When Kickstarter Fails: Jack Houston Has A Problem

By John Walker on August 30th, 2012 at 3:00 pm.

In other news, people who pledge money they don't have are pricks.

There are a number of potential ways Kickstarter funding is going to go wrong. The most obvious is the first time a high-profile crowd-funded big-budget game comes out and is a big pile of crap. That’s going to hurt things. The other is if a game doesn’t come out at all, and the ensuing fuss that will follow. But one I hadn’t considered is people making pledges they cannot honour. That’s exactly what happened to Warbird Games, whose stop-motion based adventure exceeded its funding goal of $56,000 by an impressive eight thousand bucks. Except, it turns out, one $10k pledge never existed at all. So now the indie studio is asking for donations via its site to make up the gap.

You can’t help but imagine this is something that is going to happen too often. When you make a Kickstarter pledge, it’s exactly that. Using Amazon’s system, donors essentially set up a delayed payment, that doesn’t come out of accounts until the Kickstarter is successful. Which means people can pledge huge sums of money they don’t have, which won’t be revealed until the Kickstarter is complete, payments bounce, enquiries are made, and eventual failure to honour the pledge becomes a certainty. That’s what followed on for Necronauts’ lead developer, Stacy Davidson, who explains,

“After the exhilaration of passing our goal by almost $10k, I was expecting to spend the next few days getting ready to start production on the project. Instead, I spent them frantically trying to find out what was going on with the donation, whether we’d even get the other funds and glued to email for any news.”

It’s not especially unusual for a project to start taking Paypal donations post-Kickstarter, but in Warbird’s case it’s slightly more important to them that they plug the gap, and they’re doing that here. But it does raise an extremely important issue for those Kickstartering to be aware of, and reveals a very significant flaw in the whole crowd funding model.

You can see the original Jack Houston pledge video here:

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107 Comments »

  1. Gundato says:

    Yeah, we are well on our way to the KS “bubble bursting” when one of the high profile projects (I’m looking at YOU Ouya) either fail or are unsatisfactory to a vocal portion of the funders.

    Not sure what will happen then, but I wouldn’t be surprised if KS evolves into the same state as traditionally published games: Getting anything revolutionary/risky funded will be hell, and it will mostly be “safe” games with established developers.

    • JFS says:

      Failing is a possibility for KS going downhill, but I don’t see dissatisfaction to a vocal portion of funders as that much of a problem. Everywhere you look on the internet, there’s always a vocal dissatisfied portion of people, but still things are going on quite alright. I think most people have adapted to that property of the web.

      • Gundato says:

        The problem is if that vocal portion start being, well, vocal.

        I know that I have given a few people warnings to not support a few projects that seem doomed to fail (games with very small budgets and lots of extras, for example). If you get enough people spamming the airwaves, some of the very reasonable things that people would otherwise take a risk on are going to seem too risky, as it were.

      • Chronos1985 says:

        I think we’re under-estimating the players that are rooting for Kickstarter projects. For the most part, you’re right, the vocal minority will bitch. But It will be forgotten, especially because the games aren’t attached to a history that comes with a publisher like EA, or Ubisoft’s DRM, or Activision-Blizzard, or whatever label you’ve attached to a pub. In this case it’s games that stand on their own with a clean slate. Chances are the majority will forgive them.

        I also want to make one important point and it’s the mindset (at least my opinion) of the players turning to Kickstarter. Is that we for the most part are coming to it because we desire a time where games developers are risk takers again. Their imagination not held back due to higher ups, and deadlines, or whatever. I miss that about my games, I miss makers that decided to be the fool who did something different. And players DO appreciate it. S.T.A.L.K.E.R was an example. Flew under the radar and players boasted it. Boasted the developer’s creativity and chance taking in taking a shooter into a new direction. Despite it’s flaws we FORGAVE them. Cause deep down we appreciate as a community well thought out creative developers. Even when they fail.

        So with that said, i’m fine with them failing. My appreciation for the attempt will still be quite high, and I will -still- continue to donate because i’m a gamer who supports creative risk taking. At some point one of these games will turn out to be a Placescape, or a Baldur’s Gate that captivates me enough that I still talk about it 15 years later.

        btw not saying you’re not that kind of player. More just stating my gut feeling about the KS community overall.

        • spamenigma says:

          A couple of projects I believe in I’ve backed… then the money came out for the first one (ouya), my wife see’s my statement and asks what’s this for? So I happily tell her, so she asks… you paid for something you might not get? errr.. “yes” I reply. I try to explain but found it difficult since its my gut that was doing the thinking… I’m backing a project based on a gut feeling that this needs to happen and I want in!

          What she doesn’t know is we’re about to have the same conversation about the Oculus Rift… lol!

          Bottom line is, there are risks in any project and usually all on the dev’s/publishers.. but KS takes the edge off a lot of the risks to allow these things to happen. I’m happy to take on a small portion of the risk on the back of such potential of some really good stuff happening!! if something fails I’ll probably swear, want to know why and look forward to the next innovation to back!

    • AngoraFish says:

      Most people can’t remember what they had for breakfast yesterday. 12 months after kicking in $15 to a nebulous prospective project the vast majority of pledges will be struggling to remember that they pledged at all. I’ve backed around 20 kickstarters to date. All looked interesting at the time and I’m looking forward to seeing a few wins, but I could barely give you the name of five of these 20 off the top of my head.

      • Baines says:

        That is perhaps the main thing protecting Kickstarter from backlash over failed-to-deliver projects.

        By the time Ouya is released, it might not even be news. It may be that it gets a couple of paragraphs on gaming sites mentioning how silly people were for donating to it with the next gen consoles hot on its heels.

        If Defense Grid 2 doesn’t happen, as long as the creators stay silent, it could be years before it becomes truly obvious. It can take years to complete a game. And while some companies will silently cancel a game, or describe it as “We continue to work on it” only to never release it, sometimes games do emerge in completed form many years down the line.

        • MadTinkerer says:

          Several of the non-software Kickstarters I’ve backed since the Double Fine Adventure started have already completed their obligations by sending me everything they promised. Others, software based, have made playable builds and/or alphas available. Almost everyone has provided post-campaign proof that they’re doing something, and most of those that haven’t have at least provided fresh backers-only videos of what they have done.

          As far as I can tell, there may be one or two that I have to regret because they’ve been a bit quiet. But most of them, even if there’s a giant earthquake tomorrow and they can’t finish their projects on budget, have provided something I can use.

          So overall it’s been a pretty positive experience.

      • Sic says:

        Precisely.

        … and why would I be mad if some of them failed?

        It’s like with Project Zomboid and all the neckbeards who were going crazy after someone broke into their home and stole the computers they developed the game on. Seriously, you are yelling at people that are doing their best. You gave them a few pounds, pocket lint, basically, and now all of a sudden, you have a right to get in their faces?

        It’s pretty ridiculous. I view Kickstarter and donations to indie developers as a vote of interest and a pat on the back. If it doesn’t work out, it doesn’t work out, and I’m not going to get my jimmies rustled if it doesn’t, because I knew what I was getting into when I gave my money away. I didn’t buy anything, I donated money to a project I thought was worthwhile.

        • Joshua Northey says:

          The chance of that story being true I would estimate at 0% Criminals stealing desktops? Even laptops out of a house? Not common. Particularly in the kind of house someone running a kickstarter likely lives in.

    • bfandreas says:

      I can’t follow the scepticism surrounding the OUYA. The hardware components exist in a large quantity, the operating system already exists and has proven to be very accessible and controller support is also already integrated into Android. And they don’t have to deal with form-factor constraints like Tablets do. They don’t need a touch screen which propably is the most expensive part. HDMI is also a non-issue. And Tablets have proven to at least have the power to run PS2 level games smoothly(and in 3D as my Transformer Prime does). The games propably don’t even have to be ported. They will have to be patched to add controller support because for some reason a lot of them don’t have it already.

    • JackDinn says:

      I don’t think I’d view it as the bubble bursting, but the market maybe growing up a bit. I dare say that the small scale pledges aren’t going to take too much of a hit. They’ve always struck me almost as small punts – “oh, this would be a nice thing to happen, and they just want £7″. It’s the nearest I get to gambling. For larger pledges, people will start looking under the hood a little bit more before parting with their potential pennies. It’ll be the same as any form of investment, really.

    • Moraven says:

      But, this article has nothing to do over Kickstarters projects failing to produce a product. (if commenting about the article directly.)

      Its about the project gets pledged but then 1/5 of your pledges do not process while the other 4/5 already has. This puts you back down below the Kickstarter goal, meaning without this phantom pledge the project never would have reached its goal and received all the money. Costly to refund all those people.

      Other solution, do not have insane $10k options that people can abuse. Maybe have a direct donation on your page for high pledges. Or use the Indiegogo(mentioned below) where you are charged right away and refunded on campaign fail.

      I could see some shady Kickstarters give themselves phantom pledges just to hit their goal to get partial funding.

    • mouton says:

      Bubble, huh? I don’t know about you, but when pledging, I know full well that I have no guarantee that the product will come out and/or be any good. I am buying hopes and rewarding good ideas but that’s that. Actual game coming out of it is a bonus.

        • MadTinkerer says:

          Exactly. It’s not a “bubble” unless there are actual investors involved. I’m a backer, not an investor.

      • InternetBatman says:

        Pretty much this. I think Kickstarter should have a warning on every project page rather than in the FAQ, but the model relies on an informed consumer.

      • tuluse says:

        I think when he says bubble burst, he means there could be a large drop in number of people willing to give money and/or amount of money they’re willing to give.

      • FhnuZoag says:

        You might think this, but what proportion of the general public backing Kickstarter does? I for one will never, ever, pay $20 for the ‘hope’ of a game.

        Further, do developers believe this themselves? If they started thinking that backers don’t really expect them to deliver the game, there will be a lot less pressure to live up to what are usually hugely overoptimistic pitches. Expect to see a lot of ‘well, we’ve tried, here have some concept art to go with your t-shirt!’ Then the bubble will be well and truly bursting.

      • sophof says:

        whenever there is mention of kickstarter, there always seem to pop up several people who clearly want it to be a ‘buble’ or in other words: fail. Either these people simply don’t get the principle or I really don’t understand them ;)

    • Teovald says:

      There already have been failed kickstarters, for example I heard of an iPhone cover (yeah some people apparently feel the need to crowdfund that) that was pitched as very high quality and turned out to be a piece of garbage that blocks your signal.
      For games, I don’t have high hopes for Republique by Camouflaj … one over hyped game that throws buzzwords at the potential founders instead of having ideas. It is also supposed to feature a strong feminine main character but all you see in the pitch video is an helpless girl with a designed by comittee hoodie. And lastly it changed the target platforms in the middle of the campaign without changing the money needed to make it a reality (whereas they stated in the beginning of the campaign that these platforms would simply not fit for this game because of the command scheme).
      At $500 000, it will make some noise if it fails miserably.

    • D3xter says:

      It can’t be a “bubble”, since it’s not a company or a thing but simply a different form of investing. Even if KickStarter loses its popularity or breaks out in flames and goes down Crowdfunding will continue to exist.

      Massolutions amounts the Worldwide Crowdfunding “market” to $1.5 Billion in 2011 and predicts $2.8 Billion for 2012: http://www.marketingcharts.com/direct/crowdfunding-platforms-raised-almost-15b-in-11-up-72-y-o-y-22049/
      That is not all KickStarter

      There’s all sorts of different kinds of services or possibilities with different sorts of rules opening up including social/charitable projects or even crowd-investment, where you actually invest in companies and get something back.

      Here’s an interesting run-down of only German platforms in one article I read a while back (Google translated): http://tinyurl.com/cvpxts4

      Talking about the “crowdfunding bubble bursting” is just about as stupid as expecting the “credit card bubble” or the “stock market bubble” to burst (well one can only hope with that one)…

    • frequenZ says:

      That’s already happened. Albeit not with the kind of money Ouya got;
      http://www.kickstarter.com/projects/zioneyez/eyeztm-by-zioneyez-hd-video-recording-glasses-for

      • b0rsuk says:

        Fun fact: they were careful enough not to show their faces. Also, no actual names mentioned. Compare to Sauropod Studio of Castle Story, where the 3 people are present in the video and list their first and last name.

    • b0rsuk says:

      $20 is not a high budget game. $3,000,000 being wasted is something a publisher would be concerned about. For a typical Kickstarter backer, it’s $15 or $20.

      Kickstarter hasn’t appeared yesterday. I has been used for board games and other projects for a while now. I don’t see much drama. I think the site attracts people who can accept a risk. I mean, it’s not an investment site. Each project is more like an experiment. Everyone backs people he believes in. If Wasteland 2 ends up a crappy game, I may lose faith in Chris Avellone and Brian Fargo, not Kickstarter.

    • tuluse says:

      I have 10 projects I’ve contributed to get funded, and 2 more on deck (I’m expecting Expeditions: Conquistador and Broken Sword will get funded).

      I expect at least a 50% return rate of things that actually get made and that I enjoy. I don’t think this is unreasonable, and if there are more failures than that, I’m going to curtail my contributions greatly.

    • soldant says:

      I agree, but nobody else will until the bubble bursts… and it will. As you say, it’ll take a few projects (or one or two big name ones) to screw up or fail to deliver, and the ride will be over. The more people get burned, the worse it’ll be, and none of the big-name projects that people have funded are likely to come out any time soon. People may start to forget exactly what they funded, but when the big-name projects roll out they’ll remember, and if they don’t like what they funded, they’ll complain and become wary.

      People here are saying that their contributions are a pat on the back for the developers, but you’re funding their game. You’re giving them money because you like their idea, not just because they’re an indie dev. If you are doing the latter, then that’s pretty misguided, and Kickstarter has become nothing but a privately-funded welfare system. If the idea ends up in a game different from what most people were expecting, they will be disappointed, and most of them probably will regret donating.

      Make no mistake, most people are donating because they want that game in their hands, and they donate to get a copy of it on release/during the beta. That end product promise is what entices people. Gundato has the measure of Kickstarter.

  2. Sam Atkins says:

    Indiegogo works a bit differently – they charge you immediately, then refund you if the campaign fails. Which… feels a bit uncomfortable, but at least it stops this sort of thing happening.

    • Ninja Foodstuff says:

      A system that favours the developers over the pledgers isn’t ideal at all.

    • John Walker says:

      That seems very problematic to me, and of course incurs far more bank charges for them, which makes it a weird choice.

    • MikoSquiz says:

      I would much prefer that. If I’m making $100 in Kickstarter pledges now, that means I have $100 to blow on it now, not necessarily that I’m going to have that to spare in arbitrary sized chunks over the next two months.

      • SouperMattie says:

        @MikoSquiz Wow, when I read your comment about “making $100 in Kickstarter pledges” I thought you were speaking from the point of view of a developer – ie, spending the funds pledged to your campaign straight away, before the campaign was over (and then running the enormous risk of having to return that already-spent money if your campaign was unsuccessful).

        I was like, “NO NO NO PLEASE NO, OH THE HUMANITY, CAN YOU NOT SEE THE FLAW IN” etc etc and then I realised you were talking about it from the backer’s perspective, and I was like… oh yeah, right. That makes sense!

        Just leaving this here in case some other reader misinterprets your comment as foolishly as I did :)

  3. nasenbluten says:

    I don’t like Kickstarter payment system, that’s why I wait until they set up Paypal donations.

    • mouton says:

      Why can’t we send real money in envelopes? How is that electronic cash even real?

      • LionsPhil says:

        Psh, these newfangled IOU tokens. Give me actual precious metals for currency, or give me two turnips for a week’s rent of my mule.

    • LionsPhil says:

      I am baffled that, with all the evil PayPal known for, people would prefer them to Amazon.

      • The Random One says:

        Just because you don’t hear news of Amazon holding all the money in Notch’s account hostage it doesn’t mean they are any less evil.

      • SouperMattie says:

        I am still disappointed that PayPal seems to be the only way to “subscribe” to RPS. Without wanting to repeat the same old discussions about PayPal’s relative merits and drawbacks, let’s say that for my own reasons I avoid using PayPal if I can. As it is, right now I cannot commit to an RPS subscription while PayPal is the only payment option.

        DO YOU HEAR ME, JOHN WALKER? PLEASE LET ME SEND MONEY TO RPS.

        Alternatively, if there is already another way, I’d love for somebody to enlighten me.

    • Teovald says:

      You realize that Paypal is basically the devil for everything indie, right ?

  4. JackDinn says:

    I guess one way round this would be to cap individual pledges, and have some other, more certain, process for making larger pledges. It won’t be a silver bullet, but ought to be sustainable and avoid trivial or malicious false pledges.

    • Clavus says:

      Yeah, they shouldn’t have had options for donations that are nearly 1/5th of the goal. Way too risky. There’s always a percentage of donations that won’t go through.

    • trjp says:

      What should actually happen is that large pledges should be checked properly – because as this shows, one of those being false (almost 20% of the total in this case) is a show-stopper.

      Kickstarter should just re-open donations for a period of time to make up the shortfall – and they MUST check large pledges are genuine in some way (taking a substantial and non-refundable in the event you can’t make-up-the-rest deposit for donations over a % of the target would make sense).

      e.g. if you donate more than 5% of the total – they require 20% of that sum upfront. If the KS doesn’t fund, you get it back – but if it does and you can’t make-up the rest, you don’t get your deposit back.

      • JackDinn says:

        My thoughts exactly, and given KS would have gotten quite a chunk of change out of the $10,000, the cost of checking ought to be easily recouped.

      • Saul Bottcher says:

        Excellent idea

      • The Random One says:

        I think you have a schewed vision of KS targets over the huge ones game projects have. There are many projects with very small goals. If I’m asking for $200 to fund my interpretative dance city tour, should all donations over $10 be subject to that kind of check?

      • Joshua Northey says:

        That is a really good idea.

  5. AmateurScience says:

    I am actually surprised this hasn’t happened more frequently. i.e. some divvy thinking: ‘hur hur $10,000 donation I will click that hur hur’ .

    Did they get to keep the rest of the money? And if so, what’s to stop an unscrupulous dev faking a large donation to get the project over the finish line?*

    * I am categorically not suggesting that has happened here. Just an interesting point I think.

    • John Walker says:

      That’s another very interesting discussion KS needs to be having. I believe it’s against their rules for developers to fund their own projects. But if you’re looking at a Kickstarter for $300,000, with $290,000 and minutes to go, you could basically pay $10,000 to receive $300,000. It would be, surely, madness *not* to get a buddy/business to chuck in that cash for you, then pay them back.

      • AmateurScience says:

        Or even have someone make a dummy pledge that’s not even collected. No money need change hands and they can effectively get away with artificially lowering their target to get hold of at least some money.

        That is worrisome, and open to serious abuse (fake project, some fake pledges to encourage people to pledge/push the thing over the finish line. Money paid, project disappears).

        Edit: or do Amazon payments check that the money is at least there when you pledge, even if it’s not there later?

        • Joshua Northey says:

          They do not check to see if the money is there, just if the card is valid.

      • Deano2099 says:

        Wouldn’t even need to do that. The friend could just then not pay like in this example. Who is going to chase them?

        • LionsPhil says:

          Kickstarter. The devs don’t collect the money directly.

          Failing to [be able to] pay might do something something credit rating.

      • MondSemmel says:

        This seems to be the right time for JOHN WALKER, INVESTIGATIVE JOURNALIST.
        In other words, have you considered interviewing Kickstarter directly? I.e. not a kickstarter project, but rather someone affiliated with the site itself. EDIT: Kickstarter projects are featured very prominently on RPS – and questions like these regularly appear. I really want some semi-authoritative answers to them.

      • Baines says:

        There have been a few Kickstarters that have managed to make “last minute” runs to meet their goals. I honestly would be surprised if at least a few of them didn’t manage it by employees or other involved people making pledges near the end.

        Particularly if you’ve got a larger goal, and you are *almost* there, but the pledge pace makes it look like you are going to fall short. The temptation *has* to be there… Do you give in, or do you give up? You can try again with a second kickstarter, but while you might do better the second time around, you also could do worse…

        • InternetBatman says:

          On the other hand, Double fine made about third of its money in the last two days, so unless the last minute runs are well over that proportion or in very large amounts, I don’t think they’re a sign manipulation.

      • faelnor says:

        I’m a little fuzzy on the memories, but I’m almost positive this has already happened. Like, very large donations right before the countdown ends.
        What I’ve also seen multiple times were very vague projects with a relatively low goal (between $800 and $2000) and only three or four backers who pledged a lot, between $100 and $500 in the first two days. It’s difficult to guarantee that those are scams, but I find it interesting that this can have the effect on unsuspecting people of both appearing credible and giving an incentive to back the project “just to fill the low remaining amount”.

        You find plenty of interesting things when going in depth through the list of kickstarters.

      • InternetBatman says:

        The flip side of this is intentionally setting the goal lower than what you need to actually make the game.

        Brian Fargo was pretty open about this in the Wasteland 2 Kickstarter, where he set the price lower than the development costs and offered to pay out of pocket. I don’t think it was a bad thing in his case, because he was realistic and open about it, but less scrupulous developers can also take advantage of this.

        • Shuck says:

          “The flip side of this is intentionally setting the goal lower than what you need to actually make the game.”
          Which is something done by almost every single game campaign on Kickstarter. Look at how much people are asking for – these are almost never amounts that will completely fund a game, except for a few exceptions that are fairly simple games. Mostly what I’m seeing are ambitious games asking for funds that will pay for a small fraction of their development.

    • step21 says:

      I thought they would put a hold of the amount pledged on the card, like hotels do I think. So that the money isn’t withdrawn prematurely, but will stay there.

    • Fearzone says:

      Yeah I did these kinds of things when I was 15.

      Maybe not for $10,000, but hey, it’s the Internet.

  6. Ninja Foodstuff says:

    So what happens in this case? Presumably kickstarter can’t consider it “failed” after charging everybody else. Or do they refund everybody?

    Also, why does it matter so much? They asked for $56,000, thought they were getting $64,000 but in reality ended up with $54,000. That’s only a $2,000 shortfall which they could probably make up, assuming they didn’t overestimate their budget (which they really ought to have done in any case). It only seems like a problem if they spent the money before receiving it, in which case…

    • John Walker says:

      I imagine on believing they were to receive $64k they began budgeting and working with that number in mind. It’s been three weeks since their KS completed. But even a $2k shortfall isn’t exactly something the average indie could easily plug.

      • trjp says:

        It depends what you’re funding of course. If it’s hardware and licences and external contractors then a shortfall is a bit of an issue.

        If it’s your own income/time then you can be more flexible – remember that you’re not ‘selling’ anything here, you’re making a game which you’ll earn money from.

        I suspect a lot of KS developers are ‘spending it before they’ve earned it’ – hell some will ahve spent it before they even start their KS – and that’s how it will unravel for them.

        • Joshua Northey says:

          Exactly, at reasonable rates an extra $2,000 is about 20-40 hours of labor. If you cannot really cannot afford to extend your deadline for release an extra half week or week to make up the difference your project is not going to make it anyway.

      • BobsLawnService says:

        It boils down to not counting your chickens before they hatch. Presumably the developers knew how the system works so they should only plan once the money is in their bank accounts.

      • Fearzone says:

        If they are genuine in their intention to make the game and make it good then I have no objection to a little Indie company filling in for a small shortfall in funding. And their is no way Kickstarter could or should stop, say, the game developers mom from making a $5000 donation.

        If they create a nice kickstarter video with the intention of getting whatever donations they can, hiring a hundred people to falsely donate the rest, and taking what they have and heading for a Caribbean Island, well hopefully that gets prosecuted as fraud. As scams go that seems rather hard to pull off unless it is easier than I think to make a bogus credit card account with a fictitious identity.

    • Baines says:

      It could be that $56,000 was a legitimate minimum for them. If they were already chipping in their own funds or manipulating their own expenses (like not taking a salary or something) to get the number so low, then scraping up an extra $2,000 might not be so easy.

      There could also be some sort of promises or obligations involved, such as if some part of a deal hinges on their ability to show that they could raise that specific amount.

      One other thought… What does Kickstarter do if dud pledges brings a “successful” project below the “success” level? Is Kickstarter in a position where they might legally need to kill such a project? After all, donators are promised that their money won’t be taken unless the goal is met. In this particular case, the dud pledge means the goal arguably wasn’t met, even if it wasn’t found out until Kickstarter started collecting the money.

    • johanbcn says:

      As far as I know, they don’t consider it “funded”. The game Skyjacker almost made it, but no money was retrieved by kickstarter. When a project fails they can still use the page for more anouncements, or like in the case of SkyJacker, point out to a paypal account for the rest of the backers to send their money if they still wanted to.

      • InternetBatman says:

        They consider a project funded as soon as it reaches funding and the project ends. Skyjacker never reached full funding (which was a shame) so no one was ever charged. They were in this case.

  7. Tom De Roeck says:

    Isnt there a 9% nonpaying pledges anyhow, that you have to take in mind?

    • trjp says:

      Some did a breakdown of their KS experience and it was quite interesting (tho I can’t find the link offhand).

      The total is reduced by Kickstarter’s cut – and they also had a % of nonpaid pledges which ate into their ‘total’ as well.

      They then discovered their rewards (posters etc.) not only cost more than they’d expected but also ate a tonne of time to satisfy.

      The summary of their experience – which everyone on KS should have read – is that they asked for too little – or at least didn’t factor in the real ‘cost’ of a KS.

  8. BaconAndWaffles says:

    I am surprised that there isn’t some sort of fund verification when pledges are made. It would make faking a pledge of $10K a lot harder if you had to pre-authorize the money… It wouldn’t eliminate the problem at lower donation levels, but losing a few of those won’t sink a project.

    • trjp says:

      It occurs to me that places like hotels will routinely ‘reserve’ money on a card – KS could do the same (with credit cards at least – I don’t think you can do it with debit cards)??

  9. ReV_VAdAUL says:

    I am surprised this hasn’t been done maliciously yet. Certain projects that aroused intense dislike from a lot of people seemed wide open to being maliciously overfunded.

    • The Random One says:

      I don’t think it’d gone through anyone’s mind before this. If this project is any indication, it would only cause it to receive funding it should not. Plus, how hard do you have to hate something to be willing to make a ten grand debt you can’t honor on your card?

  10. trjp says:

    Aside from needing to check large pledges in some way – another common-sense thing would be for developers to aim for a realistic but slightly high figure.

    They lose a chunk to KS anyway – and they need a bit of padding between what they ‘need’ and what they will get if a KS funds.

    Let’s be honest, if you ask for £x and you get just a BIT over £x, that’s not gone well really – you were asking for close to the max people will give you – leave yourself more headroom.

    • AngoraFish says:

      Any developer that has not made an allowance for contingencies is a fool. Murphy’s Law applies to game development as much as everything else, if not more. If your budget doesn’t contain at least a 20% buffer for unexpected expenses you’re setting yourself up for failure.

      • Shuck says:

        The problem is that getting the actual amount of money one needs for game development from Kickstarter is almost impossible (unless you’re Tim Schafer). So what developers are asking for is funds to plug particular gaps in their budgets (assuming they’re not just doing it for marketing purposes). Since the more money one asks for, the less likely one is to get any of it, the pressure is to under-ask. (Of course what this means is that a lot of Kickstarter projects are teetering on the edge of the precipice, financially speaking. There’s a good chance many of them won’t have the funding they need to finish.)

        • The Random One says:

          I backed Haunt: The Manse Macabre and they sent a budget estimate after it was funded. Essentially they need to become the next incredible indie darling to make any money at all. IIRC the precise amount they said they needed to sell was 40000 copies – no mean feat for a brand new indie company even when the most excited fans aren’t getting it for free.

          • Shuck says:

            It’s sad, because it really defeats the promise (and purpose) of Kickstarter. Since people have no clue how much games cost to make, and developers are asking for such small sums, it makes it even less likely that anyone will be likely to give the kind of money needed to actually make games in the future.
            Which means even “successful” Kickstarter campaigns are likely to result in developers who either don’t have enough funds to complete games or release games and then go broke (never to make another game).

  11. LordShaggy says:

    At least they got to keep their money. We were told that if that happened you were considered failed and would not receive that.

    We lost about 5k do to drop outs for Edge of Space. It’s just something you have to account for with your kickstarter.

    We also encountered people abusing the system to try to get others not to pledge by pledging HIGH to get people thinking your fine with the donations you have, but then pulling out last minute.

    The next wave will be people pledging high with no intention ever to pay, like in this scenario.

  12. equatorian says:

    My pledge for the Lilly Looking Through kickstarter bounced. My bank changed the dates it deduct my credit payment without me knowing about it (it’s staggered by one-and-a-half month while it used to be one month straight). Having spent a lot of money moving two months before, my card went over and the Kickstarter ended about two weeks before the card was usuable again. I’m still rather sad about it. :/ Would love to fund it again, but since there’s no mechanism I guess I’ll just wait for the game is out and support it the usual way.

  13. Ultra-Humanite says:

    “You can’t help but imagine this is something that is going to happen too often.”

    I guess I have a limited imagination then, or a different definition of “too often,” considering this is the first of dozens of projects I’ve heard of something like this happening.

  14. maninahat says:

    That sucks. I backed this, and I can’t be the only one who was delighted to see it reach its target at the last possible second. It feels like I’ve been defrauded too.

  15. spacedyemeerkat says:

    I’ve pledged to many KS projects and am proud to have done so.

    However, what’s opening my eyes at the moment are the customs charges I am incurring with reference to Amanda Palmer’s project, specifically the ‘Summer Mailbox Invasion’ tier.

    To receive my first package – a 7″, some stickers and a cardboard box to keep all four 7″s in – cost me almost £20 in charges. I have another three of these packages to come, all of which appear delayed in customs, in addition to a CD, vinyl and art book package.

    Since the first 7″, stickers and box were valued at an astonishing $71.50, I shudder to think what the piece de resistance (CD, vinyl, art book) are going to be valued at and, consequently, cost me in customs charges and handling fees.

    Caveat emptor, folks.

  16. BobsLawnService says:

    Priorities change. A person may have $100 to give away to a pie-in-the-sky idea but two weeks later your kid gets sick or your car breaks down and that disposable income isn’t so disposable. I don’t see what the problem is. It isn’t like you are paying money for a product. You’re donating money to an idea. Easy come, easy go.

    • orionstar says:

      A difference between $100 and $10000 is huge – unless the guy’s kid got sick 100 times between the times when he pledged and when the kickstarter was over.

      To the developers, it’s 20% of what their goal was, so I’m guessing on a whim that this is a problem.

  17. Joshua Northey says:

    If you have a $10,000 donation you really need to get that persons info and contact them beforehand to vet it. otherwise don’t rely on it.

  18. tkioz says:

    I always found it odd that Kickstarter uses a pledge model rather then an escrow model. Frankly people using it aren’t seeing it for what it is, they see it more as a traditional pre-order, but what it really is a speculative investment.

    From both a practical and business perspective moving Kickstarter to an escrow model would make the most sense. For those that don’t understand what escrow is, it’s basically when you agree to give someone money, but you don’t give it to them until conditions are met (most offend buying a house), instead you place the money in the hands of a 3rd party (usually a bank or an agent), who holds onto it until both sides are happy with the deal, then turns it over to the seller.

    From the donators perspective it’s good, because if the project turns out to be a scam, well they get their money back.

    From the project perspective, you get less false pledges, what you see on your page is what you get.

    From Kickstarters perspective, it’s a gold mine. The way escrow accounts traditionally make money is that while the bank/agent holds the money they collect the interest on it, say they hold it for 30 days, about normal for a house say, let’s say a 200k sale, at say 5% PA interest, that’s roughly a grand they’ve made, the more money that moves through the more interest they gain. It’s also how banks make most of their money on transfers, currency conversions, purchases, savings, etc. They use your money to make sure term investments and loans and keep the profit.

    What you thought that taking 2 days to move money between banks was for security? Hah! No, it’s for them to make money.

    But back ontopic, it would allow Kickstarter the company to make considerable amounts of cash from these projects. I don’t know how they currently make their money (likely a flat fee or percentage), but an escrow system, while requiring more work for them, would be a much bigger cash cow, and allow them to do away with fees letting them attract even more customers. Of course they would need to deal with financial regulations (ick!) and governments which might be why they’ve avoided it.

  19. Yancey says:

    Sorry to hear that the project had this problem. Lifetime, just 1.8% of all dollars have not been collected due to credit card issues, so this is a rare occurrence on Kickstarter.

    Thanks,

    Yancey
    Kickstarter