• Francois DesRochers

The Bazaar #37: Titan Robotics Kickstart Campaign


INTRODUCTION


I imagine that as a fan of Palladium Books’ games (hence why you are here), I'd be much surprised if you’ve not heard about this Kickstarter project by now. I thought I would lend my voice to help boost the signal, but not simply in a ‘Wave the flag in support’ manner. I purposefully held back this post until this week in order to inform those who might still be sitting on the fence, deciding whether or not to support this project. Because of the platform, there are a number of elements to examine. To a lesser extent I hope to address/affirm some of the issues for those who are more of a firm ‘no’ to backing Palladium Books Kickstarters; I have little hope in changing their minds.


First off, in the interest of full disclosure, I have backed this project on Kickstarter.


Secondly, this post is not a ‘fan-boi’ or ‘world through rose-colored glasses’ approach to the topic – I’ll be reviewing and critiquing this from the background of my formal education, namely an MBA. In case this needs to be stated, this is not meant to be presented as 'professional investment advice.'


Lastly, I'm not an officer for Palladium Books. As one of the authors for what I anecdotally believe to be a decently successful Rifts World Book (WB 22: Free Quebec), I have some personal investment with Rifts and Palladium Books. Otherwise, I am just a passionate 3rd party provider who likes talking about the various PB settings, Rifts in particular. If something needs to be called out, I’ll be doing so (hint: I’m calling some things out).


KICKSTARTER – A PRÉCIS


General. For those that are new to Kickstarter (myself included), it is essentially a funding platform akin to GoFundMe or any of the other similar methods for people to transfer money to a cause or purchase an upcoming product before it ‘hits the shelves.’ Kickstarter projects require the creator to plan and provide a clear goal, such as an album, book, or work of art – something must be physically produced at the successful conclusion of the campaign. This isn’t a store per se – once projects are funded by the end of their funding window, those that backed the project are supposed to receive the product for the level they funded to. If the funding target is not reached, backers are supposed to be refunded their money. As a general concept, this is relatively easy and straightforward.


CORRECTION: It was very correctly pointed out to me that the italicized text above should reflect the following: backers are not actually charged for their pledge until the funding target has been reached. Apologies for the nuanced error. FCD


Fee Table. This doesn't directly impact backers at all, but I thought it interesting to mention. I decided to take a look at the Fee Table, and of course it’s different per country. For Canada, fees start at 5% of total funds raised, with an additional 3% plus a $0.20 charge per pledge as a Payment Processing Fee for the service Kickstarter uses (Stripe). These percentages and processing fees are identical across North America and most Europe; only the currency changes. Nothing unusual until you try to derive the Processing Fee structure as written. From a purely contractual perspective, as a creator, the Fee Table would be my very first point of clarification. The language is vague enough to be completely binding under two distinct methods of calculation. Using the pledge levels and number of backers from the project as of 22 November, one can calculate the Processing Fees as follows:

  • Example 1: Kickstarter receives ~$4,446.00 upfront; no argument. The Processing Fee in this example would be ~$1,941. Calculated by taking 3% of each pledge, adding 20 cents per pledge, the multiplied by the number of backers. Total Processing Fee as of today is ~$6,387.00

  • Example 2: Kickstarter receives ~$4,446.00 upfront; no argument. The Processing Fee is the 3% calculated from the total funds, ergo ~$2,677, and then 20 cents per pledge, netting another fee of $139.00. Total Processing Fee in this case would be ~$7,252.00, costing just shy of $900.00 more expensive.

Accountability. Long-story-short, Kickstarter does not step in to keep creators accountable; it abrogates that responsibility to creators and backers. It leverages the reputational risk creators must bear if they fail to deliver. Creators are expected to maintain good faith efforts and inform backers of any delays. Failure to fulfill on the project has an expectation of returning funds (Kickstarter Terms of Use). The Kickstarter website goes to copious lengths to reiterate they are not a store and do not issue refunds – this is a creator-backer relationship issue to sort out. From a backer's perspective and compared to ordering from any LGS, where the transaction is an immediate exchange for a product, this is not necessarily a risk-free endeavour.

Stretch Goals. As described by Kickstarter, these enticements ‘sweeten the deal’ with folks who want to invest in the idea for the product. These can come in a variety of methods or offers, most commonly additional product, special product not part of the original launch, or special access to items that are exclusive to backers during the campaign. I won't get into the marketing theory behind this, but it's a thing. That said, no issues.


PALLADIUM BOOKS KICKSTARTERS


History. One cannot examine this project without at least addressing the elephant in the room: Palladium Books’ partnership with Ninja Division to develop the Robotech RPG Tactics (RRT). Launched in April 2013, it was successfully funded to the tune of $1.4 million from 5,342 backers. Delays and ultimately the failure of the project led to no small amount of vitriol and shameful commentary, with some tragic results that are not relevant to reiterate. For clarity, I was not involved in this project in any form. By no means attempting to downplay the impact or effects of this Kickstarter, what I read was through the lens of posterity and disassociated from the heat and anger of those involved at the time.

  • Ninja Division (Partner). A subsidiary of Soda Pop Miniatures; I’m not privy to the specifics of the partnership. In researching this issue, I found it interesting to note how many controversies Ninja Division had caused with other gaming companies (e.g. Paizo) on several other unfulfilled Kickstarter campaigns. At one point even the Idaho Attorney General got involved. In one project, Ninja Division disclosed that from a project backed to $1.27 million, they used over $343,000 (27%) of the pledges on Annual Overhead (payroll, facility leasing, other overhead), which is a huge red flag. Quite frankly the entirety of their response to the Idaho AG is a series of flags.

  • Palladium Books (Partner). As the owner (CORRECTION: as the Licensee; FCD) of the IP, I’m assuming the formative partner in this arrangement (Ninja creates models, PB rules and scenarios?). At this point PB has had a long history of RPG publishing and a serious catalogue of books across multiple IPs. At the time, there were a number of release dates missed and books announced that failed to reach production. Did this licensing have any play in these delays? Unknown.

  • Partnership Details and Non-Disclosure. There is a lot of this deal that frankly, hides behind a veil of secrecy in the form of a Non-Disclosure Agreement. From the comments on Kickstarter and elsewhere, it’s obvious to me that most people filled a void of ignorance (lack of information) with what I will simply label as “uninformed ignorance” (lack of understanding). It remains unclear as to the decision or authority for retooling sculpts and/or game rules that caused the delays and ultimate failure of the project. What I do know is that PB does books for gaming rules and settings; Ninja/Soda Pop does models (or purports to). In hindsight, Ninja has demonstrated some nefarious business practices after the RRT campaign. This isn't me giving PB a pass; I just know enough to know what I don’t know. And that is a factor in my due diligence.

Licensing. Likely a significant part to play in the RRT debacle, I bring this up to point out that not all attempts at licensing failed. I am also fully aware that I’ve been around long enough to know this is a prickly topic, one again clouded in a veil of NDAs. Why bring it up then?

  • Palladium Books. There were several attempts to license their IP in the form of other products, not the least of which was a movie script that was optioned but never produced. This was largely in the late 90s and post-Millennial period when, Rifts was at its height. Aside from the Rifts Collectible Card Game (I thought was great fun), we saw the Rifts Promise of Power for the NGage system. I never saw the game, and eventually the NGage failed as a gaming platform, its competitors just giving a better product for gaming.

  • Savage Worlds. The Rifts material is officially licensed by PB to Pinnacle Entertainment Group (PEG). Pinnacle does a fair amount of Kickstarter campaigns in support of the release for their Savage Worlds: Rifts material. From all accounts I’ve been able to find, the reception has been relatively well to pretty awesome in terms of support, commentary and number of backers/pledges. I’ve not had the chance to read or review any of their material, but I hear good things, and more importantly, all projects backed were completed as advertised.

  • Sean Roberson. As a corollary and follow-on to the PEG licensing of Rifts, in a move that took many by surprise, Kevin asked Sean to come into Palladium Books as a partner and take the mantle of Creative Director. This delegation demonstrates some evolution to the control Kevin has thus far demonstrated, and I take this as a very good sign. Sean has also been heavily involved in the PEG Kickstarters, as well as interaction with the player base. As the ‘lead’ for this Kickstarter, that level of experience with the platform and business model bodes well. In response to the demand, he has already added new lower-entry level backing options for those with a more limited demand from this project.

  • Split Targeting. This is a smart element to this campaign, allowing it to draw on two separate target groups of consumers: Savage Worlds players and Palladium system players. Sure, there is some overlap between the two groups, but they are not entirely interrelated. Based purely on anecdotal evidence, I would argue there are fewer consumers that overlap than there are exclusive to each group (more play just Savage that both, and more play just Palladium than both). The campaign presents something for both groups, allowing them to leverage both for support. This places a greater risk on PB for failure.

First Principles. So, one of the issues I gleaned from the review of the RRT Kickstarter campaign was the attempt to enter into a market that PB was not necessarily familiar with. Were they deceived by Ninja? Unknown. Did PB try to impose their will and interfere with Ninja’s business practices? Unknown. Until recently, PB did not have any real interest in models (resin, pewter, plastic, or otherwise); they currently have a fairly limited but interesting selection of resin models available. What I find interesting about this Kickstarter campaign is that the product is books, both physical and PDF, with supporting goals primarily based on what they do: publishing. There is no outside agency or partner involved and it leverages what they do as a core business. This is reassuring.


Open Communications. A common thread among the (copious) commentary from the RRT campaign was the sense that backers were never provided the true nature of the delays and the reasons surrounding the failure of the Kickstarter. Sure, elements of the NDA are at play, but this is only a factor in limitation of communications. By that I mean I'm not talking about marketing and weekly updates. I would presume from PB a meaningful and detailed reason for any delays, and the plan to overcome them. This also translates to promulgation of attainable target dates for product release. My expectations are higher than the norm for this element, so I will be watching. This isn’t me putting PB on notice, just an extension of due diligence. I have expectations expectations from the project creator. To be fair, I level this aspect on anyone/anything I invest into. Trolls are gonna’ troll, but by far the more impactful posture would come from better, upfront and honest communications. In my conversations with Sean Roberson, I have seen nothing remotely worrisome.


DECISIONS, DECISIONS


Options for Backing Titan Robotics. As one skims through the various backing pledge levels, there are a number of permutations revolving around the Titan Robotics book (softcover, hardcover or both, with foil options and PDF), the Cyberworks Collection book (softcover, hardcover or both, with foil options, and PDF), Savage Worlds conversion document, several art prints, the playing card set, and a number of discounted add-ons from Palladium Books catalogue. Some have critiqued this as another sales avenue for current stock, and I can see the basis for the argument. To counter this though, the campaign does give the consumer choice, which is ultimately the one benefit I would point to that negates the argument. You don’t want the extra doo-dads? Select another option; you can get just a physical copy of Titan Robotics if you wish.


New Business Model. One question I have been asking myself, is how much does this bode for a future business model for all future releases? Understanding that Kickstarter is not an online store, there is a transfer of risk to the consumer. Sure, there are aspects to promote use of a Kickstarter: you have the chance to invest in additional items at the same time, perhaps promotional items and exclusives. This is also wrapped up in high-brow marketing techniques that entice buyers to perhaps buy more than they were initially looking for, or to commit as a first-mover reaction (not the real names, but the Gotta get in on the action, or Oh! That’s bright and shiny! principles).


For someone who simply wants the perfect-bound Sourcebook from their LGS, they must await campaign completion and then order through normal distribution channels. Does this make the campaign suitable for everyone? Well, no. Does that dispel Kickstarter as an option? Well, no, it remains perfectly viable for those willing to accept a certain level of risk. I’m not in the industry enough to make a judgement on the apparent shift to Kickstarter as a venue for marketing and to function as a ‘pre-order’ system (for which Kickstarter itself clearly indicates was not intended). Remember, this is not a store. That said, I know that production costs on a well-defined demand schedule (e.g. backed pre-orders plus extra stock for warehouse and distribution) is a much stronger method to finance a project. Do the Fee Schedule charges make this a better method for capital investment that internalizing the Cost of Goods Sold and recovering profits based on market demand? Unknown. I would hope PB is solvent enough to be able to conduct publishing runs without having to resort to Kickstarter each time.


CONCLUSION


The purpose of this post is more than simply advertising on PB's behalf. There is a bit of a deep dive into Kickstarter as a whole, and questioning whether or not this is the new business model moving forward. Honestly, I’m not sure how this will play out across the RPG industry, but I understand the financing and economics behind why it would be appealing. And hey, it’s worked well over at PEG.

Ultimately I ended up backing the Kickstarter. Because I can, I decided to go for the foil covers. One could argue I fell for the marketing (literally the shiny), but I knew this element going in and tempered my choice. So it’s a win for me, or at least will be once the package arrives. To top it off, it provides the updated versions of several books that I was looking to get, all wrapped up in the Cyberworks Collection. I’m a sucker for the ARCHIE-03 storyline.


I believe I’ve addressed any lingering questions about the Kickstarter process and the RRT background, or at least in a manner that I feel comfortable investing. There are those who will decide otherwise, a choice I will not begrudge. This is, however, a publishing company managing a campaign for a book release with an already established IP, under direction of someone who has a vested interest, and experience with the platform. If I could, this should be an ‘easy mode’ entry for PB to successfully produce and distribute this product under a new platform.


I am definitively more confident with this campaign now than when they initially announced it months ago. Does the Kickstarter make sense for you to invest into? My question back is then “Why not?” For the more risk-averse or unwilling to commit to major investments, there are several backing options that involve just getting the perfect-bound or hardcover versions of the Titan Robotics, accompanied by the PDF. For those with limited hobby dollars, this is a way for you to mitigate risk. Otherwise, you simply have to wait for the LGS to order it in for you.


My intent was to give a fulsome picture on the Kickstarter campaign, and provide some depth to the lingering questions one may have. I am not in a position to tell anyone how to spend their money – “you do you,” as they say. But hopefully this review provides a little more insight to help you make your decision.


What I’m really looking forward to is Palladium Books once again getting back to a consistent release schedule of quality RPG products.


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