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Greg Rice

Production Update #1: Where does all the $$$$ go?

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Huh. Hopefully, those backers with failed transactions will be forever cursed!

Nah- j/k. I knew there would be a certain % of failed transactions or pledgers that would back out, but I'm glad the total net was still over 3 mil!

Definitely interesting info. Thanks for sharing!

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What strikes me as interesting would be the breakdown of which backers get (or contribute to) what percentage of the reward dollars.

If we look at the Kickstarter Stats thread, we see that the vast majority (83%?) of backers fell into the $15 and $30 reward tiers, which have no "physical" rewards at all, so I'd suspect the vast majority of the reward production\shipping costs must be going to the (~11,500) $100 tier backers. So, about $26 apiece for the T-Shirt, Poster, and boxed game\DVD. (~$45 with shipping).

Right?

Not quite right. Remember, all of the tiers above $100 also get the shirt/poster/boxed game+dvd. So assuming for the moment that all the "rewards" cost is for physical rewards, that's (~12,700) physical rewards going out. Dividing the total production/fulfilment/shipping cost by 12,700 gives a bit under $20 average production cost, and a little over $37 after shipping (average fulfilment+shipping cost: ~$18).

Making the faulty assumption that everyone eligible for a physical reward donated exactly the amount required for their tier, those pledges brought in $1,642,000 (before amazon/kickstarter take their cut, $1,481,905 after). Total costs for those rewards are around 29% of the pledged amount (before ap/ks fees, 32% of the net after those fees).

Even after amazon/kickstarter fees and reward costs, the physical reward tier pledges directly added at least $665K more to the game/docu budget than they would have if they were all only $30 pledges (call it at least $100K of the docu budget and $565K of the game budget).

Disclaimer: I'm sleepy and may have made a major calculation error I missed somewhere. If so, I apologize in advance.

(Edited to add the additional amount added vs if the higher pledges were only $30 pledges. The average non-physical pledge was closer to $20, but $30 seems fair since the higher pledging backers have deeper pockets but might not have found either the $30 or $60 rewards sweetened the deal enough to pledge at those levels).

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I added to my previous reply, because I'm not sure of some other things you said, either.

But as far as this reply goes: a middle man is fine, as long as it adds value. Kickstarter has added the value of providing hosting for the updates and pitch video (which require a lot of bandwidth), having a site tailored for exactly this sort of pitch, having a system for ready DF to build and send out surveys for the rewards, managing the details of 80k backers, providing a message board for them to talk on during the funding process, dealing with account enquiries not directly related to questions about DFA (which Double Fine would have had to handle by themselves if they'd not had Kickstarter) and countless other fiddly things. I think they earned their 5%.

I do agree with you however at a certain point the cost don't go up linear anymore... so it would have been nice if this was calculated in say a cost per backer or something like that, a percentage doesn't seem 'fair' especially with backers buying a costly award.

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Being able to put eleven people of the DF staff towards this project just made me even more excited for it, it would have been a good game regardless but I'm sure it'll be a lot more in depth now. Good luck and have fun creating the game, we'll be watching ;)

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Interesting... I love seeing information like this, and it makes the whole process much cleaner...

Is there any hope of seeing what it's like when you have to deal with a Publisher rather then just direct investors?

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Thanks for those stats. Indeed the transparency is much appreciated.

There was just another question that came to my mind:

As all the money is paid in advance, what's happening with the interest of that money?

Don't get me wrong, I don't want to be picky. I'm just curious if this gets into the calculation.

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How about taxes? I don't like them any more than the next guy, but it seems a bit odd to neglect their impact altogether.

One thing I don't understand is that with the conventional business model where you end up selling copies of the game in the end, you end up giving up a significant percentage of the money in sales tax.

Given that all the backers have effectively pre-paid, and will be getting free copies, did the state now effectively lose sales taxes for all these copies? Or does that factor in somewhere regardless?

Also, doesn't someone have to pay income tax on the donations? I wonder what % of the money will be 'lost' that way.

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Thanks for all the information Greg! Gives me a nice warm feeling inside to know that 11 people will have regular work for the next year thanks in part to my pledge. Doing my part for the recovery, one starving developer at a time.

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Hey, thanks for posting this. Transparency indeed!

Excactly what he said :) - Can't wait to get this show on the road!

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This kind of thread is one of the reasons I decided to back this project! :-)

Hooray for transparency!

I'd also like to see a cost breakdown for the production of the game itself.

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To end on an up-note, you should go back and add a slice for "the 400k we originally hoped to raise," just to make a nice visual comparison

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This is awesome! Thanks for the info Greg!

I wonder if it's more, less or the same amount of work to make these kinds of forum posts versus standardized progress reports that they'd have to do if it were a standard publisher.

Super excited to see how the sausage gets made and how the pie is eaten!

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This is great, I hope we get to see some insight on the accounting with the documentary too. Not because of checking but to learn how to budget one.

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Also what 2PP? While I'm not as interested in knowing how a documentary production is budgeted as I am for a video game it would still be interesting.

Your typical half hour, low-budget TV documentary might cost in the region of $300,000 all said and done. It can be done cheaper of course, but then you really have to compromise on the equipment you use, editing time, music, talent etc. The original $100,000 for 2PP for 6 months work wasn't very much money at all, what they have now is a bit more realistic.

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I'm kind of curious about any contingency plans. There is a possibility, however small, that development could be rough and that the money will run out. What happens then? Do they do another Kickstarter campaign? Do they just release what they have at the end? At the end of the day they have to release a product to us, they signed a contract, quality is irrelevant. I'm not professing gloom and doom, I'm just legitimately curious as to what happens then.

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Hey Greg,

Thanks for that, awesome information!

Though, I really hate 3D pie graphs because they distort the data. I made a comparison graph to illustrate this.

HdA5F.jpg

I think my dislike for 3d pie graphs is akin to my dislike for 3d games, here's hoping that DFA is mostly-2d :)

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How about taxes? I don't like them any more than the next guy, but it seems a bit odd to neglect their impact altogether.

One thing I don't understand is that with the conventional business model where you end up selling copies of the game in the end, you end up giving up a significant percentage of the money in sales tax.

Given that all the backers have effectively pre-paid, and will be getting free copies, did the state now effectively lose sales taxes for all these copies? Or does that factor in somewhere regardless?

Also, doesn't someone have to pay income tax on the donations? I wonder what % of the money will be 'lost' that way.

Double Fine are based in America. They don't have taxes in America.

In all seriousness though, that's a very good point, and it got me thinking. What if all the donations are classified as gifts (which go untaxed) and in return, all the rewards sent out are classified as gifts (which also go untaxed). This is surely a bit loophole-y?

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Thanks for laying that info down so clearly.

IMO the fees for Kickstarter and Amazon are a-okay. Sure, 5% seems like a lot, but to put it simply: this wouldn't have happened at all otherwise... also, while both Kickstarter and Amazon didn't just cover their costs with those 5%, remember that those are still companies that try to make some money. So, yeah... overall I'm fine with those fees.

It was also obvious that some of the money would go to making and shipping rewards, that's why I had to add some money to my pledge for shipping, since I'm in adventure-land, according to Tim.

I'm also glad that 2PP get a bigger budget for that documentary. To be honest, that documentary to me is fairly important. Sure, getting an awesome adventure from Tim Schafer and Ron Gilbert is top priority, but being able to "look over the team's shoulders" while they're creating that game is, in itself, a huge reward for me and I look forward to it a lot, so if that documentary gets better: Yay! Go for it.

As others have said, I'd be interested to see a breakdown of the development budget, but it would be even more interesting to get one before production really starts (a guesstimate, so to speak) and one after the game was finished, for comparison. Simple reason: I'd like to see how accurate the professionals are at estimating complexity and cost of parts of their game.

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Anyone notice how this is not just cheaper than your average "AAA" game, but significantly cheaper, and probably going to be a lot more fun?

(Sorry, just came off an argument with a guy who's a game designer, claiming we all wanted AAA games, and demand more and more money be spent...)

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So I've got a question... (Actually several questions with a common theme.)

How does funding like this compare to an equivalent amount of funding from a traditional publisher? Would it be like a publisher providing $2,232,465? Or are some of those costs in the pie chart things that the developer would have to cover with a publisher's money? i.e. would it be more like a publisher providing $3,099,660? Brian Fargo has mentioned that having a publisher on board can often increase costs for a variety of reasons (having to provide certain deliverables, doing expensive cutscenes, implementing things the developers don't want to implement, etc.) Is there a way to get an estimate saying $2,232,465 is roughly equivalent to getting X from a publisher?

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Using the modern miracle that is math, that means we can now deduce that our game budget is $2,232,465. That's way higher than $300,000!

It's even higher than it might sound initially, because with 300k, you'd still have to cover all of these expenses, and while it would obviously take less total money to cover the expenses it would probably be roughly similar in turns of percentages. Right? Leave out the documentary because of the change in percentage and you get $2,626,429 / $3,099,660 is approximately 15% in expenses.

Remove 15% from 400k, and you get 340k. Then subtract the 100k for the documentary and you get 240k. So $2,232,465 is way higher than 240k.

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that's all interesting stuff. good to see the game got most of the funding though.

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So here's a question I've had since the start, and I would love if someone on the Double Fine team could explain it a bit.

In your videos, you have a large studio, with what looked like approximately 25-30 people. Your video said that you were all in fear of having to lay people off if a new project didn't come around, but then this happened and now you have (after all fees and such) approximately 2.2 million dollars for the tech/salaries/general costs for 11 game makers full time. So what happens with all of the other Double Fine staff we saw in the videos? Was the kickstarter just a life extending temporary financial solution until you guys get a bigger game? Are they all actually working on another publisher backed game? Any explanation on this would be greatly appreciated

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@mistermanticle: As has been stated elsewhere, Double Fine has multiple projects going on, including the Super Secret Ron Gilbert project. One of these projects was cancelled, leaving ~12 people without work, but fortunately it happened just before the Kickstarter adventure exploded, so it all worked out in the end.

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