Stretch Goals are Not RealPosted by Advice February 4, 2019 in
Stretch Goals! The end-all sign of a healthy Kickstarter campaign! It shows the publisher not only has surpassed their expectations for funding, but are putting those profits right back into the project, right? Wrong! In this short article, I will explain how most stretch goals are at best disingenuous as to the manufacturing process, and at worst down-right marketing scams.
Stretch Goals are not unique to crowdfunding. They have actually been used for quite some time in the workplace to set extraneous goals for staff to reach past the otherwise adequate requirements of the job. Many companies who use stretch goals have actually gotten into trouble, such as Wells Fargo. Wells Fargo created increasingly aggressive stretch goals for their sales staff, leading to more than 3.5 million fraudulently opened accounts and more than $300 million in fines and class action lawsuit payments. Stretch goals as an incentive in the workplace cause employees to become fixated on a lofty numeric goal and lose sight of what makes a company special, the product itself. Notice any similarities yet?
Let’s clear something up for stretch goals as they relate to Kickstarter campaigns. Your pledge on its own does not influence what a competent publisher does to improve the project. 100 backers do not warrant adding linen finish to cards, and 200 backers don’t justify adding a miniature to the project. These decisions are all made in advance of the campaign before a penny is pledged. Even CMON’s quarterly losses last year can be easily attributed to making detailed plans for numerous Kickstarters and seeing those plans through, even though the money actually wasn’t there to make as grand of a game at the time based on backer interests. Let me break that down as it actually relates to manufacturing.
According to BoardGameData.com, about 300 successful campaigns attracted more than 1500 backers in 2018. More than 1900 successful campaigns attracted fewer backers in the same year. What you may not know is that most publishers (with very few exceptions) should not mass manufacture below 1500 units in order to benefit from production scales of economy. Scaling is what is pitched to you the consumer as the reason for the stretch goals, usually. “We reached x dollars, so we can now afford this x upgrade.” In fact, most reputable Chinese manufacturers, such as LongPack, Panda, etc., have minimum order quantities of around 1500 units. Even at 500 units produced from a smaller printer, the lesson in this article should remain intact.
Because most publishers need to make at least 1500 units no matter what, your added pledges to the tune of 100s of units won’t actually affect the planned profitability of the project. The publisher was always going to make more units than your combined pledges would amount to, especially if that publisher is in distribution. That means that more backers do not equal more goodies. Instead, marketing is needed and what better marketing than FOMO (fear of missing out) and word of mouth?
Still here? Great! Let’s break down how a publisher does math before a campaign. I am going to purposefully ignore shipping, logistics, etc. because even though that factors into what the Kickstarter goal should be, it does not reflect in what is done after the goal is made (again, with exceptions related to added weight, new shipping lanes, etc.).
A publisher has a publishable game. It is fun, it is mostly ready for press. It may need art, and it may need a few more pizzazz elements so it has the best chance on Kickstarter. So the publisher goes to a number of manufacturers, and gets quotes on the specific breakdown of components, down the millimeters, weights, colors, and finishing in everything related to the finished product. I want to stress that this is a delicate and detailed process that continues all the way through the campaign to production and subsequent reprint. During this quotation process, a competent publisher will always quote all of the stretch goals they have in mind, or, in some cases, the deluxe editions of the game. This pricing is broken down by line item and the publisher can make out which combinations of which stretch goals will cost x dollars when added to the full print run. Side note, publishers. Always ask for line item breakdowns.
Remember that we said a publisher usually needs to make 1500 units when mass manufacturing in China. That means that all of the stretch goals must be priced out to keep each unit sold profitable, no matter which upgrades are present. Miniatures and wooden pieces in a game complicate this math, but the principles are generally the same. The publisher always needs to manufacture more units than Kickstarter units sold, and the profitability is not impacted by making more units until you cross about 3000 units (at least for paper-based products, more/less so for other components).
Let’s take a deck of cards for example. A run of 1500 decks of cards costs roughly $1-$2 per unit depending on the box type, finishes, fancy glosses and metallics added to the box, etc. Let’s say all the upgrades you could possibly do to a deck of cards amounts to $3 total production per unit (this is high, but let’s just run with it). As long as the publisher covers the cost of freight shipping, fulfillment, etc. in the cost of the game and shipping charges, that publisher only needs to add their own
What usually happens is that the publisher creates a marketing engine called stretch goals by presenting a reduced version of the game from the start. The publisher wants your attention and excitement, but mostly your shares, throughout the campaign. It is cheap marketing to say that we will unlock linen finish once we hit $1000 more, so go out and tell your friends so we can hit that goal. In reality, linen finish is already planned for the print run at pennies added to the unit cost of the run. You just got
Detractors of this article will say what about added art costs, or development costs for game modes, or distributor/retail interest due to the high performing campaign? I will go back to my original statement that most competent publishers plan for this eventuality and all of it is accounted for in advance in a nice little spreadsheet, to include the Kickstarter graphics which gave you a sense of being there when we all successfully unlocked linen finish! It’s all a man behind the curtain, sending you off on sharing quests to get the publisher that one-way ticket home to profit town.
Wasn’t the original game concept enough to get you to back on day one, proudly presenting your backer number? Aren’t you losing out by not demanding that all unlocks be made available from the start of the campaign with relatively few exceptions? I want publishers to present their masterpiece as they were intended, rather than a Frankenstein of upgrades. We should ask ourselves which games we want to play, and why we actually care about stretch goals in the first place.