Kickstarter Lessons: Everything will cost you more than you’d expect (and how to prepare for this)
Last week we discussed all the stages in your game’s production and delivery that will take you more time than you ever imagined. Time and money are pretty intertwined, right? Well, In today’s article, we’ll talk about all the things that will likely cost you more than you had expected so that you can be better prepared for your Kickstarter campaign.
We’ll talk about art, production, taxes, testing, and other fees that may crop up to help you plan your upcoming Kickstarter project.
As mentioned in last week’s article, art, like many other creative pursuits, takes time. We all know that time is money, so the more unique art you have in your game, the more it will cost you.
Also, if you are working with a well-known artist, they may command a higher rate than others.
So, what can you do to ensure you create an amazing looking game without blowing the budget?
Well, for starters, figure out your art budget. If you have an amount you’re comfortable spending on art, this will help to set expectations around what you can and can’t do.
Also, make sure you know exactly how much art you;ll need and for what purposes. See if there are ways to re-use pieces within the game and for your Kickstarter campaign.
You need to think of all the headers, banners, and ads you may need as part of this budget. It’s really easy to fall into the trap of needing “just one more thing” from your artist. I’ve definitely done this. Even though I thought I had every piece I could possibly need, I realized I needed something else specific for Facebook banners or the Kickstarter page.
So, make sure you have some money left in your budget for these little things that may pop up.
Your production or manufacturing cost should be fairly well-known. You will have gotten multiple quotes from manufacturers and decided which one you will be working with. So, your manufacturing costs will be pretty well set.
However, be prepared to make adjustments as necessary.
It’s not unusual for the manufacturer to have to increase the box size after the initial specs. Sometimes everything just won’t fit as nicely as you had planned.
You may decide to include a custom insert. This can add more value to your game, but of course, this comes with a price as well. This insert may be another reason your box size changes.
Maybe a backer has a great suggestion and you end up adding something new to the game.
So, make sure you have listed all components, get updated quotes whenever you change anything (or even think about changing anything), and be prepared for the manufacturing cost to edge up a bit.
I’m no tax expert and this definitely shouldn’t be taken as legal or tax advice. All I can share is my own experience when it comes to taxes, so I advise that you always do your own research and talk to industry professionals to understand your own tax situation.
Generally speaking, you only need to charge tax for customers in your own country or region. The EU seems to be the major exception to this rule, however, as all imported goods are charged VAT (Value-Added Tax) and possible customs fees.
Yet, Kickstarter doesn’t collect taxes or give you any way to capture this other than charging backers more by including this in your pledge levels. Yet, it’s not really fair to charge everyone for taxes that only need to be paid by backers in certain regions. Not to mention that tax rates vary wildly from one region to the next.
One way you can charge taxes is through a pledge manager after your campaign. This is already highly recommended for charging accurate shipping costs and allowing backers to upgrade or add to their pledge (and sell your game to late backers). So, you could charge taxes based on the region here. Just make sure to specify clearly on your campaign page that this is your plan! You don’t want angry backers claiming you tried a bait-and-switch move.
Taxes can really add up, so you must understand the tax implications for your project and account for this appropriately. Otherwise, you can end up turning any profit from your game into a loss.
It’s wise to have your game safety tested as well. This will make it much easier to sell and deliver your games in the EU in particular.
It’s a detailed subject, so I’ll share a link about this here in case you want to learn more.
Be prepared to spend hundreds or even a thousand or more dollars on testing for your game, depending on the game and the company you work with for testing. However, in some cases, a manufacturer can test their own products to meet compliance requirements.
Again, you’ll have to do some research and talk to your manufacturer to determine what’s best for your situation.
Countless little things can cost you more than you expected, from preparing for your Kickstarter campaign to having your game shipped and delivered to backers.
Here are just a few of the other areas where this can occur that you need to keep an eye on:
- Rulebook editing and creation
- Kickstarter video and GIFs
- Reviews and previews
- Customs Fees
Be prepared, get quotes, and figure out your budget for everything. Then add 10-20%. Do your best to stick to your budget, but don’t beat yourself up if you’ve forgotten anything or underestimated some costs. Sometimes these expenses are necessary and they may even be a great return on investment or save you a lot more money down the road!
What expenses have come up when working on your game or preparing for a Kickstarter campaign?
Please leave a comment and share your story.
George Ayala Angear
Thanks very much Joe for all your useful posts.
My pleasure, George!
The most recent of the three that really caught me by surprise were rulebook editing. I created it myself,and hey it makes sense to me. With a little distance, and possibly a bit more objectivity, I now realize having another set of eyes, besides my graphic designer, would be beneficial.
Just before that I realized I’d need to hire someone layout a KS page and make short videos, like 15 seconds, 30 seconds. I thought, well it’s such a short videos, but there’s a cost.
And before those two entered my awareness, I realized that I really should budget for reviews and previews. As I type this, there’s a fourth: making a prototype to send to reviewers.
Yes, rules are critical and it can be very beneficial to hire a pro to help with this.
Videos can get very pricey as well!