Washington state sues Kickstarted game creator who failed to deliver

> There were tons of backers investigating the life of ~REDACTED~ and his company Altius Management, especially after the artist reached out and told us that he never got a cent, and the US Playing Card Company said that they had never heard of the guy.

This was a case of selling customized playing cards through a well known company, it was a very low risk venture and he failed to make (assuming that quote is accurate) even minimal attempts to create what he started the Kickstarter for.

This wasn't even a "we screwed up and decided to give up early" it was a "lol thanks for the free $25k".

Each of the backers only contributed small amounts to the project, so a tort action by each/any of them would have been economically unfeasible. Hence, the consumer protection law kicks in, allowing the state to pursue action in their stead because it is far more cost-effective. (For example, the AG's office personnel are salaried, so legal fees aren't dependent on hours spent, etc.)

I'd certainly have ground to sue the artist or carpenter if they failed to eventually deliver a song or house (or indeed, didn't deliver one according to the terms of our agreement).

To illustrate the first point, companies have used Kickstarter for projects that were essentially fully developed first, and where the Kickstarter was only to provide capital for the production run (to alleviate the risk of scaling production wrong) -- with rewards being (or including) the thing being produced. As long as the rewards offered have a production cost (not retail value) less than the support level required to earn them, this eliminates the creators risk in production of a run that includes both the rewards and additional units to be sold through whatever "regular" means are appropriate to the product (ideally, it also provides buzz through the rewards to spur sales of those additional units). From that, the company can then assess future demand and appropriately scale later production runs.

To illustrate the second point, its quite possible to do a speculative product and offer rewards related to but not dependent on the project. For a game project, for instance, you could do things like exclusive prints of concept art, etc.

If you want people to share your risk, well, there are avenues that do that -- like sale of equity. Of course, those are more heavily regulated than simple sale of goods, because its very easy for avenues where you are asking the purchaser to assume risk to be used as vehicles for fraud.

And if Kickstarter commitments aren't enforced like sales commitments, it will be as much (or more) the doom of Kickstarter as anything that would strictly enforce them -- because as soon as any uncertainty is resolved in that direction, Kickstarter will become (and become known as) as an ideal vehicle for fraud, and backing projects on Kickstarter will become the equivalent of falling for a 419 scam.

My guess is that it will shake out that any delay is actionable for a suit, but communications are a mitigating factor. It depends a lot on what kind of defense Altius goes for.