Creating a Retailer-Friendly Crowd-Funding Campaign

by Brian Dalrymple

Crowd-funding has solidified its acceptance as a necessary step in the creation of games in the minds of small and mid-sized publishers and the player base at large, but the idea still meets resistance from retail game shops, and there are valid reasons.

While many crowd-funding efforts over years have included well-intended gestures designed to enlist support of stores, some recurring challenges for retailers have not been addressed comprehensively until recently.

Fair warning: I’m a game store owner and a supporter of crowd-funding from the retail perspective. I’m also a graphic designer and publisher (our first Kickstarter is in its final days as I’m writing this). The positives of a successful crowd-funding campaign have long been apparent to me, but I’ll mention them briefly:

  1. Most important – the thing actually has the money to happen.
  2. Access to capital without going into one’s own savings.
  3. You have a much clearer idea of your budget.
  4. The ability to pay writers, editors, artists (and yes, graphic designers), etc… up front, or earlier in the process.

5a. Awareness of your product to players, creating excitement and a market of consumers ready for your game.

5b. Awareness of your product to distributors and at the retail level – proof of demand.

Ultimately, this should lead to higher production values for your game, better sales, etc…

The problem is, even highly successful crowd-funding projects create problems for retail stores – even when the creators want their support, and would like to see their games on store shelves. The reasons for this often boil down to lack of knowledge of the challenges stores face. The most cited, most valid issues stores mention when complaining about crowd-funding can be solved by better-constructed campaigns that seek to include the retailer in the crowd-funding process in more advantageous ways.

Among the complaints are:

Tying up operating capital for extended periods of time, or, “Why retailer backer dollars are worth more”:

When a player backs a game, that money comes from their entertainment budget. Whether it comes out of their available cash now, or a year from now, it’s still the same set amount. When a retailer backs a game they intend to sell, that money could have been spent on product for that week, which could have sold, generating more money to pay bills and order more product the following week, which could generate even more money, etc… Now, multiply that by every week until the game is in their hands.

Why not just wait until the game comes out and get it from distribution? What’s the incentive not to?

We feel like we’re tacked on. We don’t get any of the special rewards at the retailer backer levels.

You’re circumventing us, going directly to our customers. They don’t even have a reason to come into the shop.

All of these problems are fixable, and it’s not hard to do. Let’s take them one at a time:

Tying up capital

Offer a low cost pledge level for retail stores. Consider it a placeholder, or a deposit. This allows stores be part of the project, receive updates, comment, and participate in any post-campaign things like Backer Kit, late pledges, etc… Tell them you’ll contact them when the game is ready to ship, to find out how many they want. Make this pledge amount small, but not so small they’d dismiss or forget about it when the time comes. Use the expected wholesale price of one unit as a guide. Or the cost of a meal. Credit this amount toward the initial order – “You already have enough credit for one core game. How many more would you like, and how many of the expansions?”

Incentives to back instead of waiting for distribution

Send all your backer rewards out near the same time – the retailers’ with the other backers, if you can – so they are received close enough together, and ahead of when the product goes to distributors. Build in a meaningful timeframe during which backer retailers can sell your game exclusively – 30 days if possible. You can offer a slightly better price than what you expect the wholesale pricing to be, but don’t go crazy here – just a few (2-3) percentage points. You want the distributors to carry you, too.

All the good feels

Let your retailer backers have access to extra stretch goals and special rewards. Go further than this. Offer stores something special just for them. This could be a retailer-exclusive item, or something digital, an event, or special recognition in the product somewhere. Make this a higher pledge level. Perhaps include the small price break mentioned above, here, with a commitment to a higher product quantity. For many stores, 2 or 3 copies is a good place to start.

Give customers a reason to go to the store

The special thing mentioned above can be a good reason for a gamer to come to a shop. So is early release. If you offered an event, this would be a good time for stores to run it. You could also try to more directly facilitate a connection between your player and retailer backers by having the option of shipping customer rewards to stores of their choice, and letting them pick up their games at the shop. You can pass along the savings on shipping to your player backers as an extra incentive. Some people would rather have their packages delivered to a secure location. Enterprising store owners will realize this is an opportunity to upsell. More enterprising retailers will try to get any regular customers considering backing your project to pre-order it through them instead. Don’t worry about “losing backers” like this, any more than stores do about “losing customers”.  In a system as large as a crowd-funding effort, there will be enough dollars to go around. Very few campaigns reach only their funding goal and no more. Ultimately, they’re your players, whether they pledged early, or through a shop. One could argue a purchase made through a shop has a even better chance to create more players, but that a subject for another article.

Brian Dalrymple owns The Adventure Game Store & Dragon’s Lair in South Florida, and is a partner in Alligator Alley Entertainment, publisher of The Esper Genesis Heroic Sci-Fi RPG (on Kickstarter right now), and Witch Hunter: The Invisible World. He has worked at every level in the games industry, and has been actively involved in the Game Manufacturers Association for more than 20 years. Find him on Twitter @AdvGameStore

 

2 Responses to “Creating a Retailer-Friendly Crowd-Funding Campaign”

  1. Chris says:

    I feel like another big advantage for Kickstarter creators is explicitly because it bypasses distribution and retail, giving the creator a much larger percentage of the gross. Normally distribution and retail would between them claim what, 75% of the revenue? You don’t get all of that back because you have to ship and the Kickstarter and payment fees are not trivial, but you get a lot of it.

    Another major issue of course is that while there is a proven demand for the amount of product your Kickstarted, that doesn’t really help retailers all that much. You may have cornered such a significant percentage of the total demand with the Kickstarter campaign that there isn’t much left.

    For this and all the reasons you say, it seems like Kickstarter is just so antithetical to the needs of retail that it’s a circle that’s really hard to square. All the reasons people use Kickstarter are at odds with the retail chain, and likewise if that chain reliably provided better value the demand for Kickstarter wouldn’t be so great. If I was a creator looking to get a game off the ground, and not working with an established publisher, I’d just use Kickstarter and worry about distribution after that, if my game started taking off.

  2. Brian Dalrymple says:

    Hi Chris,

    The number is around 60% through distribution. If you got direct to shops, it’s about 50%.

    What we’ve found in retail is there’s a ready demand for good games that far exceeds what pre-sells in a 30 day window, six months to a year ahead of time. In fact, the better a game does in crowd-funding, generally speaking, the more copies it sells in the shop.

    It’s true that creators keep a larger percentage through direct sales, whether that’s during the funding period, at conventions, or through one’s own website, but those reach only a fraction of the potential market, and apart from convention sales, they don’t do as much to spread play.

    I’ll absolutely concede that some projects are best kept out of the distribution chain, especially if the margins aren’t there. You have to do what’s best for your situation. But if getting your game on to store shelves is something you want, my suggestions above should be things that small publishers can manage.

    And there are stores like mine and others who *want* to sell your games, and put them in front of people who might never see them otherwise. I’m offering suggestions on how to make this work beneficially for creators and retailers, as someone who is both. I don’t believe we have to be at odds, and I think both would be more successful if we worked to accommodate each other’s needs.

    Thanks for your feedback!
    BD

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