Double Fine’s Kickstarter project is just like Zynga’s Free-to-play model

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Yesterday, Tim Schafer and Ron Gilbert, creators of classic point-and-click adventures such as Day of the Tentacle and Monkey Island respectively, broke new ground in the funding of video games.

They put up a Kickstarter page asking for fans to fund them $400,000 to build Double Fine project, a new point-and-click adventure. Within 24 hours, they had raised the full amount, and then some, and the process they have demonstrated how the digital world has totally transformed the nature of content creation.

It’s not about volume

One commentator said words to the effect of “they’ve only had 11,000 people committing to the game, which isn’t exactly a best-seller”.

Which totally misses the point of what Double Fine have achieved. Tim and Ron are huge figures within the community of adventure gamers, people who are adored by their fans for having created masterpieces of storytelling, fun and intereaction.

They also can’t get those type of games funded by publishers any more. “There’s no market for point-and-click adventures”, say publishers who aren’t interested unless a game is going to sell 3 million units.

Tim and Ron ignored that, and went directly to their fans. They aren’t trying for a mass-market appeal: they are trying to make games that people love – and are willing to pay a lot for.

Who paid what, and why

This analysis was done at 13.51 GMT on Thursday 9th February. This is important because the numbers are rising so rapidly that I’ll probably have to redo the analysis in a few days.

At that date, this is what the Kickstarter summary looked like:

A traditional games publisher or media executive might thinkg “$534k, 12.5k users, that’s a little over $40 per user.” Which is completely accurate and utterly misleading.

Let’s look at what is really going on. Double Fine offered different reward tiers for pledging to the game that ranged from a copy of the game on Steam when it was released, through HD videos of the documentary, soundtracks and signed posters all the way up to lunch with Tim Schafer and Ron Gilbert themselves. Each reward was triggered by pledging a minimum amount, e.g.:

So how many people paid for each tier:

Looking at this chart, you would be forgiven for thinking that people who spent $15 were your most important source of revenue. Then people who spent $30 and so on.

Now look at how those revenues (not pledgers) were split. Note that this is not perfectly accurate because the tiers are priced at, for example, $100 or more, so someone could have pledged $150 but I can’t tell this from Kickstarter. For the chart below, I’ve assumed that everyone pledges exactly the amount of the threshold, which understates the revenue for each category.

Let’s put it another way:

• People pledging over $100 generated 55.7% of the total, but are only 12.9% of the audience
• People pledging over $250 generated 32.5% of the total, but are only 3.2% of the audience
• People pledging over $1,000 generated 15.7% of the revenue but are only 0.4% of the audience

It’s a power-law in action

Anyone who has heard me talk knows that I am a big believer in the power-law. I believe that the Internet is eroding the mistaken belief that we have to charge everyone the same price. Digital relationships with our fans enable us to offer them the ability to spend as much or as little as they like. It is the business model that drives free-to-play games from companies like Zynga, and it is the business model that has driven the Double Fine Project.

(I fully accept that Tim and Ron are going to make MUCH BETTER GAMES than Zynga. That’s brilliant and I look forward to it. They’re not giving it away for free. That’s their choice. But they are enabling players to spend lots of money on things that they value, just like Zynga.)

The point is that Tim and Ron have allowed their players to choose how much they spend. 6,230 chose to pledge around $15, the price of many indie games on Steam. If that was the only price that Double Fine offered, they would have made $93,430 from these people, and probably another $15 from everyone who was prepared to spend more on their game, for a total of £185,085.

But they didn’t. They realised that they had fans who wanted more, much more, and were prepared to pay for it. So via the medium of Kickstarter they’ve been able to give fans the opportunity so spend more.

And they’ve generated 3x as much revenue by giving fans what they want. That’s the real lesson of the Double Fine Kickstarter experiment.

If you make games, that’s what you should learn from: how to give your biggest fans MORE, and let them pay for it. They’ll thank you for it.

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