January 7th, 2013 | By Alex Wilkinson
Lately there seems to be a growing trend towards these small consoles that plug directly into your TV at very little cost to the consumer. It seems to be a new way of trying to capture the casual market and bring it away from mobile and back to just the TV.
Ouya was the most notable first case of this new generation of consoles last year and its Kickstarter proved a great success, although jury is still out as to whether or not the Ouya will be a success or not. Now PlayJam are attempting to do something similar, but are they just exploiting Kickstarter?
One of the great things about Kickstarter is the company tries to keep the platform as open as possible. This is to allow more and more people to realise their dream and create the next big thing, however being so open can leave it wide open for exploitation, or at the very least for companies to not work within the original spirit that Kickstarter was intended for.
Kickstarter has been a platform that was created to fund new and exciting projects that the public wanted. It has always felt like an all or nothing platform so turning to Kickstarter after your company has already raised a lot of funds may go against the idea behind Kickstarter.
PlayJam is firstly not a small start-up looking for funding for their first project, nor is it not even a moderately successful company trying to secure extra money to make a project come to live. PlayJam is a medium-sized company with offices in London, San Francisco, Krakow, and Seoul who currently run a successful company. Their business has been working with smart TV companies to create a ubiquitous platform for smart TVs to allow developers to deliver apps and games that will work across all TVs.
They have been doing this for a good few years now and so far it seems to be one of the big projects the company has invested in. So where does GameStick fit into this picture and more to the point, how does their crowdfunding angle really stack up here.
PlayJam have, to many people’s surprise managed to raise $5 million in a series of funding rounds in October 2011, with backers including GameStop, Adobe Ventures, etc. Along side these PlayJam have also managed to raise funding earlier last year of an undisclosed amount along with receiving a government grant in May of at least $870,000.
With such strong investments over the last couple of years you would expect PlayJam would in fact not need to turn to crowdfunding to create the GameStick, hell $100,000 is a mere drop in the water for PlayJam, so what is their reasons to open a Kickstarter?
In an interesting and not too revealing interview Develop did with PlayJam’s marketing officer Anthony Johnson, we see Johnson claim that the funding raised prior to the Kickstarter was in fact just to fuel their core business model of their SDK for smart TVs. Claiming the funding raised has been “absolutely costed against a roadmap to deliver games on Smart TV” stating that PlayJam have no room at all to dip into their own funds to fund their GameStick project.
In the interview Johnson is quoted for describing GameStick as a “boiler room project” which really begins to sideline the companies overall investment in the GameStick. Sidelined so far in fact that it appears to have not even been mentioned on the PlayJam official site, hell PlayJam is only mentioned twice on the Kickstarter page and both within the “About us” section
There does seem to be a deliberate distancing of GameStick from the parent PlayJam and this could be a good thing as it will prevent corporate control and allow it to be driven by the people, However this could also be a way to take the risk out of the investment.
It is quite obvious that if PlayJam wanted to raise $100,000 to make GameStick they could’ve. They are a big enough company with enough resources to launch this very minor project on their own. Pushing it out into an almost separate company however will prevent any of the fallout landing in the PlayJam court, and may be more of a business strategy then a genuine way to connect to the people who will buy this device.
When looking at this from a business standpoint it is very much a win-win for PlayJam. If the GameStick falls flat (and with all the competition it very much might) and fails to really generate any actually traction in the marketplace then PlayJam lose nothing. If however it works out well PlayJam get a new platform for free along with a lot of free marketing from the project being Kickstarter. Looking at this as strictly business this is just the perfect way for PlayJam to invest in a new product completely risk free.
Although PlayJam are doing nothing wrong with this Kickstarter project their reasons behind it are no doubt suspect. But at the end of the day does this matter if the company deliver what they promise? Or does Kickstarter need to change to prevent corporate exploitation?
Information obtained via Develop
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Forum link – Are PlayJam Just Playing The System?