[tptacek]

As they said: they clearly overpaid on company formation ($4000 for legal and accounting, which could have been accomplished to the same effect for around $500 if they were frugal, including filing quarterly estimated returns). But still, they'd have ended up with ~$9000 gross instead of $6000; the point still stands.

Some of these Kickstarter numbers look more game-changing than they really are.

But whatever, I'm not a games industry person; I'm really just here to chime my recurring bell about "don't put your company together on a napkin, get the LLC done; it doesn't have to be expensive and it will help you down the road."

[jay_kyburz]

I'm in the indie games business and I can say they overpaid for everything.

6K for music should be 1-2k at most!

Poster Art - What's wrong with those awesome sprites that Kotaku used. Should be 0.

IPads? More that one?

PAX East? - That's a holiday not a legitimate business expense.

This is why they say so many people don't make their money back in the App Store any more. You can't spend indie money like you work for a AAA studio.

[jay_kyburz]

Actually, now that I read my own comment I realize it makes me sound like a cheap and grumpy old man.

Perhaps they want to make a big budget game with really great music from their favorite artist, really awesome posters, and I know of course that each dev should have an iPad. You might even need all the different kinds.

[tptacek]

Not to disagree (I don't know enough about the industry to disagree) but they got the iPads to show the game teaser at PAX.

[marquis]

>6K for music should be 1-2k at most!

For good music? For music that you don't want to turn off the second time you play it? Don't undervalue good production values.

[jaems33]

Seriously. Oh development can be 5k and above but something also important like music? Pssh, screw that...

[marquis]

The developers still get to sell their product right? This is a Kickstarter - they get to keep making a profit. If they want to bootstrap then sure, use the most cost effective method but if someone has given you $20k to get a beautiful game made, make that beautiful game. I love good music in my media experiences and I'll pay for those games that have that.

[InclinedPlane]

"PAX East? - That's a holiday not a legitimate business expense."

For a game developer? No, it's a fantastic way to raise the profile of your game. You get the most avid gamers interested in your game (who will spread the word if they like the game) and you get press coverage too. For an exhibitor PAX isn't a 3 day vacation, it's 5 or 6 days of working 12+ hours days, most of them staying chained to their booth in their expo hall.

[jay_kyburz]

Nar, a game as great looking as theirs would get the press anyhow. The press are dying for more interesting games to write about.

You raise another good point though, not only is it 3k, but its 5-6 days at 12+ hours. A whole week of dev time lost to the event.

Events are great fun, but if you don't have money you don't know what to do with, I don't think they are a very good investment. Not much bang for the buck I don't think.

[corin_]

I've been in the fairly unique situation of seeing the results a wide range of companies in the extended games industry (from top games publishers to indies to gaming hardware... etc.) got from exhibiting their products and I couldn't disagree more about it being a good investment.

[jay_kyburz]

Hey Corin, I'd love to hear more about why you think so. I'm always trying to work out how to best spend my marketing money (and energy).

Do you have any metrics you can share about how an appearance at a show relate to final game sales? Or even press coverage?

For example, if they were to spend that money on banner advertising they could generate say 6-10k clicks through to their website.

[corin_]

Press coverage - not metrics, but I've seen an awful lot of stories come out of events, and most importantly an awful lot of journalists meeting exhibitors, from bloggers to mainstream websites or newspapers. Obviously this doesn't guarantee coverage, but it puts the ball in your hands, once you're stood talking to a journalist while standing over your product it's time to knock it out of the park.

I don't really have any customer data I can share with you, the sort of selling points generally used are more vague - such as "The average spend per visitor at last year's event on products sourced at the show was £767, a total audience spend of £79.8m" (taken from the sales pitch of a 2012 event). The overall focus of selling - though I'm not actually in sales so this isn't my direct area - is about the size of the audience, and what sort of demographic they are.

I don't know if events are a good use of your money when it's as tight as that, i.e. if you can chose between $3k on an event or $3k on a PR company, but only one, as I can't think of any exhibitor I've ever had that paid that little, or that was small enough not to have marketing budget around it.

The single biggest argument I can give, I think, is that if you go to PAX you're going to get more people looking at your game than you'd get clicks for $3k online - and when it comes down to it, are you going to sell your game better by having somebody look at your website, or stand in front of you try out your game?

Incidentally, what adverts are giving you that click-rate, and do you have any calculated CPA figures?

edit: I just want to note that like I said above, my experience comes more from big budget companies like big studio publishers rather than indies, so I can't necessarily say events are or aren't a great idea for people like you, just that they do offer bang for buck.

[vibrunazo]

But it's a lot of money tho. If your goal is marketing, then isn't it a more efficient cost per user acquisition to just buy adwords or whatever online ads instead?

$3k is a lot of ad impressions.

[patio11]

It's virtually impossible to make AdWords work for their business model, and if it were not impossible it would require someone intelligent to implement, and unlike game developers SEM specialists expect to get paid on a regular basis.

This is largely a function of the unit economics of indie games being terrible compared to e.g. the unit economics of a free to play MMORPG.

[gavanwoolery]

It's hard to make an impression when you have no money left to make a game. Make the game first, and if its good it will market itself. If you have funds left over after the game is finished, THEN you can spend them on extras.

[phaus]

"IPads? More than one?"

A better question might be, "iPads? Why are these people soliciting money from people to make an iPad game when they don't have any experience developing for the iPad?"

[sukuriant]

Theirs broke?

They've done iPhone development?

[EricDeb]

Agreed. It's not that these weren't legitimate business expenses but if you are trying to start a company on a shoe-string budget you should really spend considerable time trying to get the best deal possible and limit all expenses to the bare minimum.

[guelo]

I think I disagree, for a $30k investment all the paperwork is useless and distracting from getting things done. Just do a handshake agreement with your partners and get down to doing the real work. After the $30k is gone, which will happen surprisingly quickly, you can look at your business more honestly and see if figuring out the paperwork is even worth it. I wouldn't even bother thinking about taxes, screw the IRS, there is no way for them to know about that $6k salary if you don't tell them, if you're successful later you can have an accountant figure out the mess. $30k is a short window to actually get something out the door, don't let anything else distract you.

[tptacek]

"there is no way for them to know about that $6k salary if you don't tell them"

Best advice ever.

[shuzchen]

I don't entirely disagree with your position, but considering the publicity and press coverage they've received (both before and after the kickstarter funding), it's harder from their position to feel like they can safely slip under the radar. Also, from the IRS pov it's not a $6k salary, it's $30k+ income. It's only after you deduct all the business expenses does it come down to $6k profit. I'm not entirely certain how kickstarter works, but I would be surprised if they didn't file paperwork with the IRS when they transfer the $32k-fee to the developers. Vegas casinos report winnings to the IRS at a cut-off point way below that.

[tptacek]

They file 1099's like everybody else does. If you don't file, the IRS will just impute taxes to you at the least favorable possible rate, and probably not tell you about it until after you've incurred penalties.