someday!). But to me, a little progress toward those goals is worth getting up early in the morning (or, more likely for me, staying up long into the night)!

It’s a brave new indie world – time to figure out why you want to be a part of it.

Final homage to a company that knows WHY

I’m Kee-Won Hong, the founder of Iterative Games, and I’m working on my first title Contract Work. If you enjoyed this article, consider following me on Twitter.