At the Digital Dragons expo in Poland last month, Justin Bailey (not that one), the CEO and founder of the investment/crowdfunding platform Fig, spoke about the decline of crowdfunding. Bailey compared the history of video game crowdfunding to the history of the Ultima games, calling the past two years "The Age of Armageddon."
Keeping with the Ultima metaphor, Bailey attributes campaigns like the Broken Age or Shenmue 3 Kickstarters to creating the "The Age of Enlightenment," where many high-profile campaigns earned millions of dollars and garnered worldwide press coverage. Bailey has even seen the current build of Shenmue 3 during a recent trip to Japan. "It's a beautiful game," Bailey said. "It looks great."
"But although [Shenmue 3] was a very successful campaign, the whole narrative of a major publisher, specifically Sony, using crowdfunding to fund a campaign, and them being the ones to profit off it didn't go too well." Early rumblings of this exact sentiment first appeared during both Penny Arcade Kickstarters – especially the DLC Podcast campaign, which had a goal of $10. Although neither campaign was for a specific video game, they were both ostensibly video game adjacent considering Penny Arcade's influence on the video game industry. Bailey argues that Shenmue 3 was one of the factors behind the crowdfunding "Age of Armageddon," alongside "crowdfunding fatigue."
"I think probably the worst thing that's lead to crowdfunding fatigue is a correlation with the actual budget and the campaign goal; there basically is none. A lot of times, when developers are coming up with [a campaign goal], they're engineering backwards from what they think they can get and then reducing that so they can end up with a multiple on top of that to get press coverage," Bailey said. "Which leads me to my next part: there's not as much press coverage anymore."
Bailey notes that since the explosion of Kickstarter campaigns, press coverage has significantly dropped. Anecdotally, as a reporter for a relatively popular video game site, the word "Kickstarter" in a press release will often ensure I skip that particular email. Not only is there less coverage from press or social media, Bailey also claims there are fewer big-money donors. "This is by no means scientific, I'm definitely going to use some anecdotal parts of this, but the data I have seen indicates the higher tiers have been drying up for the last few years," Bailey said. "Where people used to throw down a thousand bucks and they'd have dinner with the developer or a party or something, that's not happening anymore."
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