Does Crowdfunding Really Foster Innovation? Evidence from the Board Game Industry
DDoes Crowdfunding Really Foster Innovation?Evidence from the Board Game Industry
Johannes Wachs
Vienna University of Economics and BusinessComplexity Science Hub Vienna [email protected]
Balázs Vedres
University of OxfordCentral European University [email protected]
January 8, 2021Crowdfunding offers inventors and entrepreneurs alternative access to resources with which theycan develop and realize their ideas. Besides helping to secure capital, crowdfunding also connectscreators with engaged early supporters who provide public feedback. But does this process fostertruly innovative outcomes? Does the proliferation of crowdfunding in an industry make it moreinnovative overall? Prior studies investigating the link between crowdfunding and innovation donot compare traditional and crowdfunded products and so while claims that crowdfunding supportsinnovation are theoretically sound, they lack empirical backing. We address this gap using a uniquedataset of board games, an industry with significant crowdfunding activity in recent years. Eachgame is described by how it combines fundamental mechanisms such as dice-rolling, negotiation, andresource-management, from which we develop quantitative measures of innovation in game design.Using these measures to compare games, we find that crowdfunded games tend to be more distinctivefrom previous games than their traditionally published counterparts. They are also significantly morelikely to implement novel combinations of mechanisms. Crowdfunded games are not just transientexperiments: subsequent games imitate their novel ideas. These results hold in regression modelscontrolling for game and designer-level confounders. Our findings demonstrate that the innovativepotential of crowdfunding goes beyond individual products to entire industries, as new ideas spillover to traditionally funded products. K eywords Crowdfunding, innovation, novelty, board games, entrepreneurship
Introduction
Entrepreneurs are increasingly turning to crowdfunding to raise capital for their ideas, and to involve an interestedpublic in the process of creation. Crowdfunding platforms offer a large scale and decentralized alternative to traditionalsources of capital. One distinguished example of a crowdfunded product is the Oculus Rift virtual reality headset, whichwas eventually acquired by Facebook for over $ billion. While previous research documents key differences in howdecentralized crowds and experts decide who or what to fund [47, 33, 41], less is known about how products createdthrough crowdfunding efforts are distinct from their traditionally funded counterparts.Crowdfunding is often framed as a potential antidote to specific problems in traditional industry. Gatekeeping isone such issue thought to harm innovation in creative industries. The problem of gatekeeping refers to the notion a r X i v : . [ c s . S I] J a n hat, historically, decisions about the allocation of capital have been up to a small, homogeneous slice of society [58].Members of this decision-making group may naturally be drawn to conventional alternatives by strong social forcessuch as homophily [19], familiarity bias, or risk aversion. Such preferences can manifest in the exclusion of newcomersor even established entrepreneuers with innovative ideas [38]. Even for capital intensive ideas, a small-scale prototypecreated with funds from the crowd can open doors [30]. From this perspective online crowdfunding, as a technology,represents a shift from hierarchical to decentralized modes of capital allocation [37].Previous work also highlights other ways in which crowdfunding supports ideas that may otherwise languish [58], forinstance by facilitating coordination with end-users and communication with supporters [21]. Such interactions areknown to be an important source of ideas and support in the creative process of bringing a product to market [47, 12].Another benefit of a supportive crowd is that they double as emotionally-invested early adopters [1], seeding potentialnetwork effects in product adoption down the line and lending valuable credibility to nascent projects [30, 3].So while we do know from prior work that crowdfunding offers a real alternative to traditional funding, and that itboth expands and shapes the field of products that are launched, we do not know if the end products of crowdfundingefforts are really different from traditionally funded ones. It is conceivable that the process of crowdfunding tendstowards stereo-typical solutions or chases fads, binding the entrepreneur to the lowest common denominator of tastes ina group. The crowd may steer an entrepreneur towards increasingly niche ideas [48] or exhibit strong biases againstentrepreneurs that are members of racial minorities [59]. With these competing factors in the background, evaluatingthe innovation outcomes of crowdfunded products is important because public support for and general interest incrowdfunding generally assumes that it increases innovation [53].In this paper we address this question using a novel dataset of nearly all board games published in recent decades sourcedfrom BoardGameGeek (BGG), an online portal curated by thousands of hobby gamers. Unlike previous empiricalstudies, which tend to compare crowdfunded products amongst themselves, our dataset contains many examples of bothcrowdfunded and traditionally published games. The proportion of crowdfunded projects in our database increasedfrom practically none in 2006 to more than 30 percent in 2017. This case offers a unique opportunity to analyze theimpact of crowdfunding on the nature of innovation for an entire industry.To compare different games, we characterize them by the combination of mechanisms they incorporate. The BGGcommunity maintains a list of 51 mechanisms which games can have, for example dice rolling, pattern recognition,negotiation, and player elimination. Some games are simple: the famous children’s game Candyland has only the“roll/spin and move” mechanism. Others are much more complex, sometimes combining over ten mechanisms. Thesefeatures place games in a 51 dimensional feature space. We emphasize that it is the combination of these fundamentalbuilding blocks that describe the essence of games and differences between them [15]. Recent studies of creativity andinnovation in diverse cultural products including music [5], video games [14], and political speech [6] use a similarmulti-dimensional perspective. Distances such spaces encode distinctiveness and novelty of products relative to theirpeers.Using this embedding of games into the space of their mechanisms, we observe several differences between crowdfundedand traditional games using a regression modeling framework. Compared to previously published games, a crowdfundedgame tends to be more distinct than similarly aged traditional games, measured by their distance in the mechanismspace. Crowdfunded games are also more novel , in that they are more likely to combine pairs of mechanisms thathave not been combined before. This suggests that crowdfunded innovation is often substantive rather than marginal.Lastly, we observe that future games are more similar to crowdfunded games than traditional games, suggesting thatcrowdfunded innovation is resonant , setting trends that others follow and shifting the direction of the entire industry.The rest the paper is structured as follows. First we review theoretical arguments for the potential of crowdfunding as anaccelerant for innovation. Then we introduce the board game industry and our dataset from which we derive measures See: https://boardgamegeek.com/ f innovation and other features. To help conceptualize our core message, we visualize the landscape of board gametypes at various points in time as a network, highlighting hotspots of crowdfunding. We then present our models andinterpret the results. We conclude with a discussion of our work, its limitations, and potential extensions and futurework. The Innovative Potential of Crowdfunding
Crowdfunding has emerged as a significant institution for raising capital for new ventures. It has been involved ina number of highly visible success stories, such as the Oculus Rift VR headset, the Pebble smartwatch, a variety of3D printers, and countless other projects from games to works of art. Crowdfunding, we argue, is not only an avenueto access funding, but it is also an organizational innovation that fosters creativity [49]. Crowdfunding combinesaspects of traditional financial intermediation with an expert public. These two forces mutually transform each other:financing becomes a public testament of quality, by virtue of the expert public watching money pledged, and opinionsvoiced are made credible by the funding committed, serving as an entry ticket to the expert public. Funders offerboth a commitment of money and usually a public form of support. Successful campaigns win legitimacy [46]. Serialentreprenuers build loyal networks brimming with social capital [43] and embedded trust [23].Though there are historical examples of crowdfunding, for instance by the early social scientist and philosopherAuguste Comte[17], who solicited contributions from the public to support his work, as an institution crowdfunding isinextricably tied to the web. It is only as an electronic market that crowdfunding could realize its potential as a tool forboth outreach and coordination. The intensely public nature of digital crowdfunding also creates important externalities:competitors surely observe and learn from the ideas and experiences of the crowdfunding entrepreneur [1].Crowdfunding is an institution that diversifies the base of potential entrepreneurs. Through engagement with the crowdand the pressures of public visibility, it exerts substantial force on the creation of new products. It is a fundamentallydigital institution because it is only through the scale and public nature of the web that it can serve as an effective andreliable market. Crowdfunding decreases an entrepreneur’s uncertainty about her product through interactions withpotential customers and observations of competitors. It also decreases uncertainty for the people that deal with theentrepreneur: potential investors, partners, collaborators can observe how she works and how others receive her work[42].We claim that these institutional features of crowdfunding facilitate innovation. It opens a path for outsiders to raisefunds, enables creators to iterate on high risk ideas with tight feedback loops, and diffuses the risk of supportingnovel ideas among the crowd. We therefore hypothesize that, keeping features of creators and products constant, crowdfunded products will be more distinctive than traditionally published products . Beyond distinctivenessor atypicality, we also argue that crowdfunded products will more often manifest some entirely novel idea orcomponent . This is an important distinction - crowdfunded products may seem relatively distinct if they are quicklycopying the most innovative products created by traditional means. We will argue and demonstrate that this is notthe case: crowdfunding is not simply a tool that facilitates imitation and iteration on the latest inventions. Our lasthypothesis about crowdfunding is that crowdfunded products are influential, inspiring imitation by subsequentlypublished games.
Crowdfunding happens in the open and competitors can observe and learn from crowdfundedprojects. In this way the iteration that happens between entrepreneur and crowd not only creates more appealing projectsand quality innovation, but can facilitate imitation by other designers [25]. We will test these hypotheses using datafrom the board game industry, which we now describe.
The Board Game Industry
Board games have a rich social and anthropological history [57]. Games such as Monopoly and Scrabble are culturalicons of post-World War 2 consumer society. A market for more sophisticated games emerged in the mid-1990s, when a ascent style of so-called “eurogames” flourished. These complex games eschewed the simplistic design of games suchas Monopoly. A primary example of this style is Klaus Teuber’s Settler’s of Catan a game published in 1995 which hassold over 25 million copies worldwide. In recent years, the board games industry has undergone a boom , with Statistaestimating global revenues in 2018 at around $12 billion. Several of the most popular games of the last decade havebeen crowdfunded, including Cards Against Humanity and
Gloomhaven , the top ranked game on BoardGameGeek.Board games may be especially amenable to crowdfunding [51] and the case of the board game industry an especiallysuitable natural laboratory to understand how crowdfunding can contribute to the innovativeness of an entire field.Games have relatively low capital requirements and can be conceptualized and designed by individuals. The coordinationoverhead to develop and distribute a board game is substantially less complex than that required, for example, to developa video game or medical devices. Board game development can also take make good use of feedback from the crowd:designers often emphasize the importance of user-testing in the development process. For instance Matt Leacock,designer of the best-selling
Pandemic series of games, credits early play-testers with the idea to add a new mechanismto the first game of the series [34]. Leacock’s background as a user experience designer suggests that he was aware ofthe value of gathering feedback from potential users and iterating on their inputs. The crowdfunding model connectsentrepreneurs directly with an interested audience, facilitating this important kind of feedback [55].Specific examples from the early history of Kickstarter highlight other ways the crowdfunding process can help bringdifferent kinds of products to market. One of the first crowdfunded hits,
Alien Frontiers , the fourth ever board gameproject on Kickstarter raised nearly $15,000 in 2010 [39]. Tory Niemann, the game’s designer, had unsuccessfullypitched previous ideas to mainstream publishers. As an outsider, he turned to crowdfunding to get around traditionalgatekeepers. A few months later, another game called
Eminent Domain raised nearly $50,000. The team behind thistitle had previous experience published games with traditional publishers, but was interested in the potential interactionswith end-users that they had seen the designer of
Alien Frontiers benefit from [44]. That the team behind
EminentDomain was aware of the process of crowdfunding
Alien Frontiers went through highlights the potential for knowledgespillovers in crowdfunding. These two games signaled the start of a significant acceleration in crowdfunding in theboard game industry, powered by platforms including Kickstarter and Indiegogo.
Data and Methods
We collected data from BoardGameGeek (BGG), an online database containing tens of thousands of board games.Created in 2000, BoardGameGeek has emerged as the online hub of board game enthusiasts. Besides storing informationabout board games, the site has a lively web forum and organizes real life conferences that have become an importantpart of the board game industry. It boasts over a million registered users and an Alexa ranking in the range of 2000-3000.Its role in the industry can be compared with the role that IMDB or Rotten Tomatoes plays for the film industry. Gamecreators have significant incentive to add their game to BGG.We collected data on all games on the website by early December 2017. From each game’s page we extracted a varietyof features that describe the game. These include traditional descriptive attributes of the games, such as their genre,recommended minimum age to play, and characteristic playing time, and feedback from users about the game, includingtheir perceived quality (a rating on a 1-10 scale) and “weight” or complexity (a rating on a 1-5 scale). Games that werecrowdfunded are labeled.BoardGameGeek maintains a curated list of 51 mechanisms that describe the core functional elements present games.Examples include dice-rolling , hand management , and player elimination . We list the full set of mechanisms in theAppendix (see Table 4). Each game’s page lists its mechanisms. Using them as a description of the game, we abstractgames as 51-dimensional binary vectors. Though mechanisms themselves do not capture all aspects of gameplay [32], For an overview from the popular press, see: uch of what makes games unique is how their mechanisms interact. We use this description of games to compare therelative position of crowdfunded and traditional games in the 51-dimensional mechanism space, and to study how thesepositions evolve over time.We filter the data to make reasonable comparisons between crowdfunded and traditionally funded games. We considergames which list a designer, and have at least two mechanisms. To reduce the likelihood that we analyze games withmissing or inaccurate metadata, we consider only those games rated by at least 10 BGG users. Finally, we filter outtrivial expansions: those expansions of previously made games which do not change their mechanisms. For instance, wedo not want to overestimate the novelty of crowdfunded games by comparing them to the hundreds of rebranded/reissuedversions of Monopoly (i.e. Monopoly London), which are more common among traditional games. After these steps,we are left with 9,170 games published since 2006.Figure 1: Count of traditional and crowdfunded games by year. Data was collected during 2017, and does notinclude all games published in that year. The share of crowdfunded games in our data rises from below 1% toaround 30% in just a few years time, reflecting a major change in the industry. Dependent Variables: Quantifying Innovation
Quantifying innovation in creative industries often depends on extracting features from unstructured informationincluding music [5, 56], funding pitches [24], scientific proposals [8], video games [14], and political speeches [6].These previous works typically compare consistent mathematical descriptions of new products to those that have comebefore. Outputs that deviate significantly in some way are described as novel. There is a growing body of theoreticaland empirical evidence that innovation occurs when content creators combine familiar elements in new ways, which inturn creates possibilities for new combinations [50, 26]. This conceptualization of the “adjacent possible” is based on adescription of products in terms of comparable constituent elements - in our case the mechanisms of games [31]. Theliterature on “recombinant innovation” also frames innovation in terms of new combinations of ingredients [60].An alternative perspective is to consider the inputs that a product takes. In the case of academic research, the novelty ofworks cited in a scientific paper can predict breakthrough success [52]. Patents also cite prior work - and it is knownthat patents citing more diverse prior work are generally assigned to more exotic combinations of categories [2, 10].We follow the former approach, considering a consistent set of features that describe our database of board games.To quantify innovative outcomes, we will compare a focal board game’s combination of mechanisms with those ofpreviously published games. As innovation is a multi-faceted phenomenon, we present several measures to describe he newness of a board game. We compare games in our data with games that were published in previous years usingtheir mechanism vectors. When we are interested in the influence or significance of a game, we compare it with gamespublished in subsequent years. We share a plot of the distributions of all three innovation measures in the Appendix(see Table 5). Distinctiveness
The distinctiveness of a game measures the average distance of the game’s vector to all games published in the previous2 years (we replicate our findings with 1 and 5-year windows). We apply the Hamming distance, which simply countsthe entries in which the two binary vectors differ. In the case of game mechanisms, the distance adds the number ofmechanisms present in game A but not game B to the number of mechanisms present in B but not A. Expressed inmathematical notation, the distinctiveness D of game g i published in year y is defined as: D ( g i ) = (cid:80) g ∈ G y − ,y − Hamming ( g i , g ) |{ g ∈ G y − ,y − }| , (1)where G y − ,y − refers to the set of games published in the previous two years. Novelty
While distinctiveness measures how atypical a game is, our measure of a game’s novelty quantifies the extent to whichit combines mechanisms in a way completely different from previous games. We calculate the minimum distance ofa game to all games published in the previous 2 (resp. 1, 5) years. A game with a novelty score of k has a vector ofmechanisms that differs by at least k mechanism from any game the previous window. Though we may mark as novelgames that recreate the same combination of a mechanisms as a significantly older game, the revival of such dormantdiscoveries is an important part of innovation [16]. Expressed in mathematical notation, the novelty N of game g i published in year y is defined as: N ( g i ) = min g ∈ G y − ,y − Hamming ( g i , g ) . (2)To simplify our analysis, we map this count variable to a binary variable N , ( g i ) taking the value 1 if N ( g i ) is greaterthan 0, otherwise 0. We do this because we are primarily interested in whether a game implements a new mechanismlist or not. The extent of the novelty is to some degree captured by the distinctiveness measure. In any case, our resultsremain qualitatively unchanged if we model novelty as a count rather than binary outcome. Resonance
Novel combinations of mechanisms may not be interesting. In the words of Loguidice and Barton, writing about videogames, “if a game does something first, [it doesn’t] make it more influential than the later games.” [35] A profoundinnovation, on the other hand, would inspire future designers to imitate a game. To that end we adapt a measure fromBarron et al.’s study of influential speechmaking during the French Revolution [6]. The authors argue that while aspeech that differs significantly in content from prior speeches may be novel, it is only influential or resonant if futurespeeches imitate it. A game may implement a surprising combination of mechanisms, but if this combination turns outto be rather strange than interesting, games in the future will not imitate it. The resonance of a game is the differencebetween its distinctiveness compared to previous games and its distinctiveness compared to subsequent games. ( g i ) = Distinctiveness relative to past games (cid:122) (cid:125)(cid:124) (cid:123)(cid:80) g ∈ G y − ,y − Hamming ( g i , g ) |{ g ∈ G y − ,y − }| − Distinctiveness relative to future games (cid:122) (cid:125)(cid:124) (cid:123)(cid:80) g ∈ G y +1 ,y +2 Hamming ( g i , g ) |{ g ∈ G y +1 ,y +2 }| . (3)The first term of this expression is simply the distinctiveness of the game D ( g i ) , while the second term is its distinctive-ness relative to future, rather than past, games. Because the calculation of a games’ resonance requires two (resp. 1, 5)years of data after the game was published, we have a smaller sample of games for which we can calculate resonance. The Landscape of Board Game Types
Our measures of innovation refer to distances between different kinds of games, defined in terms of their vectors ofmechanisms. Using this notion of distance between types of games, we can create a map or landscape of the boardgame industry. In particular we adapt a network visualization method developed by Aharonson and Schilling to studyinnovation in technology using patent data [2] which they call a technological landscape.In this network visualization, nodes are unique game vectors that have been realized by a published game. Two nodesare connected by an edge if the Hamming distance of the two vectors is equal to one. Our measures of innovation canbe interpreted using the network: a game type is distinct if its vector of mechanism’s node is far from the center of thenetwork, away from the other nodes. A game type is novel if it introduces a new node to the network - and moreso ifthat node is disconnected from the other nodes. Finally, a game type is resonant if subsequently published games areclose to it in the network. In this framework, games that implement a new type and are then frequently imitated are themajor innovation success stories.Figure 2: Three snapshots of the networked landscape of board game types. Nodes represent board game types,characterized by their mechanisms. Two nodes are connected if their mechanisms differ in only a single dimension.Node size reflects the number of such games published to dates. Nodes are red if they are often crowdfunded up to thatyear, grey otherwise. Red nodes turn orange as they are more often implemented by traditionally published games. e plot the evolution of the overall board game industry in this network landscape of types in Figure 2. To draw thenetwork we use a physics-inspired force layout algorithm [29]. The algorithm simulates the network as a physicalsystem: nodes repel one another as though they were charged particles, while edges act as springs pulling connectednodes together . We run this layout algorithm for the data at the end of 2017, fixing the nodes in previous years totheir position. To improve visibility we also filter for game vectors implemented by more than five games in our entiredatabase, and do not plot nodes disconnected from the main component of the network in 2017. Within each snapshot,nodes are larger if there are more games with that vector published by that time. We highlight those nodes for whichcrowdfunding is particularly common in red. Nodes are colored orange if they were crowdfunding hotspots in previoussnapshots, but now tend to be implemented by traditionally funded games.Qualitatively, we can observe a diversification of game types between 2008 and 2017. Game types that were firstimplemented by crowdfunded games are often adopted by subsequent traditionally funded games. As whole, weobserve the center of gravity of the board game industry shifting dramatically towards territory originally staked out bycrowdfunded products. We redraw the three landscape snapshots in Figure 3 comparing the centroid of the game typeswhich tend to be traditionally published with the centroid of the game types tending to be crowdfunded. The traditionalcentroid seems to follow the crowdfunded one towards the right part of the landscape. In the following section we willprovide more rigorous evidence for this visual observation in the form of regression models.Figure 3: The three board game type landscapes, with the centroids of traditionally published and crowdfunded gametypes highlighted. Previous period centroids are plotted with transparency to better visual the trend. The crowdfundedgame type centroid, in red, moves to the right of the network, and the traditional game type centroid, in grey, follows. Controls
To exclude potential confounding factors in our regression models estimating the innovation premium of crowdfundedgames, we add control terms to our models. First of all, our models also include include year and genre fixed effects tocontrol for overall trends in the game industry and differences between, for example, war games and party games. Thegenres are: “strategy”, “family”, “wargames”, “thematic”, “party”, “abstract/strategy”, “childrens”, “customizable”. Wenow outline our control variables and discuss how they may confound the relationship between innovation outcomesand crowdfunding.As discussed in previous sections, crowdfunding enables different kinds of creators to realize their projects. From ourdescriptive analysis, we know that crowdfunded games are more often made by larger teams of designers and debutdesigners. Larger teams may, independently of crowdfunding, be more likely to create innovative products because oftheir greater potential cognitive diversity. Likewise newcomers, regardless of whether they are crowdfunding or not,may bring an outsider perspective. We also expect that newcomers are more likely to be attracted to crowdfunding ecause of the gatekeeper effect: publishers might prefer to work with proven talent. We therefore control for both teamsize and whether the design team is making their debut.There are a number of game attributes that indicate that a game targets a niche market. Niche games might be moreinnovative only as a function of serving a special market. Niche games might also be more likely crowdfunded, aspublishers might stay away from catering to smaller markets. Though we excluded expansions that do not modify themechanisms of the original game from our dataset, we have kept non-trivial expansions. Such games may be more likelyto be crowdfunded as the designers want to test potential demand for extensions. Expansions may also have limitedpotential for novelty in general. Similarly, the minimum and maximum number of players a game recommends and itsestimated playing time can also highlight niche work: if a designer wants to make a game for dozens of individuals toplay together, it may be intrinsically innovative regardless of crowdfunding status. Games targeted at adults may becrowdfunded because traditional publishers hesitate to attach their names to such efforts. Cards Against Humanity , oneof the most successful crowdfunding projects, not only among board games, is marketed to gamers 18+. We control forthese basic board game level features in our models.Another potential source of bias to our estimates of the relationship between crowdfunded status and innovationoutcomes is heterogeneity in complexity between game types. Links between the BGG community and crowdfundedprojects suggest that hobby gamers play an important role in the crowdfunding market and may drive the designers tocreate more complicated games for this group of customers. Traditional publishing houses might be more skeptical ofthe market for complex games. Game complexity may relate to our innovation measures because complicated gameslikely implement unfamiliar combinations of mechanisms. We control both for the game’s minimum recommended age,as board games designed for younger individuals may be less sophisticated or may emphasize different mechanisms,and BGG’s complexity score for each game. BGG users rate the complexity of each game on a 1-5 scale. Inclusion ofthese controls insures that any relationship we observe between crowdfunding status and innovation outcome is notsimply the result of selection into crowdfunding by designers with a preference for complex games.We report univariate descriptive statistics of all the variables in our dataset in Table 1. Before we introduce the modelsand our findings we comparing the population of crowdfunded games with traditionally published ones using bivariatestatistical tests. Count Mean Std. Min 25% 50% 75% MaxYear Published 9170 2012.6 3.26 2006 2010 2013 2015 2017Is Crowdfunded 9170 0.21 0.41 0 0 0 0 1Distinctiveness 9170 5.64 1.15 3.74 4.79 5.39 6.26 18.39Novelty (Count) 9170 0.88 1 0 0 1 1 13Novelty (Binary) 9170 0.57 0.50 0 0 1 1 1Resonance 7023 -0.11 0.13 -0.52 -0.21 -0.12 -0.02 0.45Is Expansion 9170 0.12 0.33 0 0 0 0 1Min. escriptive findings We find several substantive differences between the two group of games, summarized in Table 2. We report the means ofcrowdfunded and traditionally published games, and apply a Mann-Whitney U test to measure the statistical significanceof their differences. We also report the effect size of a hypothetical classifier distinguishing crowdfunded and traditionalgames using only the feature in question, measured by the area under the receiver operating characteristic curve (AUC) -in this case equivalent to the common language effect size.We find that the teams creating crowdfunded games are slightly larger on average than those making traditional games(3.3 vs 2.9 designers and artists). Larger teams may have greater access to the social capital and networks so essentialto crowdfunding [7]. While half of published crowdfunded games are made by a debut designer or design team, lessthan one-third of traditional games are made by newcomers. This suggests that either new entreprenuers are selectingcrowdfunding, or are turning to crowdfunding because they cannot tap traditional sources of investment.Games created via crowdfunding are also different in substantive ways: games for adults (labeled explicitly or havinga recommended age of at least 18) are much more likely to be crowdfunded. It may be that some crowdfundedprojects have difficulty getting traditional funding for reasons of content. Crowdfunded games are also less likely to beexpansions of existing games and have slightly shorter average playing times (roughly 2 minutes, on average).Turning to our measures of innovation, crowdfunded games have significantly higher distinctiveness, novelty, andresonance than traditional games. However, given the significant potential for confounding factors (as we have seen thatcrowdfunded games differ in terms of their creators and content), we defer a discussion of the relationship betweeninnovation outcomes and crowdfunding until after we present our models.Feature Crowdfunded Avg. Traditional Avg. M-W U P Value AUC/Effect SizeDistinctiveness 6.05 5.53 5164212.5 <.001 0.63Novelty (Count) 1.13 0.82 5808176.0 <.001 0.58Novelty (Binary) 0.67 0.54 5978946.0 <.001 0.57Resonance -0.08 -0.12 4994918.0 <.001 0.64Is Expansion 0.09 0.13 6605528.0 <.001 0.52Avg. Complexity Rating 1.98 1.96 6765551.5 0.05 0.51Is Adult/Mature 0.01 <.001 6885773.0 <.001 0.50Team Size 1.47 1.44 6694195.5 <.001 0.52Debut 0.50 0.31 5628148.0 <.001 0.59Table 2: Comparing the means of key features between crowdfunded and traditionally published games. Weapply a Mann-Whitney U test, calculate a p-value and report the effect size via the AUC measure. Accordingto these bivariate tests, crowdfunded games tend to have greater innovation outcomes and bigger fanbases.Their teams are slightly larger and they are more likely to be debut games.
Models and Results
We fit three regression models on our dataset, one for each innovation outcome dependent variable. In each modelthe key independent variable is a binary variable: whether or not the game was crowdfunded. We add controls termsas outlined in the previous section, and fixed effects for both year and genre. Two of our dependent variables arecontinuous: distinctiveness and resonance. For these variables we fit ordinary least-squares (OLS) regression models.The dependent variable novelty is a binary outcome - either a game implements a never before seen combination ofmechanisms or it doesn’t. We model this outcome using a logistic regression. ependent variable: Distinctiveness Novelty Resonance
OLS Logistic OLS
Is Crowdfunded 0.235 ∗∗∗ ∗∗∗ ∗∗∗ (0.032) (0.061) (0.004)Team Size 0.023 − ∗ ∗∗∗ ∗∗∗ ∗∗∗ ∗ (0.014) (0.027) (0.002)Playing Time (Log Mins) 0.164 ∗∗∗ ∗∗∗ − ∗ (0.022) (0.049) (0.003)Min. − ∗ − − ∗∗∗ (0.018) (0.034) (0.002)Max. ∗∗∗ ∗∗ ∗∗∗ (0.006) (0.012) (0.001)Min. Age 0.023 ∗∗∗ ∗∗∗ ∗∗∗ (0.003) (0.006) (0.0004)Is Expansion 0.632 ∗∗∗ ∗ − − ∗∗∗ − ∗∗∗ − ∗∗∗ (0.090) (0.192) (0.009)Year FE Yes Yes YesGenre FE Yes Yes YesR-Squared 0.19 0.05 0.31Observations 9,170 9,170 7,023 ∗ p < ∗∗ p < ∗∗∗ p < ur results replicate when modeling novelty as a count variable, measuring the minimum distance of the game’s vectorto all previously published games, with a Poisson regression (see Table 6 in the Appendix). As mentioned, we reportwindowed measures of innovation, looking back (or in the case of resonance, forward) two years. Our results replicatewhen considering one and five year windows, see Table 5 in the Appendix. We report robust standard errors, which aremarginally higher than the uncorrected errors [4]. We emphasize that for a range of alternative specifications, filteringor windowing choices, and alternative standard error calculations our models and data tell the same story: controllingfor a rich variety of possible confounders, crowdfunded games have significantly higher innovation outcomes.We report the results in Table 3. In all three models crowdfunding has a positive and statistically significant relationshipwith the innovation outcome in question. For instance, a crowdfunded game has 50% greater odds to implement a novelcombination of mechanisms than a similar traditionally published game (exp(.412) ≈ ggeffects [36]. The third model predicts that traditional games will have negative resonance: they have more incommon with games created in the past than in the future. M a r g . P r ed . D i s t i n c t i v ene ss ( S t anda r d i z ed ) M a r g . P r ed . P r obab ili t y o f N o v e l t y −0.050.000.050.10 Trad. CF M a r g . P r ed . R e s onan c e ( S t anda r d i z ed ) Figure 4: Model predicted average innovation outcomes for crowdfunded and traditionally published games.We standardize distinctiveness and resonance to facilitate interpretation. Marginal estimates are derived fromthe primary models in the text. Bars represent 95% confidence intervals.Primary findings aside, we also find relationships of interest between various controls and the dependent variables.Larger teams do not make more innovative games. Debut designers or design teams make more distinct and novelgames, though these games are not resonant. This suggests that creating a lasting or influential innovation may requireat least some insider experience or legitimization [11]. Previous research suggests that teams that combine insiders andoutsiders tend to do well [28, 54]. omplex games are more innovative, though only slightly more resonant. Longer games tend to be more distinct andnovel but actually significantly less resonant. Together these findings highlight a potential tradeoff: a long, complexgame may be different from what came before, but overdoing it can make it unlikely that you will be imitated. MattLeacock, designer of the hit game Pandemic , emphasized the importance of making games, quoting Einstein, “as simpleas possible, but no simpler” [34]. The expansion dummy variable also has a different relationship with distinctivenessand novelty than it does with resonance. Expansion games are distinct and novel but not more resonant, suggesting thatthe industry prefers the original to the imitation.
Discussion
In this paper we have tested a fundamental question about crowdfunding as an institution: does it facilitate the productionof innovative products? Despite significant theoretical support in the affirmative, empirical evidence has been lacking -perhaps because it is difficult to source data in which similar crowdfunded and traditionally financed products can becompared. Using a large database of board games sourced from an online community of gaming enthusiasts, we filledthis gap and found that crowdfunded games were indeed more innovative in several ways.To quantify the innovativeness of individual game types determined by their mechanisms, we embedded them in alandscape determined by how they combine fundamental gameplay mechanisms. Different facets of innovation can bequantified in this space using different measures of distance. We said a game is distinct if it has a relatively averagedistance to previously made games. A game is a novelty if it implements a new combination of mechanisms comparedto what came before. On both counts, crowdfunded games scored higher than their traditional counterparts. Lastly,considering subsequent rather than previously published games, we defined a game’s resonance as the differencebetween its distinctiveness in the past versus the future.In this sense we went beyond our original question and found a surprising result: that crowdfunding not only supportsthe creation of different products, but that these products predict where the industry is headed. These findings supportthe notion that crowdfunding represents an extensive disruption [22] to the board game industry. Several mechanismsmay explain this finding. The crowdfunding process may create stronger ideas through extensive end-user input [55].The open and public nature of crowdfunding may facilitate knowledge spillovers [27]. Future work is needed tounderstand the relative importance of these factors.We can also point to specific interesting counterfactuals that we cannot test with the data at hand but that wouldilluminate the relationship between crowdfunding and innovation. We do not observe failed projects on either thecrowdfunded or traditionally published sides, and cannot observe differences in preferences between crowd and expertfunders, which are thought to be significant [45]. Randomized control trials, though expensive, and natural experiments,though rare, would present a significant complement to our observational study.Even with our results, we caution that crowdfunding is not a silver bullet for the problem of sluggish innovation inthe advanced economies. Indeed, despite much fanfare, crowdfunding still makes up a small share of investment inthe economy. Perhaps most important is the question of scale: while some coordination is required to create a newboard game, board games have relatively low capital requirements and can be made by small teams or individuals. Cancrowdfunding effectively contribute to more organizationally and capital-intensive innovation?Perhaps it is better to ask which sectors are becoming more amenable to crowdfunding. Trends in digitalization andnascent fields like additive manufacturing are decreasing the cost of communication, coordination, and prototyping. Weargue that these forces are expanding the industries and technological areas to which our findings apply. Crowdfundinglikely has significant potential to support innovation in non-traditional settings such as DIY labs [18], makerspaces[20, 13], and open source software [40]. It may also smooth out some of the strong geographical economic forcesthat concentrate investment in major hubs [9]. Future work to measure and understand the innovation impact ofcrowdfunding should focus on this expanding frontier of places, sectors, and people where it can make a difference. cknowledgements We thank Sándor Juhász, Hannes Fernström, Tamer Khraisha, Gerg˝o Tóth, David Deritei, Milán Janosov, Anna May,Theresa Gessler, the participants of seminars at the Chair of Computational Social Sciences and Humanities at RWTHAachen University, and the Institute for Analytical Sociology at Linköping University for helpful comments andsuggestions. We are grateful to Zsófia Czémán for assistance with our figures.
Conflict of interest
The authors declare that they have no conflict of interest.
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Mechanism Examples
Acting Times Up!Action/Movement Programming Shogun, Robo RallyAction Point Allowance System TikalArea control/Area influence EclipseArea Enclosure Go, BoxesArea Movement El Grande, Dead of Winter, War of the RingArea-Impulse Storm over Arnhem, Thunder at Cassino, Turning Point: StalingradAuction/Bidding Modern Art, RaBetting/Wagering TichuCampaign/Battle Card Driven We the People, Hannibal: Rome vs Carthage, Twilight StruggleCard Drafting Through the Ages, Mage KnightChit-Pull System Zulus on the Ramparts, A Victory LostCo-operative Play Pandemic, Escape, Battlestar Galactica, Castle PanicCommodity Speculation Acquire, Kanban, Merchant of VenusCrayon Rail System Empire Builder, EurorailsDeck/Pool Building Dominion, Star Realms, Marvel LegendaryDice Rolling Roll for the Galaxy, Mice and Mystics, YahtzeeGrid movement Space Hulk, Forbidden DesertHand Management Android: Netrunner, Through the AgesHex-and-Counter Twilight Imperium, Advanced Squad Leader,Line Drawing Telestrations, Pictionary, Cranium, SproutsMemory Codenames, Hanabi, Coup, Sleuth, ClueModular Board Settlers of Catan, Mansions of Madness, Blue Moon CityPaper-and-Pencil Eat Poop You Cat, ScattergoriesPartnerships The Resistance, Dune, Tragedy Looper, Ultimate WerewolfPattern Building Castles of Mad King LudwigPattern Recognition Quirkle, Ingenious, Ubongo, Jungle Speed, Cathedral, PentagonPick-up and Deliver Merchants and Marauders, Indonesia, GenoaPlayer elimination Magic: The Gathering, King of Tokyo, DiplomacyPoint to Point Movement Arkham Horror, Tales of the Arabian Nights ress your Luck Goa, Ra, Incan GoldRock-Paper-Scissors Sid Meier’s Civilization, Yomi, Dungeon QuestRole Playing Chaos in the old world, Descent: Journeys in the DarkRoll/Spin and Move Monopoly, Marrakech, Formula DèRoute/Network building Power Grid, Railways of the World, Food Chain MagnateSecret Unit Deployment Letters from Whitechapel, Fury of DraculaSet Collection Gin Rummy, Lords of WaterdeepSimulation Castles of Burgundy, The Voyages of Marco Polo, Flash Point: Fire RescueSimultaneous Action Selection 7 WondersSinging CraniumStock Holding Mombasa, Rapa Nui, Tesla vs EdisonStorytelling Tales of the Arabian Nights, Dixit, Rory’s Story CubesTake That Cosmic Encounter, Saboteur, Bang, MunchkinTile Placement CarcassonneTime Track Horus HeresyTrading Tikal, Antiquity, Fief, BohnanzaTrick-taking Hearts, Haggis, RookVariable Phase Order Puerto Rico, Race for the Galaxy, Citadels, MythVariable Player Powers Cosmic Encounter, Dominant Species, Sentinel of the MultiverseVoting Werewolf, Battlestar Galactica, PatchistoryWorker Placement Agricola, Terra Mystica, Caylus, Caverna, Le Havre, OrleansTable 4: Table of mechanisms in games, with examples. Note we use the mechanism system as definedin 2017. Source: https://web.archive.org/web/20170722061312/https://boardgamegeek.com/wiki/page/mechanism Distinctiveness (2-Year)
Novelty (Count, 2-Year)
Resonance (2-Year)
Figure 5: Distributions of dependent variables. obustness Tests Dependent variable:
OLS Logistic OLS OLS Logistic OLS
Is Crowdfunded 0.237 ∗∗∗ ∗∗∗ ∗∗ ∗∗∗ ∗∗∗ ∗∗∗ (0.032) (0.064) (0.003) (0.033) (0.059) (0.012)Team Size 0.022 − − ∗ − ∗ ∗∗∗ ∗ ∗∗∗ ∗∗∗ ∗∗∗ ∗∗ ∗∗∗ ∗∗∗ − ∗∗∗ ∗∗∗ − ∗ ∗∗∗ ∗∗∗ − − ∗ − ∗∗ − ∗∗ − − ∗∗∗ (0.018) (0.036) (0.002) (0.019) (0.034) (0.003)Max. ∗∗∗ ∗ ∗∗ ∗∗∗ ∗∗∗ ∗ (0.006) (0.012) (0.001) (0.006) (0.012) (0.001)Min. Age 0.023 ∗∗∗ ∗∗∗ ∗∗∗ ∗∗∗ ∗∗∗ ∗∗∗ (0.003) (0.006) (0.0003) (0.003) (0.006) (0.001)Is Expansion 0.616 ∗∗∗ − ∗∗∗ ∗∗∗ − − ∗∗∗ − ∗∗∗ − ∗ ∗∗∗ − ∗∗∗ − ∗∗∗ (0.090) (0.196) (0.008) (0.091) (0.194) (0.014)Year FE Yes Yes Yes Yes Yes YesGenre FE Yes Yes Yes Yes Yes YesR-squared 0.19 0.04 0.39 0.19 0.05 0.26 ∗ p < ∗∗ p < ∗∗∗ p < ependent variable: Poisson Regressions
Is Crowdfunded 0.211 ∗∗∗ ∗∗∗ ∗∗∗ (0.026) (0.029) (0.033)Team Size − − − ∗∗∗ ∗∗∗ ∗∗∗ (0.021) (0.024) (0.027)Avg. Complexity Rating 0.098 ∗∗∗ ∗∗∗ ∗∗∗ (0.013) (0.015) (0.017)Playing Time (log mins.) 0.196 ∗∗∗ ∗∗∗ ∗∗∗ (0.027) (0.032) (0.035)Min. − − − ∗∗ (0.016) (0.018) (0.020)Max. ∗∗∗ ∗∗∗ ∗∗∗ (0.006) (0.006) (0.007)Min. Age 0.016 ∗∗∗ ∗∗∗ ∗∗∗ (0.003) (0.004) (0.004)Is Expansion 0.079 ∗ ∗∗ (0.034) (0.037) (0.041)Is Adult/Mature 0.001 0.008 0.102(0.124) (0.136) (0.135)Constant − ∗∗∗ − ∗∗∗ − ∗∗∗ (0.094) (0.108) (0.123)Year FE Yes Yes YesGenre FE Yes Yes YesR-squared 0.03 0.04 0.04 ∗ p < ∗∗ p < ∗∗∗ p <0.001Table 6: Poisson models predicting count novelty calculated with 1, 2, and 5 year look-back. This alternativeformulation of innovation for the dependent variable aligns with the findings we report in the text: crowdfundedgames are significantly more likely to implement a novel combination of mechanisms. We report McFadden’spseudo-R-squared and robust standard errors for all three models.