Kickstarter Not Built for Ouya Failure.. Sort of.

piscian18

piscian18

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Kickstarter advises people to use "internet street smarts" when deciding which projects to back.

It started as a question about the Ouya, but the conversation soon ended up in uncharted country. The question was simple enough; if Ouya never materialized, would backers of Ouya's very successful Kickstarter campaign get their money back? Ouya wasn't sure, but said that the matter was ultimately a question of Kickstarter policy and not Ouya's call to make. And that is where the train went off the rails, as Kickstarter's founder Yancey Strickler admitted that there was no policy in place for Kickstarter failures, let alone refunds.

"You know, that would be new ground," said Strickler. "I don't know. I mean, no, I don't think that we would. But certainly, the kind of thing you're talking about is not a bridge that has been crossed yet. Someday it will. And you know, I think if something did go awry, it would be ... it wouldn't be my favorite day." It certainly wouldn't; and if you had been one of those who, say, plunked down $10,000 or more - $10,000 was the top tier Ouya pledge level - on a dud, it wouldn't be your favorite day either.

Kickstarter's FAQ is worth consulting. "It is the responsibility of the project creator to fulfill the promises of their project," it says, but adds "Kickstarter does not investigate a creator's ability to complete their project ... If something sounds too good to be true, it very well may be." Kickstarter's final piece of advice is to "use your internet street smarts." Meanwhile Kickstarter's Terms of Service are somewhat less fluffy: "The Company does not guarantee that any Content will be made available through the Service. The Company has no obligation to monitor the Service or Content ... Kickstarter does not offer refunds. A Project Creator is not required to grant a Backer's request for a refund unless the Project Creator is unable or unwilling to fulfil the reward." In the case of a campaign like Ouya, where the console was part of the reward for those who pledged $95 or more, presumably this translates to 'anyone whose reward package includes a console is entitled to a refund if no console is forthcoming,' But as Kickstarter has no means of facilitating this process it will be up to the goodwill and resources of the Project Creator, which may or may not be able to meet refund demands. In the event of fraud - internet street smarts sometimes aren't enough, after all - it would seem backers will be left out of pocket.

Whether or not Ouya becomes Kickstarter's first high profile failure doesn't really matter. What matters is that one of these days a major Kickstarter project will get funding and then implode; demands for repayment will follow. Strickler's least favorite day will have arrived, and what happens after that will probably determine whether Kickstarter retains its reputation as a trusted crowdfunder or vanishes like the works of Ozymandias.

Source: NPR, Kickstarter

UPDATE: Kickstarter representative Justin Kazmark has contacted me and advised that the NPR quote replicated here was, as Kazmark puts it, "a bit confusing." Kickstarter co-founder Yancey Strickler believed he was responding to a question about the Ouya console itself, and whether or not Kickstarter would get involved if the console failed to materialize. Cash refunds are handled as per Kickstarter's Terms of Service, as mentioned above.
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http://www.escapistmagazine.com/news/view/119413-Kickstarter-Not-Built-for-Ouya-Failure

I wanted post this since theres been some argument as to what exactly happens when you donate to a campaign.

The basic official stance is this - "Lets hope to god it doesn't happen" HOWEVER you are obligated a product within a foggy definition of what was presented on the kickstarter.

Regardless I think it's no different than when anyone clicks something someone links on the forums. It's in your ISP EULA. USE AT YOUR OWN RISK.
 
While I think most people are inherently honest, a lot of people are not...and even more people are well-intentioned have have no way of delivering on what they promise. IM GONNA MAKE A CONSOLE! Good luck with that. Some of the largest and wealthiest corporations on the planet can barely do it right.
 
Exactly. It doesn't take ill will to fail; sometimes it just works out that way, even if everyone involved is talented, motivated and qualified. Of course I wish the KS donors the best, I just hope those going into it have realistic expectations.
 
There have been a few articles on this popping up lately and Kickstarter really needs to create a system for creators to easily refund backers and they need a policy that demands creators give refunds in the event that the backed product does not release. It would put pressure on creators to make sure they have a clue what they're doing. It wouldn't stop the scam artists of course, but it would hopefully make the honest well-meaning types stop and think.
 
well it is quite possible to make the main thing is the console will prob be as good as a sony psp but without as much content. also it wont look as nice on a big screen.
 
I don't understand what is so surprising here. If you ask somebody for money because you think you have a great idea, then obviously you are asking because you aren't rich and you don't have the funds on hand to fund the project yourself. So if you donate money, and a person's idea doesn't pan out well then that was the risk that you took... you shouldn't expect money back. The project itself is being funded with donations so if the product is made, or attempted and nobody jumps on the idea or buys it, then how is the maker/creator/inventor supposed to pay you back? They shouldn't have to. Just like if you invest $100 into 1 slot machine, but get nothing in return you don't expect the casino to give you something back.

I guarantee that those people who donated $10,000 or more have enough money already that if they lose that $10,000, it won't hurt them too much because it's not like a investment in stocks where you get residual returns if the idea goes well. So I really don't understand what all the fuss is about, besides the problem of being able to recognize fake listings like that one that was advertising a video game. You just have to stay informed and use common sense on the amounts you donate.

Bottom line is if you donate, then don't donate because you want something in return for donating... donate because you want to support the project.
 
zamardii said:
I don't understand what is so surprising here. If you ask somebody for money because you think you have a great idea, then obviously you are asking because you aren't rich and you don't have the funds on hand to fund the project yourself. So if you donate money, and a person's idea doesn't pan out well then that was the risk that you took... you shouldn't expect money back. The project itself is being funded with donations so if the product is made, or attempted and nobody jumps on the idea or buys it, then how is the maker/creator/inventor supposed to pay you back? They shouldn't have to. Just like if you invest $100 into 1 slot machine, but get nothing in return you don't expect the casino to give you something back.

I guarantee that those people who donated $10,000 or more have enough money already that if they lose that $10,000, it won't hurt them too much because it's not like a investment in stocks where you get residual returns if the idea goes well. So I really don't understand what all the fuss is about, besides the problem of being able to recognize fake listings like that one that was advertising a video game. You just have to stay informed and use common sense on the amounts you donate.

Bottom line is if you donate, then don't donate because you want something in return for donating... donate because you want to support the project.
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If they promise you something in return for your funding then it is in fact not a donation. You are purchasing something.
 
Derangel said:
If they promise you something in return for your funding then it is in fact not a donation. You are purchasing something.
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Isn't there a "if" in there somewhere? Like, " You will get this IF it succeeds?"

Anyway, my point was not to expect anything in return if you donate. That way you'll be less disappointed.
 
zamardii said:
Isn't there a "if" in there somewhere? Like, " You will get this IF it succeeds?"

Anyway, my point was not to expect anything in return if you donate. That way you'll be less disappointed.
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I think it depends on the project. Some projects are "sold" as only needing Kickstarter funds to be completed. Now for projects where the creators are saying "we need these funds to get started and to prove to investors that there is interest" there is a specific level of control the creators don't have no matter their intentions or skill.
 
the way i see kickstarter projects is that it's the same as investing in any start-up company. there's always a chance to fail, and it's got to be a risk you're willing to take.
 
Derangel said:
I think it depends on the project. Some projects are "sold" as only needing Kickstarter funds to be completed. Now for projects where the creators are saying "we need these funds to get started and to prove to investors that there is interest" there is a specific level of control the creators don't have no matter their intentions or skill.
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I hate to say it because I'm a huge kickstarter fan but I'm noticing more and more kickstarter projects that are more just to generate hype than because they need money. Shadowrun Online an obvious Pay2Win MMO really pissed me off.
 
Derangel said:
If they promise you something in return for your funding then it is in fact not a donation. You are purchasing something.
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No you're not; you're donating to a project to produce something, which you should get at the end. If it doesn't pan out, I don't see how anyone could expect their money back - if that was the case, they wouldn't need Kickstarter and you'd just purchase the final product.

andrewbub said:
the way i see kickstarter projects is that it's the same as investing in any start-up company. there's always a chance to fail, and it's got to be a risk you're willing to take.
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Only on the downside - you lose your money. If the project is wildly successful, you get your game/product, sure, but you don't make any money off your investment. People dropping $10k on these things are crazy.
 
TwistedAegis said:
No you're not; you're donating to a project to produce something, which you should get at the end. If it doesn't pan out, I don't see how anyone could expect their money back - if that was the case, they wouldn't need Kickstarter and you'd just purchase the final product.
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It's kind of an odd spot. Project starters are advertising goods / services in exchange for money, and promises (contracts? Probably not in a strict legal sense, but there's a definite implication the same as if you pre-order a game/book/gadget) for funding.

For legitimate scams, I can certainly see class action lawsuits from backers, or individual claims from the larger donations being a possibility,
For simple failed projects, it would seem most backers would be so far down the pecking order that any repayment from a bankruptcy / liquidation process would yield little if anything. So it's unlikely to matter one way or the other.
 
Nothing much to add to it. Using your own common sense and "internet or gaming street smart" is pretty much something everyone should keep in mind.

To me, online games is something that's significantly more risky as these games relies on a large community and this is something I won't be betting on. Its difficult for small project to rally the large number of users that big titles like Guild Wars 2 or Diablo 3 can. Single player games on the other hand are able to stand on its own.

OUYA, depends on what you expect out of it. Its not going to be a Playstation or Xbox, that's for sure. The hardware itself is not impossible, I don't doubt they'll deliver the hardware. But those backers need to know what to expect in terms of gaming support.


TwistedAegis said:
Only on the downside - you lose your money. If the project is wildly successful, you get your game/product, sure, but you don't make any money off your investment. People dropping $10k on these things are crazy.
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Its certainly not an investment in that sense. Its more like say, I'm a billionaire and I love RPG games like Ultima series. There's a group of people who promise they can make that happen if they have the funding, and so I "invest" in their project by giving them the money no strings attached, in hopes of finally getting the game I want. This is why projects like Wasteland 2 is very successful, it appeals to the people who have always wanted another such game, but we know pretty well there's not a snowball chance in hell anyone else is ever going to make another such game. So we "invest" in Brian Fargo's proposed project, and the return would be having that game we wanted.

As for those who put hundreds or thousand of dollars into a project, its probably for the same reason people spend on collectors edition, just for the extra stuff and to feel special (having your name in credits, in game, etc etc...)
 
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I donated to a couple successful fashion Kickstarters mostly to just see what the hell the process is all about. I don't understand it at all yet but hopefully once the products start production it will become easier to figure out. Then maybe I'll venture into more.
 
Hornet said:
Nothing much to add to it. Using your own common sense and "internet or gaming street smart" is pretty much something everyone should keep in mind.

To me, online games is something that's significantly more risky as these games relies on a large community and this is something I won't be betting on. Its difficult for small project to rally the large number of users that big titles like Guild Wars 2 or Diablo 3 can. Single player games on the other hand are able to stand on its own.

OUYA, depends on what you expect out of it. Its not going to be a Playstation or Xbox, that's for sure. The hardware itself is not impossible, I don't doubt they'll deliver the hardware. But those backers need to know what to expect in terms of gaming support.




Its certainly not an investment in that sense. Its more like say, I'm a billionaire and I love RPG games like Ultima series. There's a group of people who promise they can make that happen if they have the funding, and so I "invest" in their project by giving them the money no strings attached, in hopes of finally getting the game I want. This is why projects like Wasteland 2 is very successful, it appeals to the people who have always wanted another such game, but we know pretty well there's not a snowball chance in hell anyone else is ever going to make another such game. So we "invest" in Brian Fargo's proposed project, and the return would be having that game we wanted.

As for those who put hundreds or thousand of dollars into a project, its probably for the same reason people spend on collectors edition, just for the extra stuff and to feel special (having your name in credits, in game, etc etc...)
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You can already buy nearly identical hardware for around $50 from chinese supply shops. Ouya doesnt have to do much here...
 
I think this falls in to the duh list. Look at it this way, kickstarter is a form of investing. You're investing cash for the promise of a product coming to market, instead of taking a % of profits, you agree to take a "gift". If the product fails to materialize, as startups often do, you're out that money as an investor. It's your right to try and get a return on your investment ...but usually the company is folded. Your claim to assets would be minimal and way at the back of the line. If fraud was involved, you could go after the people operating the company.

The whole idea of kickstarter is that it is to fund DEVELOPMENT of a product. People need to understand this.

Kickstarter is just the transaction market. Only way they're responsible is if they knowingly committed an act of deceit or omission. Such as if they are warned that a product may be fraudulent vaporware and choose to ignore it without doing due diligence.

My take.
 
i think the thing kickstarter is trying not to be is a "publisher". they are trying to be function to show games off for independent developers and a way for them to fund their projects. but if they start putting in stuff like what was talked about in the quoted section they would in term be acting as a publisher which they don't want to do. in the end it keeps them from being sued by people putting up money toward the developers as well. honestly i don't think its kickstarters responsibility to monitor everything that goes on either. it should be up to the developer and quite frankly the gaming community themselves to do the monitoring and research so they know what they are putting money into before they do so.

spidey's explanation is a good one as well.
 
Spidey329 said:
The whole idea of kickstarter is that it is to fund DEVELOPMENT of a product. People need to understand this.

Kickstarter is just the transaction market.
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There is reality and then there is perception. When you get scammed on eBay (which too is only a transaction market) then eBay refunds you your money. It's irrelevant that they weren't responsible for the scam.

I can't wait to see the whole Kickstarter and crowdfunding fad to rightfully implode.
 
It's easier to label something a fad than it is to endeavor to fully understand it.
 
wonderfield said:
It's easier to label something a fad than it is to endeavor to fully understand it.
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I believe that most people actually don't understand how Kickstarter works which is precisely why Kickstarter is still in business. People see Kickstarter projects and make an emotional rather than a rational choice. So only by fully understanding Kickstarter you become enlightened to realize its scam-esque existence.
 
Thuleman said:
I believe that most people actually don't understand how Kickstarter works which is precisely why Kickstarter is still in business. People see Kickstarter projects and make an emotional rather than a rational choice. So only by fully understanding Kickstarter you become enlightened to realize its scam-esque existence.
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I see your still crapping in every kickstarter thread you find by trying to spread your unsubstantiated bullshit.
 
wonderfield said:
It's easier to label something a fad than it is to endeavor to fully understand it.
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maybe... maybe not.


MySpace, Facebook (just watch), GroupOn, Digg, just to name a few of the ones that used to be top in their class but are now Has-Beens.


Facebook is still holding on because they did more than myspace about digging their claws much deeper into every day life/games/media. It won't last forever, nothing does.

Boil all the BS away and kickstarter is just a very very slow version of gambling. If things work out you have a good time, you get a trinket or discounted piece of software. If things don't work out you chalk it up to a loss and go about your business.

At the end of the day unless you know the guy doing the developing, it's akin to giving 10 dollars to the homeless guy on the corner who promises to "clean up his act and just needs the money for food".

Whether he goes and uses the money on food is out of our hands - and is just the risk you take by doing such things. Have I ever given money to Kickstarter or homeless people? Nope - with as scarce as money is these days my money goes for sure bets only.
 
It would be one thing if Kickstarter actually had you purchasing shares of a company so that you shared in its financial success if there was any - a true investment market. But instead, it allows unsophisticated (generally) "investors" to give up front money for the product alone and no additional return for their risk of capital, not to mention the time value of it (up front money vs delayed delivery of product).

Value is subjective, so if people feel that is worth the risk, that's fine. But I can't help but feel many don't fully understand the entire proposition, and are just handing away money in what could be a sucker's bet.

Many people on this board are against pre-orders, yet many are jumping on Kickstarter, which is orders of magnitude beyond a pre-order.
 
TwistedAegis said:
Many people on this board are against pre-orders, yet many are jumping on Kickstarter, which is orders of magnitude beyond a pre-order.
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It's an effect of pricing, really. People are more than willing to drop $10-$15 on a cheap, indie game because it's cheap. I also lost track of how many people dropped money on cheap steam games (indie or AAA) and are now stuck with huge "backlogs" of games they have but have trouble playing. The days games made with quality and pride are diminishing and starting to funnel into bargain bins since that's where everyone seems to flock to.
 
Plenty of stuff has been successfully delivered via Kickstarter, just not video games (yet).
 
LeninGHOLA said:
Plenty of stuff has been successfully delivered via Kickstarter, just not video games (yet).
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Good point. Although the intangibles and development timeframe of software, games in particular, we'll see how well suited Kickstarter is for it. For things like the iPhone cases, stands, etc - it is a much more straightforward process - we contacted X manufacturer who can fab Y number of these parts for Z dollars, etc.

Even if the game is completed and successfully coded, it could still be a totally different experience than expected. Of course, if it's only $10-$15 you're throwing it, it isn't the end of the world by any means. But quite a few people are donating much more than that.
 
Thuleman said:
So only by fully understanding Kickstarter you become enlightened to realize its scam-esque existence.
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"Scam-esque". That's cute.

collegeboy69us said:
MySpace, Facebook (just watch), GroupOn, Digg, just to name a few of the ones that used to be top in their class but are now Has-Beens.
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Those are individual entities, though. He was referring to both Kickstarter and crowdfunding in general as fads. While Kickstarter may not be the crowdfunding platform of choice in the next two to three years, crowdfunding itself is most certainly not going anywhere. At that point, he'll still be bitching about crowdfunding, and I'll be playing games on my Oculus Rift.
 
TwistedAegis said:
Good point. Although the intangibles and development timeframe of software, games in particular, we'll see how well suited Kickstarter is for it. For things like the iPhone cases, stands, etc - it is a much more straightforward process - we contacted X manufacturer who can fab Y number of these parts for Z dollars, etc.

Even if the game is completed and successfully coded, it could still be a totally different experience than expected. Of course, if it's only $10-$15 you're throwing it, it isn't the end of the world by any means. But quite a few people are donating much more than that.
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Yup. I gave $90 to the Wasteland 2 project. If it failed, I'd be somewhat pissed. However, the constant updates and asset showcases help ease my mind, as does the fact that the crew behind it has a track record of delivering good games. Certain startups have gotten a minimum pledge from me if their project looks good enough. I don't go over minimum for those because they are often unproven in the industry.

Those already established in the industry have a large incentive to deliver. Their reputation, income and future employment depend upon it. The platform is going to favor the Brian Fargos and Tim Schafers over the John Doe, until John Doe actually makes a game people like.
 
wonderfield said:
Those are individual entities, though. He was referring to both Kickstarter and crowdfunding in general as fads. While Kickstarter may not be the crowdfunding platform of choice in the next two to three years, crowdfunding itself is most certainly not going anywhere. At that point, he'll still be bitching about crowdfunding, and I'll be playing games on my Oculus Rift.
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Crowd funding is definitely not going anywhere. I'm surprised it didn't really take off earlier. It gives consumers a more direct role in what products make it to market.
 
LeninGHOLA said:
Plenty of stuff has been successfully delivered via Kickstarter, just not video games (yet).
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One has. FTL has been delivered on Steam. It is a "beta" at this point, it isn't on sale yet to people who didn't Kickstart it, but anyone who gave them enough to get a reward level ($10 or more) got Steam keys. I've installed it and played it and it is real, functional, and complete. They are just testing for bugs. In Microsoft terms, it would be Release Candidate.

So it has been successfully delivered by every standard. That is hasn't launched for retail sale is of no consequence to delivery for Kickstarter backers.

The other games I've backed have estimated release dates still in the future so we'll have to see what goes on.
 
It's been the rule for the last 50 years that 9 out of 10 small businesses fail within their first 2 years. Did people think kickstarted businesses were immune?

I think there is a relevant quote about learning from history or being doomed yada yada...
 
Kueller said:
It's been the rule for the last 50 years that 9 out of 10 small businesses fail within their first 2 years. Did people think kickstarted businesses were immune?

I think there is a relevant quote about learning from history or being doomed yada yada...
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Don't invest in anything, because its doomed to fail, yada yada yada...
 
Kueller said:
It's been the rule for the last 50 years that 9 out of 10 small businesses fail within their first 2 years. Did people think kickstarted businesses were immune?

I think there is a relevant quote about learning from history or being doomed yada yada...
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No it is 2/3rds of small businesses fail. However I think you misunderstand that. You seem to think it means "66% of small businesses never sell anything." No it actually means "66% of small businesses can't make enough money to be worth it for the owners (if they make any) so they fold."

Happened to my parents. They opened a quilt shop and it just wasn't worth it. So they went out of business. However during the time they were in business they did indeed sell fabric and quilting supplies, about half a million dollars a year worth, to any and all that wished to purchase them.

While I've no doubt there will be Kickstarters that fail to deliver, or that deliver shitty products, I have a feeling it will relatively few of them. More will "fail" in the business sense in that once the game is released, not a whole lot of people will buy it. However that doesn't matter to backers since they aren't backing for future financial return.
 
Derangel said:
If they promise you something in return for your funding then it is in fact not a donation. You are purchasing something.
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And if the company goes bankrupt, it won't be able to pay back it's creditors regardless.
 
Thuleman said:
I believe that most people actually don't understand how Kickstarter works which is precisely why Kickstarter is still in business. People see Kickstarter projects and make an emotional rather than a rational choice. So only by fully understanding Kickstarter you become enlightened to realize its scam-esque existence.
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Its not a scam. You back a project in the hopes they deliver something you really want to see funded. If they don't deliver you loose your money. Its not that hard to understand. :rolleyes:
 
Flogger23m said:
Its not a scam. You back a project in the hopes they deliver something you really want to see funded. If they don't deliver you loose your money. Its not that hard to understand. :rolleyes:
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While simple, many people don't understand their money is gone and they get nothing if the project fails.
 
Donate to kickstarter only if you can afford the risk. If not then you shouldnt even think about it.
 
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