Recently I’ve been writing about how Kickstarter is changing the way smaller games do business. This weekend we saw the effects of more open and transparent development with an honest Reddit AMA from Brian Fargo and Chris Avellone ofWasteland 2. It seems without publishers in the way, developers may be more inclined to discuss development specifics with players. Well today we learned that some of those specifics may also include financial details as well. Warballoon, the makers of Star Command, have posted an update on their Kickstarter explaining where all of their pledge money went. Surprisingly, not that much went into the actual game.
Either due to transparency or tax day, Warballoon has released the financial details outlining how they spent their $36,967 pledged Kickstarter bucks. First things first, they didn’t even get the full amount as almost $2,000 bucks was lost to “no-shows,” people who pledged but didn’t or couldn’t fork over the cash. Then Kickstarter gets a cut, and so does Amazon for using their payment system, then they have to make all of the prizes for their reward tiers which cost roughly $10,000. By the time they were done settling all of their affairs regarding Kickstarter they had $22,000 left for the game and the business. This means essentially that the cost of using Kickstarter, for Warballoon, was roughly $13,000. Granted they wouldn’t have made any money without Kickstarter, so it isn’t a bad thing, but the act of having a Kickstarter cost them roughly a 3rd of their pledged cash.
Warballoon spoke candidly to others about properly pricing reward tiers. They didn’t anticipate the cost of posters, shirts, and all of the shipping involved, so it cut into their budget more than they would have liked. They were happy with how everything turned out production wise, but do admit that a lot of time and resources were spent on them. Some of this may have been from a simple lack of experience, but in being candid the backers commenting on their page don’t seem to mind.
So what about the rest of the cash, the $22,000 left for the company and the game’s development? Well after music, start-up and attorney fees, poster art, iPads (for testing I assume), and PAX East admittance they were left with $6,000. That remaining cash is technically counted as income, which means it was taxed, leaving them with $4,000 for development. That’s not a lot.
In looking back Warballoon admits that hiring a lawyer, their knee-jerk reaction to receiving Kickstarter funds, may have been a bit over zealous, “in hindsight a nice piece of napkin paper probably would have done just as well.” Legal fees alone cost them $4,000 the same amount they have left for development, but they planned for the worst, they didn’t know at the time that they wouldn’t have any legal issues, either internal or external. Still though, being overly cautious cost them quite a bit of cash.
With all that has happened they still expect to make their summer release, which is a good thing, that last thing anyone needs is to see a game flounder due to mismanaged Kickstarter funds. As for the community, they seem to be pretty much ok with it. A few people here or there may have a problem, but by just looking at the comments the community seems to be responding much more to the open communication being offered by Warballoon than anything else. It seems, at least so far, that when it comes to Kickstarter, honesty really is the best policy.