Yogscast Kickstarter failure is a painful reminder of the risks of crowdfunding | Hacker News Reader

Yogscast Kickstarter failure is a painful reminder of the risks of crowdfunding

polygon.com

37 pointssmacktoward43 comments

So 13.000 people risked $50, and they lost. This is a painful reminder? It's just $50, it's no ones livelihood except the that of the Winterkewl people. They thought they could do something, turns out they couldn't.

Why does this author take offense to the tone? Isn't it clear as day? The game won't be made, so the backers won't get their reward. The studio did their best, but it wasn't enough so now they're stopping. Yes the Kickstarter says there should be a refund, but obviously the studio should have spend all of their money by now. That refund clause is just to make sure companies don't go taking money without being indebted to the backers if they fail. This one does go bankrupt, so everything is in good order.

He says Yogscast and Winterkewl are to blame, what for? For attempting to do something cool for their fans but failing? There's no shame in that.

So you're saying that if I overpromise something and get a bunch of people to give me money for it, I have an escape hatch to never repay the money? Then it's appealing to start some BS kickstarters, never deliver, and never refund the backers (and isn't that a problem already?).

Is Yogscast to blame? Sure - they misled people into paying for overhyped vaporware by throwing their name on it. They also have the money to refund people, and right now they're trying to hang on to their money as tightly as they can.

The escape hatch is either you going bankrupt and/or refunding people, sure. Not much of an escape hatch, really. Also, if you endorse and support something like this and it fails your reputation takes a hit.

I don't think it's a big deal when it comes to luxuries like that. Also, I like kickstarter for supporting people who do cool stuff they can't finance any other way. I really don't care if they fail or not too much since I don't spend much money on it. (Hey, and for me personally it has always worked out so far.)

Maybe we need a Kickstarter competitor that is a lot more clear in its marketing that backing a project is a donation to people making something you think is cool, with those people sending you something as thanks if they are able to. I get so frustrated with the perception of Kickstarter as a pre-pay store and Kickstarter's inability or unwillingness to change that perception.

No, because that would be mismanagement, it would make you liable for a lawsuit by the backers. The government would hold you personally responsible for the debt of your LLC and you might go to jail.

There's no escape hatch, this is business.

Yogscast has nothing to do with this endeavour, it's a separate LLC that attempted to make money. I don't see why Yogscast would not try to hang on to their money. They have mouths to feed as well don't they?

I don't get why people are out for blood over $50 lost on a bet.

> Yogscast has nothing to do with this endeavour, it's a separate LLC that attempted to make money

As TFA notes, the entire Kickstarter page (https://www.kickstarter.com/projects/winterkewlgames/yogvent...) is written from the perspective of Yogscast.

"We feel incredibly lucky to have been given the opportunity to entertain you as we play games made by other people..."

"Countless times we've felt limited by games and come across features we have wished we could change. 'Come On Blizz!' Simon would yell..."

"Since we'll be helping to develop the game we'll be able to ask YOU the players what features you want and actually have them created..."

"We aren't programmers or artists but luckily we have close friends at Winterkewl Games who are..."

"We started concept work and pre-production during our trip to Los Angeles in October 2011..."

"Winterkewl’s artists, modelers, animators and programmers are partnering with us on this project to create the game our community wants..."

"We're truly honored to have the opportunity to bring the Yogscast to life in a game of our own making..."

So it's not hard to see how people could have gotten the impression their involvement in the project would be deeper than "we handed it over to those guys, blame them."

Well it could be then that the backers stand a chance of winning a lawsuit against Yogscast for misleading them. Still I think it does depend a lot on the screens the backers saw when they commited their pledges. If those clearly said Winterkewl llc, then who knows what a judge would say?

The problem is than an inexperienced team will genuinely believe they can deliver an ambitious project and it takes someone with industry experience to see that they're biting off more than they can chew. I don't think anyone is being deliberately deceptive.

There should be some sort of due diligence process for projects that raise large amounts of money. I.E. if a project raises over 50k, they're obligated to hire a qualified and independent 3rd party to verify their project plan before any money is released.

>. if a project raises over 50k, they're obligated to hire a qualified and independent 3rd party to verify their project plan before any money is released.

Ya, that would be a complete logistical nightmare. It's simple: the more failures there are the in the market the more backers will react to projects with skepticism. The creators themselves then must go to greater lengths to prove the viability of the deliverable. If you end up getting sold vapourware then you learn a good life lesson for 50 bucks - caveat emptor.

It would only cost a small fraction of the money raised to prevent huge losses. Why shouldn't a project owner be obligated to spend a few percent of their total raised? The burden of logistics falls to the project owners. If they can't even be bothered to create and verify a project plan, then they don't deserve a single cent of the money they've raised anyway!

Because who watches the watchmen? Who is this "3rd party" company that verifies kickstarter projects? What metrics are they qualifying the projects?

My buddy Bob is a qualified and independent 3rd party and he has signed on with the project, so we are good to go right?

There's no shame in failing if you haven't taken your customers' money. "Kickstarter" is not synonymous with "give us your money and we'll try really hard, but if we fail, bummer for you".

Kickstarter backers are not customers. They are speculators. There may be shame in failing one's customers, but not speculators. Kickstarter backers know (or should) that any backed venture can fail.

Yes it is.

Caveat emptor.

A rule of thumb I learned from my parents long ago is when you see something you want to have, wait two weeks. If you still want it in two weeks, and can afford it, then buy it. I suspect a little bit of waiting and research would have informed these backers to the potential disaster that was coming. I remember this kickstarter and I thought it was a joke, but the fans don't want to hear that.

I think the problem with game related kickstarters is that a lot of the backers are probably fairly young and have a poor understanding of the amount of resources and risk involved in a project of this size. To an 18 year old $0.5 mil sounds like a lot of money and it would seem like it should be possible to make 3 games with that much but they don't understand how quickly it can get swallowed up because they have limited experience with the business world.

So they spent $50 dollars to learn a life lesson. Honestly, that much cheaper than it could be. If the game designers were deliberately trying to exploit this then there would be a problem.

And here I stand, having just ordered a OnePlus One, after I forgot all about that thing until I got a 'Here is an _invitation_ to buy our product, valid for 24 hours' mail.

I guess they succeeded to work around my own "Let me think about that" protection.

Lewis from Yogscast had some responses on Reddit a couple days ago:

http://www.reddit.com/r/Games/comments/2apng1/yogscast_cheat...

I think this is ripe for a lawsuit if money is not refunded. You can name both Yogscast and Winterkewl in the suit knowing that Yogscast has enough money to pay damages. Yogscast would then try to get out of the suit, but it'd be tricky for them to shed their responsibility in the matter (which apparently they're trying very hard to do, according to the article).

I can't imagine that Yogscast HAS any responsibility in the matter, considering the kickstarter was run by "Winterkewl Games LLC" who was developing their first game "in partnership with Yogscast"

Clearly they're the ones with the legal responsibility.

In lawsuits, it doesn't really matter. You can name anyone and everyone who's connected to the matter, and then sort out who gets dropped from the suit in court.

For example, if Yogscast was actually behind a lot of this, then it wouldn't be fair for them to hide behind a shell company that takes the blame. Otherwise you could just play a game of setting up little shell companies with no money, let them go bankrupt, etc.

Kickstarter's terms are very clear that you may receive nothing in return for your money, just like with other investments.

A) It's not an investment.

And B) their terms don't say anything like what you said:

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. (This is what creators see before they launch.) This information can serve as a basis for legal recourse if a creator doesn't fulfill their promises. 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.

https://www.kickstarter.com/help/faq/kickstarter+basics

I completely agree, but I think that it feels a lot more like an investment than a purchase. When I buy something it is because I want it more than I want my money. When I kickstart something it is because I want something that is not real to become real. I'm willing to risk wasting my money because I want cool people to do a cool thing. If they try hard and fail, I don't feel like they owe me anything else.

If the company has burned through all their money though, it's kinda hard to draw blood from a stone...

Since they've setup an LLC apparently, the end developers won't be held personally liable (and I don't think they shouldn't be), so if it comes to a lawsuit and there isn't any cash left to refund, that will be the end of it.

Kickstart is very clear that if it falls through, then it's not Kickstarter's problem.

The terms are very clear that there's a contract for the vendor to deliver or give a refund. There's certainly warnings that vendors can go bankrupt and leave you with nothing, and Kickstarter tries to ensure this won't be Kickstarter's problem.

But the vendors have a contract to deliver or refund.

Eh, that's how it goes. Sometimes development pans out; sometimes, it falls flat. With crowdfunding, we the people get to choose what things we want instead of publishers - which does mean we take the risks in case it misses the mark, and that is a very real risk.

I backed this one myself; a little bit, basically to see what happened. I like YOGS (back to when I played right alongside them on WoW, actually - small world!). They're always looking for another fun platform to play/tell stories with. The developer/s were inexperienced; although it wasn't quite clear just how green they were, I was aware that this one was looking a bit wobbly, as I'd never heard of them, and I was getting Molyneux vibes from the promises.

After I saw the alpha and beta, it was clear Winterkewl just couldn't deliver the goods to anything resembling a reasonable quality, which is why Yogscast didn't feel comfortable really going forward with it like that any more.

Pity about the lead dev's marriage. Isn't the first marriage killed by game development; won't be the last. Obviously the studio is bankrupt (or to the extent that it isn't, needs to refund).

Interesting to see Yogscast did at least get the source and assets out of the ruins of this project (although they're not very good assets, unless you really want a dwarf beard simulator), and they seem to have some kind of rescue plan with another studio. Let's see what happens.

I'm pretty sure no-one's swimming in half a million quids' worth of Jaffa cakes out of this one - but that's development. Sometimes it goes like this and goes nowhere. Sometimes (like Elite: Dangerous, which is turning out brilliant) it goes to the stars.

I'm actually glad we can choose to take these risks with crowdfunding. Just, you know, remember it's not a pre-order.

One of the more interesting things is that the demos were almost entirely just the demo form a marching cubes package they bought on the Unity Asset store for $100 [1]. Even down to the textures. The only additional feature were the two rigged characters and a those few building meshes.

The creator of that package, formerly an enthusiastic developer of a cool product, pulled his product from the asset store when yogcast's kickstarter hit half a million and apparently abandoned game development entirely.

[1] http://forum.unity3d.com/threads/introducing-voxelform-voxel...

I skimmed through that thread. For those interested, here are the salient posts.

Where winterkewl finds the package: http://forum.unity3d.com/threads/introducing-voxelform-voxel...

Where the creator acknowledges that winterkewl is using the package for the kickstarter campaign: http://forum.unity3d.com/threads/introducing-voxelform-voxel...

Here is where the creator pulls the package: http://forum.unity3d.com/threads/introducing-voxelform-voxel...

They should release the unfinished game and source code/assets to backers as a sort of liquidation.

I'm a little surprised this hasn't become an accepted practice yet... Tons of game developers fail to complete their projects for one reason or another, and the open-source scene for PC games is practically non-existent (actual games, not middle-ware). I wouldn't expect publishers to ever open-source unfinished games, but for indies that don't need to protect their IP, it seems like it would be a pretty great move to open-source your code and assets under a non-commercial license, if you can't complete a relatively mature project.

It seems to me that it would be beneficial to everyone involved... but maybe I am missing something.

It's because so often they leave it reluctantly, hoping to finish it sometime in the future. I also think there's the gaming community in general has a culture that puts ideas on a pedestal as this great commodity that's inherently valuable.

I wonder why this isn't their first reaction. The game looked reasonably well fleshed out in their latest videos (they'd even been releasing demos and alphas.)

Is it possible Winterkewl are holding on tight to the IP for some reason?

I guess, but an unfinished game and source is pretty valueless. People who work on an unfinished think there work adds up to something valuable (an engine, some art) but I have seen people try to sell unfinsihed projects many times and they are almost never valuable. And they are only valuable when they come with a team that is passionate about continuing to work on them.

The thing is, backers are getting nothing for their contribution. But the team didn't create nothing, they created a ton of art assets and code. It might have little market value, but to the contributors it's better than nothing.

What if the community decided to try to finish the game themselves? Would be interesting.

The failure of these Kickstarter projects is several orders of magnitude less than what we will see when crowdfunding of startups hits full stride. It's a snakeoil salesman's wet dream, to be able to sell a great idea, "fail" and say "sorry, we tried". The only difference is that it will be 13,000 people losing $50 as opposed to a handful of rich people losing $1M each.

Kickstarter is an interest free business loan with absolutely no obligation to deliver or recourse if they do not. You'd have to be a damned fool to Kickstart anything for-profit, and people Kickstarting things think you're an idiot ripe for exploitation. If you want money to start a project take out a loan or sell equity.

I don't really have a problem with this. Kickstarter projects shouldn't lead to backer entitlement. Campaigns are a risk that everyone can pitch in a little for in the hopes of success. Pledge at an amount appropriate to risk and you'll lose the bet here and there, but it's part of the game.

Kickstarter need to create rules that protect the backers who can't reasonably be expected to understand the risks. 1% of the project's funds could've paid for an industry expert to take a look at their project plan and tell you they are likely going to fail.

"The Yogscast's Yogventures was the first Kickstarter I ever saw that set off alarm bells in my head" What? Was this also the first Kickstarter the article author ever saw?

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