big thread exactly on that here in case forum members are living under a rock
Is this 5% inXile's "kick it forward" campaign or do the kickstarter get a different 5%? Is kickstarter for-profit or non-profit?
Kickstarter collects a 5% commission on pledges. It is a for profit company; I imagine some might feel the amount they are ending up collecting is a ton for the amount of work they are doing, keep in mind that most of these projects would not be possible without the visibility and services it offers. Unlike many other means of raising funding, this model also offers unprecedented lack of "strings" attached to the funding and Kickstarter makes no claims of ownership over the intellectual product or project itself. It does however bar the later removal of anything posted after the completion of the project - creating a permanent record of both successes and failures which I suppose some might find inconvenient. Amazon payments (managing the collection and deposit of funding from pledges) also collects a seperate 3-5%.
The 5% "Kicking it forward" pledge only comes into play if the finished product ends up making a profit above and beyond development costs such as salaries, materials, publish fees, etc. This would not come out off the top of the pledge ammount; the only realistic way in which even a portion of a portion of the pledge ammount itself would be directly part of this would be if the developer chose not to or couldn't figure out how to spend all of it. For most projects then, this will mostly have to do with net profits on the sales of the finished product to non-backers (this could be quite significant in the case of a successful product as margains will be rather high in cases where the pledge ammount 100% coverd development costs.)
Let's consider Wasteland 2 as an example then.
$3.04 Million Raised
-$152,000 goes to Kickstarter itself as a comission
-$91,000 to $152,000 is taken as the Amazon Payments comission
--------------------------
Roughly 2.74 to 2.76 is actually deposited to inXile
Now lets take a stab at estimating an example of how kicking it forward would work. Estimating actual final profit (considering costs of ongoing support/post-launch patching and variable comission/markup for digital distribution routes) is a bit more guess-work. Let's go with a middle sounding estimate of 50% of initial post-launch price of $40 being profit and a very conservative low-end guess of 50,000 non-backers buying the game at this price. This would be about 2 million dollars in sales and 1 million dollars in proffit (margain per-copy is higher than normal because development costs are already pretty much paid in full.) For an optimistic guess, let's guess 250,000 in sales equivalent to initial price (ie, 400k over its lifetime but many copies discounted during steam sales and similar promos) for a total profit of
Low-end (I guess) selling 50k equivalent at initial launch price sales:
$1 million in profit
$50,000 is reinvested as pledges to other kickstarter projects
Optimistic 250k equivalent at initial launch price sales:
$5 million in profit
$250,000 reinvested as pledges to other kickstarter projects
Again, none of your pledge is going to go directly to other projects, just some of the fruit of the fruit of your pledge (a portion of their success in the open market post launch.) The way Brian Fargo has stated it, it sounds that he intends this profit to be determined on a per-project basis; this means that it will be profit from sales after paying all fees and costs associated with development and support but not on the year end profits from his company's balance sheet. This means it seems his intention is to kick it forward before reinvesting profits in other projects or dividends for himself and others.
Less genuine "kicking it forward" projects could conceivably kick it forward based on calculating profits after reinvesting net project profits back into their company - which means that the ammount could ultimately be entirely arbitrary. It is an honor system though and I would hope the most succesful projects at least do follow the spirit of the system.
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