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Is Sony's behind-the-scenes involvement in a Kickstarter campaign concerning? We look at it from all angles and try to answer the question: is a large company's involvement with crowdfunding a big deal, or is this only a scandal fit for conspiracy theorists?

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No need to cogitate in silence. For your pleasure, we've provided some musical ambiance to accompany you during your read. This article's feature: sounds from the Dreamcast title, Shenmue [1999]. Go ahead, click the pic and enjoy.

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Backstory

At this year's E3, Sony stirred up a bit of hubbub—a keruffle, if you will—when it announced that it would be contributing to the production of Shenmue IIIa game being funded on Kickstarter. They heralded their involvement proudly, but immediately they were met with cries of foul play and corporate scheming, some journalists going so far as to call the move a "deception" that "takes advantage of backers’s nostalgia".

What happened? Well, a lot...and all within a short amount of time (roughly 48 hours, from beginning to end). 

It started when Sony's Vice President, Adam Boyes, announced Shenmue III (a sequel that fans have been begging for for nearly fifteen years) at this year's E3 press conference. This is how he introduced the game: "Recently, a developer told us that they were bringing back a fan favorite to Kickstarter... Now this is very much their project, but we wanted to celebrate their announcement on our stage."

Letting a small-time game developer use their platform to promote their project was a kind gesture on Sony's part, but their trouble didn't start until twenty-four hours later—after Shenmue III's Kickstarter campaign had already achieved its goal in record time—when Sony's Gio Corsi stated that, “Sony and PlayStation are definitely a partner in this game...it's going to be run through third party production and we're going to help YS Net get the game done...we are going to be partners the whole way, and we're really excited to see this come out in a couple of years.”

This news quickly raised eyebrows (and tempers) of the fans who had already donated money to what they believed was a small developer in need of grassroots support. When fans expressed their concerns that the small, struggling developer Ys Net was just Sony in disguise—using Kickstarter as a tool for free publicity—Yu Suzuki reassured his fans that he and his company were 100% in control of the project. Although, in an interview with Polygon, he did confirm that he is relying on help from other resources than Kickstarter. "I can't get into specifics," he told them, "but for right now I just want to keep the comment that: yes, I have funding sources outside Kickstarter that I collected through my company YS Net, and that will combine with the Kickstarter for this project." But when asked if Sony was one of those resources, he stated that no other questions would be answered on that subject.

Which was the cryptic response that both Suzuki and Sony gave every time that question was asked. On the Kickstarter's FAQ page, the official statement read at the time: "We are very sorry, but due to contractual obligations, details of outside investments will not be disclosed." Ambiguous responses like these only added to the fans's suspicion.

But later, in Suzuki's live chat on Twitch, he said, right off the bat, "Sony is providing us comprehensive support in marketing, promotion, and funding. They are one of the most important partners of this project. But as we said before in our statement ... they are not receiving one cent from the Kickstarter... the funds collected in the KIckstarter project will be all used for development except for the fees used for the Kickstarter and for providing the Kickstarter rewards. Not a single cent will go to Sony from the Kickstarter funds."

In the week following the launch of Shenmue III's Kickstarter, a time that Yu Suzuki should have spent celebrating, he instead spent apologizing and doing damage control. The official statement on Kickstarter regarding external funds was changed, and Suzuki himself made a lengthy official statement about Sony's funding.

Shenmue III [PC/PS4 2017]

What is the extent of Sony's involvement?

In all likelyhood, Sony's involvement is exactly what they've be claiming since the start: minimal. They are, most likely, only contributing enough resources to make Shenmue III compatible with the Playstation 4—perhaps encompassing exclusivity rights, an American localization, and a marketing campaign—but nothing that affects the actual product.

Yet there is still a chance that they (and other resources) will provide much more funding than the Kickstarter campaign can possibly ever make on its own. As many have pointed out, the Kickstarter's original goal of 2-million dollars is pocket change in the video game industry, especially when you compare that number to the 47-million dollars required to make the first two games (which was fifteen years ago, at that). It's so stark of a difference, the number one question on the Kickstarter FAQ is: "Can you make an open-world game for 2-million dollars?" which is answered: "No, we cannot make an open world game for $2 million. Shenmue will be produced using both the funds raised from the Kickstarter and through other funding sources already secured by Ys Net Inc."

What if Sony's involvement is larger than we believe?

Well, there are two opinions on this.

  1. This would be fantastic.
  2. This would be the beginning of the end.

If you are in Camp #1, your main argument is this: the more Sony gives, the better the game will be, so why be upset at their involvement? This is a difficult point to contest. While it is probable that Shenmue III would have reached its 2-million-dollar goal without Sony's aid, it never would have broken the Guinness World Record for fastest video-game crowdfunding without the use of Sony's platform at E3. Not only that, but there is a possibility that Shenmue III will break the record for largest video-game Kickstarter ever by the end of its run. This is an obtainable goal for Ys Net, but not without the help of resources like Sony. So...shouldn't we be more-than-happy to accept all the help that Sony and others can give?

Well, if you are in Camp #2, you have two different arguments to rally behind, depending on whether you're a fan of Shenmue or just a fan of crowdfunding indie games. If you are a Shenmue fan, the idea of Sony having any involvement is terrifying, because it conjures images of Sony as a Big Bad Wolf dressing up as Yu Suzuki's friend just so it can devour him later. But if you have no emotional connection to the game and are still concerned, its because you feel that big developers like Sony (Microsoft, EA, Activision, Ubisoft, etc.) have no place in the world of crowdfunding. Places like Kickstarter are safe havens for the little guys, those who would otherwise be crushed under the foot of corporate giants. Both perspectives are somewhat vilifying, but the fact that Sony didn't clarify its involvement until after the game was crowdfunded only added to Camp 2's evidence that something devious was going on behind the curtains. So...

Amplitude [PS4, 2015]

Is it BAD that Sony is involved in a crowdfunding campaign?

To answer this, there are a few things that need to be acknowledged. First, it should be made clear that Sony getting involved with Shenmue III is not the first time a successful gaming publisher has gotten involved with a Kickstarter campaign (see: Godus Bloodstained , and Broken Age); it's not even the first time Sony itself has gotten involved in a Kickstarter campaign (see: Amplitude).

Second, it's worth saying that if you are still worried that a big publisher like Sony might try to take advantage of consumers by resorting to tactics like minimizing transparency, abusing crowdfunding, and suffocating small developers, you are not a deranged conspiracy theorist for thinking that they are at least capable of those things. The PlayStation brand has a nearly flawless record of making decisions that benefit gamers, but the same cannot be said of its parent company, Sony, or of the gaming industry in general. In 2005, Sony got into some big trouble when a programmer discovered that the company had been secretly hiding DRM software on users's computers, software that was hidden, impossible to uninstall, not mentioned in any product's EULA, ran in the background constantly, and relayed details of the user's habits back to Sony servers. More recently, Sony's gaming rival, Microsoft, revealed that its new console—the XBox One—would hinder the player's ability to resell and lend any purchased games, would require a 24-hour internet "check-in" or else the console would disable, and would require that its camera be always connected and always on (unnerving, especially considering that Microsoft had an unused patent to charge different rates for content based on how many people were detected in the room). All of these aspects were eventually dropped, but only because of huge backlash and scrutiny by consumers, so it is fair to say that gamers have a right and a responsibility to be suspicious of powerful developers.

Lastly, it's imperative we define the purpose of crowdfunding. According to Kickstarter's mission statement, crowdfunding is "supporting [someone's] dream to create something that they want to see exist in the world." Note how this is not the same as saying: "crowdfunding is a form of affirmative action to assist small, independent developers in gaining ground otherwise dominated by the goliaths of the industry." This is not to say that crowdfunding isn't a wonderful tool young developers can use to gain ground in a competitive market (which it definitely is, and an awesome one at that), but it does imply that the tool is free to be used by anybody.

All of that being said, the answer to, "Is it bad that Sony is involved in a crowdfunding campaign?" boils down to this: is Sony truly helping to create a product that would otherwise not exist without the help of donations? Because if they're not—if they are only using Kickstarter as a means of advertising a title that would be produced even if the Kickstarter goals might not be reached—then it is indeed bad. It is a blatant re-purposing of the democratic nature of crowdfunding to serve goals that exclusively benefit the producer and not the consumer.

But there is (so far) absolutely no reason to believe that this is the case with Sony and Shenmue III. While the company hasn't exactly been transparent, they have been honest, the closest thing to an "admission" being their statement that they are simply using Kickstarter to gauge interest in the game before committing to it.

Which leads us to ask...

Is it okay for a large developer to use crowdfunding to gauge interest?

Once again, consider the Kickstarter Golden Rule: crowdfunding is a means for a creative project to exist only when it otherwise might not. As long as this rule is upheld, it is indeed okay for anyone to use crowdfunding to gauge interest, even if a developer creates a product using funds thousands-of-times greater than the requested total donations.

Take Shenmue III, for instance. When the Shenmue franchise was cancelled way back in 2001, fans went to great lengths to see the creation of a sequel. They petitioned, they campaigned, they even went so far as to construct a human collage. For fourteen years they tried and tried, yet nothing ever happened. Even large developers like Sega and Sony admitted they could hear the fans's cries, but they still refused to act. Why? Because developing a Shenmue game is a huge risk, a horse that Sega already lost a lot of money on, not to mention that fifteen years have passed since the last game was released, enough time for an entirely new generation of gamers to be literally born and raised. 

Yet this year the fans finally obtained their obsessive request...but only after donating money to prove their interest. Therefore Sony did not violate the Golden Rule of crowdfunding, because Shenmue III proved over and over again that the game was not going to be released without preproduction donations. Sony is in the clear for now, but that still leaves questions about the future of crowdfunding. Such as...

Do large developers have the potential to ruin Kickstarter?

Many have argued that allowing big names to participate in Kickstarter is a slippery slope. For example, let's say we allow a large video game developer to publicly endorse a Kickstarter campaign—one that the company has invested money into—and the game turns out to be a wild success. Before you know it, every big-name video-game developer will try to replicate that success by promoting their products on Kickstarter—eventually, that's all E3 will be: one giant megaphone to announce Kickstarter campaigns for Assassin's Creed 23 and Halo: Combat Evolved Master Chief Collection Anniversary Edition (Revised). In its final days, Kickstarter won't be anything more than another storefront overcrowded with AAA titles while small indie developers take a back seat to big money.

Now, the only problem with any slippery-slope argument is that all sides of this philosophical hill are slippery. Let's say we stop allowing companies to participate in Kickstarter based on how big they are. If we do that, suddenly we find ourselves having to decide whether or not a developer is too big because they employ more than two people, or whether or not a children's book has too much of an advantage because the single mom who wrote it also self-published a cookbook three years earlier.

But that's not the only argument as to why large developers might ruin crowdfunding. An epidemic of pre-order madness is currently gripping the video game world. Developers have realized that they can make a consumer commit to purchasing a game while it's still in development if they seduce the player with add-on content. Because of pre-orders, developers can skip the crucial "critical examination by third parties" phase that typically comes before the "consumer purchase" phase, which means that, these days, the quality of a game isn't as important as how well it's marketed. So, now that developers have their sights set on crowdfunding, that means they could use Kickstarter as an extension of their pre-ordering obsession; now they can make a consumer commit to a product before it's even developed, thus further increasing the gap between marketing and quality.

Two things to consider about this argument: (1) this scenario is more of a threat to gaming than to crowdfunding; and (2) how are these potential risks any different than the risks that come with any crowdfunded project? Like with all Kickstarters, there is a chance that the creator will not produce everything that was promised—that's why Kickstarter has a fail-safe in place that allows contributors to retract their donations at any point during the campaign. This is a problem that has been discussed since the conception of crowdfunding, so it should be addressed separately from the Will-Big-Companies-Corrupt-Kickstarter issue. 

If anything, big companies will bring some much-needed accountability to crowdfunding campaigns. Like in the case of Areal—the Kickstarter-funded successor to the cult-classic video game S.T.A.L.K.E.R. The project surpassed its goal of $50,000 but was shut down in the final moments by Kickstarter when certain ambiguities became too big to ignore, such as outcries from the original S.T.A.L.K.E.R developers claiming that the campaign was fraudulent, revelations that all of the screenshots and concept art for the game were actually old assets taken from the original S.T.A.L.K.E.R., and concerns about the authenticity of a signed letter from Russian President Vladimir Putin publicly supporting the video game. The Areal campaign is the worst-nightmare scenario of over-promising and under-delivering. But imagine if—instead of the few-months-old developer West Games—a large developer like Nintendo or Konami had been the name tied to the project. What would have happened had it turned out they were faking screenshots and concept art? Take a moment to fully imagine the size of that scandal and the damage it would do to the company responsible.

But instead, crowdfunding disasters like Areal and YogVentures (a half-a-million-dollar project that was cancelled after the Kickstarter campaign ended, making all the backers's donations disappear, some donors losing as much as $10,000) have had relatively little coverage, West Games even trying for a second time to accomplish whatever it was they couldn't do the first go around.

Not only is it possible that big names might actually improve crowdfunding, it's even more possible that crowdfunding could improve big-name games. As a mental experiment, let's say that EA decided to hop on the Kickstarter bandwagon and "gauge interest" in reviving an old fan favorite, Star Wars: Battlefront. Now, if you are unaware, EA is already developing this game without the assistance of crowdfunding, and responses to development choices have been mixed. Certain features were either cut or lessened in order to improve others, such as cutting out the single-player campaign in order to focus on multiplayer game types, lowering the maximum-player count from 64 to 40 to make gameplay more efficient, and removing space battles in favor of atmospheric dog fights. It is yet to be seen whether these decisions will be good or bad or meaningless, but if the game had been crowdfunded, fans could have expressed their priorities from the beginning in a language that developers understand and trust: money. Players could essentially vote with their wallets for what features they would like to see in a game they would pay full price for. Single-player campaign or multiplayer missions? Space battles or sky battles? Open maps or cramped maps? A class system or a customization system? Better graphics or more in-depth gameplay? Admiral Akbar or Greedo? Imagine if instead of pre-ordering in order to obtain an add-on that you never asked for in the first place, you instead gain a guarantee that the game will have one of your favorite features. It's a neat thing to think about.

Keep in mind that even if EA didn't pass the Kickstarter Golden Rule of does-this-project-REQUIRE-donations-to-exist (which, frankly, is a hard thing to prove and can be easily ignored), nothing is stopping them from starting their own service—Jumpstarter, they'd certainly call it—and crowdfunding that way with no regulation.

But, still, this leaves one last question unanswered...

Will allowing big-name publishers to crowdfund hurt startups?

Well, the immediate dilemma that comes to everyone's mind is this: if a consumer has a limited amount of money to give to a Kickstarter campaign, are they going to give it to two guys who, in their freetime, made a game about spaceship management, or will they give it to the AAA title listed beside it, the one spotlighted during E3, the one advertised across Youtube and gaming magazines with all the promotional clout of corporate powerhouses, the one that offers prizes like watches, designer jackets, and dinners with gaming legends in exchange for contributions?

Well, there's only one valid response to that concern: without crowdfunding, how would this be any less of an issue? Even if small developers were the only ones allowed to use Kickstarter, the consumer still has to decide who they will give their money to—a big guy or a little guy—right?

Still, does allowing big-names to promote on Kickstarter somehow exacerbate the already overwhelming challenges that most startups face? This question may be at the heart of everything we've been talking about, and yet the answer can only be guessed at since this territory is still unexplored.

Kickstarter itself believes that allowing big names to participate would actually be beneficial to indies. They point to their highest-profile campaigns like ones by Zach Braff, Veronica Mars, and Spike Lee, highlighting how each campaign introduced Kickstarter to more and more people, and that these newcomers went on to donate millions of dollars to other drives on the site—millions that these projects would otherwise never have collected had these celebrities not joined Kickstarter.

But others believe that their projects struggled for funding because their competitors—other Kickstarters with similar goals who have the advantage of corporate funding—only list a portion of the total costs required to make a video game, misleading consumers about the costs of other, smaller projects, thus discouraging funding to these projects due to the impression that they are too expensive for what they offer. Is this a legitimate complaint? Well, in....

Conclusion

The current concerns about the involvement of big money in crowdfunding seem to stem from a matter of perspective—both on the side of developers and on the side of consumers. The trouble seems to start whenever one side or the other begins to perceive crowdfunding as equivalent to charity. To refresh, "charity" implies that backers are simply handing over their money to a cause that they believe in, all for the sole purpose of helping someone else—whether that cause be eradicating Ebola or manufacturing a watch that can adjust your thermostat

When a large company like Sony or Warner Brothers tries to downplay their involvement in a Kickstarter campaign, it's because they still think of crowdfunding as charity and, perhaps out of pure reflex, act ashamed for being the recipient of donations. When a small-time Kickstarter developer shouts "UNFAIR!" because a larger competitor is offering the same product as them for a lower cost using the same platform, they are only doing so because they are also thinking of Kickstarter as a charity. They forget that the consumer has the right to give their money to whomever they choose, and if Activision is promising the same thing as Two Guys, a Girl, and a Joystick Inc. for half the price, there is no reason that Activision shouldn't get that sale.

This reiterates the Golden Rule. Kickstarter is a means for great ideas to compete against established norms—great ideas, not great businesses. If you are a small business and you have a truly revolutionary idea, Kickstarter is a way to get that idea out into the world and allow the public to choose and then grant (or deny) the idea life. If, however, you are a small business and you are pushing a—how do you say?—tried-and-true idea in hopes of getting a foothold in a competitive market, crowdfunding is not the option for you or your business, and it will tell you as such (hence why only about a third of video-game Kickstarters are successful). The public knows what's new, what's tired, what they want, what they already have, and what they'll never need―but the same consequences are in effect when large developers resort to crowdfunding. If a business—no matter the size—wants consumers to give them money based only on the fantasy of how successful they might be, they really are better off creating a charity, because crowdfunding will get them nowhere.

Also, when a consumer worries that a company will use Kickstarter for the sole purpose of advertising or free market testing, it's because they forget that crowdfunding―as oppose to charity―requires that the fundee give something to the funder. When someone exclaims, "Why should I give my money to a company that already has tens of millions of dollars in investments?", they do so because they forget that they aren't giving anyone anything. Since crowdfunding is not a charity, you are always trading your money for a reward, whether that be a discount on the final product or a glow-in-the-dark T-shirt.

As a consumer, you should hope that any business will turn to crowdfunding because that means you are helping to sculpt the product you are paying for, but it also means that you need to be fully aware that you are taking part ownership in both the rewards and the consequences of the project. Charities rely on donors; crowdfunds rely on loaners, and that's exactly what you are doing when you participate in crowdfunding: you are loaning your money to a cause today for something in return tomorrow...hopefully. It is an investment, and at the center of every investment is a risk. But investors always have a choice; they don't have to take the risk, and this ensures that only the risks worth taking are...taken.

So, next time you've got twenty dollars to drop on a Kickstarter, don't think of it as supporting a cause or even as paying for a product or a reward—think of it as a way of communicating with an increasingly astronmical market that is getting further and further out of touch with the people back on Earth. Crowdfunding may indeed be the democratic element that is missing in the world of big video games, but, like with real democracy, it only works if people trust it. While it does technically allow for others to take advantage of the system, this will only happen if the people allow it to, and if gamers are as critical, smart, and scrutinizing in the future as they are now, this bleak forecast of gaming will never come to be—at least not because of crowdfunding. As the President of the United States once said about Kickstarter: "There is nothing wrong with crowdfunding that can't be fixed by what is right with crowdfunding!"** [nd]

**This quote is furnished by West Games, who keep the original statement locked in a safe along with their letter from Mr. Putin and their two gold bricks from Oprah.

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