War Balloon Games 'spent $10,000 on prize fulfilment'
An indie studio that successfully doubled its Kickstarter funding target has warned that the money earned through crowdfunding can disappear faster than expected.
In October, War Balloon Games raised $37,000 for its iOS project Star Command – having initially asked for $20,000 – but has claimed that expenses for the Kickstarter reward process were far greater than it had anticipated.
Kickstarter is a tiered system where people earn certain privileges for pledging cash.
In the case of War Balloon, those who pledged $100 or more would have a poster delivered to them as well as other such deliverables.
These prize fulfilment costs amounted to about $10,000 of the game's total funds, the studio said.
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“Our kickstarter earned $36,967 after asking for $20,000 so that was incredible,” read an update on War Balloon's Kickstarter page.
“To begin with, we didn't get all of that. We lost about $2,000 to no-shows; just people that pledged and the funds did not transfer.
“That got us down to $35k, and kickstarter and Amazon Payments take their portions, which got us down to right around $32,000.
“Now, right off the top you had $10,000 for prize fulfilment. That includes printing the posters, the shirts and shipping everything (thanks Australia).”
From the remaining $22,000, the company said it spent $6,000 on music, $4,000 on legal costs, $2,000 on poster art, $1,000 on iPads and $3,000 to exhibit at PAX East.
That left the studio with about $6,000 for development costs, it claimed, which was taxed as income.
The studio says it has taken on $50,000 of debt as part of its plan to finish the project.
“If we had to do it again, we would have probably had the price point a bit higher for the t-shirts and posters, as those turned to be a very large expense,” the company claimed.
“We also would have included the cost of a 3rd party fulfilment house - we just aren't equipped or skilled in that area, and it was (still is) something that we struggle with.”
War Balloon said, if it had a second chance, it would forgo attorney expenses.
“We got a little nervous after we received all the Kickstarter money and wanted to make sure our business was set up correctly. We registered our LLC, got operating agreements, but in hindsight a nice piece of napkin paper probably would have done just as well.”
The post continued: “Rewards are something to watch out for as well. We just didn't fully appreciate the cost of printing 200 posters, shirts, and more than anything shipping.”
War Balloon nevertheless believes the project wouldn’t have materialised without the kickstarter funding.
“We're extremely confident were going to hit our summer release date and that never would have happened without you guys,” the post concluded.
One of the nice things in the UK is that it costs about £20 to incorporate a company, and you can do it online yourself.
It does however take a deceptively large amount of time to get all the paperwork just so, set up a business bank account, register with HMRC (tax) etc
Honestly you didn't look into how much posters and t-shirts and the posting of them would cost you?
I'm a small micro studio developer and one of the basic things you do in any schedule is work out the costs otherwise your going down the tubes straight away.
I'm not sure what your time scale is/was for the development of the game but $20,000 initial funding is a very small amount of money for a small team.
You've got nobody else but yourselves to blame and hopefully it hasn't put off crowd funding for small developers.
The people that paid $100, what's that like £50? For a poster, t-shirts and a ios game that might never be finished. And the devs are moaning about the cost of the trinkets they promised.
I'm not keen on these Kickstarter projects myself. I get that it's good for the devs. I mean who doesn't like free money? But these investors get very little out the transaction apart from hope.
RE: £50 for a poster!
The developer is not crying, they are simply sharing with the rest of the developer community to not make their mistake and underfund due to costs of the extra items.
A poster can cost $20~$30 shipped each, T-Shirts can cost between $15 and $30 shipped then you loose the $1 to $5 you would charge for the game plus what ever other content you provide them. Just off those three items alone out of the $100 provided they could loose $36 to $65. They planned poorly and are warning other devs to plan better otherwise you defeat the whole point of a kickstart funded project. It's not crying.
Scionwest, didn't mean any offense to the devs.
Sorry War Balloon devs for my tone.
My main point (poorly articulated) was really against Kickstarter not the devs. I don't think the investers get a good deal out of it. My personal view though.
Your right that they planned poorly, but not a reason for me to have a go. Re-reading my post I can see how you thought I was.
So next time put the rewards at $200 donation then you have everything including prizes & tax covered.
Let me get this straight. They asked for $20,000, but received $37,000 but they said the rewards will cost them $10,000...
So what are they bitching about? If they only got $20,000 to the dollar, they'd only have half the money to fund development, yet they made an extra $17,000 ($12,000 after funds), so not only do you still have 100% of your money to fund the project you're still $2000 up on it! How the hell do you lose out???
You're either incompetent at finances or disgustingly ungrateful for getting acumen at absolutely zero financial risk to yourself. I don't know whether to laugh at you or be sickened.
You really didn't read the article beyond the title, did you? Where are you getting the $37k figure? They clearly stated that after everything was taken into account, only $6,000 dollars was left to spend on the core game. What's that, one nicely set up desktop with the necessary software, no programmers, designers, or playtesters included?
They clearly stated they weren't very good at the business side of this, so it's not necessary to call them incompetent or disgustingly ungrateful. They expressed gratefulness and apologized for their own underestimations, which preemptively dissipates both of those condemnations.
