Recently there’s been a bit of a hubbub in the gaming press concerning unfulfilled promises and crowdfunding failures. This was kickstarted ahem by issues surrounding the Peter Molyneux project ‘Godus’ and culminated in the now infamous Rock Paper Shotgun interview which begins ‘Do you think that you’re a pathological liar?’. In that context, and given that I will be launching a Kickstarter campaign for Top Secret soon, I thought it would be a good moment to share my thoughts about crowdfunding risks.
Molyneux referred to the huge pressure to over-promise in order to secure funding during a crowdfunding campaign. With Kickstarter it’s all or nothing - you only get the money if you hit your target. For a struggling campaign with only a few days to go, there’s a big temptation to say whatever’s necessary to get those final pledges. Be wary of projects which promise new features mid-campaign. I won’t be doing this with Top Secret.
As well as overpromising, it’s tempting for devs to underestimate the money they need. The number of pledges made is often affected by how likely backers think a project will achieve its target (no-one wants to back a failing campaign). Allied to the ‘all-or-nothing’ mechanism, this creates a perverse incentive to deliberately set your funding goal lower than necessary in the hope that you will overshoot it. It’s fair to include an element of risk in your budget, but often the target asked for wouldn’t even cover the dev’s salaries under ideal circumstances.
Some risks are subtle - maybe the game doesn’t turn out to be quite as good as you hoped, maybe it wasn’t exactly how you imagined or goes in a direction you don’t like. Others are more predictable - perhaps the project is unexpectedly delayed, perhaps the project is cancelled.
All these things can, and do, happen.
In traditional investments, the investor gets something extra for taking on risk. With crowdfunding they often don’t. This isn’t necessarily a problem though. Risk can even be a reason to back an project. Kickstarter shouldn’t be used as a glorified shop-front or a marketing tool for well-worn ideas. It should be used to help innovative, challenging, and yes, even risky projects to completion which otherwise wouldn’t exist.
Ultimately, all these issues come back to one question: How much do you trust the project creators? Do you trust them not to over-promise, not to under-budget, not to be incompetent or deceive?
It’s a hard call to make.
This may all seem a bit of a downer but don’t forget that there are many brilliant and innovative projects which could only happen via crowdfunding.
Sometimes, as long as you know what’s involved, the risk can be worth the reward.« Back to blog