Originally Posted by GDSage
As for what would be the most profitable reward tier, I don't think the teams that do kickstart assume they will be making sizeable profits through the pledges but rather through the new consumers that actually purchase the title when it is released. Obviously, a team would not want to setup reward tiers that lose them money but their real profits will be coming through the $10-$25 given from release day by those that have not pledged.
At that point it will be the teams responsibility to try and sell the game to these new consumers but then that's no different a scenario to any other team regardless of the means of their funding.
Also, I think people are overestimating how much influence pledgers could have to a kickstart project. In any case, it's hardly going to be worse than what already happens with the funding model we have now where if a publisher doesn't outright dismiss the project because it isn't of the top 5 game styles, they can see to it all sorts being added because that's what CoD does or they will pull the entire project on any whim (see the recent Eurogamer article on the demise of Free Radical).
Any problems that can face devs using kickstarter already faces devs with the publisher model. It's odd how kickstarter is being picked apart on this front when it already exists in this industry only now there is an additional model for projects to be funded. A good thing when it is being shown that the middle section of the development industry (not the $10m+ budget devs or the $100k+ devs) are being squeezed like hell under the current publisher / retail model.
We will have to wait and see if Kickstarter can become a large viable route for that middle or if something else does that for them but the reality is the industry is suffering by relying so much just on the current model. Other entertainment industries have managed to expand on how a project can be funded, so it's odd that the newer (what is meant to be) more adaptable games industry has yet to properly expand in the same way.
I don't think he means profit in the literal sense, he's just noting that a substantial slice of that $550,000 is going to pay for miscellaneous swag, overhead, taxes, etc., rather than funding actual game development.
But I completely agree with you. Combined with digital distribution channels, crowd funding allows developers to sidestep publishers entirely and pitch their ideas directly to end users. Publishers purport to know what the customer wants, and place constraints on the developer accordingly, but now the customers can tell the developer themselves what they want without a patronizing middleman.
It's early days for crowd funding, so there's a lot of inexperience and unreasonable expectations on all sides, but it's not hard to imagine a future where funding is handled by companies like Kickstarter, distribution is handled by companies like Apple and Amazon, and publishers/movie studios/record labels simply do not exist.