How will the Doom Kickstarter fraud scandal affect future Kickstarters?

Morrus · Jul 29, 2013

Talking of Kickstarters (as we do... a lot!) you may have heard about the "cancellation" (by which I mean "kept money; did not provide product") of The Doom That Came to Atlantic City. Eberron's Keith Baker stepped up (and to be clear, this was not his responsibliity: he had nothing to do with the Kickstarter project) and declared that since the rights had reverted back to him, and Lee Moyer, they'd give it to all the backers for free as a download. Not the same, obviously, but they didn't have to do that. Keith has now followed up with some more news.

So this is a high profile crash and burn. Some folks are talking fraud. Do you think this will affect Kickstarting?

Dannyalcatraz · Jul 29, 2013

It can't help but do so, at least in the short term. But as long as situations like this remain the minority, the market will only see it as a speed-bump.

After all, Enron didn't kill the stock market, did it?

Mark CMG · Jul 29, 2013

The failures still seem to be in the minority of projects by a wide margin. Although JoeGKushner has seen a number of slow movers and failures and tracks them on his website.

Here's some thoughts from successful game publisher and KS user Lester Smith -

http://lestersmith.com/2013/07/29/kickstarter-isnt-broken/?fb_source=pubv1

Janx · Jul 29, 2013

Morrus said:
So this is a high profile crash and burn. Some folks are talking fraud. Do you think this will affect Kickstarting?

Interesting. I guess the problem is, was this a Fraud, or was this "bad management"

Technically, the folks in KS sponsored money to make a game. it raised four times more money than the goal.

The Guy, seems to have used the money to incorporate, move himself, pay rent, and maybe pay for producing the product.

I have no doubt the guy did lousy management.

But none of those uses for money are illegal in and of themselves. Businesses do pay money to incorporate. busineses do pay rent. Businesses do pay to move employees.

If part of what it takes to produce something is to work full time on it, that heavily implies that a chunk of the KS money is paying for the worker's rent, food, etc.

When the Roll20 KS started, the whole reason was so the devs could focus all their time on the project. I run a software development department. I know EXACTLY what that means and what it costs. It means the people working on the project need to be paid $$$ so they can pay their rent and thus be able to continue to show up to work.

Again, I'm not siding with the guy, I'm just seeing that the situation can be legally ambiguous and things that "you didn't think you were paying for" are part of the cost of business.

Somebody producing a product SHOULD be represented by an LLC or something and NOT their own person. Somebody putting "full time work" into a project SHOULD be paid as a full time employee.

I think there needs to be classification of KS project sizes. Small scale implying this is being built after hours and in my living room. Large scale implying there's staffing and a facility to be paid for. Expectations on how the money is spent are not clearly defined.

I know there's a sense of running lean and mean with these KS projects, but clearly some of them are bigger operations.

Umbran · Jul 29, 2013

It is inevitable that some Kickstarter projects will fail. Why? Because projects in general sometimes fail. Things go wrong, costs get underestimated, and all that.

However, will this impact Kickstarters as a whole, or gaming kickstarters specifically? Probably not.

Why not? Two reasons:

1) Exposure probably isn't as great as you think. For example, this thread is the first I've ever heard of it. Sure, some folks who are really "in the know" will be influenced, but most people aren't "in the know". They're just folks who go, "Hey, I heard about this kickstarter, it sounds awesome! Here, take my money!"

2) Because, while this may be a big kerfuffle at the moment, large groups of people, collectively, have a short memory. A week or a month from now, nobody will remember this. Specifically, they won't remember it when they next look at a cool-sounding kickstarter.

delericho · Jul 29, 2013

Morrus said:
Talking of Kickstarters (as we do... a lot!) you may have heard about the "cancellation" (by which I mean "kept money; did not provide product") of The Doom That Came to Atlantic City.

So this is a high profile crash and burn. Some folks are talking fraud. Do you think this will affect Kickstarting?

I've been expecting a Kickstarter backlash pretty much since the start. I'm still sure it's coming. However, I don't think this will be the cause of the backlash, nor even particularly accelerate it - it's just one more bit of pressure against the dam.

(Basically, if you're* wanting to benefit from Kickstarter, you really need to be jumping in now, and you need your initial projects to succeed. When that backlash comes, it will be nigh-impossible for anyone 'unknown' to get funding - only people with a proven track record, or perhaps those with a "big name" behind the project, will have a chance.)

* Note: by "you" I mean you in general, not Morrus specifically, of course.

Alan Shutko · Jul 29, 2013

The biggest concern I have is already happening. Kickstarter has changed their terms of service so that the project needs to refund backers if the project cannot deliver the rewards.

If your kickstarted project includes a reward that is an output of the project (board game, device, etc) then that converts Kickstarter into a preorder store. It shifts all risk away from the backers (no longer investors, they're just purchasers) and onto the project. Worse, you need to refund more money than you received, because you also need to refund the money that Amazon and Kickstarter took as part of their cut.

That means that projects are going to take on less risk and go for sure things. We've seen how well that works in Hollywood, right?

dm4hire · Jul 30, 2013

I agree. Kickstarter is becoming more a preorder system than a project support fundraiser as mentioned.

Another trend that is irritating me is with the stretch goals. Instead of having rewards listed out that everyone can purchase in order to reach the primary goal and then have rewards for reaching stretch goals that everyone gets the new trend is adding new items you can buy once you reach a stretch goal. Why not just offer all the stuff up front instead of baiting me into giving you more money. It seems disingenuous and turns me off of funding the project. Case in point is the Numenera Map project where the stretch goals are only offering new versions of the primary maps you can purchase. Nothing creative is being added and it's stuff that should have been presented upfront imo and really shows lack of planning on his part.

In line with that is making the stretch rewards reserved for high paying levels. I understand the need for high level stuff but offer all the super cool stuff up front for those levels, don't taunt people by waving it in their face for those who can't afford it. If you want to have a really cool leather bound version then offer it up front at a set price, don't suddenly go "hey we'll also make a leather bound version you can order if we reach x dollars" or "hey if we make x dollars we'll convert your book over to the exclusive leather bound version if you paid $100." To me it should be "here's what you can buy and hey if we reach x dollars everyone who contributed at (first real level of contribution with a reward) or higher gets a really cool bonus item." Then have the really cool item be something that enhances or goes with the primary item, not a rehash of the primary done a different way. Case in point of the maps above. He could have listed all the awesome versions of the maps up front then said if we reach the stretch goal I'll include a specially designed ruler for measuring on the map (just and example so please don't focus on it) or some other cool map related thing.

So many of the methods they are using now just seems like a bad TV commercial. "But waits there's more. Call now and we'll also include this paring knife for no additional cost. It slices and dices and makes Julian fries." Basically stop the gimmicks sales approach and actually reward people for helping you make the product you want.

Fetfreak · Jul 30, 2013

I also think kickstarter has changed greatly.
My main concern is that a lot of people who are famous, have money and reputation (both in rpg community and outside) are still turning to kickstarter as a safe shot. Turning it into a pre-order for their future product.
Kickstarter doesn't really help the little guy anymore. The famous folk will invest into advertising, they'll easily create a buzz and when they launch, they get the staff pick, popular project and other first page features. While some other projects (good or bad), that do not have such exposure will be buried in kickstarter's poor search options.

I don't know if you guys know who Amanda Palmer is, but her kickstarter was literally a pre-order, it said so in the project's first line.
She was already famous, has money, is Niel Gaiman's wife and yet she needed a kickstarter to record an album.
The only thing that I really, really liked about her project is that she was really cheap. For a 1$ you could get the whole album to download.

It's a bit sad to me that even in a crowd funding scene it's easier for rich/famous people to make a lot of money, than it is to some unknown with an idea. When kickstarters started I though it will be a game changer but I guess it's far from it.
The last nail in the coffin of the whole story would be, if EA games along with Bioware turn to kickstarter for their next multimillion franchise.