Friday, February 8, 2013

Shipping the Future



When I called Dan Yarrington from Game Salute I didn’t expect to talk to him for more than two minutes, let alone more than twenty!  Originally I just wanted to find out more about the Storm Hollow rebranding issue that I wrote about earlier, but during our discussion deeper issues about the Kickstarter formula and the future of boardgame Kickstarters rose to the forefront.  

Is Four Months and counting acceptable? 
Big Money!  Big Prizes!  I LOVE IT!
When talking about the delays that the rebranding was going to cause the Storm Hollow group we ended up talking about Kickstarter delays in general.  Dan brought up an interesting statistic from CNN Money that showed 84% of high profile successful Kickstarters were delayed, often times greatly delayed.  The reason for it was so simple and obvious I couldn’t believe I hadn’t ever thought about it, let alone discussed it!

The number one culprit in his opinion was the often celebrated stretch goals. Stretch goals have become normal after projects began blowing past their original planned goals.  These “extra” goals often give people a chance to add more to a game, spend more money for more art, or add extra bits for those who want them.  They’re the bread and butter of many a successful Kickstarter, but as Dan pointed out they necessarily cause delays.   

“When people launch a Kickstarter with a set goal they’ve already budgeted for that goal amount.  The problem occurs that when you add more rewards and goals to that level they aren’t always as planned out.  This will of course mess up delivery times.”  

When people plan for their Kickstarters they plan out a run of games, say 50 games at a cost of $10 each.  So the cost of the printing is $500 and then they find out the cost of having those shipped to his receiving area and maybe that comes out to another $500.  Add in the cost of say 20 T-shirts at another $10 each gives our hypothetical project a total “physical” cost of $1200.   

What happens is that in the rush and excitement of blowing past that $1200 “hidden costs” pop up that weren’t planned for.  Say our hypothetical project makes $2400 and doubles the number of games they originally planned for.  They also tossed in a “Mini-expansion” for everyone who bought the base game.  So now instead of 50 games at $10 they now have 100 games at $13 each.  ($10 original price plus $3 for the “mini-expansion”) That base price alone now eats up the original $1200 budget along with an extra $100.  Next comes the shipping, which is almost always higher than expected.  So instead of $500 to ship 50, he now might be looking at $1300 to ship 100 plus the 100 expansions.  Congratulations, just getting the game made has now cost the creator $200!  ($1300 shipping + $1300 manufacturing = $2600 which is $200 more than the double goal!)  

Unfortunately this is not an uncommon thing.  Shipping delays, customs, manufacturing issues, we’ve heard them all time and again, especially in the board game section of Kickstarter.  While Kickstarter shows a 43.57% success rate for Kickstarters in general, and 33.83% for gaming Kickstarters, Dan wonders how many of those are financially successful.  He believes the number that break even are probably only a fraction of those who are successful.  




It's February 8th 2013, I still don't have this game.  
A left turn at Albuquerque
Another cause of delays beyond the purely financial and production delays are shipping delays.  Many new creators don’t realize how much time, money, and energy shipping is to a Kickstarter.  Any time you’re dealing with physical objects be they miniatures, game boards, cards, bags, or even T-shirts shipping will play a key part of a Kickstarter’s fullfillment process.  Every physical transfer point in the delivery chain causes time and expense especially since the increase in shipping prices and the rules on international shipping.  

International shipping alone is a nightmare that many Kickstarter projects are not prepared for.  When shipping nationally one can often prepare sheets of prepaid postage and labels to speed up packing times and then add delivery addresses as needed.  These simple streamlining steps aren’t possible with international shipping as every box needs to have a separate custom form, different postage, different packaging, etc.  All of which becomes even more complicated with stretch goals and “add-ons” that make packages different per backer.  The ongoing saga of Gunship: First Strike shows just how harrowing shipping on your own is. 

I like these guys but 8 months?  Really?  I might move again before they ship!

The customer is always...


Being a backer isn’t the same as being a customer, nor is it wholly different from being one either.  Even after Kickstarter’s continued insistence that is not a storefront, going so far to make sure the individuals projects added a “Risks and Challenges” section, people still back projects without noticing the “backer” terminology.  As a backer you are taking a risk and supporting a project with no guarantee of return.  Sure, every project lists “rewards” and every successful project makes a genuine effort to live up to those promises but in the end Kickstarter itself isn’t promising anything will come of your money.  

Every creator must be ready to bombarded with lots of questions which only makes sense considering money is involved, but sometimes these questions show the disconnect people have about being a backer versus being a customer.  Some will ask for refunds once a project is funded, without realizing the project probably hasn’t even received the money yet.  Or even if they have it’s most likely already spent.  The money isn’t just sitting in a pile doing nothing, it’s been budgeted and put to use doing what you backed the project for.

Another common complaint is international shipping, Dan went to great lengths to describe how aggravating it is to deal with folks who don’t understand how expensive it is to ship overseas.  Even on projects where the creators are prepared to eat the shipping and offer a lower cost to the international folks there are those who still complain.  Asking for people to put “gift” on a custom form is not only cheating, it’s against the law.  Then there are the problems of missed addresses, “lost packages” that arrived in country but were sent back when the backer didn’t pick them up in a timely fashion.  Those returns could take months to get there and back with much of that time the project knows nothing about the package’s status.  

Customs can bite a project in the arse not only when sending packages to backers, but on receiving shipments from overseas manufacturers.  It is not unheard of for new international receivers to have their packages given special attention by customs.  This of course adds time which adds costs.  All of these issues combine to create the situation where shipping equalling half if not more of the time involved in a Kickstarter’s fulfillment.  

Do you even need that finger?

There are those who think stretch goals are even more harmful to Kickstarter than just the financial fallout and delays, even go so far as to call them “bullshit.”  Andy Schatz is the designer of Monaco and has gone on record with the PA Report describing stretch goals as a form of game bloat.  He contends that features being put up as stretch goals,  “...you should decide if the game is incomplete without those features. If the game is missing a finger, add a finger, if the game is not missing a finger, don’t add one.”   

Are stretch goals effecting projects negatively?  Dan argued that stretch goals have basically become Kickstarter.  Projects are launching with lower goals than what they really need and hoping the stretch goals will be hit to produce what they really wanted.  What we’re seeing happen though is these projects will hit their goals but in the last week or so they’ll cancel as they didn’t hit their actual desired goal which was actually called a stretch goal.  Currently the number of products doing this is small, and most cancelled projects are cancelling for good reason (like Days of Wonder’s Small World 2 campaign), but if the trend continues the stated goals will become more of a marketing tool to gain backers instead of an honest estimate of required funds.  

They actually showed up earlier than their release date to the backers. 

What are you doing about it?

The Kickstarter community is very much in flux as people try new ideas to bring their projects to completion, this also applies to those trying to improve on time rates.  With the number of projects Game Salute is involved with it is not surprising that Dan had some ideas on what they can do to remedy these issues.  In the end all of the changes he is proposing will succeed or fail based on what the community thinks of them.

One of the key issues he’s spotted in the Kickstarter paradigm when it comes to board games is “the local game store issue.”  Right now local game stores have almost no incentive to stock or buy a Kickstarter project since many of those who want the game already back the Kickstarter.  They’d be left with stock that just sits around, and every businessman knows that idle stock is lost income.  To remedy that problem Game Salute has introduced the “Springboard Local Support” program.  The program allows for Kickstartered games to be delivered straight to the local game store, but instead of just being a bulk delivery location the local game store will also receive credit for the game as if they had sold it!  It’s a win-win system for gamers and local stores that really changes things for the gaming community.  An added benefit for this system?  Every Springboard game that hasn’t shipped already has this option retroactively applied, meaning you can support your local game store with games you’ve already backed but haven’t received yet.

The other ideas to improve on time deliveries Dan suggested are simple yet may require Kickstarter.com’s support.  The first of these is adjusting delivery dates.  Currently once you’ve created a backer level you can’t modify it in any way either the wording or the delivery date.  This is a protection for the backers as it prevents creators from changing things mid-stream.  Dan’s contention is that maybe you SHOULD be able to adjust those backer levels, at least the estimated delivery date.  As it stands a Kickstarter can have all these wonderful stretch goals and know for a fact they can’t make the original delivery date now, but they can’t change the official delivery dates, they can only warn their backers in updates.  Dan proposes allowing creators to adjust the delivery dates ONCE during a campaign no later than 1 week from the end of the project.  That would give backers a chance to pull out if they feel the new date is too far away while still being full upfront and open with the backers.

The next idea is directly controllable by the creators and it’s simply to not offer international shipping.  It is something unpleasant and limiting but it would cut out all the troubles of dealing with international fulfillment.  Another way to keep costs down and ensure proper delivery times is to limit the total number of backers for any physical object.  The limits are usually saved for offering “early bird specials” and limited special rewards, but they could also be used in general to make sure a project doesn’t produce more orders than a creator has budgeted to make.  

In the end these ideas might work, and they might not.  It’ll be up to the market and Kickstarter itself to decide.  Right now most folks are resigned to the idea of “all Kickstarters are late” and will sit back and wait however long it takes.  On the other hand the market might not be willing to tolerate those indefinite delays for much longer and if that occurs than Game Salute will be prepared to adjust to those new conditions.  Every other prospective Kickstarter creator must be prepared for these changing conditions and plan accordingly.