AAA Crowdfunding: How Kickstarter is Changing Face of the Industry

To put it simply,the packaged games business, and in
particularly the Western market packaged sales business’
operating and earnings efficiency, has been very challenging.

Kickstarter has finally caught the AAA’s  attention

When Yosuke Matsuda made this comment in a quarterly financial statement, he wasn’t just making a statement about money, but about the rapidly changing face of the publishing and distribution models currently being used by AAA publishers. Despite the success of games like Tomb Raider, SquareEnix has been struggling to move games off the shelf in their packaged distribution sector.

Not only are they struggling against smaller, more agile developers that are able to rapidly change targets and tactics in order to meet the demand of the consumer, but let’s face it, AAA developers have been out of touch with gamers for a long time now. However, crowd source funding giant Kickstarter has changed the face of the game, and publishers are now starting to realize that the best way to know what the consumer wants is to ask them.  

One could go as far as to say that in today’s times, making
customers wait for years with little to no information is being
dishonest to them. We’re no longer in an age where
customers are left in the dark until a productis completed. We
need to shift to a business model where we frequently
interact with our customersfor our products that are
in development and/or priorto being sold, have our
customers understand games under development, and finally
make sure we develop games that meet their expectations.

There is a crowdfunding website called ‘Kickstarter,’ which
does not only serve as a method of financing for developers,
butI believe should also be seen as a way to unitemarketing
and development together by allowing us to interact with
customers while a game is in development.

That’s a very good thing; here’s why:

This kind of mentality can only be a win for both developers and consumers for a number of reasons. First, if consumers are directly communicating with the developers, there is less risk for the consumer of shelling out their hard earned cash for a product that they hate. Second, if developers are directly communicating with their players, there is less risk for them because their games are funded up front, at least in part, and they have a pre-established player base prior to the games ever going to market. 

While less earth shaking than their Kickstarter-style aspirations, Matsuda also expressed initiatives to develop new IP’s for mobile platforms, as well as more region specific content. While all three of these initiatives are, of course, directly tied to profits, it is important to step back and realize that if AAA devs don’t make a profit, you don’t get to play their games because they simply will not exist.

One other aspect of this is also really exciting for me, though it will not likely impact the existing AAA developers as much: If projects like Kickstarter show promise of being long term, reliable methods of getting capital for new IP’s, game developers can forego going public and selling shares.

Why does that matter?

Because it changes the accountability paradigm in the market. Instead of developers being accountable to people who do not care about games as anything more than a profit margin, they become accountable to the players who care about great games. There is no way that this could be anything but good for the industry. 

While Kickstarter is certainly not a new concept, seeing AAA devs like Obsidian and SquareEnix moving to the platform is a huge deal for the gaming community. Who knows, this might be the pebble that starts an avalanche of great games, getting us out of the rehashed rut that the industry seems to be in.