Kickstarter games

[merithyn]

On the car ride home from Niagra Falls yesterday, my son mentioned that Kickstarter is the way that most indie games are now being launched. Put your idea out there for others to see, show your company's portfolio, and raise money in the process.

I checked out a few games on there last night when we got home just to see what was on the line, and wow, but there are a lot! Many of them have raised hundreds of thousands of dollars to make the games, too.

How does it work, though? I mean, people just give over cash in the hopes that the games will be made, but have no actual vested interest in the game? In other words, they donate toward the making of the game, but receive no return on that investment other than the t-shirt and first shot at downloading that comes with their $50 contribution?

[crazy canuck]

The question I have is how long will it take before the questionable types who try to convince people to buy penny stocks on various OTC markets will turn their full attention on the unregulated money making potential.

[MadImmortalMan]

Yeah, one of the main concerns with crowdfunding is that there is no way to enforce any rights for the buyer. You pay your money and what you get in return is hope.

[Valmy]

The question I have is how long will it take before the questionable types who try to convince people to buy penny stocks on various OTC markets will turn their full attention on the unregulated money making potential.

Well it has been years and they haven't yet.  A couple road blocks would be that you actually have to make your goal to get any money at all and it is easy to depledge if the word gets out you are shady.  It would require a reasonably sophisticated con operation and that may be alot of work for comparatively little gain compared to what can be scammed elsewhere.

[Valmy]

How does it work, though? I mean, people just give over cash in the hopes that the games will be made, but have no actual vested interest in the game? In other words, they donate toward the making of the game, but receive no return on that investment other than the t-shirt and first shot at downloading that comes with their $50 contribution?

Pretty much.  You are giving over the money because you want to support that studio making the sorts of games they make.  Generally they are games that would have been made 15 years ago but with today's crazy AAA budgets are no longer economical.  So you end up with a large market that is not being served hence kickstarter.

[Valmy]

Yeah, one of the main concerns with crowdfunding is that there is no way to enforce any rights for the buyer. You pay your money and what you get in return is hope.

Yeah.  You are not a customer here, you are a patron of the arts.  That crazy Mozart may finish your requiem mass or may die half-way through.

[crazy canuck]

The question I have is how long will it take before the questionable types who try to convince people to buy penny stocks on various OTC markets will turn their full attention on the unregulated money making potential.

Well it has been years and they haven't yet.  A couple road blocks would be that you actually have to make your goal to get any money at all and it is easy to depledge if the word gets out you are shady.  It would require a reasonably sophisticated con operation and that may be alot of work for comparatively little gain compared to what can be scammed elsewhere.

There is a lot of talk about how commercial enterprises can start getting funding through this sort of system.  It is entirely unregulated and open to enormous abuse.  It is easy to imagine someone putting out a pursuasive pitch with a target goal that has lots of fine print enabling them to pocket lots of case for next to no work.

Who decides when the money is earned?  If there is a disupute how is it resolved? and on and on and on.

This already happens in the regulated world of securities.  One wonders what the potential is in this enviornment for those kinds of fraudsters. 

[Valmy]

There is a lot of talk about how commercial enterprises can start getting funding through this sort of system.

I guess I am confused.  How are commerical enterprises not now getting funded through these sorts of systems?

It is entirely unregulated and open to enormous abuse.  It is easy to imagine someone putting out a pursuasive pitch with a target goal that has lots of fine print enabling them to pocket lots of case for next to no work.

Who decides when the money is earned?  If there is a disupute how is it resolved? and on and on and on.

This already happens in the regulated world of securities.  One wonders what the potential is in this enviornment for those kinds of fraudsters.

Well the difference is in securities people expect a return.  Here you are just giving somebody money without expecting much in return except the glory of having participated in making something.  So it is all about reputation and so forth.  It is hard to get a good amount of money without that reputation.  Also I question the assertion it is 'entirely unregulated'.  I mean Kickstarter is a company with policies and I presume they have to follow laws.

[garbon]

Well the difference is in securities people expect a return.  Here you are just giving somebody money without expecting much in return except the glory of having participated in making something.  So it is all about reputation and so forth.  It is hard to get a good amount of money without that reputation.

But that's not true. I think most people are going in expecting an end product. After all, I think there is very small pool of people who would are excited to give away money to a favorite game developer with no hope of a return.

[Valmy]

But that's not true. I think most people are going in expecting an end product. After all, I think there is very small pool of people who would are excited to give away money to a favorite game developer with no hope of a return.

Giving money to see the game (or art piece or music album or whatever) being made and giving money to see a return (as in to make money) are very different things.  Everybody who donates to a kickstarter understands the risks, but generally for game kickstarters you are donating to a developer with a track record of actually producing games so the risk is pretty small.

[garbon]

Giving money to see the game (or art piece or music album or whatever) being made and giving money to see a return (as in to make money) are very different things.

Yes and no. I mean in both cases, you are forking over money for something you expect to receive later.  I think that most people are expecting to eventually receive a game if they donate funds.

[crazy canuck]

I guess I am confused.  How are commerical enterprises not now getting funded through these sorts of systems?

A couple examples of how this can work.

http://www.forbes.com/sites/groupthink/2013/04/19/crowdfundings-latest-invasion-real-estate/

http://www.fundageek.com/WhatIsFG

I personally have "crowdfunded" some scentific research after I did some due diligence to ensure it was real.  But I can readily see how someone could easily be scammed into thinking they are funding something worthy when it is all a sham.

[Grey Fox]

Yes, it's the far west!

[Ed Anger]

I did the reaper minatures one and Steve Jackson's Ogre. I went with established company kickstarter's instead if some random dude's.

Got my minatures and am still waiting for Ogre. Ogre may give the UPS guy a hernia.

[frunk]

There is a lot of talk about how commercial enterprises can start getting funding through this sort of system.  It is entirely unregulated and open to enormous abuse.  It is easy to imagine someone putting out a pursuasive pitch with a target goal that has lots of fine print enabling them to pocket lots of case for next to no work.

Who decides when the money is earned?  If there is a disupute how is it resolved? and on and on and on.

This already happens in the regulated world of securities.  One wonders what the potential is in this enviornment for those kinds of fraudsters.

The money is held in escrow until the funding period is done.  Up until that point it is easy to get a refund, and even after that point you can sometimes still get a refund if you paid by credit card (and the payment was recent enough).  After the money is released (barring credit card refunds) it's much harder, and basically involves a lawsuit where you have very little chance of getting anything back unless you can show outright fraud.  The success rate of projects is reasonably high, but the failures have been pretty spectacular.  The best bet is established companies and studios that have a track record of success outside of Kickstarter.