A number of backers were angry at my previous update, feeling that we were asking them for more money without having delivered anything for their previous pledges. That was never the intent. The object of that post was to:
Announce the upcoming supplementary Kickstarter (starting May 12)
Share the new version of the break-in room demo
Show how the game is finally progressing from concept art to a real game
Show that a small donation from many people can make a big difference
Thank you for your past support and bearing with this delayed game
That was all. It certainly was not intended to demand more money from backers who were generous to us when we had nothing more than a game concept. You are the 6,000 who believed in us more than any of the other hundreds of thousands of Quest for Glory and Castle of Dr. Brain players. You mean the world to us.
As you know, nearly all of my updates have been open to everyone. Yesterday's update was the first of a series of backer-only updates to keep you posted on why we are doing the new Kickstarter and other project details that we feel are of more interest to you than to the rest of the world. There won't be any secrets here, but there will be some very honest talk that some will take negatively.
One of the questions raised several times yesterday is, "What did you do with the first $400,000? Why do you need more?" It's a great question, and I'll answer it here.
But first let me put it in perspective - $400K after our costs of making and shipping rewards, Kickstarter fees, and so on, is actually less than $300K net towards the project. That was enough money to pay for one programmer and four artists for a year, even with no other expenses (music, Unity licenses, etc.) and paying Lori and me nothing.
We started with four artists, a musician, and a programmer. If nobody had left the team and we completed it in 8 months, we'd have broken even. That lasted one month before a key team member quit and we could not find a replacement.
Let’s look at all the money we've received from crowdfunding and our site:
Pledged on Kickstarter (Gross): $409,000 (but some did not pay)
PayPal and Humble Bundle (Gross): $26,000
Total Crowd-Funding to Date (Gross): $435,000
Deductions and Funding Costs: $60,000
Total Crowd-Funding to Date (Net): $375,000
Here’s where we spent the original Kickstarter funding:
Art and Animation $205,000 (includes work on virtual rewards)
Programming $85,000
Music $25,000
Taxes/Fees/Overhead $75,000 (includes cost of funding)
Software/Supplies $10,000 (Unity and other licenses)
Rewards and Shipping $35,000
TOTAL: $435,000
Of the $85,000 spent on programming, $45,000 went to work that proved unusable by team members who later left the project. We’ve deferred about $25,000 of additional programming expense until after the game is released.
$84,000 of the art expense went to Contract Art House for 3D character models and animation.
Note that there is no category for game design, writing, or management. Lori and Corey each took a $20/hour salary for the first year, resulting in $15,000 in taxes. Once we started running low on funds, we returned every dollar of our salaries to Transolar Games in the form of a personal loan.
We estimate the total project cost at $550,000 to get the game out the door. We are deferring an additional $75,000 in costs until after the game becomes profitable - Deferred contractor payments and cost of producing and shipping physical rewards such as game boxes.
Lori and I are personally covering all expenses beyond the crowd-funding amounts. In fact, we’re literally betting our house on the project - Since we have no income from the project, we are using a $150,000 home equity line of credit to cover Hero-U development and pay our living expenses. We are completely committed to finishing Hero-U: Rogue to Redemption and making it a game that players will love.
We will not make any money from Hero-U until everyone else is paid, backers have their games, and we manage to sell some copies.
If this campaign is successful, here is how we will spend the funds (based on exactly meeting the $100,000 goal):
$10,000 Kickstarter and bank fees
$20,000 Cost of project rewards
$40,000 Programming
$20,000 Art and Animation
$10,000 All other expenses
If the project reaches $200,000:
$20,000 Kickstarter and bank fees
$40,000 Cost of project rewards
$70,000 Programming
$40,000 Art and Animation
$20,000 Game testing, production, and shipping
$10,000 All other expenses
Any additional funding will be used for:
Improved game play, art, and sound effects
Debt reduction to lower interest expense
Additional section of the Sea Caves (Temple of Gog-sosloth)
Localization and Voice Acting
Android and iOS Tablet versions of the game
Our artists have been doing amazing work on the project over the last 2.5 years even as we had to change the specs because of programming issues. Our new strike team of four part-time programmers are all doing great work. Many of the team members are making sacrifices to keep the development costs reasonable, and we hope we can make it up to them later. They are Hero-U's biggest fans (all were backers before they joined us), and we are blessed to have them on our team.
Lori, I and the team are really excited about recent progress and what we expect to happen this year. We'll keep you posted on all of it!
