Crowdfunding – Investment or Pre-Order
The more I see people talk about board games on Kickstarter, Gamefound, or others, the more I realize that people often don’t think through the whole process. And this is something from both sides, I don’t think creators often think through everything as well as those who back. I’m pretty sure I’ve written about this area of crowdfunding before, but let’s talk about it again.
Is Crowdfunding an Investment or a Pre-Order?
This is a challenging question yet a simple question to answer. Crowdfunding was created to be an investment system. And it is still that. However, some companies treat it as a pre-order system and that muddies the waters. But at it’s heart it is an investing system into a small company or individual to help them support a dream.
Why Does This Matter?
Well, if it is purely a pre-order system, then a company 100% owes you a board game at the end of the process. And the board game should be basically ready to go. A pre-order should be for a fully designed game that just needs to get over the finish line.
And investment, it is going to come with more risk attached to it. The game is not going to be completed, it is going to be developed enough to show it off, but it won’t be ready to hit print once the funds are transferred over. And for your investment that expectation is the game will be produced and you will get a copy. But that is the expectation, not the demand.
But the Waters are Muddied
The tricky thing is that some companies use it as a pre-order system and that changes how it’s handled or perceived for the other companies where it truly is an investment into their success. Now, because Queen Games is shipping out big boxes quickly, or Claustrophobia was ready to ship and in a warehouse before the campaign was done, people see it as a pre-order system. It’s been that way for other companies, why not for company X? Well that company actually needed it for an investment.
So What Should Expectations for Crowdfunding Be?
I do think that on both sides there needs to be a resetting of expectations. Why, because we’ve seen companies go under. The standard for companies needs to change as we look to crowdfunding in the future. And the expectation of investors (backers) needs to change as well.
Let’s start with the backers, because a lot of the issue and responses I seen do lie with the backers. Firstly, for the majority of companies, even more of the larger ones than you think, they couldn’t produce the content they do and the amount of content that they do without being invested in with crowdfunding. Companies are not getting rich from board games, in fact, the margins are razor thin on crowdfunding because crowdfunding platforms take some of the money.
So let’s get back to the mindset of what this is. It is an investment. And if you are not able to invest the money to back a game and not get that game. Then don’t invest the money in the first play. We’re seeing some of that right now with smaller campaigns often not funding because people are choosing what to invest in. But back before inflation started increasing rapidly, people are still getting mad that an investment they made then isn’t fulfilling now. If you can’t afford to lose that money, you can’t afford to back it.
Or if it’s about not getting the game. If you are worried about that loss, buy it at the 150-300% mark-up later on eBay. If money isn’t the concern, it’s the concern that the game might never deliver, then change your strategy and buy it second hand on eBay, Board Game Geek Market, or elsewhere.
Companies, I don’t think that this expectation really shifted that much. But it is the most important thing you can do right now. And I will say, that the amount you do this and what you share in this matters a lot. Keep your backers informed all the time. Even if there is nothing to update, you need to update a minimum of once a month post campaign. For me once a month is ideal, but twice a month might satisfy some people more so.
And you might think that most people don’t read those updates. Let me let you in a little secret, you are right. Most people don’t read the updates. But you still need to do them. Firstly, it reassures people that you are still there and care. Even if they don’t read it, the fact you’re updating shows that you are still active with the project.
But the other thing is when things do go sideways, inflation happens, COVID happens, the shipping crisis happens, production costs go up, materials go up, last mile shipping goes up, you can talk about it. You let people know what is happening early and often, people will be more forgiving. And if, heaven forbid, your company goes under or a game won’t deliver like planned, or you need to ask for additional funds to get pushed over the last little bit, now you have already warned people.
Yes, people will still be mad. But that is one them, that goes back to what I wrote above. If you don’t communicate, though, that’s on you. If you pretend that everything is fine, or go radio silent when things aren’t, that is on you. I am your investor, I want to know how my investment is doing.
The Sad Truth of Crowdfunding
Let’s wrap up with the downer bit, right now we are going to see more of these small companies going out of business. Holy Grail Games and Grimlord Games are two that I can think of with outstanding projects. Also the company that made Alba a puzzle book story as well. And I would not be shocked if Mythic Games follows that direction shortly.
I am privy to three of those. Alba was cheap, I don’t mind losing that money, though sucks because it is a book and should be a more stable project. But when that company went under the one who bought their assets talked about how the numbers were low. Grimlord Games, they didn’t communicate at all, don’t be like them.
Finally, Mythic Games, this is one that they haven’t gone under yet. I’m just waiting on HEL: The Last Saga, if that will ever come. I expect to be asked to double my pledge. But let me be clear Mythic Games. Start communicating right now. Communicate heavily about finances and about cost increases, decreases, and changes you might need to make. This is on your to try and save your reputation. Because with Darkest Dungeon and 6Siege, you haven’t done that.
And like I said, I expect to see more, mainly smaller companies this happen to. When it does, remember, these people aren’t stealing your money to get rich. They work with thin margins hoping to bring you something they are passionate about. Probably without business knowledge they should have. So try and give grace, be frustrated, sure, but don’t be mean. That doesn’t help our hobby grow and at the end of the day, that is what we want.
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