I see the VAT thing this way: publisher could demand more money from EU bakers. But in return there would be a lot less bakers from Europe this way. EU has a HUGE growing board game market. If you loose those bakers your factory quotes goes up (smaller printrun=more cost per copy) companies are not stupid, I'm sure they are aware of this and the profit they make from a bigger print run including EU bakers > then VAT cost. No one is paying for someone else's copy.
Then EU backers should suffer via higher payments. It's their own governments implementing these taxes - hold them responsible. "We can't buy games anymore" may help pressure the EU into removing VAT.
@@timraley8299 I don't think you understood my answer. Would you be happier if EU people had to "suffer" therefore fewer backers result in a higher cost for you? (through fewer stretch goals for example because of a lower print run and worse quotes) I'm just saying that more backers level the cost or are even more valuable then what the companies have to pay in VAT.
@@Sarahmalt it’s debatable who is suffering more if you consider we pay out of pocket for healthcare and other amenities that you get “free”. Your view is “euro-centric”. That is not meant to be a knock but simply an acknowledgment that this is a complicated process and gray area.
@@forouza1 I try to keep the topic on boardgames but let me assure you that no VAT that is paid is going to anyone's "free" healthcare. As an international wholesale trader, I know how pricing in the background works. I just find it very odd to asume Europe's copies are more expansive because of VAT. Your product will always have a lesser or bigger margin compared to region. Most of the time "the rest of the world" copies will be the most expansive compared to others. In comparison it would be more expansive for every copy to be priced Individual. As the U.S. installed trade tariffs with China, US bakers didn't had to pay more, so it can go both ways you see. Primal is an European company, they can get there VAT partially back from the government. For them as an EU company I can almost assure you that copies sold to the EU will have the best margin compared to the rest of the world and their taxes and tariffs they have to pay for those copies. I just find the whole topic very petty. It all stands on the ground that someone has to pay for someone else's copy or even worth, their health Insurance ;) This is not true. Shouldn't we, as board game community, not all stand together and be happy about our games instead of pointing fingers and creating a conflict that is really not there? If anyone has anymore questions, feel free to contact me and we can talk about international pricing a bit more :)
Sarahmalt is right. KS are barely worth it right now. The only thing charging extra VAT to europeans will acomplish is to make europeans quit backing projects and that will hurt the company, and the other backers. Luckily most companies are not stupid and know math. If they earn 30% benefit per game and they have to choose between absorbing the 20% vat and only earning 10% per game sold to Europe, or don't sell games to Europe and lose that 10% benefit too... That without taking into account all the benefits of a bigger run, lowering cost per game a lot. Take into account that making a minis game has not a linear cost. You have a shitload of fixed costs (dessing, development, tooling, molds, art, playtest, etc) that makes the first copy extremely expensive and each subsequent copy cheaper and cheaper. So gain a lot more money from the copies between the 10.000 to the 11.000 than from the first 1000.
There are multiple issues with that CMON VAT system: first of all the rules and amount of VAT have not changed, just the way it has to be reported which means CMON wasn't paying before or has just increased their profit margin on Europe by 100$. Secondly prices in Europe are always including VAT, it's illegal to sell something without the VAT included which means even the way they did it on the cartoon KS by just anouncing there will be VAT is illegal because we don't know the exact amount of VAT we will have to pay. Also what happened to the 'KS is not a store'? We all know KS is only not a store when they want it not to be, because if it was just a gift there would be no VAT. And lastly the 100% refund of CMON actually costs us a lot of money, the dollar dropped A LOT since that KS so you would still lose like 20 euros with a 100% refund on top of the fact that you had no control over your money for half a year. A 100% refund is really not enough compensation. I'm happy I got to experience the glory days of KS, but it think those are over for me and Europeans in general. The value of a KS was already dropping over the past years and I was already getting kind of over it. No way I'm ever backing CMON again, and for the other ones I will be very very selective. Which is a good thing for my wallet ofcourse :) There are a lot of very good games straight in retail so I really don't need KS, as fun as the excitement of the campaign is. Anyways my 2 cents, thanks for the video!
I think that the main issue with MD2 is the use of the EU-Friendly logo by CMON. In EU the advertised prices must always include VAT, unless it is clearly specified. Therefore, both, the use of the logo, and the missing note about VAT in the campaign were a clear indicator that there were not gonna be extra costs (except shipping) for EU backers. Regarding the use of the EU-friendly logo, this is what was the idea of its creator and what it meant according to his words: "Why Does “Friendly” Shipping Matter? “Friendly” shipping matters because if it’s not a possibility, the cost to the backer can be significant. Say that someone in the EU backs a $40 reward and pays $30 in shipping from the US to the EU (we’ll assume that the reward includes a built-in shipping subsidy of $10 so that the creator can say that there’s “free” US shipping). Legally, the declared value must be the reward price plus shipping. When the courier delivers the package to the backer, the backer must pay VAT (~21%, depending on the country). So a $40 reward could end up costing the backer nearly $85. Sometimes there’s even an administrative fee on top of that. With EU-friendly shipping, the shipping fee is lower in the first place (because the goods are shipped from within the region) and the creator pays for VAT when the goods enter the country so that backers don’t have to (at least not directly). This is not necessarily the normal or standard way to handle VAT, but it’s what my definition of the “friendly” label is referring to" You can find it here: stonemaiergames.com/kickstarter-lesson-212-calculating-and-paying-value-added-tax-vat/ I think this is the reason why a lot of EU backers did complain about how CMON handled this issue. It would not have been a problem if the not included VAT was clearly stated in the campaign page ( regardless of the huge increase of the final cost)
On the VAT subject, you could also see that as : the companies increased their margin, overall, but that margin may be a bit cut in case of Europe sales. Like they usually get 12% margin, but for KS, they go for 14%, hopping that the ratio of backers from VAT countries will result in an average 12% in the end. In the end, everything is basically : is the price asked by the company fair for what they're offering, in your consumer's eyes, or not. Also, is it more acceptable for you Americans, if paying a bit more for the european VAT helps gather some money from said Europeans, have maybe a better game, and helps the company overall ? BTW, you're welcome in Europe anytime ! ;)
As a note on the VAT, it’s only really an issue for UK / EU backers of USA projects. Take note of Primal; Italian project, who have stated straight up that they are handling VAT “properly”. For those of you in the USA, think of it of a “cost of doing business” in the EU / UK, similar to them collecting your Sales Tax up front (it’s coming, don’t think it isn’t). They make less money off EU /Uk customers, but companies do exist to maximise profits, no?
Interesting video, but I think you don't know really how the VAT is working in Europe, so if I may help you (and correct the idea that Americans are paying for our European consumption taxes in your video). Taking a basic example of a shop in France, where VAT is 20%, for a product with a value of 100 euros excluding tax, which costed 50 without tax to the shop (buying from supplier or manufacturing, whatever). The shop then had in their books a good of a value of 50, with a paid VAT of 10 euros. When someone buys it in the shop, the shopper would pay 120: 100 of the game, 20% of 100 for consumption tax (= VAT). The shop then registers as follows: 100 in sales, 20 in collected taxes. Then, after closing their books, the French company will declare that they need to pay 10 to the state: they collected 20 euros, and paid already 10 to the supplier. The supplier will declare that they collected 10 euros of VAT for this product, so the state will end up with 20 euros of the final good's value (-> 20% as expected). What's important to remember here is that VAT has no impact on your profit: the ratio sales/cost of goods does not change, the shop only collects the tax for the government. Now let's say this shop is selling online, and an Italian resident is buying it; VAT is 22% in Italy, the person will pay 122 euros, and the Italian government will send an invoice to the French shop for 22 euros. The shop will pay it, and ask for 10 euros of reimbursement from the French government for the VAT for getting the product in the first place: this tax is only paid by the final consumer, never by the shops/suppliers. Final example: an American resident orders from this French shop/website. The USA are not members of the EU (believe it or not), so none of the European VAT applies: the consumer pays 100. The French, Italian or whichever governement will NOT receive any VAT for this sales, as it will be recorded as an exportation. Americans DO NOT PAY OUR TAXES. At all. And at the same price, the margin ratio (sales/cost of goods) stays the same. Now looking at the case you mention, where VAT "is included", it does not mean you guys pay for our governments (I insist) but rather than the original product price changes depending on the country. Which actually happens often - the same product will have different prices depending on the markets. You can of course complain about that (although the total paid including VAT is the same for you as for the other countries), but that's totally different from paying for our policies. The company is simply making a higher margin on the USA than in France for example - so they did reduce their overall margin on the other countries compared to a strategy of charging VAT afterward. Whether it is the best commercial strategy (average margin rate etc as you mentioned) or not is a totally different matter! I hope this long text may be helpful! Thanks for reading.
So instead of seeing it as us paying your VAT we should see it as we both pay the same price for the game but the game company receives less profit from a European purchase after taxes? In reality though the company knowing this sets a certain price to make sure that they make the profits they are seeking after taxes. I get that we may not be paying your taxes. That is clear. Based on your info though we are really paying more for profits that were lost because of VAT. So American still pay a little more the company just gets to keep it 😅.
@@tunexsquid2604 yep, that's how it ends up. And I get that it is also upsetting, I am not questioning that. I just really wanted to underline that my pension when I retire will not be paid with your money, that would indeed be insane :p
As a Portuguese consumer, I'm kinda "scared" that I won't be able to buy any more kick-starts from Murica!!! Bahhhhh. Usually great games go to 300 or more, vat over that is crazy for us
You pay sales tax in the US too. Most countries have it, it’s just always built into the price (and should have been in CMON’s). Those companies paying for it aren’t doing anything special, they’re just telling you they’re not bumping their profits and calling it VAT.
I am guessing here but potentially the USA has not sales tax on kickstarters as there is no sales of games involved just a pledge to help producers make a game and they then gift you a reward. It may have been in the past that this was assumed to also be true for no VAT on kickstarters for EU/UK but the Value Added Tax (VAT) is different to sales tax and seems it has taken more interest recently in ensuring the tax is collected. No hard facts in what I say but an informed guess.
I get the frustration of USians over VAT, but I think that as soon as you reach the "all the money we give pays for everything like offices" level of abstraction, dividing up different elements of the price stops making sense. I mean, companies also have payroll taxes that vary according to government. Do you resent paying those to a foreign company because you have no say in the rates? But do come to Europe. We have food!
Hello, I am from Poland and I love your videos :) (I'm not a specialist in finance and this is how I understand all things about VAT). I think that the whole thing about VAT came out because some companies (CMON, Alibaba Group, etc.) tried to avoid taxes, and as you said put a production price instead of a selling price on the customs declaration. Till now packages that came to the EU worth less than ~25$ (or ~50$ if it was a gift) were VAT exempt. I don't know how it works if shipping a container (because it is definitely worth more than 50$) but a lot of Europeans order on Aliexpress small things (lower than 25$). EU realized that they loose so much money and decided to change that law. From July all packages outside Europe have to be VAT included and companies should put real worth (don't ask me how they will check this :P). CMON has financial problems for a long time and it could be their way to get additional income. I also think companies which say they included VAT to all copies (shipped to USA and rest of the world) make excuse to inflate the price.
26:40 This +1000, I find this will be the case from now on though, they will hide the VAT in the pledge cost and non-Europeans will help subsidize it (it is the easiest least-confrontational way for them). I think they need to create a VAT pledge level, I've seen it before for Canadian taxes so I don't see why VAT has to be such a show or hide situation.
As an european let me tell you that VAT is a think here for decades. It is nothing new and the only reason why CMON is now asking for VAT afterwards is, that they used a loophole (other would say, scam the EU) and have not payed the regular vat. Not all companies in the past used that loophole and payed taxes as they should be even before the loophole was closed.
I'm afraid I am pretty much out of Kickstarters now. I'm a bit fed up of the whole concept. Costs have been hidden for years with EU companies subsidising global shipping, and US companies doing the same. VAT will drive the EU (and UK) community away from international kickstarters as the cost is way too high. And to be honest Kickstarter has just become a bloat fest. Primal looks great, but it's just all bloat and is in good company. I'm glad in a way. I've spent £1000's on my ever growing kickstarter backlog and skipped loads of great retail games as a result. I'll probably back the odd thing ... but they will have to be something special to tempt me. Feel like an addict on day 1 of the pledge :) Edit: Just cancelled my primal A early bird pledge. Was quite literally the hardest button press for a long time. Hope it does well, I think it looks amazing but not THAT amazing!
Similar- I am interested in Frosthaven, I have Gloomhaven and Jaws of the Lion. But I believe with patience that I can pick it up in the UK fo at retail for less than kickstarter with its postage and VAT charges. Seems strange that you can introduce a middle man and still get it cheaper but I guess per item, large quantity shipping to retail is a lot less than single backer fulfilment.
So this EU VAT change (close of loopholes) will for sure be a changer of how Kickstarter and other crowdfunding will be evaluated from now on. Will be interesting on how the different companies will handle new projects. At the moment there are only a few that charge VAT on top, most Stick to the customer friendly shipping way. For me as a German (yeah, when you come to berlin on your EU trip we can for sure grab some nice food) it’s 19% VAT, so not the worst, I will have to evaluate the value of my backings even more.
Im based in europe, and first to answer your question, the VAT of european countries differs from country to country, im based in Denmark which has one of the highest, if not the highest VAT with 25%. With that out of the way. What companies have done is often one of three things 1: Ask people to pay VAT 2: Hide the VAT prices by showing higher shipping prices than there actually are 3: Hide the VAT prices by having a higher profit margin in general The issue with the option 1 is that the chance to get european backers is suddenly very low. The second option makes it a bit more expensive for everyone around the world but still more expensive for europeans. "The reason why EU normally is a bit more expensive to ship to, than the US" The third option makes everyone around the world pay those 5 dollars for european VAT. And while i understand it isnt fair, 90% of europeans would opt out if it was done with option 1. Im a member of a danish kickstarter group, and ALOT of people took the refund from Massive Darkness 2 when they requested VAT. My guess is that CMON usually does number 2 but because of the very high shipping prices currently together with their allegedly bad economy they had to charge the VAT they had already hided in the shipping prices. Meanwhile the EU friendly logo is due to the fact that they send the product to a european company to then send it from there to european backers to avoid any toll. However its a bit fun i just noticed that at least in Denmark boardgames are not under any toll rules at all which means you dont have to pay toll for them even if they were sent directly from China.
The B2C EU model implies that VAT must be included in the displayed price; meanwhile, the B2B european model does not include VAT, because that has a volatile impact in the end, since it goes compensating (VAT on firm sales is compensated by VAT on firm purchases). In the US, the B2C model allows, if I'm not wrong, to display a certain price and only charge VAT during the sale itself. This is clearly to encourage expenditures, but is not customer friendly, it favours the seller. The EU B2C model follows the general phylosophy to protect customers (aside from VAT, there are a whole lot of strict rules on food, practices, and so on). Not saying one is better, everyone will probably like the one he/she grew up with the most! Btw, when you come to EU, if you're into food, we're waiting for you in Italy, and we also have two pretty important festivals: Lucca Comics and Games (the biggest of Europe and second in the world, twice as Essen, covering comics, videogames, boardgames, larp, cosplay, and so on) and Modena Play (specifically focused on Board Games), you should check them out, we are waiting for you :)
Haha thanks dude! I used to get loot crate a and that made me realize how much I enjoy cool nerd shirts. Before the. I just had plain t shirts mostly. They're fun! :)
I have cancelled my pledge for MD2, just because of that VAT thing. Not because I don't want to pay it if I have to, but because it wasn't advertised before like shipping...
Thanks for covering Fallen Knight, I was sorely disappointed in the campaign, and really looked like a big scam -- as you detailed with the art and mini renders, the whole think looked like it ripped off various concepts from elsewhere and a limited page with only minimal art. I don't care if they get their act together, I will not back it as it looks like it won't ever deliver or maybe a mess after 5 years.
A few points on VAT worth considering: - RRP needs to be more realistic now that VAT is added too it and shipping. At this point is worth buying at 20% off at retail unless the KSe are amazing. - Internal EU shipping from hubs probably already has VAT added too it so its being doubled on that. - Americans aren't paying for EU backers. Companies might make less profit on EU backers but they gain a larger market reducing their fixed costs and getting better economies of scale. Resulting in more profit over all than if they just sold to Americans - US companies offset the VAT they absorb against profit. Its why making a small loss but have lots of growth is sometimes better for business. Some one who enjoys maths more than me could probably work out what a popular campaign would have lost if all the EU backers were excluded? But take MD2: 9000US vs 7000EU backers, if you do some really (reaaaaally) rough math and assume all those EU backers left. The $3.8m drops to $2m which means stretch goals stop at Gryphon (missing out on 12 other stretch goals). Worse for cmon say if they made 50% profit on US backers and 30% on EU backers their profit would go from $1,520,000 to $1,000,000 that's a 33.3% drop ouch! EU backers help turn over and lower fixed costs simples.
I live in the UK and absolutely agree with you; why should others subsidise our VAT? What benefit do you get?! Don’t get me wrong, the situation sucks and I will be ALOT more selective in my backing on Kickstarter, but I really don’t think it’s fair to penalise those who live in different tax jurisdictions. So, in the short term whilst this mess gets sorted out, thank you to my international board gaming brothers and sisters.
VAT is a very complicated topic for sure and we will see a major decrease of backers from the EU (and therefore overall) if there is a straight charge of VAT. Most likely we will have way for companies to go around so that it isn't as expensive, but if not then KS is dead for me for sure. Were I live we have 23% of VAT. So if a game costs 100€ and I pay for shipping 20€ (very rare is below this) I have a VAT of 27,6€. This means that pay 147,60€ for a game. That is 50% of the price of the game for nothing. I don't agree that other people should cover this since it is an EU "issue". Australia for example pays a lot more for their games and they have to suck it up. Good video as usual and that you for covering issues on this side of the Atlantic (most US content creators forget the rest of the work when they have a lot of people seeing their stuff from outside US). Cheers
Just one point on vat... some companies don't have a problem because there eu based. They are paying vat anyway, so nothing extra to charge in the eu, so sometimes when it's not charged, its actually always charged, regardless of location. Happy to give you a rundown on vat if you like (AAT bookkeeper here)
Exactly, great example! I saw many not realizing that VAT is paid, whether it's paid by all of us paying into the company's profits, hidden as a shipping charge or charged to the end customer it's always there.
I am not sure but I believe non EU/UK companies were not paying VAT on kickstarters for EU/UK backers as kickstarters are "not a sale just a donation by you and you receive a free gift". I think VAT authorities have become aware of this "misunderstanding", cough, of what VAT is (not just a sales tax) and is keeping a closer eye on kickstarters hence the current set of non EU/UK kickstarter statements about VAT and cost.
I'd disagree with the sleeves part. A minority probably does it and it probably doubles the space you need in a box for the cards, bigger box dimensions quickly means a lot more shipping costs. So while it might make sense for a game with not that many cards, from the moment you have a lot of cards it really doesn't make sense. This is like demanding all the addon's fit in the box, it's an upgrade. What they could do is offer a separate box for it though, that would make a lot more sense.
Yeah great point! I should clarify quite a bit as there are multiple points. For sure though 100% only for games withotu a ton of cards. Additionally I still want my unsleeved cards to be fit in there nicely so really there needs to be separated added space if they are sleeved so unsleeved you simply don't use the overflow section.
Your 40k pile keeps getting bigger :D And you're clearing some shelf space...was that Starcadia Quest that disappeared? Getting some mixed messages from you on this vid though; saying that if companies didn't mention VAT they should suck it up and pay it, after spending several minutes saying that anything they spend from their profits was partially paid by Americans (getting the impression that didn't impress you very much). I'm leaning toward the opinion that once a company has made its profits, its up to them how they spend them. If they want to equalize the prices with other consumers around the world, buy offices, have a vacation, it's all good so long as I get what I paid for. I was willing to pay a price for a product, and they didn't need to inform me about everything they would potentially be spending those profits on. Unless, of course I find they spent that cash in a super-immoral way, then I'll be pissed off with the company and never back them again.
The thing about the VAT and CMON. Transactions completed before the 1st of January don't get charged the extra VAT. However CMON's pledge manager didn't happen until after that date hence the VAT charge. HOWEVER. CMON was supposed to have their pledge manager up in November. They had 'difficulties' getting it ready. If they had got it ready no VAT would be charged as it would have been before the 1st of January. Basically backers (me included) were made to pay for CMON's mistake.
I see it differently. If a company loses 30% of their customers, the production costs will increase too. I already see a trend where companies who charging VAT lose a lot of their EU backers. (Castles of Mad King Ludwig collection, already decreased shipping cost for EU). European companies will do much better I'll guess? Look at Darwin's Journey. But paying VAT is no problem for me. It has to be clear at the beginning of the campaign. Not like CMON did, even now they haven't done an simple update.
yes,VAT is terrible. We are used too have that fear of getting our online purchase stuck in customs (when you gamble on a purchase without paying VAT upfront) and when it gets stuck we are forced to pay VAT for them or the item goes back and you pay a fine,here in Portugal VAT is 23%. I get why they exist but it give us, Europeans, less purchase power to countries outside the European Union.
The thing is that, I understand they found a way before to circumvent the VAT and increase their profit, however if you compare Addons KS price with retail price (I take addons because there is no extra context so it’s the easier way to compare items) I would pay a bit less or same price in retail before the addition of the VAT in the KS, now that the KS has VAT it costs me 20% more! Now unless CMON loose money when selling retail (I doubt that :) ). the retail price includes: VAT, retailer margin, shipping costs, and CMON still does profit on that, so even if their price includes VAT they would still do plenty of profit and more profit than if people would buy in retail, so I don’t understand this move, they lost loads of customer and therefore more than if they would have absorbed the VAT cost.
VAT and other taxes are tricky and I will just go by simply example of typical buyer experience in EU and US: In EU - you go to the shop pick an item which price tag 50, go pay for it and you are charged 50. [behind the scene it could item cost 40 + 10 VAT (25%) but you don't care since the price was 50 and you agree to pay for it when picking the item] In US - you go to the shop pick an item with price tag 50, go pay for it and you are charged 55 !!! - this happens because you pay 50 + 10% sales tax. Why: VAT same in whole country, may very per product (some have lower vat) Sales tax can be different per city in US - sometime even 0. It also varies per product type. Rest of the world follows one or the other model - tax included in price or not - even if the taxes can be different. If there is another way of doing this - I just didn't experience it myself. Imo the kickstarter and producers should work together to update the user experience to make it clear for all (including EU and US) how much thing will cost as people get used to different way of thinking. One of the issues here is the money is initially charged by kickstarter not producer company (kickstarter probably cannot charge the VAT, don't know if they keep part of that or get paid back by company later on ... how that should be taxed if they keep it). Lot of big companies are "eating taxes" and I understand that small cannot afford that :(
As someone who lives in South America, I have to pay a 22 percent VAT fee on every international purchase above 200 dollars. Now Europeans are suffering the same fate as I. Misery loves company I guess?
Looking forward to see you in Europe. I just received my Dice Tower pledge 2 days ago from last years Kickstarter, and had to pay almost 21 Euro for my 45 dollar pledge, so about 50 procent, which as far as I can tell was above the shipping I paid earlier. Was send through Quartermaster logistics. Is VAT as far as I know and was quite surprised, as I did not had to pay it for any other earlier Kickstarter.
What I dont know and am curious about is how VAT is actually handled in EU for these KS projects? I mean goods move freely between EU countries. You declare VAT and customs charges when something enters the EU area. Yet each country has different VAT. Stuff enters the EU area in containers on palett and will be individually packaged in the fulfillment hub. So, for example, if it enters EU in Germany, goes to the fulfillment hub and actually packages for customers in Czech Republic and I receive my package in Hungary, then whose VAT did they pay when it entered EU? Should be Hungary but thats a hell of a paperwork to declare, prove when looking at 10k+ EU backer projects :O If they also brought 50 extra copies to manage replacement parts how do they declare those?
When I saw you mentioned vat, I wondered if you were baiting but you dealt with it fairly well. Personally I think backers just need to focus on whether its offers value to you and let business do it its own thing as it will always subsidise someone somewhere. The one thing this whole vat thing has brought out is how poor some companies manage projects and how little many backers actually know about things like contract law.
I think the companies need to subsides the VAT for KS games the same way they do when selling to shops. The prices of board games are usually the same in US and EU, while there is VAt and extra shipping costs. My favorite negative example is Peterson Games, they make EU KS backers pay more for shipping+VAT, but they also sell the same game in regular board game shops, but with subsidizing the extra expenses for them. So as a KS backer while on earth should I ever back a Peterson Game in KS while I will be able to buy it locally with a significantly cheaper price....
Man, with Fallen Knight, I had flashbacks to the KDM Coin disaster. "Give us a ton of money and we MAY have something for you in the future." :/ Still, compared to this, KDM seems so professional.
haha yeah fundamentally I was against the whole "give us money now and you can buy something in the future but we won't even tell you what'll be there - but yeah at least it wasn't a campaign page without a single defined game mechanic. :D
With Adam you can atleast think that he's probably just very naive when it comes to business stuff and really didn't get the implication. With someone setting up a game with absolutely nothing... not so much. Kickstarter should be for people that need funding to develop a game, sure, but it has to be transparent. Imo.
Another great video. You have probably seen my rants re vat across multiple games but as long as companies are up front regarding it I don't mind. After all it is the law but I also feel for the rest of the world if the company is subsidising us euro backers. Also..that tea comment hahaha. :)
The worst part of the Fallen Knight campaign is when a backer got on there and defended the creators. He even said he was in contact with them on Facebook. If anything, showed that they were up and aware of what was going on but ignored their backers on KS. I'm curious to see what they come back with, but I wouldn't back it with someone else's money. Too bad, I was looking forward to it.
Maybe if Fallen Knight got a publisher on board, that would convince me it could get to market...I don't have a huge amount more to say about VAT that I haven't already stated, though the key factor is this is only directly effecting NON EU/UK projects, anything I'm backing from the UK/EU is already paying VAT properly and has no additional charges. I really do not believe these creators actually know enough about VAT that they are deliberately misleading people but its causing a giant mess, that is costing some projects money and others are losing business by trying to pass the costs on after the fact.
This will probably be the end of the $100 base pledge big box CMON game. I whole Heartedly think that CMON was not planning on paying VAT through xyz loophole that they've used for years and that when the rules changed they had no choice. This is why the pledge manager was pushed back 3 months because they were in panic mode. I wouldn't be surprised if from this point on if the new base pledge for all subsequent Zombicide/Massive Darkness/Rising Sun/Ankh size games is $120-$130. Just as you stated. Diluting the cost over all backers is better than the press this is generating.
Re: profits etc & VAT. I think you are not taking cost per unit onto consideration: when you make larger runs you pay less per item. Especially if the game is production heavy having the Europeans on board may cut on your margin per unit in the EU, but also may be made up (for a large part) by the extra run you get from adding Europe. In that way they may take something like that into consideration without it costing the US anything. Moreover - your product, without us EU people might suddenly get relatively more expensive / less extras per Kickstarter.
Even if a company makes every backer pay for VAT imo it is alright for US backers because with 20%+ extra fees the a major part of the EU-market would be cut out of the KS thus not helping unlocking stretch goals etc., all the while a few bucks on top of the (let's face it, already massive) amount for a new KS for everybody will hardly deterre anybody from pledging. So imo, it is a win-win.
I'm from Belgium so I had to pay €90 for the Bling all in pledge which came out of nowhere. As I don't want a full refund, since I really want the game, this kinda hurt and I feel betrayed. Definitely my last CMON kickstarter
Yeah not cool. The fact that they couldn't even bother to warn in an update that it'd be there is just a pathetic level of interaction they have with their backers.
I think make it simple and honest. Do not write shipping 50 dollars and hide a clause small written in a tiny text VAT and other things not included somewhere. Make it simple and write in big blue: shipping and VAT = 50+100 dollars. Maybe then not many will order the game, but they are pleased. WoW "XY-games". This games are great. Expensiv but great components and nice gameplay.
Regarding VAT, it is stupid to ask to get a custom price for you only, when you accept flat rates in everyday life. How would be for Netflix to charge per content viewed instead of flat rate subscription? How would be if all shipping companies would charge individual rates for each possible combination of source and target address? Second, US is subsidizing the rest of the world prices by sheer quantity. If a company would not sell to US, they would sell 60-75% less copies so the price per item would be higher. Third, taxes is s very gray legal area and companies might want to keep quiet about certain aspects for legal reasons. Maybe they pay VAT for everyone, maybe for none. There are many accounting tricks. Fourth, retail always had to pay VAT in EU no matter what, so all KS that charge VAT extra make the retail so much more a better choice.
" Second, US is subsidizing the rest of the world prices by sheer quantity. If a company would not sell to US, they would sell 60-75% less copies so the price per item would be higher. " I think this should be a consideration. Imagine half the funds if they start with VAT and people not bothering with the insane prices, the games might not even be made anymore or offer a lot less of stuff.
I don't really get your VAT argument. I understand that lots of Americans feel the same as you (full disclosure: I'm American but live in the UK), but this is just how things work in the world of international commerce. I used to live in Kazakhstan, and games that you paid $60 USD for, I could get for $20. Were you subsidizing my video games? Or is it that publishers understand that they have to accept different profit margins in different regions in order to increase sales? I don't for one second think that if Steam suddenly stopped doing business in Kazakhstan, they would lower the prices on American games. Likewise, I don't think that Primal would be 40 Euro cheaper in the US if they tried to add 20% VAT to European orders. Just as you said you would do, most Europeans would cancel their pledges or not pledge in the first place, bringing sales down, which would result in the company having to charge even more to US backers to make up for drastically reduced international sales. I get that VAT is annoying, but I really don't think the argument that Americans are subsidizing European VAT is a very valid one.
Why are we blaming these companies for charging a governmental fee?? I get that kickstarter VAT was a fuzzy area until this year. Hopefully going forward they will be more transparent.
beacuse they advertised it as not having it and then added it after the fact. From what I can tell you can't add it afterward and has to be included in the price you show.
@@Heidelmann haha no need to apologize. It's good to know. I'll probably end up reading, then come to a similar realization. I thought it looks like it has that early 2000's board game "heart & charm". But I could just be thinking about other games it reminds me of
I'm pretty sure vat has always been there, and I think even in the US there's some sort of equivalent sale tax, it's always just been included in the price.
Actually I've never paid sales tax for any of my kickstarters. Me and a few other patreons actually went through them to check if we had or not :D IDK about all campaigns out there, but I know CMON never charged VAT before Massive Darkness 2 PM.
Here in England we've been paying VAT since before I was born. Until a few years ago it was always 17.5% but then some idiot decided to round it up to 20% because it would be easier to calculate. Now that we've left the European Union we shouldn't need to keep paying VAT any more so it will be interesting to see if we do keep on paying it or if it eventually gets scrapped altogether.
Companies were avoiding or paying much less VAT by claiming manufacturing/landing cost not MSRP. That's likely a 4-5x in VAT now that it's being enforced. State sales tax is rarely collected on KS. Sales tax has historically required the seller has a physical presence in the state to collect it. Those laws are changing and eventually sales tax may become more prevalent in KS.
@@raphaelperry8159 10% is much easier, but considering the Government (Us) have been propping up the economy for the last 12M then at best it will increase. Absolutely no chance it being scrapped but there is a possibility of a trade deal with the US. Board Games are a luxury item and are not required and people are struggling to put food on the table, turn the heating on and pay their basic bill so it's had for me personally to get too worked up about 20% on a Board Game.
I think it's cool that you have The Runelords a little bit of a spotlight ! Although I am not funding it myself because Skytear, Warhammer Underworlds and soon Arena: The Contest fill that niche in my collection sufficiently, I think it looks really cool from a mechanic standpoint and art design, too. Since it is already their second go I really wish them success with this despite the struggling campaign, I think they deserve it! The KS is well made, too, with all information one needs. Grafic design looks a bit amateurish imo, not only the weird Word Art thing on the KS but also all the markers with that bland symbology and cheap stone texture. Easy to improve in that area, though.
I always find the VAT debate funny as while we don't have a VAT directly in the USA yet some states do have a form of VAT just called different CA/MI have simular tax with business style tax that can only charge to the business usually. with the EU people, they always say that VAT has to be shown upfront with the price, but from the legal stuff, I saw it it's upfront with a product for sale. Kickstarter is not a point of sale website its an investment website, pledge manager is the point of sale website in which they do showcase the VAT. A company can not turn around and demand more money once your order is completed they have to take the hit. a good example was his aeon tresspass game that he skipped over "all your pledges made before January 1 2021 will be treated in the same manner when the game ships, your VAT fees will be paid by us" that means any that was pledge after wouldn't be covered by them but by the customer. by CMON holding off was it scummy, yeah kinda, but at the same time a business is there to make money and they might of weigh the benefits of waiting to keep the business afloat vs possibly sinking the company by doing the pledge manager early.
I really don't get the American's "Why should we pay for EU VAT?" argument; VAT or not, you are ALWAYS paying for others' taxes: company's tax, shipping tax, etc. If the company don't want to pay VAT, they make the game cheaper and charge VAT from EU customers, which will gain US and lose EU sales. If they pay VAT, they make the game price higher, gaining EU and losing US sales. It is all calculated when they decided the price.
Completely agreed! That was the point: thinking "the company paid for it not me" is just silly. We all pay into their profits and what they pay for is from our money, including their own taxes, their office and their company lunches. The idea that some people think they are no longer paying it if the company says they'll cover it is just silly :D
It's the Indomitus box! A great deal I got as a gift from my awesome wife :) I've built it all, 3d printed some custom bases and have started painting now :D
Hi, what I'm interested: are there no taxes included in the price for US backers? So the European always paid these taxes too. And now the Europeans have to pay the European taxes on top of the US taxes. That's very weird too. I as an European know the system as the following: as a company you have to pay VAT for selling the product. Everything you've to pay on your own you can get back VAT for these costs. So as a company you don't have to pay VAT for the difference of costs vs income. And nobody in europe is paying VAT multiple times. So think about an Asian reseller, buying a board game from europe which was sold from us to america first. Should then the consumer in Asia pay 3 times taxes (VAT). That's insane! But please let me know how the tax system works in the US. I - as an Austrian - don't want to pay Austrian tax rate of 20% on top of US product price including US taxes. And even worse, now we've to pay the taxes on the US product price + shipping costs. So the 20% VAT gets even calculated on top of the shipping too :( The good thing: the board game hobby is a luxury hobby anyway when it comes to Kickstarter. And so I'll continue back kickstarter projects, even if they're now getting more expensive. I hope we all together enjoy our hobby and nobody gets really upset on other backers etc. At least I - as an European - don't want to "hurt" US backers. So let's game together and enjoy the show from KoA :)
Could be anything. As it was my patrons that decided to do the GoFundMe, run it, and give out a ton of games to everyone I feel it's a nice way to show some appreciation for all the work they put into it.
From my understanding some suspect that with the recent laws being pushed if they were using a loophole that it was patched (claiming manufacture cost vs charged amount, claiming it's not a product sold from a store but something else that gets around it, etc.) but could also be that they simply wanted to stop paying it themselves or some other reason I'm not aware of. Not trying to necessarily understand the why, but it's universal across the board and some are charging it to old campaigns and some aren't.
A real company would have swallowed this unadvertised VAT themselves. Cmon has had a very very shitty behaviour. They are going to lose many backers in the future: hopefully they will get hit badly because of their behaviour. It will teach them a lesson.
The thing with VAT afterwards is that technically it is illegal to to it like that in the EU. At least in my country the price i pay should be the price shown. You can show a price and let me pay and than afterwards come with oh yea we forgot VAT. VAT also differs per EU country ranging from 15 till 25% and also it differs on products, foodstuffs are usually way lower taxed. Also just doing " this is kind of the average VAT and all Europeans have to pay this" isn't how VAT is working, and pretty sure that is something you cannot do. You can import it to country X and use that VAT and distribute from there, but saying this is the average VAT in Europe so pay up is weird. What irks me most about this whole VAT thing. That when the US imposed a tax on import form China most KS games were just increased in minimum price with ~20 USD. It could have been coincidence but it didn't look like that from my side. So even though Europe wasn't taxed for that we had to pay that price hike, but the other way around it doesn't fly. And thanks to Frosthaven "EU-friendly" isn't all that friendly anymore. There used to be a time that EU Friendly ment i'd pay KS price + postage and that was it. and they can suck it with the VAT on the $1 donation, i was just going to donate it, but im not going to pay VAT on a $1 donation they can put it somewhere where the sun doesn't shine. Now idk what EU Friendly is so. Anyway as a European I've become very picky about what i back. On the upside i don't see Gamefound doing stuff like that (also because they are European based is my guess) So lets see how that develops. edit: Also as on you comment "you are paying for EU VAT what is in it for us" what is in it for you is better/more strech goals :)
Great vid as always king! I never post a comment anywhere- but I always enjoy your vids so thought I would post a little something to say thank you! Ps. I work in EU VAT advisory (I know, sounds boring 😂), so it’s quite funny to see all the fuss going on!😁
Well I am honored to have your comment Christian! Thanks for being part of such a great community - I can only imagine how entertaining this has all been for you - especially to watch an American try to make sense of it all haha :D
I was surprised to see how much money it was up to, then I looked at all the negative comments. I was looking forward to a reaction video from either you or Alex on the disaster.
VAT is different for each country. For example I have the "privilege" of having a 27% VAT rate. :| In regards to the "but you get all sort of benefits": Well if you mean healthcare and such, you actually get those for paying taxes from your salary as far as I know. We have a salary amount on paper. From which, after all the taxes and whatnot we actually get like 60% of it. VAT is a sales tax which the SELLER has to pay to the government. It is a per product tax, but at the end of the day it always comes from their wallet. So to the best of my knowledge it is completely up to the company how to handle it. Offloading it completely on EU backers is one options. But it aint mandatory because its not us directly paying this tax, if that makes sense. Of course for short term profit maxing it is the easiest. Hence why at the end of the day instead of having $100 salary to buy a $100 product, we have $60 to buy a $127 product. By having EU-friendly shipping, aka an EU fulfillment hub, we, backers, get our stuff from inside the EU. Customs and VAT declaration and payment was already done by the company when stuff entered the EU. Hence why additional VAT charges were a surprise.
If europeans stop baking projects outside EU to not pay +21% over game price and shipping. Games will get less pledges and money and unlock less stretchgoals. So all bakers will get less value for their money. That should be considered too. Current US campaigns have much lower EU backers. Come to Barcelona, you're welcome ;)
Sorry, but I think many saw this comming with Fallen Knight. It looked all the time a bit strange. But I like you speek about it and I like the projekt started and people did not go blind. I shows me there is a little bit hope in the KS Boardgame community. Uprising, Hunter A.D. and Primal are just some of the Games why I like KS. Ah, Even ISS Vangiard fitts to those games, cause they don't blind you with minis or a company name.
I'm not backing projects that don't charge VAT since it has started being charge. I think, Return to Planet Apocalypse had the best shipping breakdown I've seen.
Are companies not allowed to make money? You missed mentioning that fallen knight guys said they were well into design and almost done. Felt like a scam. Glad you called it out.
I like your view about VAT, although I did not got the whole Problem as European :-) Sorry for spamming, by the way. But it is like Telegram. People think their data is save there and don't think about that nothing is for free in life. Ford once said: "If it is too cheap, it is probably too expansive."
In EU, when you buy something, the price already includes VAT. I understand Americans not understanding this issue, as they already expect VAT on top of the price (which is what, 7%?). This is why we're mad about it.
I've been incorrect about VAT recently.. it's much more complex (of course it is) than I thought. Basically even if we pay VAT up front it's possible to get charged again before it's released.. it's a total mess and numerous stories of people in the press being charged to release held items. So if delivery was delayed from 2020 then you may be charged.. something about the price being >£130 or
Wow 380 people give fallen knight 62.5k $ for that? About the vat it is only for europe or all country? There are 3 situation that clearly interesting 1. Asian cmon shipping using vfi (higher price and already incude vat, including to singapore, cmon is singapore's corp) 2. Some country like mine have 10% vat, almost imposible to get a refund from government 3. Some countries offer free vat for import of certain value, 400 S$ for singapore and 1000 AU$ for australia. At this point i dont think they capable to sort the calculation based on backers country.
Ok the Ankh update has me somewhat miffed. Kickstarted months after Trudvang and WAYYYY ahead in terms of development. I stopped backing CMON projects because of this.
Trudvang is the only Kickstarter I have ever pursued a refund for and I don’t regret it one bit. It didn’t have a compelling IP to begin with, and when your lead designer leaves AND you blow up the game after extended development because it’s not fun, then whatever you end up producing is not what you pitched on KS. I understand any publisher can have a few duds, but wow everything about Trudvang just screams “failure.” I hope it ends up being a *great* game for the people who continue to have money in the project. But I don’t have enough money to pay CMON prices for as big of an unknown as Trudvang appears to be.
Great video and points. I'd love to get your continued thoughts on Primal. They just released a really nice survey gauging interest on potential free stretch goals. I think 3D terrain is on the list!
Ideas are easy, execution is hard. If you don't have a prototype almost ready to go to publishing, don't go to Kickstarter. All inserts should be able to hold sleeves, at minimum the thin-medium ones like Sleeve Kings or Mayday. All books should have an index. I have lots of issues with FFG, but they usually do rulebooks right. Value Added Tax is a bullshit tax with a bullshit name. It's simply designed as a way for the government to get more tax money from the people, when it should be getting it from corporations who keep not paying their taxes.
VAT: Could somebody explain me the Problem here, I really would like to understand better. I I buy a CMON game, I always have to pay VAT, once it reaches my country. Or is this not VAT? Do they charge the VAT because it comes from China and I would have to pay vat again when it reaches Europe? Thx for the help.
Im kind of torn on the VAT thing. First off, it sucks, but they are reimbursing it. So if they were upfront about the VAT to begin with, and you wouldnt have backed it, then aask for the refund and no worse off other than out a little money for a couple months. 2nd yeah the idea of subsidizing Europeans kind of sucks, but at the end of the day if you are OK with what the game costs, you are okay with it. What the company wants to do with their profits is up to them. How is it different then a company holding a contest and giving away free games? Well that money comes somewhere so that means we are subsidizing that as well. I could see a company be like ok, if we have a 30% profit margin on our boardgames, and we are paying 20% VAT, and we want to cover VAT well I guess we only make 10% profit margin on European customers. They are still better off offering it. Even if they broke even they might be better off offering it as it makes your company look better (remember hasbro and the outcry when they weren't offering Hero Quest outside of NA?). I wonder what the average is for European backers in a typical boardgame kickstarter? 10%? 40%? The smaller the backer base is, the less of a hit they take.
If the VAT starts to be charged separately, companies should start to differentiate pledges for those countries because. In my opinion, if this starts to be much more expensive makes no sense baking because you end up paying much more when you can buy it in retail a lot cheaper and sometimes the same product. The benefits of baking a game are starting to be less and less. If the prices don't start to be adjusted I will be stopping baking games and only buying it on retail. Answering to KoA in the US (for example) also has taxes but only in some states (as far as I know) that why they don't bother to charge that.
I can see why you feel like you have to pay european taxes, but here comes the problem. If we take CMON as an example, they collect the same amount of money in retail stores like they do on kickstarter. In addition to that it often happens that kickstarter games from them are available in retail stores long before kickstarters are delivered. This means for 20% less money I get the game earlier, and I get it in my language but I miss out some Stretch goals. So if this is the new deal, it's better to get games from retail store and lo longer back them on kickstarter. This might also have an impact on unlocked stretch goals. So if they do it right I guess they have to keep prices in europe and claim no extra VAT. But the should lower prices in america because it doesn't contain VAT there. This could easylie done by creating an additional pledge level for americans. But I guess in past it was easier to just take the money.
And less EU people will back, driving up the cost of projects or making them not financially viable. 770 million people priced out :) (minus those stupid enough to pay)
I think there’s plenty of room in the adult/dark/horrific board game genre for other games to occupy other than KDM. KDM shouldn’t have a monopoly over this niche. I’m hoping more games will come out in the future to give KDM some competition.
Btw vat already existed. If i buyed something from usa i had to pay vat. There's the reason for hubs. And not sending stuff directlt from usa or china. That and postages of course.
Speaking of how companies were working with VTA in different ways, this was the latest update from Spidermind Games. It's a pretty candid look at Brexit and VAT for a company working out of London. TLDR; A lot of places in Europe aren't handling the new laws properly, and even if a company has already done everything they were supposed to do, or *thought* they were supposed to do, the local governments might still get things wrong and end up charging the consumer. "If you are a backer of the Level Up in continental Europe then this update is for you. In this update we will cover concerns that have been raised over the new import / export arrangements between the UK and mainland Europe following Brexit. For UK backers, your packages have been booked into our fulfilment warehouse and will be sent out as soon as possible. Your packages are not affected by this notice. The Level Up and Brexit - the short version Due to the fact that the Level Up sales were made and declared last year, new rules for the importing of items to Europe do not apply. Vat was paid by Spidermind Games on all Level Up sales in the UK and Europe and according to the new deal negotiated by the EU and UK, all sales made before Jan 1st 2021 will be handled under the old system. So that is the Vat covered, and as far as Import duties are concerned, they were zero before the trade agreement and remain at that level now. So that is it then? On paper yes. The advice now from our accountants and our freight forwarders remains the same; the Level up will not be covered by the new rules and charges. Reading comments here and in the news, however, paints a very different picture as to what is happening on the ground. It seems many parts of the new system have little idea what they are supposed to be doing, with our freight forwarder admitting last night on a conference call, that it is very much the blind leading the blind. In short, whilst we know our items are pre Brexit and should be handled as such, we have not seen this in action yet and have little trust in a system that seems chaotic at best. And so the plan is? To ensure that our European backers have no nasty surprises when they receive their Level Up, we have been advised to test 50 or so packages to most European countries, sending these shipments with all the required paperwork and proof of taxes and duties having been paid. If this works, and these 50 or so packages arrive trouble free, then we can fairly assume the rest will be safe and the full 3,000 plus shipments can be sent. If, on the other hand, there are issues with these 50 packages, then we can remedy whatever issues arise much easier than we would be able to with over 3,000 packages going out. We will be contacting a handful of mainland European backers in the following days to seek volunteers for the test run. Once we have our required number, we will let them know their parcel is on its way and we will be asking them to let us know if they receive the parcel trouble free or not. If any charges are levied on these parcels, despite the assurances that there shouldn’t be, then the backer will have the choice to pay any extra and be reimbursed by us or refuse the package and allow it to be returned to us. Now we do accept that this extra step may be too much and may be completely unnecessary, but it does seem that the theory on what should be happening at the moment with cross border post, is far from the reality of what is happening, and we believe it is sensible to be cautious and not just blindly believe the politicians. So Will I Have to Pay More? No, we have already covered Vat on the items and there are no duties to pay. If, in the short term, there is duplicate VAT to pay, which can be claimed back later, then Spidermind Games will deal with this. Your items should not be covered by the new rules as the sale took place before Brexit. We are now working hard on ensuring that the treatment on the ground matches the theory worked out by the politicians. We shall keep our European backers posted as to the results, as soon as the first test run has been completed. Best wishes and stay safe, Jon & Oliver"
The main problem for me with the VAT is that it's always been here and we have always paid it but it's always incorporated in the price, so if you see a price of £100 you pay £100. Paying a company 2 years upfront for a product that I have been told will be X amount and then being charged an extra 20% on top without warning is not right. I just dropped my pledge to the base level for MD2 to cover the shipping and VAT so only paid an extra $2 but from now on I will only ever back at $1 and then see what the true cost is in the PM which goes against what KS is all about.
Thing is the countries with VAT are cracking down and fleshing out the VAT laws in the last couple of years. So many companies that were able to bypass those laws via loopholes in the system, now cant do that. So while you thought that £100 game included VAT it actually didn't because the company bypassed the Law.
Limbo managed to do it despite been just 2 people on boat. It was their goal... to succeed. People know forgot the utility of index because of Ctl-F. Well like you I prefer turning pages.
Oh yes for sure, indie devs do this often (though normally they are outside the scope of this channel) but Limbo had a much better KS page to begin with too :D
Don’t you talk sense to me about Aeon Trespass Odyssey!!! I feel the same way about paying European taxes. It feels weird, but at the same time if I look at it like I’m paying $5 more for the game so that more people from all over the world are more likely to back the game because there is no VAT we could possibly hit more stretch goals and have a better product in the long run. I kind of see it as I am paying a little bit more for a better product.
i hope this video puts Runelords on more folks' radar. it seems like a solid game, especially for the price, but their campaign just doesn't seem to be gaining traction. not sure why. :/
