August 2, 2022: The Danger Of Undercharging On Kickstarter
After over a decade of experience working on over 100 Kickstarter campaigns and supporting 1,000+ campaigns during that same time, I've watched many project supporters cry: "You're charging too much for the game!" The companion comment -- "Your shipping costs are too high!" -- might be even more common.
These same statements are often accompanied by "Project X packed significantly more in the box and costs less." or "Project Y offered free shipping."
Throughout it all, we continue to try and set realistic project goals and prices, even when that means it looks as if we're an outlier and our choices don't align perfectly with the rest of the industry. We do this because the last thing we want to do is find ourselves in a situation where we have to ask backers for more funds, a practice we see more and more as the realities of manufacturing and freight costs slam into Kickstarter campaigns much, much larger than we run. A handful of million-dollar campaigns, even multi-million dollar campaigns, have posted project updates telling the backers: "We don't have enough money to finish the job."
As you can imagine, the backers of these same Kickstarter campaigns are not happy when, months or years later, the project asks for more cash. Where some project updates have shared concrete numbers, the details leave me thankful that we've not attempted the "undercharge and overdeliver" crowdfunding method.
As an example, one recent update to a $1.1 million dollar Kickstarter shared with their backers that the factory's charge alone was roughly $900,000. After Kickstarter and manufacturing costs, this left the project with less than $100,000 to cover fulfillment to over 15,000 backers. Not surprisingly, this was not enough money . . . and they're now asking their supporters for more cash.
Why do we charge what may be perceived as "higher" prices for our Kickstarter games and shipping? Because we're not just looking to make games for a couple of years. Our goal is to create and release games sustainably while protecting our staff, pay them as much as we can handle, and be here five, ten, twenty years from now still making games.
So. The next time we launch a Kickstarter campaign and your first thought is that we're somehow overcharging, please keep in mind that our true reasoning behind the pricing of everything -- from the game to the shipping -- is that we want to charge what we must so that we can continue to exist as a business and keep making games for many years to come.
-- Phil Reed
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