Mika and the Witch’s Mountain
– PART III –
After the campaign ends, the period of managing, producing, and delivering rewards (both physical and digital) begins. At the same time, the development of the game is completed and the launch is prepared, which also influences some of them.
To do this, we will set up an action plan for the next few months, with regular updates (ideally 1 or 2 per month) on: the production status of the different elements of the rewards; the sample of the final product of some others (such as the washi tape or the tarot cards); and finally, to report on shipments and deliveries.
It also allows us to keep the focus on the campaign (which is important for getting the information we need from backers to minimize long-term problems), build trust, and more effectively manage problems as they arise.
At Chibig, we want to enhance the community experience with the ability to modify pledges and contributions (by adding add-ons) after the campaign ends.
That’s why we look to companies likePledgeManager and Backerkitfor that kind of flexibility to change rewards after the campaign.
Specifically, we want to offer the digital pre-order of the game, as well as the physical edition and the figure, to backers who come in after the campaign.
As mentioned before, in addition to the cost of manufacturing the physical rewards, there are complex costs to manage and calculate that result from the logistics of getting them from the factory to where the elements are assembled into a reward package, and from that location to anywhere in the world.
However, there are companies that specialize in crowdfunding campaigns that can help you manage all of this, such as Floship, Backerkit or Easyship (the latter with a direct integration with Kickstarter).
After reaching 24,000 backers, we realized that it would be much better to rely on partners who could facilitate these tasks. But this is not without risk: relying on the collaboration of external partners requires very good control of margins, as they represent another additional cost.
➤ With great power comes great responsibility
At Chibig, we believe that the accessibility of our campaign planning and design processes will contribute to the creation of a healthy video game industry. There is also an additional responsibility to those who see this campaign as an example to follow or to inspire.
For this reason, we believe it is crucial to share certain internal mechanisms that will help clarify and refute the myths surrounding the platform and how it relates to the process of making games.
➤ The “hidden” costs of physical rewards
When it comes to designing physical rewards, we tend to think in terms of the cost of production (which is the most obvious investment amount) and the cost of shipping, roughly speaking, as something that falls on the backer’s side (weighing cost overruns and discounts depending on shipping destination).
However, some of the physical rewards are not shipped directly from the factory and must be moved to a warehouse. Thus, both the transfer to a warehouse and the storage itself are additional costs. In addition, this warehouse is where the handling and packaging of the items will take place (known as fulfillment, another additional cost).
This last step can be “skipped” to save money, but in most cases certain rewards only make sense if they come in a single package (for example, if a special edition of the game is offered that includes multiple items, but each item is from a different manufacturer).
In terms of manufacturing, in some cases it will also make sense to look for different manufacturers in different territories to reduce costs; it will also mean looking for warehousing and handling personnel.
All this means not only a big puzzle, but also the time and dedication of a studio member or hiring an (extra) service capable of dealing with this reality. This is another substitute or additional cost to all the previous ones.
Finally, when designing a campaign, you need to think about what the physical rewards bring to the table, and which of them are actually good for the growth of the campaign: what they are able to scale in terms of funding is worth the logistics costs that follow?
➤ Digital rewards: necessary but not enough
After the great start of the campaign (€100,000 in 24 hours) with almost all digital rewards (16 digital items out of 21) and the average ticket we planned (€42), it could be said that a Kickstarter campaign today can be successfully funded only with digital content.
However, the incipient stagnation we saw on the third day of the campaign ( a logical outcome after the organic traffic was exhausted) became anecdotal when we introduced a physical reward that, after studying the community, we knew would work: the physical edition of the game for Nintendo Switch.
Later, motivated by the performance of this proposal, we gradually introduced more physical elements into the campaign (such as the figure); or improved other physical elements already offered (such as the tarot cards).
The huge success of the physical rewards at the end of the campaign led us to conclude that while digital rewards can drive a campaign early on, the community of backers and players still crave physical items: over 10,000 copies of the physical game, over 3,500 figures and an average ticket of €54 support this idea.
➤ Development team does not receive 100% of funds raised
The Kickstarter campaign ended with a total of €1,300,368, compared to the €40,000 initially requested. And while this is an impressive number, many people do not realize that this is not the amount the team will ultimately receive.
In our campaigns, on the one hand, there is the prominent weight of advertising campaigns and agency services (between 30 and 40%). On the other hand, there are the costs of production (around 15%) and distribution of the physical elements (between 10 and 12.5%). Finally, we must add the cost of taxes, fees and possible non-payment (around 15%).
As we can see, although the initial funding goals have been largely met and exceeded, the amount that will ultimately directly support development is far from the amount shown on the Kickstarter page.
➤ No continuous growth over time without advertising
After looking at this data, you might wonder if it is worth doing a Kickstarter.
But even though the amount for development is not as large, it is still enough for development, and maybe what you really need to ask yourself is if you can optimize certain processes to grow the campaign in a similar way, but with a more organic strategy, without as much cost.
On the one hand, you may be able to optimize your organic strategy. But on the other hand, if you’re constrained by the organic limitations of your niche (which is what it is: relatively finite, though it grows depending on variables that sometimes you can control, sometimes you can’t), you’re already at a disadvantage.
Therefore, investing in marketing actions is a practical decision that will allow the niche to expand continuously and increase the amount of funding.
However, this comes at the expense of the price of the ad service and is only accessible to those studios that can afford the investment. In any case, the key would be to find a balance: advertising with a more refined target and a more optimal cost per acquisition, not so dependent on brute force actions.
➤ The campaigns are a bet for the studio
This may appear to be a mechanical push and a great success at great cost. But there is a reason for this, as there are a number of additional elements to the funding that contribute to the sustainability of the study in the long term, not just the development of the project in the short/medium term.
Because the campaign is a validation of the product, it can bring other financial players into the equation and give the studio a status of solvency, professionalism, and presence in the vast development ecosystem.
In addition, it is important to remember that this validation, which is essential to a successful campaign, is not only intended to cover development costs, but can also serve as a marketing effort.
➤ The game is important, but so is its context
Naturally, both the game (value proposition, state of development) and its circumstances (aesthetics and trends adopted, reliability of the studio, etc.) are elementary for the success of the campaign.
It also depends on how well your campaign page is set up (it’s an extended sales pitch), the state of the platform itself (Kickstarter has evolved over the years), and many other factors that are out of your control (such as backers’ personal relationships with other games that have been funded on Kickstarter, and any issues that may have broken their trust).
By this we mean that even if the same campaign were run at any other time, the outcome would be completely different. And that is why a Kickstarter campaign is not a guarantee: we should not stake the viability of a project or the studio on the potential success of a Kickstarter.
And that’s it! From Chibig, we thank you for coming this far and hope you found it useful. See you on the Island of Winds!