What the hell these game developers did with your kickstarter money

Software development on a budget of $30k getting described as lavish. Ahh, gamers, they're so cute. Poorly-informed over-entitled misanthropes, but cute. "You're doing your shoestring budget wrong! You should listen to me! I've never shipped anything longer than a blog comment but my years of experience as a pir^H^H^H consumer mean I really know this job well!"<p>P.S. A business where the successful outcome is the principals end up in personal debt is neither a business nor successful.

Damnit people. I've lost track of how many times the Star Command Kickstarter story has been misrepresented.<p>The implication is that only $4000 (post tax) was spent on the game and that's an outright lie. They spent 6k on music, 5k on marketing (poster + pax), and 1k to development/demo hardware. That's not necessarily ideal but it's not entirely unreasonable either. You can argue the marketing/hardware issue perhaps, but 6k went directly into the game in the form of music.<p>The real lesson to take away from Star Command is their under-estimation of time and money required to create, package, and ship backer rewards. That's the real danger that other projects should be wary of.

Direct link instead of Gawker's shallow little summary wrapped around a giant quote from the direct link:<p><a href="http://www.kickstarter.com/projects/starcommand/star-command-sci-fi-meets-gamedev-story-for-ios-an/posts/208395" rel="nofollow">http://www.kickstarter.com/projects/starcommand/star-command...</a>

As they said: they clearly overpaid on company formation ($4000 for legal and accounting, which could have been accomplished to the same effect for around $500 if they were frugal, including filing quarterly estimated returns). But still, they'd have ended up with ~$9000 gross instead of $6000; the point still stands.<p>Some of these Kickstarter numbers look more game-changing than they really are.<p>But whatever, I'm not a games industry person; I'm really just here to chime my recurring bell about "don't put your company together on a napkin, get the LLC done; it doesn't have to be expensive and it will help you down the road."

"Now, right off the top you had $10,000 for prize fulfillment."<p>The lesson to be learnt here? Very carefully consider your bonus goods. Will making and shipping them cost more than the extra profit they make over the base price? Price 'em out beforehand. And build in a healthy margin of error in case you are wrong.

OK, I had another thought on this topic, another perspective as to whether this money was well spent.<p>When you win Kickstarter and get 20-30k as an indie dev, that money is yours. It's in the bank. You're expected to spend it to make sure the game is as good as it can possibly be, sure, but it's now your money to _risk_.<p>I balk at spending 6K on music, because to me that sound like taking 6k out of my family's bank account, going down to the casino and betting it all on black.<p>But in reality, that's what I do every day. I sit down at my computer and I bet 1 days salary I can earn it back selling my game directly to players.<p>My games only have a budget of around 100k each. Most of that my salary. Would 6k on music make 6k more over the life of the game? I don't know? Perhaps. Perhaps I should grow some balls and spend and extra 6K of my family's money on music for my next game as see what happens.<p>Those risks, those bets, are a lot easier to make when they are somebody else's money. When you have an investor willing to share risks, or a publisher who will own the game when it's done anyhow.

"Offering labor-intensive rewards that do not move your project forward are a net loss." <a href="http://carlos.bueno.org/2012/03/rocking-kickstarter.html" rel="nofollow">http://carlos.bueno.org/2012/03/rocking-kickstarter.html</a>

&#62;Leaving us with around $6000, which is income, so that was taxed<p>That's just bad accounting. Making a game costs more than $35k. There should be nothing left to tax.

Any <i>good</i> accountant will tell you that you don't have to pay tax on money that has not yet been earned. I've seen two of these article for two different game devs, and they both take into account tax, which should not be part of the equation until the game is actually released.

I am starting to love kickstarter more and more. It seems like it will be full of business 101 case studies before the year is out.

Link to last month's discussion of this story: <a href="http://news.ycombinator.com/item?id=3847373" rel="nofollow">http://news.ycombinator.com/item?id=3847373</a>

We keep hearing kickstarter projects complaining about tshirt costs, maybe kickstarter should start warning people about this.

I personally do not understand why they would have paid for all of the promotional material before the game was near completion. But I will say... that demo is amazing and I am ready to throw money at them.

Interesting post. I wrote an article on comp.sys.amiga about why software costs so much as a way to try to illuminate the unseen costs in development and support.<p>I really do think that folks should create the LLC first, get that setup and a copy of Quickbooks or what ever and "practice" running a company first. Seriously, go out and create an LLC right now. Not only will you learn a lot but the cost is moderate. Read the nolo press books, etc.<p>Do that and the rest is much easier.

Since they asked for 20k, I have real doubts they made a good business calculation. Especially if they note that "PayPal and Amazon take their portions" - I'm pretty sure that Kickstarter tells you to adjust for that.<p>Had they received only the 20k that they asked for, they would now (adjusting for less money necessary for rewards etc.) be left with almost no money at all. That's simply not good business calculation.

$30,000 can take you a long way. I stretched $5000 for 6 months producing a game, living like a peasant (in California, no less). These people just spent their money foolishly on a number of items. Salary is number one, whatever you have left after that can be used for other stuff. Why they did not budget salary first, I have no freaking idea. What is annoying is that it gives Kickstarter projects a bad rep, when there are those (such as myself) looking to use Kickstarter for legitimate/better thought-out purposes.<p>And for the record, I looked forward to this game in particular, even tried to donate money to them outside of kickstarter...<p>But please don't get me started on YogVentures (ugh)... <a href="http://www.kickstarter.com/projects/winterkewlgames/yogventures" rel="nofollow">http://www.kickstarter.com/projects/winterkewlgames/yogventu...</a>

Now do the math on building and shipping 85,000 watches.<p>Hint: Pebble have $117 each to get it done.

Reading this it wouldn't surprise me if the whole kickstarter idea came from some shady t-shirt manufacturers as a way to drum up more business. ;-)

All I can think of is either complete amateur hour, or a Kickstart project inspired by Mel Brooks' "The Producers"

I don't know these guys. My comment isn't aimed at them at all.<p>I see a lot of projects on Kickstarter where I find myself immediately questioning the numbers. Having the scars to prove that I've run a business or two I generally have a good sense for costs, process and other elements of typical projects. In so many cases on Kickstarter the numbers are so awfully low that you have to wonder what will happen if the project reaches the stated goal and is funded.<p>It is very easy to end-up working weeks-upon-weeks for $0.75 per hour and have nothing to show for it but a huge loss at the end of the process.<p>My recommendation: If you are thinking about posting a project to Kickstarter and don't know much about business (profit, loss, fixed costs, variable costs, development costs, tooling costs, regulatory requirements, etc.) spend a few hundred bucks to get advise from someone who does. I would run your numbers by a CPA and some of the other stuff by, perhaps, an attorney with experience in the field. If it is manufacturing related, there might be regulatory issues (UL, CSA, TUV, CE) that an experienced manufacturing engineer might be able to help you with. Be careful, regulatory testing alone can easily get into the tens of thousands of dollars.<p>In general, don't post a project to a site like Kickstarter unless and until you have had the financial model for your project verified by those best-qualified to do so.

Ignoring the suspiciously round numbers and the fact that they grossly overpaid for basically everything as an indie dev on a tight budget, here is what they raised money for:<p>"Hire extra talent for things like music, sound effects and additional platform development like Android<p>Promote and market to help sell the game and fund future expansions and possible sequels<p>Localize the game to other regions like Europe and Asia"<p>Several of the things they spent money on have nothing to do with any of those and thus the money they spent on them should not come from the money they raised on Kickstarter. IMO.