I feel stupid for even asking this, but... what does the money from the Kickstarter go to? I trust that it will be used properly, but what does "used properly" look like for something like this? I have a vague idea of "compensating the artists and various creatives", but nothing more than that, especially when my only experience with freelance art is "one time when I was a kid, a local clown paid me twenty bucks to make a simple colouring page".
(With reference to this post here.)
Well, let's break it down. I won't get into the specifics of this campaign's budget, but let's imagine a hypothetical scenario for a campaign of this type that manages to take in, say, 100 000 of whatever currency it's being conducted in.
Right off the top, basically any crowdfunding platform is going to take a 10% cut, and – assuming people are paying with credit cards, which they almost certainly will be – the credit card processors are going to take, on average, another 5%.
Next, you need to set aside a portion to pay business income taxes on the proceedings of the campaign. This can be mitigated to an extent via claimable business expenses, but unless you organise things very carefully and also get very lucky with your timing, you're not going to be able to push that tax bill all the way down to zero; the specifics will vary depending on jurisdiction, but let's assume for the sake of argument that it averages out to about 10% of gross funding.
So, right off the jump, we've only got 75 000 of that original 100 000 to work with when it comes to actually paying for stuff.
Now, let's address the elephant in the room: manufacturing.
Our hypothetical campaign's goal is to produce a printed book, so there's going to be rather a lot of that. In a perfect world, you want to maintain an 8:1 price ratio: that is, the sticker price people pay is eight times the book's per-unit manufacturing cost. Actually hitting that target requires economies of scale that typically aren't accessible to small-time projects, though (i.e., you need to be printing thousands of books, not dozens to hundreds), so in practice that ratio can end up being as bad as 2:1.
Of course, in a campaign of this type, printing expenses can be partially offset by digital-only pledges, which don't incur printing costs, so the final tally is going to vary wildly based on the ratio of digital-only pledges to pledges with physical rewards. Let's ass-pull some assumptions here and figure that printing costs will average out to about a quarter of gross funding, or 25 000 in our imaginary currency. That 75 000 is now 50 000.
(Those physical rewards will also need to be shipped, but let's pretend we're collecting shipping and handling fees at the time of fulfillment and not worry about that right now.)
So we've got half the money left to actually get content into this thing. Here we're going to need to shift from imaginary currencies to a real one; in deference to this blog's readership I'll use USD. Let's imagine our end product is a 200-page rulebook. What is filling this thing with words and pictures going to cost us? Well:
Figure a 200-page rulebook contains ballpark 50 000 words of writing. A reasonable starting rate for technical writing of the kind that goes into a tabletop RPG is $0.20 USD/word, so that's $10 000 USD for the writing.
If we're doing a proper job of this, we need editing, too. For developmental editing (i.e., the editor is functionally a game design consultant) the sky's the limit, but let's assume you only need basic copyediting and proofreading services. That's typically half again your writing cost, or around $5000 USD here.
For illustrations, let's say we want a dozen nice full-page pieces, including cover art. That will make for a fairly sparsely illustrated book at 200 pages, but we're not Wizards of the Coast. At industry standard rates, this is going to run you between $300 USD and $600 USD per piece. Let's take the higher end of that range and assume our dozen illustrations are about five hundred bucks a pop – that's ballpark $6000 USD to have the book illustrated.
Now we've gotta stitch this all together with layout – and remember, we need a print ready layout, not some bullshit we knocked together in LibreOffice. Like editing, layout with print ready prep can range widely, but let's assume we're looking at something in the neighbourhood of $20 USD per page; for a 200-page book, that's $4000 USD for layout.
So: we've got our book written, edited, illustrated, and laid out for print, and it's set us back 25 000, or about half of what we had left. Figure another 10 000 in miscellaneous expenses, ranging from font licenses to transport and storage for the printed books to compensating playtesters to administrative expenses associated with running the crowdfunding campaign itself (you are paying your social media guy, right?), and of that original 100 000, your take-home pay is roughly 15 000 – if, of course, you're doing everything properly.
At this point, you probably have two questions:
"Wait a minute – if just the content for a book of this type is going to run you $25 000 USD, why was your initial goal only $20 000 CAD?"
You're quite right; that's a comparatively low target. In part, the answer is that Eat God's initial development was partially funded as a paid early access title, so a substantial portion of those development costs were already paid up before the campaign began. In part, the answer is that my audience is large enough that the aforementioned economies of scale are starting to kick in; this campaign is not necessarily representative of smaller-scale stuff.
"Okay, but then how do publishers who are even smaller than you manage to set initial goals of $2500 USD when the book's content alone can cost ten times that figure?"
I can't speak for everybody, but with respect to the campaigns I'm familiar with, the answer is usually some combination of "the lead writer, and sometimes the lead illustrator as well, are essentially working for free, and also they did their layout in Google Docs and didn't bother with editing at all" and "they didn't do the math properly and ended up losing money on the project". That's what happens when you're working in an industry that mostly consists of semi-amateur passion projects!
The figures set out above are based on the assumption that "properly" spending the money means everyone involved is making a living wage for their time, including the person managing the project. In practice that doesn't always happen.
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