What did we learn from looking at UK video games Kickstarter data?
www.nesta.org.uk/blog/what-did-we-learn-from-looking-at-uk-video-games-kickstarter-data/
www.nesta.org.uk/blog/what-did-we-learn-from-looking-at-uk-video-games-kickstarter-data/
We use data web-scraped from Kickstarter to study the scale, evolution, geography and role of crowd-funding for UK video games.
Recent Nesta research estimates that in 2014 the Alternative Finance market in the UK will reach £1.7 billion. Reward-based platforms like Kickstarter,, Indiegogo or Crowdfunder where “backers” fund projects in exchange for rewards are especially popular in creative industries like video games.[i] Some games projects like Double Fine Adventure, Wasteland 2 or Shadowrun Returns have raised millions of dollars in Kickstarter.
The UK has also seen some big success stories in this space, such as Elite Dangerous or Broken Sword: The Serpent’s Curse Adventure. However, there is little hard data about the state and evolution of crowdfunding for UK video games projects.
To address this, we scraped Kickstarter data about UK video games projects launched between September 2011 and January 2015.[ii] We collected data on 678 projects, capturing 90% of all UK projects in the video games category. [iii]
What did we learn?
In total, UK games projects sought to raise £20,5m, and received pledges worth £6,5m from 213,409 backers.[iv] 119 projects (17.6% of the total) were successful in reaching their funding target, raising £5.45m.[v]
Although this amount pales by comparison with the budgets for AAA console games (which frequently go upwards of £50m), it is not a trivial either: the publicly backed Abertay Games Prototype fund has distributed £5m to games projects since 2010.
It is also worth noting that many projects use Kickstarter as a source of “seed funding” which is then complemented with capital from other sources, including “early-access” sales and publishers.[vi]
The distribution of funds raised is very concentrated (see figure 1 below). Only one project (Elite Dangerous) raised more than £1m, and only 50 projects raised more than £10,000. 32 successful projects raised less than £2,000.
This concentration is similar to what we see in other creative markets, which tend to be dominated by a few blockbusters, followed by a raft of B-list projects with smaller budgets, and finally a long tail of niche projects.
Kickstarter has low barriers to entry – we would expect to see one-man bands and hobbyists jostling for funding with larger companies. How do their outcomes compare?
As figure 2 shows, just over half of the projects in our list were set-up by individuals.[vii] Individual-run projects were in general less ambitious in their funding goals (they sought to raise 39% of the total funding sought), and less successful in raising funds (they only raised 15% of the total funds raised)
This makes sense: nowadays, Kickstarter campaigns require a significant investment in concept development, videos, promotion and so forth, which can be more easily afforded by a company. Audiences can also be wary of backing individuals with big goals and/or less of a track record in professional games development. A company’s bigger network can also help increase the reach of a Kickstarter campaign.
After several early hits, there has been a decrease in the amounts raised by UK video games campaigns (see figure 3). The does not appear to be caused by a decline in the number of projects looking for funding, or in the amounts of funding sought by new projects (the red bar in Figure 3).
One potential explanation is that ‘Kick-busters’ like Elite Dangerous or Broken Sword bring one-off backers to Kickstarter without increasing the overall level of funding available for other projects. It could also be that UK video games projects are facing stronger competition from projects in other media and territories. Determining what is happening here is an interesting topic for further research.
One often hears that Kickstarter gives video games developers the opportunity to work in projects that are less attractive for mainstream publishers and investors. We looked at the types (“genres”) of games launched and funded in Kickstarter to explore this issue.[viii]
Our findings support the idea that Kickstarter enables creative experimentation in niche genres. Whereas shooters, sports games and casual puzzles dominate games charts, Kickstarter brims with games straddling multiple genres, as well as strategy and role-playing games (see the right-hand panel in Figure 4).
This point is strengthened by the high success rates of Adventure games, a venerable and well-loved type of game that had until recently been all but abandoned by commercial publishers (left-hand panel in Figure 4), and the popularity of strategy and adventure games in terms of total funds raised (Figure 5).
We have mapped an index of local Kickstarter activity.[ix] This reveals “hotspots” of activity across the UK, including several “games hubs” identified in previous research.[x] Our Kickstarter index correlates significantly with the measure of games specialisation we calculated in that project.[xi] This stands to reason: vibrant games industry hubs host a critical mass of games-making talent who might start Kickstarter projects on the side, or use Kickstarter to fund spinouts from existing companies.
What about other Kickstarter hotspots in the map? Could our Kickstarter index work as an ‘early warning sign’ for the groundswell of creative and entrepreneurial energy anticipating the emergence of a new gaming cluster? We’ll have to wait and see if that’s the case.
In the last four years, Kickstarter has channelled a considerable amount of money into video games development in the UK. This does not mean that it is a panacea for games financing. Kickstarter might be democratic in access, but as it often happens in creative digital markets, it is not so democratic in outcomes.
Most funding goes to a few popular projects, often run by companies with the resources to organise a “professional” campaign. The amounts raised are, in general, dwarfed by commercial AAA budgets (although admittedly, those AAA games tend to target consoles, rarely the focus for Kickstarter projects).
Consistent with this, the profile of Kickstarter video games projects is quite different from what we see in mainstream charts. Kickstarter seems to be enhancing the diversity of UK games-making ecosystems in terms of the video games that get made, by whom and in what locations.
41 companies in our Kickstarter list also appear in the list of video games companies compiled for “A Map of the UK Games Industry.”[xii] Interestingly, 11 of these companies were incorporated in the same year or the year after their Kickstarter campaign, suggesting that Kickstarter provided an initial venue for their entrepreneurial activities.
More research is needed to understand the trajectory of “Kickstarted” projects and companies, and also the extent to which creative experimentation in Kickstarter and other crowdfunding platforms creates wider spillovers (e.g. by showing that new and niche genres have commercial traction).
From a regional angle, does Kickstarter enable games production in younger hubs that have less visibility and access to finance and networks than established games-making clusters?
These are very interesting - and complex - questions. The wealth of Kickstarter data we have started exploring in this blog post will help us tackle them.
(This blog benefitted from helpful comments from Liam Collins and John Davies, in Nesta P&R; the "Lego Crowd" image comes from Charles and Adrienne Eseltine's Flickr).
[i] They still comprise a small segment of the market though – Nesta estimates they will reach £26m of the market in 2014.
[ii] Although Kickstarter is not the only rewards-based platform channeling funding into creative projects, it is widely agreed that it is the most important one for video games. This is why we focused on it.
[iii] We did this by downloading the results of an advanced Kickstarter query for UK videogames projects, and extracting information about each project in it with R. This information included URLs for individual projects, which we crawled for additional information. Although the initial project search announced “765 UK video games projects” in Kickstarter, the query only returned information for 678 projects (90% of the total). The count for successfully funded projects was consistent across queries.
[iv] There is likely to be double counting here, since people often back more than one project in Kickstarter. It is also worth noting that the budgets for projects launched before the official launch of Kickstarter in the UK were only available in dollars. We converted them into pounds using the average monthly exchange rate between USD and GBP in the month when the Kickstarter campaign ended, which we accessed from XE Currency Converter.
[v] Kickstarter projects that fail to reach their funding goal do not receive any money.
[vi] This can be controversial among backers.
[vii] We classified projects as “individual-run” by matching the first word (“John”) in each Kickstarter artist’s name (“John Doe”) with a list of 5,494 English names. If there was no match, we assumed the project was set-up by a company.
[viii] We allocated projects to gaming genres (based on Wikipedia) by looking for keywords (“shooter”, “first-person-shooter”, “fps”) in their project description. If a project matched more than one genre, we labeled it as ‘Multigenre.’ If it did not match any, we labeled it as “Other.”
[ix] The index normalises local Kickstarter activity (measured using project location information) with population data from the Census. The census data was obtained from ONS, The Scottish Census Website, and the Northern Ireland Neighbourhood Information Service at the Output Area level (referred to as “Small Area” in NI), and allocated to TTWAs after looking-up via the National Statistics Postcode Lookup. Matching project locations to Travel to Work Areas capt uring local labour markets was not trivial, given the lack of consistency in the geographical levels provided in Kickstarter project locations (which included cities like e.g. “Brighton & Hove”, areas like “North Yorkshire” and even nations like “Wales”). We used a fuzzy matching approach between location names and TTWA names, followed by some corrections by hand (e.g. allocating Leamington Spa projects to the Warwickshire and Stratford-Upon-Avon TTWA). This method failed to clearly allocate projects to TTWAs in 101 cases, and in some cases, the allocation was rough (e.g. York includes some projects in the Yorkshire area due to similarity in names). Caution is advised in the interpretation of this exploratory analysis.
[x] They are Brighton and Hove, Cambridge, Cardiff, London, Warwick and Stratford-Upon-Avon, and Edinburgh.
[xi] Interestingly, the Kickstarter index has a stronger correlation with measures of games specialisation estimated using Nesta’s “big data” approach, than with measures based on official Standard Industrial Classification – SIC – codes, suggesting that the former approach is better at capturing ‘under the radar’ games development activity.
[xii] This number (15% of all ‘companies’ in our Kickstarter list) sounds reasonable. Leaving aside the fact that it is based on a perfect match between an organisation’s name in Kickstarter and our games dataset, many companies operating in Kickstarter might not yet have published a commercial game which would have been discussed online, and therefore, identifiable using the “big data” approach in A Map of the UK Games Industry.
