The Perils of Reward Tiers in Kickstarter Appeals

Develop has an interesting article about how War Balloon Games found that the reward tiers it created for its iOS game Star Command have drained much of the cash it generated when it pitched the game to the community in October of last year. The company raised $37,000, but only initially asked the community for $20,000. But what the Star Command developers did not anticipate was the cost of the various reward tiers it created to get donors to drop larger and larger amounts of cash.

These prize fulfillment costs amounted to about $10,000 of the game's total funds, the studio said.

“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 fulfillment. That includes printing the posters, the shirts and shipping everything (thanks Australia)."

The company said that 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 from the remaining $22,000. After all those expenses, the studio claims that it had about $6,000 to spend on development.

"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 fulfillment house – we just aren't equipped or skilled in that area, and it was (still is) something that we struggle with."

While the company notes that it was surprised by all the costs, it did not blame supporters for any of the troubles it has encountered financially.

“We're extremely confident were going to hit our summer release date and that never would have happened without you guys,” the post concluded.

Source: Develop

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