CMON: CoolMiniOrNot’s Letter to Stakeholders for 2015

Forum adverts like this one are shown to any user who is not logged in. Join us by filling out a tiny 3 field form and you will get your own, free, dakka user account which gives a good range of benefits to you:

No adverts like this in the forums anymore.
Times and dates in your local timezone.
Full tracking of what you have read so you can skip to your first unread post, easily see what has changed since you last logged in, and easily see what is new at a glance.
Email notifications for threads you want to watch closely.
Being a part of the oldest wargaming community on the net.

If you are already a member then feel free to login now.

**Alpharius**

Interesting stuff!

http://cmon.com/coolminiornots-letter-to-stakeholders-for-2015/

We owe our continued success to many people – our team, Legion volunteers, distributors, retailers, international publishing partners and most of all, our customers. You are all our stakeholders, and as such we think it’s appropriate and helpful to share our results and future plans with you.

Overview

CMON Limited is the holding company (based out of Singapore) that owns the group, including CMON Inc. (USA) and CMON Pte Ltd (Singapore). We’ve got about 30 fulltime staff. We view ourselves as an Intellectual Property company that just happens to make lots of great tabletop games. We make active use of Kickstarter, as well as selling into distribution channels all over the world and in multiple languages – Germany, France, Spain, China, Australia, UK, Brazil, Italy, Poland, the Czech Republic and Korea are all major markets.
The major shareholders in CMON Limited are myself (Chern Ann Ng), David Doust and David Preti.

2015 – Year in Review

Pictures are worth a thousand words so I present you our revenue for the last 3 years, in US$ millions.

(2015 final numbers pending audit confirmation)

Due in no small part to you, we’ve leapfrogged many of our industry peers with $17.2 million in revenue for 2015. This is staggering growth for a company that just started publishing board games in 2011, and an incredible achievement of the CMON team as a whole, especially considering our size. We like to think we punch above our weight!

2015 also saw some of our most well received Kickstarters ever – Zombicide Black Plague, Blood Rage and Arcadia Quest: Inferno. We welcomed to the team Robert Villnave, who has done a great job revamping our USA distribution sales and is now our new USA GM.

We made our debut on the iOS app store and Google Play with the app version of Xenoshyft: Onslaught (coded by Lucas Martini), which won Boardgamegeek’s 2015 Board Game Port of the Year!

In addition, we raised Series A funding from an investment fund for a total of $5.3 million, which we have put towards accelerating our growth.

Going Forward

So, what’s next? We’ve already had two very successful Kickstarters this year – XenoShyft: Dreadmire and Masmorra: Dungeons of Arcadia, with production led by our own Michael Shinall and Thiago Aranha respectively.

Dark Age and Wrath of Kings, our two tabletop miniatures games, are getting a major push with some of the most amazing sculpts I’ve ever seen from any company and great starter sets to draw in new players.

The award winning Sheriff of Nottingham has been acquired, and we will distribute the Krosmaster line of products in English.

We’re also making smaller format games a major part of our strategy, with titles like The Grizzled, Play Me, Looterz, Dojo Kun, Unusual Suspects, Potion Explosion, Waka Tanka, Tada and more entering major distribution this year.

Joining our team are Jules Vautour (Director of Sales) and Ruby Nikolopoulou (Director of Marketing), most recently of Asmodee North America. They bring considerable industry experience and know how, and I’m confident we will level up with them on the team.

We’re not slowing down on our app development either, and will be bringing more of our major titles into the electronic realm.

There are more game launches ahead, and we pride ourselves as having one of the most efficient and prolific game production teams in the business.

Onwards and Upwards!

Once again, to all our stakeholders, thank you. This is just the beginning!

–
Chern Ann Ng
CEO
CMON Limited

**Lithlandis Stormcrow**

Very Impressive!

**OrlandotheTechnicoloured**

Interesting to have some numbers from them,

I wonder if the 17.2 million for 2015 includes the 5.3 million series A funding ?

(I'm guessing not as otherwise sales growth would have actually been effectively flat from 2014-15, but then they've been doing a lot more 'stuff' so it's not impossible)

**Theophony**

i think since they said "In addition" after telling us about the growth that it really is after the 17 million.

**Mdlbuildr**

Interesting statistics. Impressive growth for sure.

The question in my mind is why use Kickstarter to fund other projects if your revenue stream is so high? I realize this is to keep the revenue stream in your pocket, but with that kind of revenue, the backing you get from something like Kickstarter is really a very small bit. I guess it's better to use other people's money, but in this case, I'm not sure I can agree with that method. Especially with only 30 employess and 3 shareholders, the company profit should be rather high with that kind of in take.

**Kilkrazy**

Why not use Kickstarter? It's practically free money for pre-order sales and avoids having to risk your own money. Especially since CMON have successfully established a reputation for quality, probity and reliability, and people can subscribe to their Kickstarters in confidence that they will get the product they want.

I get your point that Kickstarter supposedly was intended for crowd-funding of risky projects that otherwise wouldn't get started, but let's face it, that horse bolted several years ago, and it's not going to be recovered back to the stable. Kickstarter themselves make too much profit from companies like CMON to want to close down that angle.

Besides, there's no way CMON actually would have been able to release so many new games without the Kickstarter funding. On top of that, it gives them a way to address small markets like Czech Republic and Korea that otherwise might never get distribution. Everyone's a winner.

The chart shows revenue, i.e. sales, so the $5.3M investment is not included. Profits could be found from their filed accounts in the Singapore equivalent of Companies House.

**Mdlbuildr**

Kilkrazy wrote:
Why not use Kickstarter?

At a certain point you shouldn't need to. "Free money" is for those that need it, in my view. Once you're claiming $15.3M in revenue for such a small company, you don't need it anymore. I certainly understand that in the past it was needed for start up revenue, but if you milk the cow dry, you'll eventually piss off the farmer.

**Azreal13**

That's a nonsense, sorry.

There is never, ever, a point where a business doesn't need to use risk free, interest free, capital over its own money.

Rule 1 of business, always use somebody else's cash if it's an option.

You can argue it isn't exactly fitting for the stated purpose of KS, that's got some mileage in it, but while KS allow companies that, theoretically, can afford to fund their own projects, then some companies will choose to use it.

Let's not pretend it's not a two way street either, KS backers get product early and at a discount from retail.

**kestral**

Kickstarter is extremely valuable for publicity and building interest in advance of a product it seems to me.

**Mdlbuildr**

Azreal13 wrote:

Rule 1 of business, always use somebody else's cash if it's an option.

Which they already are via $5.3M as stated. And there are plenty of ways to get money from many other sources than from random people on the internet when your portfolio is $15.3M.

I feel differently than you and others. That's okay. Doesn't mean it's nonsense. It means I have a different opinion. That's what a discussion is about. My opinion is just as valid as yours.

I liken this scenario to some college kid with means starting a GoFundMe page to get money for that summer trip backpacking across Europe. He or she can certainly afford it, but why not use other people's money to go??

**Azreal13**

Invetment carries a cost that KS money does not. An investor will expect equity and ROI, a bank or other institution will expect interest.

KS cash does not carry anything like the risks or obligations of more traditional forms of funding, and, as Kestral mentioned, has a whole other PR element to it that conventional means do not.

As for having an opinon, I'll direct you to the Brian Cox quote in my sig, I can be of the opinon that the sky is yellow. I am well within my rights to believe this, it still doesn't make me factually correct.

Response to edit: If the kid has the balls to ask, and other people are willing to donate their cash, where's the problem? The only issue here is if there's a deception involved, and CMON are clearly not out to deceive anyone, otherwise the whole point of this thread would never have been published.

**Mdlbuildr**

Azreal13 wrote:

KS cash does not carry anything like the risks or obligations of more traditional forms of funding, and, as Kestral mentioned, has a whole other PR element to it that conventional means do not.

As for having an opinon, I'll direct you to the Brian Cox quote in my sig, I can be of the opinon that the sky is yellow. I am well within my rights to believe this, it still doesn't make me factually correct.

KS absolutely does have obligations. You are required to deliver what you say you will deliver.

LOL at your sig. So your opinion about something non concrete is the way it is because you said so????? Please. I'm not some 5 year old kid. Yellow is yellow. Blue is blue. That is a globally agreed upon.

Your opinion on KS is not fact based on anything but your opinion, as is mine. Clearly. That is the difference between FACT and OPINION. A FACT is reality for the time being. FACTS can change as well. An OPINION is based on your beliefs, upbringing and many other factors.

FACT: We live on EARTH. FACT: There is GRAVITY.

OPINION: You think pepperoni is terrible.

See the difference?

Definition of Opinion:
http://www.dictionary.com/browse/opinion

Defnintion of Fact:
http://www.dictionary.com/browse/fact?s=t

**Azreal13**

No, that's not the point.

I'm perfectly entitled to hold the opinion the sky is yellow. This is, of course, demonstably untrue (at least without getting bogged down in the argument that words are arbitrary and what I call 'yellow' may in fact be what you believe to be 'blue.')

You are within your rights to then hold the opinion that I'm an idiot because I think that the obviously blue sky is yellow, and in this case it is fair to say that the sky being blue is a demonstrable fact and to mock me for holding such an absurd opinion.

You are entitled to believe what you like about a large company using KS when they are capable of financing the project via other means, this doesn't alter the facts of the situation, nor the reaction of those who are versed in those facts.

**Mdlbuildr**

Azreal13 wrote:

You are entitled to believe what you like about a large company using KS when they are capable of financing the project via other means, this doesn't alter the facts of the situation, nor the reaction of those who are versed in those facts.

Ahhhh, now I understand what you're saying. Of course, anyone can use KS. That is fact for sure. And yes,it is my opinion that a company that has a $15.3M revenue stream should not used it, as they have many other means of attaining the funding they need. I also am of the opinion that someone who sees this revenue stream and is a contributor to one of their KS campaigns *might* get a little pissed off. I know I would.

I'll refrain from commenting on whether or not I think you're an idiot. (I'M KIDDING!!)

**Azreal13**

I struggle to see why?

Like I said, KS is a two way street. People who back are getting early access and a discount. If CMON were to offer discounted pre orders and prioritised delivery (weeks or months before launch) on a product that they financed through more traditional means, how does that impact the consumer differently?

**Kilkrazy**

If people don't like CMON putting stuff on Kickstarters, they can not pledge.

**Mdlbuildr**

Azreal13 wrote:
I struggle to see why?

The way I see it is if you are a hugely successful company, you don't need and shouldn't seek "crowd funding". My view is that "crowd funding" is for those chasing a dream and just can't get the financial backing to make it a reality.

To me it's like Apple starting a KS campaign to fund the R&D for the next iteration of the iPhone.

Automatically Appended Next Post:

Kilkrazy wrote:
If people don't like CMON putting stuff on Kickstarters, they can not pledge.

Absolutely.No argument there at all.

**Azreal13**

There's a whole other element to crowdfunding besides the cheap money though, the network marketing effect alone could run into the thousands, if not hundreds of thousands, in equivalent spend.

Factor in the low cost of the money, the easy access to the platform and the fact that you're not actually obliged to supply the product of it all goes south (just be able to show you did your best - unless there's been some recent change I'm not aware of, backers are not guaranteed a return, hence the discount is offered as the 'ROI') then if your company profile and product fit Kickstarter it's really, really compelling.

Apple are a bad example because their profile does not fit, their market position and branding approach don't really sit well alongside the nature of crowd funded projects, it could be argued it would work against them to use crowdfunding. But miniatures and board games are very much one of the fashionable product sectors on KS right now, however, and I completely understand why a company would want to tap into that, irrespective of their financial position.

**Mdlbuildr**

Azreal13 wrote:

Factor in the low cost of the money, the easy access to the platform and the fact that you're not actually obliged to supply the product of it all goes south (just be able to show you did your best - unless there's been some recent change I'm not aware of, backers are not guaranteed a return, hence the discount is offered as the 'ROI') then if your company profile and product fit Kickstarter it's really, really compelling.

I could be wrong, but my understanding is that if you meet your funding requirement, you are then obligated to provide whatever it is you were pitching. Is that incorrect?

**Kilkrazy**

It's correct, and CMON have delivered their projects. That is why CMON have built a good reputation as a Kickstarter company while others have built a bad reputation.

**Azreal13**

This is what a creator sees when they launch..

However...

Kickstarter does not guarantee projects or investigate a creator's ability to complete their project. On Kickstarter, backers (you!) ultimately decide the validity and worthiness of a project by whether they decide to fund it.

and in response to the question..

What is a creator obligated to do once their project is funded?

Kickstarter wrote: ...there’s a chance something could happen that prevents the creator from being able to finish the project as promised. If a creator is absolutely unable to complete the project and fulfill rewards, they must make every reasonable effort to find another way of bringing the project to a satisfying conclusion for their backers.

Kickstarter do not protect your money, you are unlikely to pursue a successful legal claim unless negligence or fraud is provable, and if it's all gone belly up, there's no money to get refunded.

There's an obligation on a Creator to try but there is far less obligation to succeed.

**TheAuldGrump**

Azreal13 wrote:
Invetment carries a cost that KS money does not. An investor will expect equity and ROI, a bank or other institution will expect interest.

KS cash does not carry anything like the risks or obligations of more traditional forms of funding, and, as Kestral mentioned, has a whole other PR element to it that conventional means do not.

As for having an opinon, I'll direct you to the Brian Cox quote in my sig, I can be of the opinon that the sky is yellow. I am well within my rights to believe this, it still doesn't make me factually correct.

Response to edit: If the kid has the balls to ask, and other people are willing to donate their cash, where's the problem? The only issue here is if there's a deception involved, and CMON are clearly not out to deceive anyone, otherwise the whole point of this thread would never have been published.

In addition, Kickstarter allows an increase in capital without a selling of stock, and the resultant loss of control.

Selling stock, even non-voting stock, has long term ramifications, loss of profit and/or loss of control.

Kickstarter offers a short term loss of profit, but at lower interest and without further dilution of profit.

The Auld Grump - there are times when the sky is yellow... generally not a good sign, that....

**Mdlbuildr**

Another spin on this then, in light of the multiple responses and the issues with a KS campaign keeping it's promise of an actual product if you contribute is this.

Does a company that has a $15.3M revenue stream not believe in itself enough to guarantee a product to it's investors? So the safeguard is that if it flops, oh well. Is that something an actual company with significant earnings wants a part of?? If so, why? Seems kind of greedy to me.

**Azreal13**

Investors want something in return

Typically, equity, as Grump was discussing, which potentially means long term diminishing of control and profits.

Banks will charge interest on a loan which will typically exceed the fees on KS, and typically will only loan the amount needed to produce the product.

KS allows a company to build in a profit to the KS prices, offsetting the fees, and not commit itself to an investment that may or may not pay off. Even if they took a bank loan something went wrong resulting in a change of plane with no cash spent ,and simply handed it back, it would still incur interest charges, early repayment fees etc.

There's no issue of a company "not believing in itself," as I said, rule 1 is don't use your own money if you have a choice, it minimizes risk and exposure, which is a really good idea if you want to stay around.

Greed isn't relevant either, I'd argue it is irresponsible for a company to risk the livelihoods of its employees and their dependants by not doing its utmost to maximize profits in any way it can.

I'll say it again, for the right product, KS carries few, if any, of the drawbacks of traditional financing, comes with some potentially very valuable bonuses and offers distinct advantages to a consumer willing to put their money in up front

Really, the only one who potentially loses is the retailer.

Automatically Appended Next Post:
It's also worth noting that $15m in revenue is really feth all, when you account for all the day to day expenditures that will need to be deducted from that before you arrive at the true figure of what can actually be reinvested into new product, not to mention how much money you have is only as important as when you have it.

It's no good having $1m in the bank in June if you can't pay your electricity bill in February.

**Mdlbuildr**

Azreal13 wrote:

KS allows a company to build in a profit to the KS prices, offsetting the fees, and not commit itself to an investment that may or may not pay off.

*May or may not pay off? So a company that brings in $15.3M is worried that something won't pay off so it asks others to pay for it with no return? Who in the world would bite on THAT? My confidence in a company like that is absolute zero.

It's also worth noting that $15m in revenue is really feth all, when you account for all the day to day expenditures that will need to be deducted from that before you arrive at the true figure of what can actually be reinvested into new product, not to mention how much money you have is only as important as when you have it.

*For a company with 30 employees and 3 stock holders, a $15.3M revenue stream is HUGE.

It's no good having $1m in the bank in June if you can't pay your electricity bill in February.

Sorry, but I guess you and I are on complete opposite ends of the spectrum on this. You won't convince me and I won't convince you. I find that such a company has no business "crowd funding". Sure they can, but just because they can, does that mean they should?

**Azreal13**

If it's advantageous to them to do so? Absolutely

You're trying to put feels into a maths equation, it just doesn't work.

**Mdlbuildr**

Azreal13 wrote:

You're trying to put feels into a maths equation, it just doesn't work.

Huh?

**Azreal13**

You're projecting emotions into something that's an entirely logical, factual decision.

A company that can afford to finance elsewhere that chooses to create a KS project isn't breaking the law, they're not contravening any moral code, they're not breaking Kickstarter's own regulations and neither could it be deemed unethical.

They're simply looking at their options and choosing the one which costs them the least/generates the most cash.

That, to you, this somehow "feels wrong" is not an issue for them to consider, that's an issue for you to consider when you decide whether or not to back that project.

**Mdlbuildr**

Azreal13 wrote:
You're projecting emotions into something that's an entirely logical, factual decision.

A company that can afford to finance elsewhere that chooses to create a KS project isn't breaking the law, they're not contravening any moral code, they're not breaking Kickstarter's own regulations and neither could it be deemed unethical.

They're simply looking at their options and choosing the one which costs them the least/generates the most cash.

That, to you, this somehow "feels wrong" is not an issue for them to consider, that's an issue for you to consider when you decide whether or not to back that project.

I see what you're saying. It's also an issue when/if I ever decide to give them any of my business.

I actually do consider it unethical. There is a point where a company can be completely self sufficient with it's current investment portfolio and revenue stream. Especially if their portfolio is increasing exponentially. If it chooses not to be, there is only one conclusion in my mind. Greed. That's not cool with me at all. And please don't try to convince me that their exponential growth is a result of their KS campaigns. The numbers don't jibe with that argument.

**Azreal13**

It would only be unethical if they were somehow portraying themselves as a tiny, poor company that had no choice but to go, cap in hand, to Joe Public to ask for a few coppers.

The very existence of the article completely discredits that, as well as the point I made that their turnover says nothing about the liquid funds hey have on hand for R+D, you're assuming that their turnover translates into significant liquidity, which simply isn't true.