Kickstarter Pledges Are Risky Investments, Not Purchases

By John Walker on January 21st, 2014 at 5:00 pm.

2014 is going to be the real Year Of Kickstarter. While the phenomenon became enormous in 2012, and saw continued enormous successes in 2013, it’s this year that’s really going to count. This is the year that so many of those multi-million dollar projects are due to appear. It’s going to prove, I would like to argue, the year that we are going to change our understanding of what a Kickstarter pledge really is.

Here’s an important thing about games: sometimes they’re terrible. Mostly they’re average. Quite often they’re good. That’s how “average” works. What people don’t appear to be ready for is the possibility that these rules will apply to games that have been Kickstarted. Some of the games, from the indie projects raising $10,000, to the big-names-going-indie gathering millions, aren’t going to be very good. And others are going to be alright. And here’s the thing: that’s okay.

Clearly there’s some quality bias when it comes to the bigger name KS projects. There’s a far greater chance of greatness, when the money’s been raised on the back of its being pledged to developers with proven track records. There’s a reason people are willing to hand over such copious amounts of cash to Chris Roberts to make Star Citizen – dude made Wing Commander. There’s not only a far higher expectation on the game to eventually be good, but there’s also a greater chance it will be. Thing is, it could still be just about good enough. It’s still possible. And that’s just fine.

January’s seen a couple of high profile Kickstarter games appear. The highest profile of them all, Double Fine’s Adventure – eventually named Broken Age – has released its first half. And it’s pretty good, but not incredible. And The Banner Saga has appeared from the ex-BioWare team who saw both enormous fundraising and alpha success, and it’s, well, mostly good. Neither has changed the world of gaming. And of course, that’s just fine.

Then there’s, say, GODUS. Over half a million raised, and, well, it’s for sale and so far it’s not very good at all. And of course, that’s just fine.

At a farther extreme, there’s examples like Unwritten. Months after being successfully Kickstarted, Roxlou Games realised the game simply wasn’t going to get made, due to family problems, issues with the project, and so on. There will likely never be an Unwritten. And of course, that’s just fine.

What all this points toward is the reality of Kickstarter that has always been the case, but almost everyone has refused to acknowledge. As much as it may feel like it, pledging to a Kickstarter (or Indiegogo, or whatever else) is not pre-ordering. It’s funding. And we have to grasp this.

It’s certainly not helpful that the entry point tier for almost every Kickstarter is that which will secure you a copy of the finished game. It’s doubly unhelpful that if this weren’t there – if funding the project were separate from buying a copy when it’s finished – then they would likely receive far fewer backers. But as counter-intuitive as it seems, what we’re actually doing is giving the project the amount of money a copy will cost when it’s done, in the hope that one day it will be done. Rather than in expectation of it.

Because that’s the reality of game development. Lots of games get stuck in development hell, or simply run out of funds and can no longer be supported. Others get canned because it becomes apparent that it’s never going to come together. Some are given up upon because they’re terrible, and they can find no way to fix it. And none of this is changed with the funding method. Whether privately, publisher or crowd-funded, these risks are still very much in place, and they’re risks Kickstarter backers need to take on board before putting in their wedge of cash.

I think it’s so sad to see people claiming refunds from Unwritten. It demonstrates just how little understanding there is of the process for someone to demand their $20 back because the game didn’t get finished – $20 that will have been spent already, on not being able to make a game. That money was invested in a project that didn’t work out. It wasn’t leant. And it wasn’t a purchase. It absolutely does not merit a refund.

There are of course exceptions to this. If a pile of money is raised, and then not used for the purposes stated, that’s fraud. If someone asks for £50,000 and then goes off on a world cruise, and never attempts to develop a game, there’s a legal dispute in hand. (Although this isn’t so clear cut. If I asked for £50,000 to fund my making a game for a year, that money would be partly for tools and staff, but partly to pay my salary. If backers give me £150,000 in response to my appeal, that extra £100,000 really is mine to spend how I see fit, and if that’s to increase my salary, that’s a valid use of it.) But we’re not talking about cases of fraud here – we’re talking about cases where the game just simply doesn’t come together, or is perhaps a dreadful game on release.

And yes, as you pick at these threads, all manner of things start unravelling. But this all starts to lead to a clarity of what a Kickstarter pledge really is. What about if someone asks for £25,000 to make their game, but it becomes clear after spending that and being nowhere near done, that this was never going to be enough? Well, again, it’s tough to the pledger. That’s part of the risk of investing in such a project, and it’s absolutely why people should withhold pledges when they suspect the target isn’t going to be enough.

If people started to view their pledge as an prospective investment in that project, rather than a very early pre-order for a game they like the sound of, there would be far more scrutiny before money was put down. Someone announcing they’re going to make an MMO for $5,000 isn’t going to make an MMO for $5,000. Putting in $25 because you like the sound of the finished game is a naivety on your part. You’re a bad investor. We have to start weighing up what the chances are of making good on our investment – am I likely to get a game that is worth this cash if I give it? What are the chances of that successfully happening? And most importantly of all: being aware of the risks and challenges of making games, and the possibility of failure, am I willing to risk this money on not getting a return?

Tim Schafer did something very smart, and weirdly forgotten, when he launched the Double Fine Kickstarter. He said, “Whether it goes well, or whether it all goes to hell, we’re going to show everything.” He then adds, “Either the game will be great, or it will be a spectacular failure.” There was no pretence that the money he was asking for ($400,000, of course) was going to guarantee a finished product to play. That they were going to film it, for a quarter of the budget, meant that either way there would be something at the other end of the process, admittedly. But the game, the other three quarters, was never a promise. And that, really, is how it should always be.

So the next time we go to pledge on Kickstarter, we have to let those words ring in our ears. “Either the game will be great, or it will be a spectacular failure,” then adding, “Or it’ll be just fine.” And then put forth our money with this in mind.

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202 Comments »

  1. bit_crusherrr says:

    This is why I never back Kickstarters, and only buy Early Access games if they are playable in their current state.

    The only exception to this I’ve made really was Next Car Game because that genre barely exists any more.

    • meepmeep says:

      I would like to back Kickstarters, but find it hard to invest without any clear independent assessment available of how likely the project is to complete.

      What would be better was if there was a third party involved that I (and others) give my money to, and they commission an assessment of the investment potential of the funding applicant on behalf of all the investors who are interested, and only put the grouped money together if they feel the project is sound.

      If this framework existed, then we could even move to a form of spread betting, whereby my money is split up into multiple small investments in many projects, so that the projects that don’t perform well or fail have a minimal impact on the total pool I’ve put in. I could possibly choose the level of risk I am willing to be exposed to.

      We could call these third parties something like, I don’t know, “banks”?

      • Corb says:

        Bank……hmmmm….no, no what I think you’re looking for is the general term “Financial Advisor”
        http://en.wikipedia.org/wiki/Financial_adviser:
        ” financial adviser and financial planner are general terms or job titles used by investment professionals”
        tl;dr; you are describing publishers, no, just stop and go away.

        And while nice, this doesn’t make sense. You aren’t an investor investing money to make money. You’re investing personal funds on a bet that there is going to be a game with extra goodies for you…the reason you invested. So no, portfolios only work if there is money supposed to be coming your way. If it fails, well, you get nothing…just like an investor who invested, and lost their investment on a bad investment…they don’t get that money back but they make up for it with other investements that return money….can’t replace money with game in that sentence as all games are different…unlike US dollars…

        • stupid_mcgee says:

          Even then, it still doesn’t hold up. If a company goes belly up, you don’t just go, “oh well!” and throw your hands up. You liquidate and debtors always get paid first. So, you will still be out some money, but you have contractual obligations and a little thing called the rule of motherfucking law on your side when deciding obligations and disputes.

      • Shuck says:

        Unfortunately people have a completely unrealistic sense of how much it costs to make games, which creates poor risk assessment. Even more unfortunately, even sites like RPS contribute to this, every time they talk about how some development team is rolling in piles of cash for having raised a million dollars – for a game that could easily take five times that amount to make cheaply. So people see the average game campaign, which is asking for less than $15,000 and think that’s a reasonable amount, despite the fact that there are enough people and time involved that the developers are essentially working for free (and thus, if a single one of them was unable to continue, it would scuttle the whole project).

    • Lenderz says:

      I’d rather kickstart a game project with a well thought out pitch, from people who are passionate about what they’re making who communicate that well and invest in their vision on the basis of “it may be terrible but golly I like the sound of it” and get another Godus rather than buy something on Early Access which doesn’t seem to have any communication guidelines and simply gives you a vague overview of “we make game fun” like most seem to.

      I’m a firm believer that Early Access needs improvement, especially around expectation management. Whilst with Kickstarter I hope it comes good, but won’t be overly hurt if it doesn’t.

    • Cung1947 says:

      my best friend’s step-mother makes $74 an hour on the computer . She has been unemployed for 10 months but last month her check was $13881 just working on the computer for a few hours. go to website……
      http://www.Jobs84.com

    • Sharlie Shaplin says:

      That’s pretty much my philosophy on Kickstarter, games and genres I enjoy but no one is really making anymore, so far I have been happy with it. I understood the risks right from the beginning.

  2. NelsonMinar says:

    I find it strange you’d criticize people taking refunds from Unwritten when the Kickstarter Terms of Service are very clear on this point. “Project Creators are required to fulfill all rewards of their successful fundraising campaigns or refund any Backer whose reward they do not or cannot fulfill.” There’s no ambiguity there. It’s a completely unrealistic requirement, and one that AFAIK has never been stringently enforced in a lawsuit, but it’s the way Kickstarter is set up.

    I think talking about Kickstarter funding as investment is misleading. “Investment” implies that the investor is entitled to some future return, either appreciation of the asset or dividends or interest or the like. All a Kickstarter backer is promised is a delivered future good, plus some sense of goodwill and the fun of following along a project. Backing a Kickstarter project is much more like a pre-purchase than an investment. And if the seller turns out not to deliver the goods, asking for a refund seems entirely appropriate.

    Maybe Kickstarter should be set up the way you suggest, more of a sort of largesse where we give some money to folks and hope for a good outcome. In practice I think that’s how many backers see it. But there’s got to be some force to counterbalance $500,000 fiascos like Clang.

    • Smuckers says:

      Unless they are completely incompetent, i’d imagine most devs likely structure their businesses as corporations or l.l.c.s to insulate themselves from personal liability in the event that a project fails. If the company spends all the money developing a game that doesn’t work out (even, as John says, on personal salaries) then there likely won’t be money left for refunds even if the kickstarter t.o.s. obliges a company to fulfill rewards. What happens is the company declares bankruptcy and folks move on. I don’t think this is a bad thing, that’s what kickstarter is for. It allows people to fund risky ideas, people just need to be aware that that it is, ya know, a risk.

    • TillEulenspiegel says:

      But but…entitled gamers! Aren’t they just the worst? Don’t you hate it when people expect something they were explicitly promised in return for money?

      • Ich Will says:

        “something they were explicitly promised”

        That’s how I know that you don’t understand kickstarter

        • Werthead says:

          Well, as is quoted just three replies up:

          “Project Creators are required to fulfill all rewards of their successful fundraising campaigns or refund any Backer whose reward they do not or cannot fulfill”

          You can argue whether it’s realistic or practical for them to make that statement, but that does constitute an explicit promise by Kickstarter and by the projects appearing on it that if they don’t appear, backers will be refunded.

          • P.Funk says:

            But who in their right mind would believe such a thing would be possible? If $500k went into a project and it failed utterly with nothing to show, where is the refund money coming from? The developers going to take out a bank loan to pay back the pledgers?

            There’s whats written and then there’s whats sensible. Any sensible investor knows its not just what you’re promised, its also about whether its realistic, in any eventuality.

            This is why most people can’t be professional businessmen. They just don’t get it.

          • Chirez says:

            Surely arguing that people should have known it was not possible for kickstarter to enforce that rule is basically saying that kickstarter lies to people, and kickstarter projects lie to people, and that’s ok, because people ought to know they were being lied to?

          • jrodman says:

            It doesn’t make them liars, necessarily. It does suggest they are at least incompetent or quite plausibly negligent.

            Demonstrating bad faith takes a bit more than that.

        • tetracycloide says:

          The fact that there’s a risk the promise won’t be fulfilled doesn’t change the fact that it is an explicit promise. He understands kickstarter just fine, you just don’t understand English.

          • Ich Will says:

            Go learn the meaning of “Project Creators agree to make a good faith attempt to fulfill each reward ” and get back to me about how much I understand ;)

          • frightlever says:

            @Ich Will – you fail at cut and paste. That should read “Project Creators agree to make a good faith attempt to fulfill each reward by its Estimated Delivery Date.” ie a good faith attempt to meet stated delivery times.

            The relevant quote from the T&C is “Project Creators are required to fulfill all rewards of their successful fundraising campaigns or refund any Backer whose reward they do not or cannot fulfill.” – which is pretty cut and dried. If people want their money back, they’re entitled to it.

            Up above someone mentions LLC/company protection – that’s also as intended. If someone forms a limited company and goes bust to avoid their financial responsibilities that’s how the system works. The backers don’t get their money, but importantly it’s not a trick the Creator can pull twice because as director in a bankrupt company their life just got a whole lot more “interesting”.

    • molamolacolacake says:

      In the case of Kickstarter, the anticipated return on the investment is the game. Like any investment, however, it might not shake out in your favor. That is the inherent risk, whether you invest expecting cash or expecting a product. I don’t think it’s misleading at all to frame it as an investment.

      I personally have always viewed it as a donation from which I might get a cool game, much like getting a tote bag from a charity. Either way, the point is the same. Don’t give more than you are prepared to lose.

      • Entitled says:

        “Don’t give more than you are prepared to lose.”

        This is true for every form of purchase where the seller might fail to deliver a product.

        That alone doesn’t make them donations. Retroactively arguing that you were really just “donating” to the guy who promised a product in turn for money, because you knew that he might break his promise, is not a good foundation for a business model.

        • Shuck says:

          “is not a good foundation for a business model.”
          Luckily it’s not a business model. It’s a system whereby money can be given to developers in the hopes that they’ll make something that they couldn’t otherwise fund through traditional means.

      • stupid_mcgee says:

        “In the case of Kickstarter, the anticipated return on the investment is the game.”

        Which is why you’re a customer and not an actual investor. Investors get financial returns on their investment, not knickknacks and products. That’s the very definition of an investor. It’s like if you have a shape with 4 sides, 2 angles are same, and 3 sides are the same length. You can argue all you want that it’s a square, but it’s not and never will be because it doesn’t fit the definition of a square.

        • drewski says:

          You’re not really a customer, because the traditional buyer/customer relationship doesn’t exist either.

          Patronage is the closest model, but really it’s something fairly new and all old models for financially rewarding creation aren’t going to fit perfectly.

      • frightlever says:

        Kickstarter is not an investment, that’s nonsense in the title. Kickstarter would not thank you to perpetuate that myth.

        Kickstarter are at pains to point out that they are a funding platform. There isn’t a single mention of “investment” in their own “About”.

    • Awesumo says:

      That clause basically says that if you fail to complete the project then your company had better go bankrupt, as you are liable. Of course, you can just get $500000 from customers, pay yourself that money as wages, then lean on the limited liability status of LLC’s to take the cash… so it in no way stops abuse by nefarious individuals.

      • chargen says:

        That’s why it’s probably a good idea for backers to not go all glassy eyed during a kickstarter pitch and start throwing money at people who may be frauds, and instead require some concrete information on their designs, business plans, background, etc. to whatever reasonable degree that would make them comfortable risking their precious $20.

        Why the hell did some people not realize that pledging money to kickstarter involves risk?

        • Shuck says:

          Hell, you should have that information for campaigns that you know aren’t frauds, as well. Even totally honest, completely well-meaning developers can seriously screw themselves by underbudgeting or otherwise not thinking things through enough. (Are they not raising enough money to pay salaries? Then the project is cheaper but much riskier, as if anyone drops out, they can’t hire a replacement.) And even if it is well budgeted, looking at costs will tell you what sort of game you’re funding – based on the amount asked for, Double Fine was making a cheap little Flash game, originally. I don’t know how many of their backers knew that.

      • Entitled says:

        This is the oldest one in the book, and as such properly countered by a judge ordering “Lifting the corporate veil”, if they deem that the LLC was acting in bad faith and serving as a false front for it’s owners.

        • Everblue says:

          Not sure about US law but it is really hard to “lift the veil” and go after the directors in the UK. You would have to prove that they were lying in their kickstarter pitch.

          • tetracycloide says:

            If you can’t prove that then in what sense would you deserve anything anyway?

    • Vinraith says:

      Putting up terms of service like that and then utterly failing to enforce them is actually worse than just admitting up front that backers aren’t really guaranteed anything, if you ask me.

      • chargen says:

        The terms are between you and the project runners, not kickstarter. The project runners are the ones promising you things, and they are the ones you have a contract with.

        • Vinraith says:

          Thus rendering them useless, as noted in several other posts here, since it’s straightforward for the project runners to structure things in a way that allows them to wriggle out of it. Again, a false sense of security is not helpful, here. You’d see less bitching about Kickstarters gone wrong if the site was honest about the risks involved.

          • chargen says:

            They structure what things? They’re entering into a contract with their backers that they will use their money on the project they’ve described and deliver the rewards they’ve promised. They could fail and then you would get nothing unless you want to take them to small claims court. What false sense of security, can’t you read?

            Let’s say you know nothing about what kickstarter is and any of the implications to how it works. Someone tells you that there’s a place where you can buy games that haven’t even been made yet or even designed yet, where the developer has nothing but an idea and a few sketches to tell you what he hopes it’s going to be. You would think that this is risk-free? You would need someone to explain to you that it is not?

            I’ve got no sympathy for people with no common sense nor do I care how much they bitch.

          • Chirez says:

            So, apparently you’re arguing against consumer protection laws.
            The reason companies at least in the UK are legally required to offer cooling off periods after certain forms of purchase. The reason the concept of consumer fraud even exists. The reason there are government bodies for the regulation of advertising.

            There have always been con men. There always will be. It’s very unkind to face an innocent person who has been taken in by a confidence trick and tell them they should have known better.

            It’s easy to take advantage of people if you structure things in such a way as to draw them in. To what extent kickstarter projects do exactly that is a very debatable issue, but any time money is changing hands it’s vitally important to have mechanisms in place to protect the interests of both parties. Good faith is not ever enough.

    • Aerothorn says:

      Clang is a horrible example of a “fiasco,” given that it delivered the promised product to backers. Troubled development, some scuttled ideals for future iteration, sure; but in a universe where a lot of kickstarters don’t deliver at all, this seems like a poor case.

      • Shuck says:

        I think it’s a good example given how pissed off backers were *despite* the fact that they delivered what they promised. People had weird, inflated expectations of what it was going to be like, didn’t understand what the money was actually being used for, understood but also weirdly assumed that the further fundraising efforts were automatically going to be successful, etc. It was a disaster, really.

        • stupid_mcgee says:

          I don’t know much ( nor really care) about what happened with Clang, but is it that much worse than Takedown: Red Sabre? Because I have never seen so many backers so horribly disappointed when that game released.

        • Sharlie Shaplin says:

          “People had weird, inflated expectations of what it was going to be like”

          Some of the questions the backers of Star Citizen ask the devs, make me think this all the time.

    • hairrorist says:

      And the counterbalance to prevent another Clang–a leviathan project helmed by an already-wealthy geek elite–is this project? A small single man studio trying to balance a family budget and launching a new business and drowning due to unexpected medical bills in a land of no insurance? You may be legally entitled to a refund but I am certainly legally entitled to think you’re a blight to the race. The law allows people to be massive pricks. It makes no guarantees as to whether or not someone is a human wort.

      In the words of the great philosopher Lewbowski: “You’re not wrong, Walter, you’re just an asshole.”

      • jezcentral says:

        They are wrong if they think the dev is on the hook for the refund. He/she isn’t. Their limited company is.

    • Tsarcastic says:

      Everything you just said.

      People misuse the word “investment” a lot, but it’s pretty cut and dry. If you’re making a financial investment, it’s because you expect to see a return on that investment. And receiving a copy of the game, or other pre-determined swag doesn’t count. Since the terms are pre-defined, that’s a purchase.

      An investment would give you a share of equity in the company, or a project, where your money would be tied to them, and the return on the investment would be proportional to its level of success. Without going into the details of how that would work, it would be incredibly difficult and time-consuming to structure any Kickstarter rewards in this fashion.

      • Talon2000uk says:

        You might expect a return. It doesn’t mean you will get one.

      • Syphus says:

        Those are simple one type of investment, or a specific type of investment. However, not all investments work that way. There is in fact no definition that says an “investment can only have the following returns”

        Also, in any investment the terms are predefined. Whether its a product, if they just want their investment recouped, if they want royalties or a percentage of a profit, stock, whatever. These are all predefined. The point of an investment is getting your money back, yes. But it doesn’t have to be more money, it is quite valid to get your money back in a different form of something that is valued at that same monetary amount.

        • His Divine Shadow says:

          i was about to agree with this, but then i thought about it more, and came to a conclusion that whilst returns on an investment don’t *have* to be monetary, the word itself implies that you get *more* than you put in, in one way or another (consider the examples like investing into your children, or your future – they all support this if you think about it). that’s what distinguishes it from other forms of money transfer.

          what does it make kickstarter pledges then? i think it depends on the pledge amount and the backer’s motivation. they are definitely not pre-orders, since there’s no guarantee of the results (neither there can or even should be). if someone picks the minimum pledge that would give him a copy of the game, that’s an investment (and yes, a risky one). if someone knowingly pays more than he’d pay for a similar fished game, that’s a donation (note that the fact that there might not *be* any similar game unless these specific guys make it must be factored in). and top-tier pledges can probably be best classified as patronage.

          • The Random One says:

            You invest because you expect to get more than you put in, but this is not always the case.

          • His Divine Shadow says:

            i did try to come up with an example of the opposite, but wasn’t able to. it always seems to be about exploiting your unique position and/or taking risks to get ‘rewards’, as opposed to buying, where you just pay the established market value

          • Syphus says:

            Its hard to answer this question really. If you pay $20 and get a game that retails for $50, is that more than you put in? But also there are so many rewards that only have the value you associate with them? Is “Meet this random guy, pledge $10,000″ getting more than you put in? Maybe it is to whoever pledges it.

            Anyway, while banks and financial institutions are mainly for profit institutions, lets imagine this case: You have an Angel investor who just wants you to pay him back what they put in, you pay them back, its done. Is that still an investment? I think so.

          • His Divine Shadow says:

            >If you pay $20 and get a game that retails for $50, is that more than you put in?
            if it’s the game you want, i think it can be considered an investment, yes

            > Maybe it is to whoever pledges it.
            sure, absolutely, the rewards are subjective, but i still think that the idea of gain is essential to the definition or an investment.

            > You have an Angel investor who just wants you to pay him back what they put in, you pay them back, its done. Is that still an investment? I think so.
            sounds more like he just gave you money for safekeeping. and anyway, by examples i meant something that’s commonly referred to as an investment, not something made up

        • stupid_mcgee says:

          in·vest (n-vst)
          v. in·vest·ed, in·vest·ing, in·vests
          v.tr.
          1. To commit (money or capital) in order to gain a financial return:

          Noun 1. investor – someone who commits capital in order to gain financial returns

          The definitions are quite clear, actually. It’s just that a lot of people don’t give a shit about what words really mean and use them in improper contexts.

          “A man may take to drink because he feels himself to be a failure, and then fail all the more completely because he drinks. It is rather the same thing that is happening to the English language. It becomes ugly and inaccurate because our thoughts are foolish, but the slovenliness of our language makes it easier for us to have foolish thoughts.” – George Orwell

          -edit-

          Even if we are to take the OED definition (which any wordsmith will tell you is the one source to rule them all), we get:

          investment
          NOUN
          1 the action or process of investing money for profit or material result:

          1.1 a thing that is worth buying because it may be profitable or useful in the future:

          1.2 an act of devoting time, effort, or energy to a particular undertaking with the expectation of a worthwhile result:

          2 (archaic) the surrounding of a place by a hostile force in order to besiege or blockade it.

          Now, look at the etymology of investment:

          1590s, “act of putting on vestments” (a sense now found in investiture); later “act of being invested with an office, right, endowment, etc.” (1640s); and “surrounding and besieging of a military target” (1811); see invest + -ment. Commercial sense is from 1610s, originally of the finances of the East India Company; general use is from 1740 in the sense of “conversion of money to property in hopes of profit,” and by 1837 in the sense “amount of money so invested; property viewed as a vehicle for profit.” For evolution of commercial senses, see invest.

          The word, “investment,” in terms of business, has always meant putting forth capital in expectations of return on that capital. Additional meanings tacked onto investment are simply using the definition to illustrate concepts.

          If you tell actual business people that they can invest in your business, they’re going to be confused when you start telling them about all the cool posters, pogs, and plushies they will be getting. And that’s the problem. You’re taking a definition, applying it to outside concepts, and then trying to reapply back to its origin. It doesn’t work because you’re talking about investments in a setting where investments, investing, and investors are very set and specified terms.

          • Keithustus says:

            Exactly. You quoted the definition that investment is “the action or process of investing money for profit or material result”, which fits KS nicely in that the game and t-shirt or other junk counts as a material result.

      • Talksintext says:

        Is it that complicated?

        You simply give away a certain share of the profits/revenue to each backer (per dollar spent), capping the total number of backers.

        So, if you want $10,000 to make a game you expect to sell for $100,000 total in the end, you can offer each backer, say, 0.01% of the revenue per dollar invested (so if they sell as expected, it’s a 50/50 split between devs and backers).

        It’s not any more complicated than other investments, given that the project could cap the total amount of backing.

        Of course, you could just make this for a certain backer class. So, lower tiers just get a promised game copy, but like $100+ backers get profit sharing or company stock.

    • Moraven says:

      Does not help Tim Schafer mismanaging funds.

      I am ok if they failed and we just got a half built game and the documentary. I am not ok with mismanagement of funds. Which of course is part of the risk. But everyone is giving him a pass with “He said it could fail anyway”.

      Lets expand the scope of a $3m budget to over $8 million. He was positioning the KS to fail, not because they tried and failed. Costume Quest and Stacking were $2m, we know what they could manage with that.

      • Entitled says:

        If “mismanaging funds” gives us a $8 million game where properly managing them would have failed to deliver a $3 million one AND would have resulted in Double Fine’s bankrupcy from having to refund everyone, “mismanaging funds” seems to be a lot more responsible, practical, beneficial, and responsible path..

      • Shuck says:

        This is such a weird response to what Double Fine has done, and makes me realize that no matter what they actually did, someone was going to be mad at them. First of all, the campaign was for a documentary, primarily. They were going to make a cheap game (with something like 12% of the budget Costume Quest had) to demonstrate their process, more than anything. When they raised a record amount of money, their plans necessarily changed. Since they now had the funds to make something like a real game, they decided to do that. When other funds became available, they decided to use those, too.

    • MellowKrogoth says:

      The people seeking those refunds are just evil bastards or stupid morons trying to take advantage of poorly worded legal terms to kick an already down project and its authors.

      This said, either the terms of service should change, or software projects should simply state that the promised game reward will be a game but may very well in no way look like what’s advertised. Then if the project fails they can send a copy of the game in its current unfinished state, or if that’s not possible because of whatever issue, send everyone a clone of Pong they prepared in advance.

    • ChromeBallz says:

      They are obligated to fullfil the rewards, not the project itself. It’s a very nuanced difference. The wording of the rewards is also important. ‘Game on release’ is something very different than ‘game’ and does not promise an actual release, for example.

    • Ergates_Antius says:

      They’re not being criticised because they’re not entitled to a refund, they’re being criticised because asking for one under the circumstances is a dick move.

  3. draglikepull says:

    One thing that I’ve evaluated for every Kickstarter I’ve backed is “Do I think this team can actually finish what they’ve described here?” So far I haven’t been disappointed. I’ve had three Kickstarters delivered (Banner Saga, Broken Age, Shadowrun Returns) and been happy with all of them.

    I’ve supported three other games that haven’t been released yet. One has been in closed beta for a while now and seems well on track (Hex: TCG), and the other two are from developers with solid track records of producing the kinds of games they’re working on.

    I haven’t Kickstarted any board games, but I have friends who have and they’ve always delivered too. There will always be the odd thing that falls apart for unexpected reasons, but generally if you take a bit of time to learn about the team behind the pitch you should be able to get a pretty good idea if they’ll be able to deliver.

    • jonfitt says:

      Board games are usually good at delivering because they’re typically looking to cover manufacturing costs. I have an acquaintance who is a small-time game designer: (http://boardgamegeek.com/boardgamedesigner/33711/cw-karstens), and in the process of his successful 2011 Kickstarter (http://www.kickstarter.com/projects/diamondkgames/dragon-valley-the-board-game?ref=live) we were talking about the economy of producing small numbers of board games. You basically have to have them printed in China and shipped on a boat to the US. In order for that to make a lick of financial sense you have to place a printing order for a not insignificant number of copies. Each copy will actually cost the designer quite a lot to print and ship, so you’re looking at a huge financial risk to get anything made.

      That’s why Kickstarter is perfect. You can bring a completed game to the site that just needs other people to help you spread the cost of paying for Ctrl-P.

      The drawback with backing some board games is while they will probably exist, they might not actually be any good to play! That’s really their risk. That can me mitigated by looking for reviews of prototype copies from trusted outlets.

    • DarkFenix says:

      I’ve backed a fair few projects on KS and have so far not been let down. At the same time I’ve carefully not backed a number of projects, among which are some of the notable failures we’ve seen.

      Let’s see, there’s FTL and Battle Worlds: Kronos; both are complete, the former is great and the latter is at least good (and more importantly, it met my expectations).

      Then we have Wasteland 2, Castle Story, 7 Days to Die, Divinity: Original Sin and Planetary Annihilation; none of these are finished but all are playable in various stages of alpha or beta and clearly will be finished to what I consider at least a satisfactory degree (particularly since all of those except 7DtD are now raking in Steam early access revenue to help things along).

      Investments I’m yet to see playable results from include Project Eternity, Torment: Tides of Numanuma, Warmachine: Tactics, ROAM, Dead State, Project Phoenix, Elite: Dangerous, Satellite Reign and Star Citizen (this one not on KS, but I’ve dumped a frankly worrying amount of money into that anyway). Of this lot, some are approaching playability and so far none of the others look like they’ll suffer from anything worse than delays caused by more funding leading to more features. In fact most are looking very promising indeed.

      It’s not difficult to see which projects are bound for the stars right from inception and which ones are powered more by hope than talent. A Kickstarter pledge is indeed an investment and all investments carry risks, but a bit of homework makes it pretty damn safe.

  4. JFS says:

    Hear, hear! You tell ‘em, John!

    (no, honestly: who are those people that still haven’t understood how Kickstarter works?)

  5. LionsPhil says:

    How is it investment when there is no return on that, e.g. dividends? If I were “investing” in a game, I would expect to get something back proportional to its sales success. Just getting my backer rewards is more like, well, buying it, but with extra uncertainty on top (and no distance selling regulations underneath).

    Backing stuff in the hope that it exists and is cool one day is more like patronage, surely.

    • pepperfez says:

      The return is the project’s success, which has a value to backers that could theoretically be represented in dollars. Which, yeah, is how patronage works – but I’d argue that’s just another form of investment.

      • khomotso says:

        That’s a bit of a tortured rationale, which ends up contributing to the general confusion. John isn’t helping his goal by stretching out to new meanings for a word which most often carries a very different sense.

        Thinkpiece on misunderstanding implications of terms could have used some wordsmithing.

        • The Random One says:

          There’s no tortured rationale there. A traditional investor invests money to receive money – he puts in monetary value to receive monetary value. A backer invests money to receive a game – he puts in monetary value to receive entertainment value. Entertainment value may not be easily measured and is difficult to trade for goods, (at least directly) but take it from someone who studied marketing and never worked in it: to a single person, those values are equivalent.

          • khomotso says:

            Think you’re missing the point. Yes, you can defend a logic for it, where concept A can take the place for concept B, and the structure can be shown to still hold, as a kind of analogy.

            It still remains the case that ‘risky investment’ – the language in the title of this post – really is a poor communication, in that it signals all the wrong things by not using words as they are ordinarily understood.

            When you have to sit down and explain to someone a possible scenario whereby the words can be taken in a different way … well, yes, tortured.

            And if your whole point is that people don’t get it, that now the year’s successes and failures might all come around to helping us understand what this process does and doesn’t mean, it might be nice to not use words that can be just as misleading.

          • The Random One says:

            There’s nothing misleading about it. The word investiment, at its most literal use, implies monetary profit. Since no one expects monetary profit from backing vidya games, it’s clear that there is some degree of analogy. Plus, as I mention some times below, in management-speak “investment” is already used as a substitute for “cost”, so we’re not treading new ground here.

          • drewski says:

            Actually, investment in it’s most literal form implies *ownership*. When you make an investment in a stock, a bond, gold or tulips, you are in a very real sense buying ownership of that thing (or, at least, a share of it).

            Whether or not that ownership later ends up being financially rewarding is more or less irrelevant.

            I would submit that investment is a poor use of the term when it comes to Kickstarters not because there is no expectation of financial reward, but because the backer has absolutely no real or implied control or ownership over the project.

    • draglikepull says:

      Patronage is also how I think of Kickstarter. It’s just patronage on a social level instead of an individual one.

    • InternetBatman says:

      Exactly this! Exactly. An investment is better than a pre-order because you have far more to gain from an investment.

    • John Walker says:

      You’d only get dividends from your investment if there were profits. But yes, you can do a rewrite of this argument arguing it’s patronage.

      • SurprisedMan says:

        The other reason I vastly prefer the patronage comparison is that it captures something else about capture that the investment doesn’t quite capture. Except in the case of so called ‘angel investment’, investment is really about risking money against the possibility of returns. But patronage is putting forward money in order to see something come to fruition for reasons that are often beyond a simple transaction.

        One of the reasons I put quite a lot of money towards Double Fine’s Kickstarters, for example, is that I like the company, the people that work there, their practices, their work, and in particular Tim Schafer has been very influential in the way I think about writing, stories, certain aspects of design, and my money was a combination of ‘thanks for making those things before,’ and ‘let’s have more of that.’

        In comparison, the act of investing seems like a rather dry affair.

        • stupid_mcgee says:

          Actually, patronage works perfectly. Patrons donate towards a project hoping to get nothing more than the fruition of that project. If that fruition includes things like a party with free food and drinks, a concert, etc. all the merrier.

          For example, patrons to the ballet might put forth money for a new concert hall. For this, they might be rewarded with a season or two of tickets and maybe a special showing or something. They put forth their money to complete the concert hall in expectation that it would be done. If there’s an earthquake and the building collapses, if the project goes way over budget, if the owner goes crazy and has to be institutionalized, then what can they do? Nothing, really. And that’s the exact way Kickstarter is.

          What can you do when the project goes bust? Not a whole lot. You can try and sue, but that’s going to be a huge PITA and good luck squeezing blood from a turnip. Although a Kickstarter backer might have a bit more legal leeway with the Kickstarter TOS, which states that the creator promises to finish the project and deliver the promised goods if the project is successfully kickstarted. That itself raises the question of whether TOS guidelines can constitute legally binding documents. Which could have some seriously “fun” consequences.

      • stupid_mcgee says:

        It wouldn’t be dividends because dividends are paid to shareholders. Investors are often rewarded as shareholders when a company goes public, and buying shares is a form of investing, but not all investors are shareholders.

        For example, Bono and John Ricciteillo were investors when Elevation Partners invested in BioWare/Pandemic and set up VG Holdings to manage them. They were not, however, shareholders because the company does not have stocks. So, they would not get dividends, but they would get what is called “rates of return.”

        Being an investor is more like being a loan service. And yes Bono, U2 Bono, at one point, in a sense, owned BioWare. The whole VG Holdings, Pandemic, BioWare Austin, SW:TOR, EA, John Riccitiello thing is a pretty sordid tale.

    • jrodman says:

      I’m not saying it’s definitely investing, but an investment can turn out to be worthless, and deliver no dividends ever.

      Or do you mean that Kickstarter can never deliver dividends?

      • LionsPhil says:

        The latter, yes, hence “proportional to sales success”. I think the investment/patronage distinction becomes fairly moot if it fails, since you’re not getting anything either way.

        The “project completes to expectations but fails to actually make a profit” case seems to just support “it’s patronage” further. For investment, that’d be a disappointing loss (or break-even). For patronage, hey, you got the game you wanted to exist, awesome.

        • The Random One says:

          My problem with your analogy is that sales success is also a figure related to monetary value. If I’m not expecting monetary returns then it shouldn’t matter.

          Let’s illustrate this with two people called Alice and Bob. Alice is a gamer who backs games. Bob is a Hollywood investors who… invests. They are both shameful to their family, her due to her usage of no garments other than sweatpants and him due to cocaine.

          One year, Bob invests in some movies. He invests on three movies, A, B, and C II: Revenge of C. He invests 15 million dollars on each movie.
          That year, Alice backs some games. She backs three games: X, Y and Z HD. She buys into the $15 bracket of each of those games, which in all cases gives her a copy on release.

          The next year, the games and movies have come out.

          Movie A was a resounding hit and Bob gets $60 millions back. It was a good investment. Movie B was a moderate success and he gets $20 millions back. It wasn’t a very good investment. Movie C II: Revenge of C turned out to be a pyramid scam and the people running it fled to Cancún. Bob gets nothing. It was an awful investment.

          Game X was a resounding hit and sold millions. Game Y was a moderate hit and didn’t sell many units. Z HD’s creators’ all died in mysterious conditions after badmouthing the mysterious force capable of killing criminals through heart attacks. It’s obvious that Z HD was a bad investment because Alice didn’t get the game. But here’s the thing: even though Game X was a resonding hit, she didn’t like it very much. If she had waited until it was out, she might have read some reviews and picked it up on a 50% off sale. But Game Y? She loved game Y! She didn’t care it had a lukewarm reception, it was her game of the year and she played it way more than any $60 title she might have bought, and kept playing it almost every day for over a year.

          So you might be tempted to think Game X was a bad investment because it sold a lot and Alice didn’t get anything more than the game for its success, but it was a bad investment because she only got $7 worth of enjoyment out of it. Meanwhile, if she had invested on game Y, it would have been a poor investment because it would have poor returns, but Alice put $15 dollars into it and got over $60 of fun, so it was a good investment. (You might argue she might have waited for the game to come out and buy it anyway, but as it turns out this particular game made exactly its target on Kickstarter. So if she hadn’t backed the creators would have gotten nothing and Alice wouldn’t get a game she liked so much. So there.) Once you adjust everything so that the returns of the investment are aligned to fun rather than money, it all checks out.

          This is a pretty huge post.

      • stupid_mcgee says:

        Kickstarter can never deliver dividends because dividends are payout from companies to shareholders. Not all business profit payouts are dividends. If this were investing, you would be getting rates of return.

    • Fox89 says:

      The risk is there just as it is with an investment. Do we really need to nitpick at semantics here?

      • LionsPhil says:

        The whole Much of the article boils down to a semantics “nitpick”, so kinda? If using the wrong word is giving people the wrong mental slant on things, then I think it’s valid to argue to use the a more correct word.

        • Llewyn says:

          No, much of the article really boils down to a philosophical approach. I agree that patronage is the appropriate word, not investment, but that specific error on John’s part doesn’t in any way undermine the truth of everything else he wrote.

          • LionsPhil says:

            Yeah, I agree with the article in general. I just think it berates a wrong word, then proceeds to use another less-than-great one.

      • stupid_mcgee says:

        Yes, we do. And here’s why: A shape with four sides connecting. Three sides are the same length, one side is longer. Two angles are the same. Is it still a square?

        We’re talking about terms that have specific meanings. If someone says the kerning is fucked up, it means the kerning is fucked up, not whatever you think kerning means is fucked up. And that’s the problem. When you use words in a context where you don’t understand their meaning, you’re just talking gibberish.

    • Talon2000uk says:

      Yes I think we do. :D

      “Investment

      An act of devoting time, money, effort, or energy to a particular undertaking with the expectation of a worthwhile result.”

      Expectation. Its a word. Look it up. :D

      • HadToLogin says:

        By that definition every time I buy already-made game I’m making an investment – I put money and devote time expecting being entertained.

        • The Random One says:

          People who do managerial stuff already use the word “investment” as a substitute for “cost”, their logic being that “cost” has a negative association with it. This gives you loony sentences like “The investment for the hotel stay at the course’s location will be…” but using “investment” to refer to a value you pay is not out of this world.

    • jrodman says:

      (EDIT: This was a reply to Ich Will’s reasonable insight of comparing a kickstarter backing to a bond, as opposed to a stock — not all investments are expected to deliver dividends.)

      It’s just that, in order to achieve a useful level of investor interest, bonds have typically had to balance the risk vs the return. But when your investors are notably naive, this is much less true.

      I wonder if one way of trueing this up would be to actually regard it a bit more formally as an investment with some rules in place for what can and can’t be done, or alternatively some requirement that the investors become edumucated on the realistic risks to qualify as some class of knowledgable investor.

      Or perhaps more simply you could split kickstarters into:

      * You will get the thing.
      * You may get the thing.

      Where games would mostly (but not always) be in that second category.

      • Ich Will says:

        Oh sorry about that – I deleted it before I saw that you had replied because I foresaw someone jumping in to explain the technicallities of why a kickstarter was not a bond, which I’m under no illusions, it’s not but you have quite succinctly made the point that I was trying to make!

      • MadTinkerer says:

        No, no, no. Games always belong in the second category. Because all Kickstarter projects belong in the second category.

        • jrodman says:

          @MadTinkerer:

          No, no, no. Games always belong in the second category. Because all Kickstarter projects belong in the second category.

          I .. don’t agree at all.

          Some kickstarters are like “We want to mass produce this specific t-shirt” and suchlike. All they have to do is

          * Take the money from the backers
          * Deliver some of it en-mass to the t-shirt making people
          * Deliver some more of it en masse to a mail-shit operation, or alternatively just do the mailing themselves.

          So there is very little expected risk, and there should be NO reason that the goods are not delivered, and if they’re not delivered you should get a refund.

          There’s a *lot* of kickstarters in this category, perhaps the majority.

          There are also kickstarters that are like “We need funds to achieve a community goal”, where the goal is something like restoring a theatre, or fixing a dance school, or whatever. These kickstarters are (often) even simpler:

          * Take the money from the backers
          * Give the money to professionals who do that type of work

          Of course, these types of kickstarters do not include any rewards besides encouragement ones, like “get a free ticket to one of our productions” or “complementary coffee mug”.

          Or “we need money to finish our album” types of kickstarters

          * Take money from the backers
          * Use it to pay for the studio time they
          * Pay some more to have the duplicators mass produce CDs, or just send out mp3 files

          All of these things are things that should *just happen*, and do. They don’t involve year-long gestation periods of trying to accomplish the goal, they represent a known, totally achievable quantity of work or expenditure that will be accomplished in nearly clockwork manner.

          The game kickstarters where it’s about “We need money to try to make a thing for a couple years” are really out of the ordinary.

          • The Random One says:

            @jrodman (I’m trying to reply to him but since the comments are broken (YOUR FAULT WILL) I probably won’t be able to)

            You’re right. It’s easier for us gaming people to forget that using Kickstarter for commercial projects is not what it was originally envisioned for. There are a lot of Kickstarters that are for, say, setting up an artistic intervention in some location. Those are closer to patronage; you pay because you want the project to go through, and you don’t get access for supporting, because its whole point is that it’s free for all to access.

            So there should be a third kind of Kickstarter: You won’t get the thing (often because there is no thing for you to get).

          • stupid_mcgee says:

            @ jrodman: Kickstarter was always intended to be about backing physical goods from an already in-place asset, not about providing long-term business nor project funding.

            And you’re right when you say that most Kickstarter projects are simple things, like, “we want 5,000 presses of our already recorded album onto vinyl.” The way many of the video game Kickstarters work is more like, “we have this great idea for an album and we have these people doing studio work and we want to record here. So, give us money so we can write a bunch of songs, record the album, get artwork made, and then publish the album.”

            In the normal pitch there’s a product that’s ready to be produced, they just need the funding to have it produced. For the video game pitch, you’re paying for an idea where the funds are being used for general purpose to create the project.

            With most normal Kickstarter projects, there is no risk. And these are the projects that Kickstarter was founded on. These newer models, I don’t like and they do not meld well with the stated intentions and TOS of Kickstarter. In fact, I would argue that Kickstarter should ban these kinds of pitches. If you want this kind of funding, there’s other crowdfunding sites that cater to this model. However, that will never happen. Primarily because video games tend to have larger funding projections than a band pressing their music or a dude making shirts. Since kickstarter makes more money if higher-valued projects succeed, Kickstarter is all but too happy to sit back and just let things play out how they will. After all, even though they completely facilitate every aspect of the transaction, they claim to bear absolutely no responsibility whatsoever.

            -edit-

            BTW, I really am very upset at how Kickstarter has progressed over the years. I was originally very hopeful for it. It provided a great avenue for inventors to get funds to take their projects from the garage to the factory.

            As someone who is prototyping some robotics right now, I can tell you that the process is difficult, intensive, and expensive. Luckily, I know how to 3D model. I took my model and sent it to a 3D printing service for the prototype parts. Tested them. And now I’m looking at injection molding facilities to produce the needed parts as well as breadboard automation. Again, it’s very nice that I have a wide skillset (graphic design, some fairly basic programming, 3d modeling (I dabble in music, too)) so I can do a lot of these things myself. Otherwise, I’d have to pay people.

            If I were to a do a Kickstarter it would be, “hey, I have this prototype of this thing. Here’s how it works. Isn’t that neat? I want x amount of money so I can pay for the parts, packaging, and a trip and entry fee to CES.” The typical idea is that backers provide a funding for product runs. Because these runs are in the levels of thousands (often tens of thousand or higher), there’s still a lot of profit to be made by selling the extra product, even after you’ve given the backers a copy of the product. Hence you’re funding a production run and hoping this person can sell these and then make more, beginning a business out of it.

            IMO, if you want to release a game on Kickstarter, the game should be finished. Or at least feature-complete. I don’t mean you can’t add features, but the game should be at a stage where development is on assets and on expanding these features. What you ask for is up to you. CES? PAX? Posters? Ads on RPS?

            The focus should not be, “we have an idea. Pay us and we’ll make it!” It should be, “here is our actual product. Isn’t it neat? We want to hire some QA people, do some debugging, release it and sell it to a publisher/pay the publishing fees ourselves.” Kickstarter was meant to help entrepreneurs get their goods out of prototyping and into production, not to fund a business’ basic funding nor its projects’ development cycle.

          • jrodman says:

            @stupid_mcgee: I sort of think that the “let’s make a game” scenario has some value, but the structure of Kickstarter as it currently is set up doesn’t support it well.

    • Arglebargle says:

      Absolutely. Patronage, not investment. The meanings or words are important. Otherwise we’d not read them so much.

    • sldsmkd says:

      I’ve put money into a few projects, and absolutely see it as patronage – but in a way that the load is spread across many patrons rather than one big patron paying for a vanity project. I absolutely don’t see sticking a $20 into a Kickstarter as a pre-order, but can see how that misconception can come around – especially as projects are tied into stretch goals and deliverables.

      I kind of fire and forget on crowd funded projects, you want to make something and I enjoyed your previous something so here have $20, send me an update from time to time and if it works out well great!

      Projects that heavily monetize crowd funding with endless stretch goals leave a bad taste in my mouth. Star Citizen is the prime example.

  6. shaydeeadi says:

    Takedown was garbage, but it’s ok. I wish they had taken an extra six months to improve the quality of the game as the map design was quite good even though there was only 4 maps on release (excluding firing ranges.) Unfortunately the missions seemed to lack any real focus and the AI was pretty horrible, unfortunately that ruined the small amount of playtime I granted it and with so much else to play I’m not too interested in following it.

    But, Shadowrun Returns was solid and enjoyable, I think they distributed the funds well considering it was originally about the editor and the campaign turned out pretty good, with the first expansion due to drop soon I think they did well. FTL was functional and enjoyable too, I’m really really looking forward to Planetary Annihilation (which is coming along superbly) and Wasteland 2 is looking pretty good right now. The REAL year of Kickstarter indeed, I am looking forward to witnessing these projects (and others) come to fruition.

    ALSO: Kickstarters should be seen more as super risky pre-purchases than investments really. There isn’t a return on it besides games and collectibles (if we keep it restricted to gaming.) Personally I wouldn’t ask for a refund on a failed project (barring extenuating circumstances) but I suppose it’s others prerogative if they want to.

    • Snargelfargen says:

      I’d forgotten that FTL was a kickstarter. It really was an unequivocal success and I would argue that’s it’s actually been quite influential among game developers.

      Shadowrun though… It still hasn’t fostered the online community that a lot of the backers were hoping for. There are too many intangibles involved to put the blame squarely on the developers or backers though. Neverwinter Nights’ persistent worlds were bizarrely succesful for a time, beyond the expectations of anybody involved. Repeating that must be like catching lightning in a bottle.

      I expect Star Citizen is going to be pretty disappointing for similiar reasons. Even if all the extra features are implemented succesfully (they probably will but much if it will arrive in updates post-release), the “investors” are expecting a finished product that is more than the sum of its parts. How are developers supposed to live up to that? The psychology behind those extra backer goals is the same that drives people to add hundreds of mods to an Elder Scrolls game. The result is rarely stable or coherent because the vision behind it has been passed through too many hands and too many changes.

      An actual response to your “ALSO”: The problem with these risky “pre-purchases” is that the games people think they are buying are often quite different from what actually ends up being produced.

  7. ramiz says:

    Really good article, I agree with everything. Well, first I saw a bit angry – but that’s just because I was rooting so hard for both Shadowrun and Broken Age, and I didn’t want to hear that they are just okay. But that is the truth, and now that I have accepted it, I don’t mind it anymore. Not perfect? Well, no games are, most certainly not my favourites (Fallout and Grim Fandango, for example). I backed two projects and am happy that the two projects came together and for the record – both are worth the money I paid.

    And it’s really important that you have mentioned: even if KS were a pre-ordering site – which it is NOT – there was absolutely no way to assure that some shit would not happen and the development would not be canceled. That’s the way it is! Don’t like it? – Don’t come to KS, stick to the games already out in the shops, there is a bunch of them anyway. :)

  8. Derk_Henderson says:

    “Investment” is generally how I’ve viewed Kickstarter, and hopefully I’ll see a good return, but I knew my pledges were a risk. I’m lucky enough to make the kind of disposable income where buying a game just isn’t a big deal for me, and so I’ve thrown the basic pledge level ($30-$50) at quite a few games that looked interesting, and have generally been pretty happy so far (just played Broken Age Part 1 over the weekend, really enjoyed it).

    I’ve made two huge pledges – I put in $350 for Eternity and $175 for Numenera, and those are my true investments. My parents were very anti-violent-videogames, so I really didn’t get much of a chance to play anything with first-person-shooter elements until college. I spent most of high school playing Civ 2, a few sports games, and RPGs (particularly the Baldur’s Gate series). BG2 is my favorite game of all time, and I just recently finished playing my second BG2:EE run (having already played the original BG2 some unreasonable number of times). I *love* old-school Western RPGs. It’s my favorite genre by far, and it’s basically dead and gone. I still play everything Bioware puts out, but they aren’t the same anymore. So for me, those games are an attempt to resurrect my favorite genre. I was willing to put that much money in because of the teams behind them – for Eternity in particular, the lineup of talent they have involved is almost the entire list of people I’d choose if I had to put together my ideal RPG Developer List.

    I hope the games are great. But they were worth the risk to me either way, because the real ideal outcome is that maybe my favorite game genre becomes a thing again. That, to me, is worth a very expensive gamble.

    • Talon2000uk says:

      I couldn’t have put it better myself and I tried lower in the comments. :D

  9. bar10dr says:

    I’ve kickstarted a lot of games, I think around 40. I’m so sick and tired of the AAA games with nothing new in them, I mostly play non AAA games now with a few exceptions and I couldn’t be happier. Some of the kickstarted games go sour, some deliver more than promised. At least its not the same old stale gameplay over and over again. I can understand why the big publishers can’t risk investor money on something new, but without vision, creating something different, something great that people will talk about 50 years from now and remember it with fondness, without the balls to go down unexplored paths in the halls of gameplay, what is the point of being in this industry at all.

  10. Sweetz says:

    I found Broken Age to be massively disappointing, but I may be a victim of my own overblown expectations. More than anything the game just seems to lack the “personality” of Full Throttle or Grim Fandango. The two main characters are boring, never really displaying the wit or charm of Ben or Manny. The puzzles are also simple to the point of being insulting. I realize that they wanted to step away from the silly leaps of logic of 90s adventures, by they went too far in the opposite direction and made the game so much more mundane as a result.

  11. Manic says:

    I’d really like to see some evolutions in crowdfunding. As it is now, a bunch of people put up money for a game that may or may not come out. If it does come out, they might get a copy, depending on the funding tier they opted into. And that’s it.

    When it comes down to it, Kickstarter can sometimes be a bunch of pre-orders coming in for a game that might not even be in development yet. And it works out great for developers–they get money up front, and then deliver the game. Anything after that is pure profit–they don’t have an investing publisher to pay back, or a debt incurred by making the game to make back. They got a huge investment with, essentially, no strings attached. Customers essentially donated money (hoping for a finished game) to an organization that then takes the money earned from these donations.

    I love indie devs, but at a certain point this is getting crazy. I think that crowdfunding, to survive and be trusted by consumers, has to change. I’d like to see a crowdfunding site that included a rate of return on profits. Instead of being donations, people would buy shares of stock in a game, much like a publisher. You and a thousand other people put down $25, and if the game profits past that investment the developer takes a portion, and the rest gets divided among the thousand shareholders. This would, I believe, draw savvy investors who are willing to take a chance to net a certain amount of return, while still providing a viable alternative to publishers.

    The other option might be that we see a lot of non-profit games crop up–that is, you and a thousand people invest $25. The developer works away and then releases the game as freeware. This could be thought of as a sort of grant, similar to how a lot of films and art are funded. However, this would be a crowdfunded grant, providing a viable alternative to charitable and government organizations.

    I’ve backed a few Kickstarters, but the risk of a game not coming out is too great for me to consider most projects. A rate of return other than a copy of a game might be a good motivator, as would a charitable donation to an dev I hope will create something great with that money. However, the promise of a game that has already been paid for is too flimsy a thing for me to not wait until it comes out–or doesn’t.

    • Aerothorn says:

      I think there’s a lot to be said for this idea, but I think the reason it hasn’t happened is that once you move into *actual* investing, you enter a complex web of laws and regulations, expose yourself to lawsuit risk, and have to devote time to navigating those structures rather than, say, making your game.

      • Manic says:

        IIRC last time I was talking about this with my family my mom mentioned that personal investors that are not buying stocks are required to be financially stable–that is, they have more than some amount of money in cash (I think $100,000?). The reasoning for this makes sense, since it prevents unsavvy and financially unsound investors from risking a lot of their stability on uncertain or even potentially fraudulent investments.

        However, I also think I heard about some proposed reform that would allow smaller investments from more investors, so we might be able to legally crowdfund in the future.

        Note: This is all half-remembered and probably wrong. Do not attempt to use this in a court of law.

        • jrodman says:

          Too late. I have already printed this out on my 9 pin dot-matrix printer (gravatar and everything) and will present it in a docket next week. YOU CANT STOP ME.

        • Shuck says:

          Yeah, legally this sort of crowd investment hasn’t been possible, at least in the US, though there has been a recent movement that’s sparked some reform. However, I fear that would-be game investors would expect that for $40 they’d get a game and a sizable chunk of the profits, and that’s not remotely realistic.

    • bills6693 says:

      I believe there actually was/is an ‘investment’ version of kickstarter, where potential investors, well, invest in companies in a crowd-funding kind of way. I think I heard about it on BBC Radio 4.

      No idea what its called, what happened to it (maybe its still going, maybe it didn’t work out), or any details. Just that I believe its out there.

      However as said above, there’s really a whole quagmire of potential legal issues to navigate and ramification for the company. In general, for funding a single game or something, its not a good idea IMHO.

    • Moraven says:

      US Congress were looking into updating the rules to allow for this type of investment. But as slow as they decide on things it probably is justified due to the nature of people getting scammed hard. In a way an IPO is just the same. You are investing in them for a % of the company in hopes they use the money to expand their business.

      Or nowadays it usually is executives who plan the IPO have a way to sell their share of the company for way to much.

    • drewski says:

      The problem with that form of investment is that it’s a beacon for Ponzi schemes if it’s not regulated well, which something like Kickstarter isn’t (or, indeed, at all).

      Securities are regulated for a reason, and it’s always going to be difficult to allow microscale investment whilst still providing sufficient protection from endemic fraud.

  12. mrpage says:

    Investors get stake in a business, and a share of the upside if the project goes well. None of that happens with a Kickstarter. Backers are much closer to being pre-orderers than anything else. Yes they take a risk, but it is not the same risk that investors take, and the tone of this goes too far in talking down to backers. They are taking on massive upside risk with almost no upside over what they would get if they bought the game on release.

    • derbefrier says:

      Just stating the obvious but there are different kinds of investments. You invest time in your hobbies, parents invest in their children etc… Kickstarter is an investment because there is an inherent risk. That risk being you may not get the game you thought you were getting or at all. Its not a preorders. Preorders guaruntee a product and has usually. Been in heavy development for a long time. Kickstarters are not that. As john said its important to make the distinction here because “preodrer” and “investment” come. With different expectations. You can choose to see it as a preorder if you insist but by doing that your attaching a set of expectations that can in no way be gaurunteed in the same way a traditional preorder from steam is.

  13. Laurentius says:

    From what I’ve seen so far Kickstarter games all already beating games published by big companies by huge margin, just by doing something new or different, even medicore ones are actually more interesting and memorable in the long run then big budgets games.

    PS. The Banner Saga is great, not perfect but great for everyone who likes TBS, seriously take Adam Smith ( and he’s was my favourite reviewer on RPS up midway 2013 ) of reviewing strategy games, the guy is clearly burnt out, i guess playing them for living does that you. The moment that next turn means ‘slog” or repetition it’s time to move to DMC or MGS:Revengeance.

    • derbefrier says:

      My only gripe with banner saga so far is I wish there were more of those awesome animated cut scenes and more voice acting. The game itself is pretty solid in my opinion.

  14. Scratches Beard With Pipe Stem says:

    I think of Kickstarter as a reputation manager. I wonder how the results of Broken Age and Banner Saga will affect those developers’ future Kickstarter efforts.

    • AngusPrune says:

      My philosophy, and I’d urge everyone to consider adopting it too, is that you only get one kickstarter. I like to back people’s development efforts, but if they can’t finance their next game with the profits of the one they just kickstarted then they’re a vanity publisher and you other people deserve your cash more.

      • jrodman says:

        Unless maybe that produced game is exactly the kind of thing you want more of, possibly?

        I mean what if the audience is niche enough that kickstarter is the means of having the game made at all. Is that such a bad thing?

        Granted, I’m doubtful we’ll see a lot of that.

      • aepervius says:

        That does not happen that way in real life really. See the average software project will get you a rendite of 10 to 20%. There are outlyers which give a rendite many time the initial sum (example , minecraft) but those are rare. So if you build something from a kickstarter of 1 million dollar, and get a rendite of 20%, you get back 1.2 million, still *not enough* to fully finance a game on your own. Heck if you think about it , why do you think so many normal game studio are under a publisher to advance them the fund ? Surely by your own reasonning they should be able to self finance by now ?

        Bottom line, you are expecting too muchand that won’t happen for your average kickstarter.

        I would suggest kickstarting a studio, then if the results is good consider kickstarting their next porject, and if it is bad, avoid them like plague.That make sense. But “only 1 kickstarting and you are done” make no sense.

        • AngusPrune says:

          I suspect you’re using figures for developers whose products are chiefly financed through publishers. If that were the case generally, the industry as a whole would operate at a loss and no games would be made at all, excluding arthouse productions made for love.

          For Kickstarter projects where every single sale is pure profit, there’s no excuse for operating at less than breakeven. If there’s no wider audience than the people who turned up to back it on kickstarter then you’ve made a serious clunker of game.

    • Philomelle says:

      Last I checked, the results of Broken Age led to thirty thousand people chuckling a collective sum of 1.2 million dollars at Brad Muir when he came to Kickstarter and got Tim Schafer to make some puppy eyes in the pitch video.

  15. damaki says:

    I’ve invested money in several nice project such as Skullgirls, Broken Age and Broken Sword 5, and a smallish french cardgame and arcade stick buttons. And I must admit that I am not that crazy about that kickstarter bubble. Sure, it’s nice to be involved with these projects, but now, I’d rather wait for a definitive version.
    I mean, it’s was perfect for Skullgirls and Broken Sword so far, but Broken Age is a ripoff. I can’t understand how a previous commenter is satisfied with half a game when he paid for an actual full game. An as of today, it’s just a beta, which I do not care about. I cannot be satisfied with a beta of half a game.
    So in the end, I will let the other guys give money out if they want. Now I’d rather wait or pay for an already greenlighted or a “rather good looking as it is” project. I’d rather let the other people roll their dice so that I always win in the end.

    • bigjig says:

      But Broken Sword 5 is also getting split in two parts (and delayed again mind you). So how is that kickstarter “perfect” and Broken Age a “ripoff”?

      • damaki says:

        Because the second part of Broken Sword 5 is free for kickstarter backers. You see the difference? The second part of Broken Age is not included in the kickstarter pledge I will have to pay a second time for it.

  16. rustybroomhandle says:

    Good wordage John W. I am in total agreement. And that’s just fine.

  17. Agnol117 says:

    I think a larger part of the issue is that Kickstarter is structured like a marketplace. The way the rewards are advertised, it’s hard to not see it as trying to say “for this much money you’re buying these things,” especially when that’s really how they’re trying to sell it.

  18. SRTie4k says:

    I’m still waiting for the only game I ever Kickstarted, Carmageddon Reincarnation, to release on Steam Early Access. The team has been very good at posting weekly updates to the backers, and the game looks in pretty decent shape right now from what I’ve seen of the few videos they’ve released.

    But I went into this knowing full well that the game could end up being as shoddy as Carma TDR 2000 was, although I’m hopeful it will be more along the lines of Carma 2 in the end. Whether I’m disappointed in or in love with the final project, I already accepted ahead of time that I had no expectations of “return on investment”.

    • HadToLogin says:

      I really hope peds will be more like Carma 1 (flying around throwing guts around) then in later games.

  19. subedii says:

    One of my favourite games from last year was a Kickstarter: Battle Worlds Kronos

    Interestingly enough, it’s actually one that almost nobody ever talked about, either in the lead up or after release. Even RPS’s promised Wot I Think never actually materialised.

    So not a well known title. But in a sense, I guess that’s kind of the point. Games like Kronos aren’t popular enough to warrant publishing deals, they aren’t done by major well known personalities or studios. But the style of game is something that has a dedicated following that is willing to pay for it and wants to see it released.

    I didn’t KS the game because it was going to be popular, but because it looked like exactly the style of game I wanted, and I believed the devs could deliver. And on release, that rang true on both counts. I got a ridiculous Battle Isle 2 sized wave of nostalgia playing through the first levels. It felt well done (complaints about tutorials aside) and it was very fun to play. And that’s enough. So if Kickstarter (or whatever) can make for more of these games that simply weren’t being made before, then I’m good with that.

    • colw00t says:

      Kronos is one that I backed on a whim, and it’s the purest success (well, maybe also FTL) out of the first wave of Kickstarter Games, imo. The only real complaint I have is that the tutorial drags on too long, but I also understand why it does so.

      Wasteland 2 is shaping up into exactly what I hoped it would be, and Dead State looks better every update.

      • aepervius says:

        How does it match against battle isle 1,2 and the last ne in 3d ? I loved all of them , even the revilled battle isle 3D (battle for andoria?). I might buy it.

        • subedii says:

          In terms of the way the game plays and feels, it’s very much Battle Isle 2: Redux. Although it’s been a long time since I played BI2 so I can’t say how closely it follows. Some differences but it uses a lot of the same systems and heck, even a lot of similar units. All that’s really missing is the ‘cutscene’ style 3D bit when 2 units engage.

          It can also be hard to get to grips with in the opening missions since the game presumes you know what you’re doing. I remember reading complaints about that (IIRC they’ve toned down the difficulty of the first missions now). Personally I found it fun, and it was nice to have the missions be interesting right from the start, but I suspect that’s because I had played BI2 before which meant I understood a lot of the core ideas (like using infantry to capture facilities, or how the more “damaged” a squad is the less damage it can dish out).

  20. Yosharian says:

    It shows how stupid some people are that this even needs to be said. Of course it’s a risky investment.

  21. InternetBatman says:

    I understand the sentiment behind this article, bad stuff happens and there’s a very real risk of kickstarter failure or mediocrity, but disagree with much of the remaining logic.

    Kickstarter is far more of a preorder than an investment. You get nothing but the goods you pledge for from the purchase, and they do not appreciate in value. It is either patronage or a risk adjusted purchase. Treating it like an investment is completely wrong-headed.

    Additionally, a model where developers can pledge to make a game and then unilaterally break that contract without consequences is a horrible deal for customers. Basically this article is asking backers to shoulder all the risk and then grin and bear it if it fails. Can you imagine if someone pre-ordered an Activision game two years early and then the company spent all the money but had no game to show for it? That’s just shitty.

    A system without consequences encourages grandiose promises, significant feature creep, and less financial risk taken by the developer (in the terms of working on a game before they launch a campaign). Under Walker’s proposed leniency, the only risk developers take is to their reputation, which isn’t much of a risk.

    Furthermore, Walker is repudiating his responsibility as a journalist to work in the best interests of his readers.

    • Ich Will says:

      Wait, so he wrote an article highlighting the risks of using kickstarter and he’s not working in the best interest of his readers….

    • The Random One says:

      There is a difference between saying “if you go to this country with high levels of violence you might be shot” and “if you are shot in that country you shouldn’t go to the police because it’s not a crime there”.

  22. sekullbe says:

    Agreed entirely. I don’t know if it will stick, but maybe the base reward should change from a copy of the game to a coupon for 100% off the price of the game at release. That way it’s at least more clear where the risk lies.

  23. JarinArenos says:

    This is something that I’ve always understood. I’ve actually backed a couple games that I might not even play, simply because I wanted to see them do well. It has always been understood thatI’m basically donating money, and the reward tier is a gift given in gratitude (I know there’s more obligation involved than this implies, but it’s a way of looking at it that helps anyway).

  24. tomimt says:

    I’ve backed 16 projects in Kickstarter, one of which I’ve become regret because of it most likely won’t ever get done because of the project running out of money. I asked for a refund, and while I don’t expect to get it any time soon, the project creator has promised it. If that will ever happen is an entirely different question.

    There’s also some projects which progress isn’t at the state I’d hope they would be at this point in time, but on the same time they are actively developed, so on those grounds I wouldn’t be asking refund. Some times project just needs a bit more time, which I fully understand and as long the crators know how to handle their budget I’m fine with that, despite it might in its turn lessen my interest towards the project.

  25. aludlam says:

    I thought Kickstarter had an innate way to solve this issue – deliverables. The Starter being Kicked puts out a set of goals and rewards – you fund me, I give you something. You give me more, I deliver more. If you don’t fund me, my project is not funded and I do not proceed.

    If it’s stated upfront to the investors that there is no deliverable, and they donate anyway, that’s fine. They know in advance that they’re spending their money on nothing, with the hope that they may become part of something magnificent. But I imagine it’s tough to get funding that way. I’ve only pledged to a few kickstarter campaigns, and all of them had hard deliverables. “I will provide you some sort of end product if you pay me now”. I cannot imagine a business relationship which says “I will try to make something if you pay me now”. That’s not how business works. In my opinion, a developer who isn’t confident they can deliver a finished good shouldn’t be attempting to crowdsource. I’d love to back the next big thing, but there are thousands of potential next big things, and I can’t spend $50 on every one of them.

    • jrodman says:

      Well, there is a category of things which work sort of like this. A variety of longer term works for hire do. The people with money set out a project that the people who have the right skills engage in. Risk exists for both parties, and typically the deal is structured in such a way where the money is provided over time, sometimes predicated on certain benchmarks towards delivery being accomplished. But some significant amount of money is usually provided before any real progress is demonstrated.

      These are pretty close to “I will try to make something if you pay me now”, but the amount that is “paid low” is usually significantly less than the total.

      That said, I don’t think for a second that Kickstarter or the campaigns I’ve seen on it are structured similarly to the above. Most are “we know we can make X/do X, we just need the funds”.

  26. Jimbo says:

    What we really need to do is stop talking about it as an investment. It can be either patronage or an early pre-order, depending on how it’s pitched.

    If they’re pitching it as “Pay $x and get a copy of the finished game!” then they’re just straight up selling a pre-order and it’s reasonable for them to be held accountable for making good on it, like they would be in any other industry.

    If they want to make it crystal clear that it’s just a donation which you may or may not ever see anything in return for then that’s fine too.

  27. Talon2000uk says:

    I’ve always looked at Kickstarter this way. To date I’ve pledge around £200 for 11 games and some more for Star Citizen not through the Kickstarter. So far I’ve had 2 games in total release. Well 1 game plus two half games, Shadow Run Returns, Broken Sword part one and Broken Age Part one.

    I’ve been very happy with my investments so far. I loved Shadow Run, it is not a huge game so far but for £15 I felt I got exactly what I pledge for and some of the PGC is excellent. I’m also really looking forward to the Berlin Campaign. Broken Sword was very good as well. Just like the originals and a lot of fun. Broken Age I’ve yet to play as I have internet access problems at the moment but I again only pledge £15 and I feel I’ve got my moneys worth from the documentary alone and at this point the game is just a bonus.

    This year will see the release of most of the rest , Project Eternity, Jack Houston and the Necronauts, Tex Murphy – Project Fedora, Wasteland 2, Carmageddon: Reincarnation, Two Guys SpaceVenture – by the creators of Space Quest, but I will have to wait a bit longer for Star Citizen and Lacuna Passage. Some will be good, some will be bad and as you say some will be average.

    However for an average investment of £15 I will hopefully have some dam good game in genres that the big publishers won’t make games in and I feel just fine about that.

    Oh and without Kickstarter I wouldn’t ever be playing a Tex Murphy game again and that’s worth £200 of anyone money. Even if it’s shit. Which it won’t be. :D

  28. Azhrarn says:

    Kickstarters are indeed “investments” in that the game wouldn’t be made, or not nearly as soon, without the funds injected by their backers, but I thought it was common knowledge that there are always risks, and you really need to weigh the pros and cons of the situation (as well as the cost of entry) before deciding to take that risk or not.

    I’ve backed plenty of kickstarters over the past year (a few for miniature games, which are FAR more costly to get into than the average video game kickstarter), but each time it’s a balancing act with how much you’re willing to lose should things go south. You do not pledge what you can not afford to lose.

    That’s the risk you’re taking, am I willing to spend that money now, on the promise that it’ll reap a cool reward later, or do I feel that it is better to wait and hope the project succeeds without my assistance while keeping an eye on development and purchasing it once it is complete.

    It is generally as simple as that.

  29. Wulfram says:

    I should see how my bank feels about the “It was an investment so it’s OK if I don’t pay you back like I promised” line of argument.

    The reminder that Kickstarters are risky is worth saying, but that doesn’t take away the obligation from the game maker, nor does it make asking that the obligation that the game maker chose to undertake be fulfilled unreasonable.

    • Syphus says:

      I’m not sure if you’re being serious, or you don’t understand the difference between a bank and what this is. This is more like you putting money into a company, as an investor, and then it failing.

      • Wulfram says:

        In such a case you are still entitled to your share of the assets. Of course there may not be any left

        But in any case, it is much more like a loan.

        Party A pays Party B X in return for the promise of Y in the future.

        Party B may not be able to deliver, but that is true in both cases.

        • The Random One says:

          Which may not be enough to cover your initial investment.

          • Wulfram says:

            Of course. I’m not disputing that there is risk involved in kickstarters.

            But there’s still obligations towards backers, even if there is no fraud, and backers shouldn’t be guilted out of asking for those obligations to be fulfilled.

            There’s a big chance that there won’t be money for your refund, but that doesn’t mean you shouldn’t ask for one.

        • Syphus says:

          In the investing world, many investments function as loans.

    • chargen says:

      Let’s see how the company I bought stock in reacts to “I bought your shares at $20 and now they’re penny stocks, gimme my original investment back!”

      Of course, neither applies here.

    • The Random One says:

      Considering that your bank uses the money in your account as capital, and that if your bank goes bankrupt your savings are lost, I’d guess your bank would be pretty keen to tell you exactly that with regards to your account.

      • jrodman says:

        Well, not sure about where you live, but here if your bank goes bankrupt your savings are not lost, unless you have a very unusual amount of savings. Specifically the current guarantee is that your savings are insured for 250,000$ with each bank who has money of yours. So unless you have more than 250,000 in savings with a specific bank you can’t lose money if your bank goes bankrupt.

        I would be rather surprised if your locality does not have similar arrangements.

        • The Random One says:

          I’d argue that in that case you’d get an insurance payout equal in value to the money you had in your account and not the money in your account per se, but that’s putting such a fine point to it I’d break the third dimension and collapse us all into an infinite tesseract.

        • drewski says:

          Maybe Kickstarter should offer fulfilment insurance. Pay 10% of your pledge extra and guarantee your money back even if the project completely fails.

          • jrodman says:

            I was just nitpicking — I need to learn to do less of that — but your comment does amuse me.

      • Wulfram says:

        People wouldn’t expect you to believe that this was “just fine” though, would they?

        Though the Unwritten situation is fine, because they’re acting honourably and offering refunds. And some people are generous enough not to ask for those refunds, which is nice of them.

  30. Branthog says:

    Having backed 600 projects, I can tell you that we’ve already seen the results and they are mixed.

    I have seen great games come out of this and more to come.

    I have seen terrible games come out of this (Takedown: Red Sabre, for example).

    I have seen people who raised 700% of their desired funding just give up one day and tell people “sorry, this is too hard and I’m quitting”. Granted, Kickstarter TOS obligates projects to fulfill pledge rewards or refund them (so when a game is both the project and the pledge reward, they are obligating themselves to complete the project), but the truth is — just what the fuck is anyone going to do about it? Nothing.

    After fifty bucks here, twenty bucks there, a couple hundred bucks over here — I’ve largely quit on crowd-funding except for very exceptional projects. My experiment is done (other than watching the final projects complete and roll in over the next couple of years). It is one thing when a game comes out poorly, but it is another thing entirely when people take tens of thousands of dollars and then just give up. Sometimes due to medical issues or family issues or professional issues and sometimes due to mismanagement of the funds or simply “it’s too hard now”… It’s mostly those ones that have gotten to me.

    If Kickstarter gave a shit about their platform, I might feel differently. Unfortunately, they don’t. And while they’re busy not giving a damn or even following up on their own TOS with projects, they’re still letting existing projects double dip. Recently, one popular sci-fi MMO style game has been making the rounds. It is their second fundraising on Kickstarter… for the same project… even though they have not completed the first kickstarter project… In fact, the first kickstarter project’s due date expired two or three months ago and they have adjusted it to *next* November. So a project that already raised their money and then had to put the game off a year from schedule is allowed to go back to the well for more funding. Crazy.

    Crowd-funding is a fantastic model, but it needs the platforms for it to be more responsible and do more vetting. It needs them to do more than say “we processed the payment, it’s not our shit to care about anymore!”. That kind of attitude shows a lack of investment in their own business. It will lead to more people feeling burned over time as one or more projects utterly implode for backers . . . and when people don’t feel *any* security in your platform, there is no reason for them to participate in it.

    And that will harm those making responsible use of crowd-funding.

    • Moraven says:

      These small devs do not know how to plan out a proper Business Plan. Maybe they have “plan” but it probably is based on some made up estimates they came up with. I like the KS that reveal a little more about their budget plan and how long it will fund them for. Give quarterly updates on the progress and how much money is left.

      Wasteland 2 and Project Eternity will succeed since it is from a bigger developer that (generally) knows how to plan. Obviously Obsidian does not have the best track record but they know more realistic numbers to aim for. Double Fine was great it just proposing an Adventure game. But they made up no plan on how to properly use their budget. Its like they just started and eventually it was “Oh shit, we have no money in 2 months”.

      You wonder why big publisher might say no to them? Because they do not know how to write out a proper Business Plan.

  31. CookPassBabtridge says:

    Personally I view Kickstarter as a charity that I may benefit from, like giving to the Red Cross or St John’s Ambulance. Give them a fiver, then maybe they pick a bit of firework out of your eye next November.

    • CookPassBabtridge says:

      No wait hang on. Its gambling, isnt it.

      Kickstarter is one of those coin-operated cuddly toy claw-crane things like you get on Brighton pier, except with some other bugger working the controls.

      • Malibu Stacey says:

        I like how you manged to click the reply button on your own comment but not the edit button slightly to the left of it.

        So edgy!

  32. soulblur says:

    I’ve not invested so much money into the games I’ve kickstarted that I feel bad when some of them have been only ok (Shadowrun Returns) and a few have been bad (Godus) or disappeared (unwritten). The worst thing about Kickstarter for me is that feeling of sadness when a great idea, which I’ve followed for months, is lost in execution or runs out of money or fails even to be funded in the first place (The Realm, Ars Magica). That sense of potential lost is pretty powerful.

  33. MadTinkerer says:

    I have personally backed over fifty KS projects, mostly video games but also a few documentaries and board/card games. My experience has been thus:

    Documentaries: Disc-based publishing slows everything down, and editing seems to take forever, but I have yet to be disappointed by any documentary I’ve backed. The end result of each was superb, without exception.

    Board / Card Games: Despite being lumped together in the “games” category, Board/Card KS projects are a different beast. This seems to stem from things like cardboard not requiring debugging, and the biggest challenge usually being acquiring the materials cheaply enough. Since the Board/Card projects usually have the design done long ago, the physical production side of things all figured out at the start of the campaign and often set up ahead of time, you tend to get the pledge rewards a lot faster even though it’s all physical product.

    In other words, in terms of delivery time and chance of actual completion, board and card games tend to be more like how we want the video game kickstarters to be: semi-reliable preorders with the rare failure. For those who have sworn off video game projects, I suggest you take a look at the physical games section if you have any interest.

    (This is also where you find the tabletop RPG games. If you’re wondering what’s going on with everything that’s not D&D or GURPS, it seems KS is the platform of choice for virtually everyone else. Whether it’s new spin-off campaigns like Deadlands Noir, a completely new system and setting like Numenera or an edition update like Exalted 3rd edition, KS has revitalized the hobby for all the smaller RPG publishers.)

    Video Games: A few utter failures, but mostly positive. Some ended up mediocre but playable, and many ended up fantastic. Video games take a lot of time and effort to make, sometimes more than backers realize. Sometimes more than the producers realize. But sometimes actual success happens as well.

    Video games are a risky proposition for a number of reasons. Often delays need to happen, but if those delays put the producers over-budget, then they need another source of income. Most producers want to at least try to go full-time with a small team or solo, which is fine as long as they realize the risks ahead of time (I’m pretty sure the rule about posting risks on your KS page is to force producers to actually think hard about what they’re doing, rather than educating backers about risks.). Many, many of the projects I’ve backed have succeeded and even delivered in spite of these potential issues.

    Some producers budget their projects as supplementary to their main job. This tends to result in “slow and steady” development with periodic updates and eventual delivery that takes much longer but is more reliable in the end. But most prefer to go full time (and who can blame them?).

    I have never asked for a refund and frankly I consider anyone who does so to be scum regardless of what KS’ ToS says. When you back a KS project, you are throwing money away, or, at best, donating to a cause that very likely might indeed fail. That’s how you need to see it. Sometimes, it turns out you aren’t, and you get a nice game back. But you should never spend money on KS that you can’t afford to give to charity. And, like with charity, you are that much of a scumbag for demanding a refund if you do.

  34. robc says:

    I don’t understand how John Walker or any of the other commenters can claim backers aren’t entitled to their funded reward. As one of the first commenters posted, “the Kickstarter Terms of Service are very clear on this point. ‘Project Creators are required to fulfill all rewards of their successful fundraising campaigns or refund any Backer whose reward they do not or cannot fulfill.’” For anybody to claim otherwise is just factually wrong.

    That being said, there is nothing wrong with people making the personal choice to treat it as patronage or an investment with the possibility to fail. There is nothing wrong for people to feel pity for those running a failed project and not ask for a refund.

    What I would like to see is some projects being structured as an investment. Fund our project and buy 1 share in the profits. The developers can reserve a certain percentage of the profits for themselves, with backers buying from a pool of ‘public’ shares. If there is no profits, then there is no return, just like an investment. Maybe it would be too complicated for the developers to actually run something like that with thousands of backers.

  35. CookPassBabtridge says:

    A game called Unwritten not getting finished?
    And people were surprised. The clue was in the name.

    I blame the school system.

  36. Deano2099 says:

    “But the game, the other three quarters, was never a promise. And that, really, is how it should always be.”

    But it was. The reward promised was the game. Now, it might have been unfinished, it might have been a buggy mess, it might have been rubbish, but you still owe it (literally and legally) to the backers to deliver what you did. In DF’s case, had they just delivered part one of Broken Age, then said they couldn’t afford part 2, that would have been fine.

    Unwritten’s case is very different. They’ve spend all the money and have literally *nothing* to show for it. That’s not okay. Can’t deliver the project? Fine. That’s the risk you take. But let’s see what you did, let’s see how far you got, let’s at least see something that demonstrates you didn’t just piss all my money up the wall with no intention of every delivering the game. Because something else you said is the key here:

    “But we’re not talking about cases of fraud here – we’re talking about cases where the game just simply doesn’t come together, or is perhaps a dreadful game on release.”

    How do you know? In any case like this, how do you every verify that the person is telling the truth, and didn’t just spin a sob story from the start and never intended to deliver in the first place? Unless as a backer you insist on the project delivering *something* that demonstrates how the money was spent, then Kickstarter is dead in the water because it becomes entirely trivial to use it for a scam.

  37. Text_Fish says:

    Agree’d. All the people arguing over use of the term “investment” are just engaging in futile semantics. The long and short of it is, the only way to ensure your money is safe is to keep it to yourself — for the rest of us, there’s much excitement, enjoyment and generosity to be experienced by backing wisely.

  38. nimbulan says:

    It is the unfortunate reality that many of these projects may fail to be completed or fail to meet expectations. I personally have only backed a couple projects that are being run by people with a proven track record in the gaming industry so I have confidence that the end products will not only come to fruition, but be higher quality than the average Kickstarter project.

    It probably helps that I’m not as picky as one of my friends, who pretty much refuses to play Shadowrun Returns that he backed because the combat system is different from the original game, and he’s probably going to be the same way about Project Eternity.

  39. Retro says:

    Broken Age may ‘only’ be pretty good, but the documentation is IMO incredible – I am so glad that I spent my money on that kickstarter!

    I’ve also backed planetary annihilation and that also seems most promising, so I’m happy (YMMV)

  40. Jac says:

    I can never view kickstarter as an investment. It is simply a pledge/donation that you might get something out that you personally value at the amount you put in. Basically backers carry all the risk. If it succeeds and the develolers cover their costs and make a game without selling another copy then no one loses. If the developers don’t succeed then the backers lose. If the developers succeed and then go on to make a fortune then they win and no one loses. Point being only the backers can lose. This is not investment. Or certainly not one I would ever commit to.

    Early access is different as there is something, no matter the state, that you are willing to pay for, for the amount you pay with the promise that it might actually become a better experience afterwards.

    As others up thread have pointed out though am not sure how developers get around the terms of service without cleverer wording than they use now.

    2014 will be the year of the kickstsrter lawsuit.

  41. Entitled says:

    The people who argue just because Kickstarters may not materialize that makes them “donations” or “investments” are exactly the kind of suckers who would buy a bridge from a scammer and then rationalize that since there was always a risk that he doesn’t actually own a bridge, it was really always more of an investment.

    When you pay money for the promise of getting stuff, that’s a purchase. There is ALWAYS a risk that you will not get the purchased product, a company can go bankrupt during pre-orders phase just as well, an online ordered product might get lost in shipping, and a digital downloading website might be a scam that just eats your money.

    This doesn’t make either of these “not purchases”, only frauds if they fail to deliver.

    • Llewyn says:

      Actually, no. A lot of us are the kind of people who don’t generally buy into Kickstarters, precisely because we understand that it isn’t a purchase in any rational sense.

  42. namad says:

    no. no. no. John Walker you are mistaken. The fine print on the kickstarter website clearly states that they ARE purchases. purchases that are not investments. The way this is supposed to work is that you purchase a vastly overpriced autographed mug and the amount you’ve overpaid causes a movie or game or cake to get made. Legally kickstarter pledges are purchases that must be honored. As such making a copy of something that may never exist a reward is legally and morally dodgey. Swag should be the key to drumming up pledges not pre-order pricing for the video games. Pre-orders are pre-orders and crowdfunding is crowdfunding… most video game kickstarter campaigns have combined the two in a largely illegal manner.

    COVER THE FACTS PLEASE.

    • Syphus says:

      “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. ”

      Taken from: http://www.kickstarter.com/help/faq/kickstarter+basics?ref=faq_nav#Acco

      That sure sounds much more like an investment than a purchase. But please, show me the opposite.

      • ResonanceCascade says:

        This is a false dilemma.

        Video game Kickstarters are neither investments nor purchases any more than automobiles were either a new type of horse or a new type of wagon.

        They are crowdfunding. That isn’t just a fancy meaningless buzzword made to be abused by tech bloggers, it is actually a new way to think about the relationship between a game developer and its customers. To use a cliche, it is what it is.

        • Syphus says:

          2invest verb
          Definition of INVEST

          transitive verb
          1
          : to commit (money) in order to earn a financial return
          2
          : to make use of for future benefits or advantages
          3
          : to involve or engage especially emotionally

          Sounds exactly like what is being done. Just the financial return is given in the form of a product or othe reward, not monetarily.

          • ResonanceCascade says:

            If you insist on robbing the word of all nuance, that’s fine. But if we take the word as literally as you would like us to, then preordering fits the definition every bit as well as kickstarting does. Henceforth, I will be relegating management of my game preorders to my financial planner.

  43. alfredjfrankel says:

    my buddy’s step-aunt makes $82/hr on the computer. She has been out of work for 10 months but last month her paycheck was $18010 just working on the computer for a few hours. read this….
    http://www.dub30.com

  44. DarkFarmer says:

    I agree 100% with John’s sentiments here regarding Kickstarter. You could even apply some of these warnings, caveats, and what have ya’s to early access games, as well.

  45. Yachmenev says:

    Well written. Feels like an instruction that should be mandatory to everyone who thinks about backing a project.

    Yes, the terms say that the backers are entitled refunds if a project fails to materialize. But everyone needs to be a bit practical about it. The project owners are asking for kickstarter money because they don’t have them (the ones that do are the exceptions, not the rule). So if a project fails, where are the refund money supposed to come from, when they have been spent on the work so far?

    Don’t back if you can’t afford the risk that you might loose your money.

  46. Carra says:

    I’ve been spoiled by the first game that I’ve backed, FTL, turned out to be exceptionally good. It would be nice if all projects that I backed are that awesome but I’ll be glad if they turn out to be average to good.

    My kickstarter backlog is currently at16 games. Some of those I’ve backed because of the makers history (Broken Age, Broken Sword, Dreamfall, Divinity, Torment,…) and others because they looked very promising (Maia, Castle Story, FTL, Grim Dawn).

    All in all, it’s also a nice sign to the big publishers. Yes, I’m interested in Adventure games and RPG’s. Yes, I want a new Dungeon Keeper or Stronghold game. No, I don’t want another CoD.

  47. Harold Finch says:

    Kickstarter shouldn’t be used for videogames development, the risk involved is far too high for general members of the public to be exposed to and quite frankly there are a lot of irresponsible games developers charging onto Kickstarter taking advantage of people.

  48. imperialus says:

    KS is in a weird place. It’s not quite an investment, it’s not quite a preorder. I have Kickstarted more than a few different things, ranging from computer games to a massive series of 200 plastic miniatures for D&D, and the latter I pledged over 200 dollars for. Every penny I spend on KS I assume I’m not going to see anything for. I’m giving money to someone to chase a dream. If that dream works out, fan-frigging-tastic, but if it doesn’t, I’m not going to begrudge the creator for trying and failing.

    That said, I do research. I’ll pledge 20 bucks on a wing, a prayer and a good elevator pitch. That’s my limit though. If I’m going to pledge more, I need a roadmap, I need to see a plan, I need to see what is going where and how my money is going to be spent. Reaper, the company that made the D&D minis is a well established, and highly respected company within the industry, having been in business for almost 30 years now. They had a plan. They had a cost breakdown, and and explanation of how the whole shebang was going to work. That said, it was still a risk… By the time reapers KS was done they had earned over 3.4 million dollars and had promised 200+ mini’s to over 17,000 backers. That was massive, that was beyond anything Reaper had ever done in the past. There were a million different ways it could go wrong.

    But, I was cool with risking my 200 dollars. I wanted to see Reaper shoot for that moon. I wanted to see a small company succeed, and yes, I wanted my minis but that was secondary. I was funding someones dream. The KS was a huge success. The minis arrived, and Reaper has nearly trippled in size, moved their production out of China to the US and launched a second highly successful kickstarter. I helped inject life into a very niche industry, and I’m kinda proud of that. If my money had gone up in smoke… well at least I would have given them the chance to try.

  49. Grottismo says:

    Haven’t read the whole thing yet but DAMN that second picture is some pretty bad concept art. I might be literally missing the whole picture here but everything is barely readable, looks like someone is dodge burning, and the colours. I wouldn’t back who hired him for professional work D:

  50. Caiman says:

    I agree with the article entirely, but what surprises me most is that this needs to be explained to people again, and again, and again. Perhaps part of the problem is that many people were introduced to the concept of Kickstarter through journalists (present company excepted of course) who simply didn’t explain the implications of the entire thing very well or thoroughly, and of course most people don’t read the entire project description (that much is painfully obvious!) nor the content provided by Kickstarter about how crowdfunding works. For many, they just see an opportunity to put money down on a product they want, and then get rather disappointed when it doesn’t turn out to be what they expected. Welcome to life.

    • onyhow says:

      Yeah, I’m surprised too. I think that this should have been pretty damn obvious…

    • DatonKallandor says:

      Jesus H Christ on a Pogo Stick!
      “Perhaps part of the problem is that many people were introduced to the concept of Kickstarter through journalists (present company excepted of course) who simply didn’t explain the implications of the entire thing very well”

      Or you know the journalists writing THIS article are the ones who don’t get the facts about Kickstarter? Beause they’re wrong. It’s not an investment. If they didn’t ignore Kickstarter’s own WRITTEN TERMS OF SERVICE maybe they’d stop preaching wrong information and passing it off as though it was true.

      You can “agree with this article” all you want, that doesn’t make the article any less FACTUALLY wrong.