In A Weird Place...
Kickstarter, do we need it? Really?
Visão de uma editora sobre o Kickstarter... (original AQUI)
This question comes to us from our current project for a first expansion to Kings of Air and Steam and a reprint of the game... Which, has a little more than 2 days to fund and is only a little more than half way there.
In relation to Kings of Air and Steam: World's Fair and the reprint... If the Kickstarter project fails, then we will not have another project, and will print the game when we have the excess cash on hand. This means that we would be looking at a late 2016 release at the earliest, probably more like 2017.
Do we need Kickstarter? Yes, TMG does need Kickstarter... But we could choose to not need it...
So, what the heck does that mean? Let me unpack the concepts at work here, which fall into these categories:
Financial
Cash Flow
Security
Behavioral
Focus
Expectations
Financial
Cash Flow
Our incoming cash flow has never been stronger in the existence of TMG, but our outbound cash flow to support 5 employees is high but sustainable. The pre-sales and collection in advance of our expenses allows us to be able to print more games and in a wider variety.
Consider this example... This is not how we accounted for funds from the Kickstarter, but we certainly could have accounted for them in this way.
Consider that after we funded Orléans for over $250,000, we had the cash required to deliver the games now even though delivery was 7 months away. The delivery cost allocation is approximately $59,370.
Between funding Orléans and delivering it, we manufactured and launched Flip City (no Kickstarter, and a more simple game to make). The total cost to make all the Flip City is a fraction of the delivery cost allocated for Orléans.
With strong sales at GenCon, online pre-orders, and good sales in the first 2 months, Flip City has already produced more revenue than the cost to make it. We have a little more than half of the print run left, and all costs covered.
This could have been funded from the additional cash on hand (but not yet needed) associated with Orléans...
Security
Our cash flows are strong, and our finances are stable. However, printing a game that doesn't sell will put serious pressure on this. Even doing this only once can create a serious problem. Right now, TMG has a decent amount of what I can "unhealthy inventory" which is simply games that we have too many of when compared to the quantity that sells on a regular basis.Actively working to convert this "unhealthy inventory" to cash is a key activity that is getting more concentration these days. "Unhealthy" doesn't mean bad, for example, a couple of years ago I would have considered Belfort (which is now quite healthy, and a wonderful game) to be unhealthy inventory.
One of the keys to keeping this "unhealthy inventory" low is to not make those games in the first place (or the extra quantities). A failed Kickstarter clearly says to us, "be careful if you print this game later, because it might not sell and end up being unhealthy inventory". A Kickstarter that barely funds communicates a need to keep printing quantities low.
TMG does not have a gold mine game like many other established publishers, we have no game that we know can fund our operations. As such, we are always only a couple of failed games away from serious trouble...
Behavioral
Focus
TMG makes many different games. That is a fact. If we concentrated more heavily on the games that are already showing significant success, then we could probably have one of those gold mine games (Dungeon Roll / Harbour / Scoville / Eminent Domain / Flip City / Cthulhu Realms are the most likely candidates).Part of the problem is that as gamers, we cannot help ourselves. I promise that we won't make a game that we think is bad, but if we think a game is very good, then we are likely to move forward with it.
If a game doesn't prove to us that we should concentrate on it, then we will not focus our attention on it. Heck, we should have made 2-4 more Dungeon Roll boosters than we have so far based on how well it sells...
TMG needs to have opportunities for gamers to tell us what we should do. We see that with sales numbers, and with Kickstarter, we get to see a portion of those numbers before the game is ever manufactured.
Expectations
Finally, we have set the expectation that TMG uses Kickstarter. It is one of the best ways that we can promote and market a game. It is mostly common knowledge that we do this, so moving away from it is more difficult.Consider that it is a very different set of customers and behavior that needs to happen if TMG does not Kickstart a game. TMG needs to convince retailers to purchase the game to sell to their customers.
Or we need our customers to pre-order the game from their retailers instead of waiting for it to be on the shelf. So that the retailers realize that the game will sell for them.
Consider that TMG sold approximately 7,000 copies of Harbour via Kickstarter. My recollection is that 5,500+ were inside of the United States. When Flip City and Cthulhu Realms launched recently (also $20 games from TMG) we did not even sell that many games combined on launch...
We did hear about difficulties finding Flip City in particular though. So, it is a very different behavior that pulls games through the distribution system.
Conclusion
Indeed TMG has enough financial stability to publish games without Kickstarter. But we wouldn't be able to do the following:- Publish as many games that we love.
- Be distracted by new titles instead of just expanding old ones. Requiring us to become the Dungeon Roll or Eminent Domain company.
- Employ a robust team of 5 individuals who are improving many aspects of TMG, and thus your experience dealing with us.
So, we could publish without the use of Kickstarter, but why would we? Kickstarter provides significant benefits that few should dare to ignore...
Cheers,
Michael
P.S. - If Kings of Air and Steam World's Fair doesn't fund, then it will probably still be made, but it likely becomes a project for a 2017 release. But that is a long time from now, and things could change...