Hello again my fellow Nectarines,
Rob here. In this update you’ll find:
- All expenses breakdown
- Development costs breakdown
- Postmortem video
How’s it going guys? It’s been awhile. Since our last update, most of the team has successfully found new jobs and gotten back to a mostly normal state. Several people have even moved on to focus on their own personal passion projects. We continue to keep in touch, and there’s been some discussion and ideas for new projects related to Resurgence but nothing solid yet. I hope you’ve all been well too!
Today, I wanted to take some time to give more details on Nectar’s financials as well as the lessons learned from this whole endeavor.
So easily the most common request we’ve had recently was for a more detailed account of how the Kickstarter funds were actually spent. This is a totally fair request, and also in line with Kickstarter’s creator requirements, so I’m happy to dig in deeper to demonstrate that the funds were used appropriately. Nothing speaks louder than data, so let’s start talking hard numbers.
In preparation for Nectar’s final business tax return, I’ve been going over all our expenses since the Kickstarter campaign and compiled the following data below. It is split into two spreadsheets, one for just development labor (74% of our total costs) and the other for all expenses by category.
You can view the full spreadsheets here (Google Sheet).
My hope is that this will both provide clarity to our backers, as well as insight to other indie devs and Kickstarter creators out there. I know from experience how hard it can be to find references and best practices for planning your project budgets, so I sincerely hope our data will useful and help others succeed in the future.
All Expenses Breakdown
This sheet represents everything we spent business funds on, broken down by category. I was extremely miserly in this respect, making use of all free resources at our disposal (Unreal Engine, Perforce, Hack-N-Plan, Google Docs, Slack, and Trello are all awesome!), so we would have as much money as possible allocated to actually working on the game. The percentages represent that item’s cost out of the total spent. These will also likely be the most helpful to other devs in the planning stages.
There are a few high-level things I’d like to point out here. First, after Kickstarter and Stripe took their cut of the campaign funds (about 9%), we were left with $168K to put in the bank. As you can see, we spent more than that on development alone. Once that money ran out, we kept going with $40K of Cohh’s own money (as he promised before the Kickstarter launched, if needed) and roughly another $20K from our friends and family. So the Kickstarter funds were gone long before the coffers went totally dry, and we continued operating on our own funds after that.
I always encourage indies not to skimp on accounting and legal, but in retrospect we likely overspent in that regard. I went with larger companies that were very well respected and recommended in my community, and the service was outstanding, but we could have saved some money going with smaller/newer companies with cheaper rates. Of course you want to make sure your business is protected, and skimping on those services could backfire in a huge way if you find yourself in trouble, so it is a balancing act on finding the perfect fit for your needs.
Also, a note on taxes. If you raise money through crowdfunding, any funds left at the end of that fiscal year will be taxed as income! So if you try to stretch the money longer, it may inadvertently increase your tax burden. Depending on how you organize your company, it could also put you in a high tax bracket and eat up a big chunk of your budget. You may get some of that money back the following year, but your company of course has to survive that long. Find a good accountant, and plan accordingly!
Development Costs Breakdown
This sheet takes the Development section from the previous one and gets even more granular (since it was by far our largest area of expense). Each person who was paid to work on Resurgence is listed, along with their role, invoicing type, average hours per week, expected weekly/monthly pay, and totals per year. The full spreadsheet also lists each person’s wages month by month if you’re curious (cropped out of the image below). Almost everyone was paid $9.50 per hour (including me) for the duration, but as you can see the hours they each worked month to month did vary.
Branden (Director of Operations) and Xander (UI Artist) were both paid at a higher rate due to their experience and our great need of their skills at the time. The rest of the Other Contractors were paid on a per task basis, with payment negotiated based on the particular task, and they contributed much less frequently. JC and Chris also quit the project early, due to unexpected circumstances in their personal lives.
Since this was where the majority of the money went, I assume it will also be the most hotly debated. I don’t doubt that we had the right team for the job though. This was the same core team that worked on it for 3 years as an unpaid hobby project, infusing every aspect with their creativity and passion. I couldn’t have in good conscious ditched them for more experienced folks, nor could we have afforded them. For reference, most professional experienced game developers expect salaries of $30-100K a year (and the linked report is several years old). Though in retrospect, we likely didn’t need all of them working from day one. It would have been more practical to scale down to just the essential design team to finish pre-production, and then add additional code, art, and audio support as needed. This of course would have risked our core people having to find other jobs, and possibly not be available later. I wasn’t willing to take that risk, for better or worse.
Above you’ll find a postmortem presentation I gave to my local IGDA chapter, and again at the most recent GDEX convention in Columbus. It is based heavily on our team discussion of what went right, what went wrong, and lessons learned. Sorry, the lighting on me isn’t great. It’s about an hour long. I could also be persuaded to write up those thoughts in article form if there’s enough interest.
To wrap up, I know it sucks whenever a Kickstarter project fails to deliver on its promises. Your money is gone and you’re left with nothing but disappointment. I know, I’ve been there too. I’ve personally been let down by some projects that never delivered or became something unrecognizable. So again, I want to give a special thanks to everyone who’s been so supportive of us as we dealt with this failure and get our lives back together. We really gave it our all, and we are so sorry that wasn’t enough to deliver on our promises. At the very least, it was an amazing experience and we learned so so much. My hope is that these lessons learned will be helpful to others and that we find another chance to finish what we started someday.
For everyone who has been waiting for this financial information, thank you for your patience. I hope this breakdown and postmortem gives you more insight into what we learned and will be of use in your own endeavors. If so, we’d love to hear about it! And if you have additional questions, just ask.
I’m unsure if or when I’ll write to you all again. But in the meantime, I’ll leave you with a quote from my favorite author. I wish you all the absolute best! Until next time, Rob out.