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Project Eternity campaign pulls in more than $4.1 million
by John Keefer, Oct 17, 2012 8:15am PDTThe Project Eternity Kickstarter came to a close yesterday, collecting more than $3.98 million, making it the crowd-funding site's most successful videogame project. Add to that the more than $140,000 in PayPal contributions, and Obsidian Entertainment blew past all its stretch goals with more than $4.1 million.
With the final tally and more than 74,000 backers (including PayPal), Obsidian has promised Barbarian, Cipher, Chanter and Paladin classes, two big cities, a player house and stronghold, lots of races and extra companions, Mac and Linux support, crafting and enchanting, a 13-level mega-dungeon, and plenty more. And since they hit $4 million, it appears Chris Avellone will be forced to play Arcanum.
If you missed contributing to Kickstarter, Obsidian has said the PayPal option is still open, but not for much longer. Development is expected to go well into 2014, but Obsidian has already released a screenshot to tease fans about what they can expect.
Comments
The Project Eternity Kickstarter came to a close yesterday, collecting more than $3.98 million, making it the crowd-funding site's most successful videogame project. Add to that the more than $140,000 in PayPal contributions, and Obsidian Entertainment blew past all its stretch goals with more than $4.1 million.
The Project Eternity Kickstarter came to a close yesterday, collecting more than $3.98 million, making it the crowd-funding site's most successful videogame project. Add to that the more than $140,000 in PayPal contributions, and Obsidian Entertainment blew past all its stretch goals with more than $4.1 million. : Shacknews
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I'm really curious how all of this kickstarter funding translates into profit for a company. Subjectively it's money gathered to fund the development of a product (game). So, it is basically seed money or operating capital. It's not revenue. Can they count the games they give out to backers as sales? I don't think so, but I'm out of the GAAP world too long to know for sure. Even if they could count it as a unit sale, what would the revenue be since they took the money as earmarked for operating capital?
74k backers translates into 74k plus lost sales since we all get 1 or more copies of the final product.
If you don't have the cash to fund your own development, you usually get an advance from a publisher or borrow the money. The advance goes against future sales and it's the publisher banking on the success of the game. Borrowing money means you have to pay it back with interest. I don't believe that's done very much these days, although I guess the advance from a publisher is kind of loan but the payments are mitigated from the game sales with the interest pre-buried in the total reclaimed sales figure. BUT, kickstarter funding doesn't fit any of that. They don't have to pay it back to us except in the form of the stuff we're promised for being a backer. No interest payment. No commitment to sales potential.
So, I guess my point is they get to take this $4.1 million, and just sink it into the game. Period. In the finance world, this is probably viewed as a Gift since there are no financial or monetary strings attached (again, outside of the promised goods some which do have a physical cost). The game could make no sales at all and it wouldn't technically be a financial failure since they don't have to pay the $4.1 million back to anyone. That's just such an odd situation from a finance pov.
Then, does $4.1 million from 74k backers, @ roughly $55 per backer, translate into a game with the potential for large sales to attract a publisher? Or, since this is an older genre is this an expression of the limit of peak of game sales? All speculation and is part of the reason why they chose to do kickstarter to mitigate the potential loss.
You can guarantee the entire industry is watching this like to a hawk to see how it plays out. The finance guys especially are the ones watching closest. Is this the way of the future? It could be, but I think as a potential backer I want there to be a firmer line a developer has to meet with some kind of proof of concept before they can ask for funding like this. Obsidian has a great pedigree to call us to arms, but lets be honest that they didn't have a lot of concrete content to share with us at the start. They gave more in the frequent updates, but if this becomes more common, how much do we want upfront before we open our wallets? Not trying to negative, but we will get burned on these eventually. As backers, where is our comfort point to adopt this as our new model to get the games we want?
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