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Money Troubles: What Happens When Kickstarters Fail?


Since Kickstarting games became a thing, everyone has soothsayed the possibility of how it could go wrong. There are two significant ways, really. A high profile game comes out, and is a big pile of doo-doo. Or a high profile game never comes out at all. Crucially, neither is in violation of any part of the Kickstarter model, and both are something that really should be accepted as a possibility by people pledging to projects. But that doesn't really change the fact that when it happens on a big scale, people are going to get a lot more wary.

And now the first example we've spotted of a game not appearing has happened, with the documented struggles of Haunts: The Manse Macabre. A successful $25,000 Kickstarter that has not only missed its release date, but isn't sure if it will ever make one.

Haunts perhaps received its primary attention after advertising on the My Brother, My Brother And Me podcast. That brought it to our attention, and we covered it in the Katchup. It was to be a multiplayer game in which people played as either the haunters or the haunted, humans or ghosts. Running for over a month, the Kickstarter was very slow to make its money, adding on about a thousand dollars a week, until a big spurt forward in its final run. In the end it exceeded its $25k goal, reaching $28,739.

And now it may not happen at all. Here's the thing: videogame projects don't always work out. They never have. No matter who is making the game, nor how it's funded, sometimes games just don't get to be games. The issue today is, Kickstarter funders haven't previously experienced this.

Haunts developer Rick Dakan explains in great depth, and with great sadness, about why his project has fallen to pieces. Starting with a very small development team, over the last few months most of them have left. One was always going back to his job at Google, but they'd hoped to have got a lot more done before then. Another received a job elsewhere so handed in his notice. And now Dakan is left with a buggy, unfinished game, written in a programming language he doesn't know, and in something of a pickle. Development took much longer than expected, new bugs are replacing old bugs, and it's just Rick and his artist Austin left at the studio. None of this was planned. And certainly none of this appears to be a misuse of $29k.

When you pledge money to a Kickstarter, you really are only ever funding the development of a project. But when tier rewards tend to promise the final result, and when the reward level that promises to provide the vanilla version of the game is usually the most popular, it's hard not to perceive it as pre-ordering. It shouldn't be, but it sure feels like it is. And it is of course ambiguous. The Kickstarter rules make it clear that projects can fail, and that developers should be open and honest about the issues they're facing, and be clear about how the money is being spent. However, it then also states that failing to meet promises is a legal matter.

Is a creator legally obligated to fulfill the promises of their project?

Yes. Kickstarter's Terms of Use require creators to fulfill all rewards of their project or refund any backer whose reward they do not or cannot fulfill. We crafted these terms to create a legal requirement for creators to follow through on their projects, and to give backers a recourse if they don't. We hope that backers will consider using this provision only in cases where they feel that a creator has not made a good faith effort to complete the project and fulfill.

As the statement says, while backers can take legal recourse at their reward not being received, it's still pretty shitty if they do when there's good faith in place. And that's a position some developers are going to be in. The money's going to be spent. They're not going to have $30k to give back to people once a development has failed. Because they spent it failing. And I'd argue that's perfectly reasonable.

Clearly this changes if a developer can't justify how the money has been spent. If you discovered you'd chucked $100 toward someone's Caribbean holiday, then yes, at that point it seems fair to want it back. But in the case of Dakan and Haunts, they've posted video footage of the state the game's in, how close it is to completion, and thus what it appears they've been spending the money on.

Watch on YouTube

What we're seeing here is the first Kickstarter funded gaming project to meet the fate of so many privately funded games. Backers are learning the lessons long known by publishers - funding game development is a risk. When Tim Schafer's adventure Kickstarter brought the phenomenon into the mainstream spotlight, he stated from the start that the project might be a massive failure - that was partly why they chose to make a documentary of the process. But this is a disclaimer pretty much no one else has made since. Most pledge videos and statements promise the moon, with enormous ambition, and no caveats. And it can surely only be a matter of time before that bites something high-profile hard on the arse. Because it's really not unrealistic for a couple of million dollars to be pissed away on a doomed game. In fact it happens very regularly, with far higher figures, whether that game is shelved mid-production, or released to dreadful reviews and minimal sales. And it's just unrealistic to think this is always because of the traditional publisher models. It's going to happen to crowd-funded games too. And the crowds are going to have to figure out whether they're willing to be a part of that.

So should people be demanding their money back for Haunts? Well, if at all, not just yet. Dakan still has plans to see it finished. After what he describes as "an enormously rough couple of months" and a year of his time, Dakan is now in talks with another studio who might be able to finish the game. Talking to Blue Mammoth Games, he hopes they might take on the rest of development, with Dakan and Austin continuing in their roles. That's a decision that will be made in a few weeks. And despite all this, and despite all the money being spent, Dakan has pledged to refund anyone who wants their money back out of his own pocket.

"We’re going to make this game, and if you can hang on for what looks to be a long road ahead, we will get it finished, but that’s not what I asked you to sign up for and it’s not what you gave us money for. email me directly through Kickstarter if you would like your pledge refunded."

Taking what Dakan says at face value, it's a sad tale. But taking it from a more mercenary view, it's an example of how pledging to a Kickstarter is a risk. While Kickstarter strongly encourages developers to be open and clear about the issues they're facing, and how they money is being spent even when it's going wrong, they also mandate that refunds should be given. But it's crucial to realise that Kickstarter has no way of enforcing this - once the money's been handed over, that's the end of their involvement beyond hosting the page. Should people wish to get their money back, it wouldn't be by going through them. On the day that happens on a high-profile, big budget project, it's going to get ugly. In the meantime, hopefully this is a reminder to those pledging that they're doing exactly that - they're not buying. And ideally, perhaps, people will acknowledge that pledging to a Kickstarter project is closer to philanthropy than pre-ordering.

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