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Giving Kickstarter the kick: The great crowdfunding crash is upon us

How Oculus f*cked it up for everyone else

Giving Kickstarter the kick: The great crowdfunding crash is upon us

Crowdfunding needs a shift in attitude, and it needs to come from the companies who use services like Kickstarter to bring in large amounts of money that is not necessarily in good faith.

It was the Oculus buyout by Facebook that served as a powerful reminder: it's possible to misuse the system - and the ones hurt by this misuse are smaller companies who need the full benefit of crowdfunding.

See, for users, the perception is that crowdfunding brings projects to life that otherwise would not have existed. Essentially, a company seeking to crowdfund has to prove that there is a need for the money. So, they have to sell that this project can't exist without people giving them their money in some form. It's about fulfilling a crazy dream.

So, when Oculus sells to Facebook - which is not especially highly-regarded amongst the exact 'core' audience Oculus Rift seemed to be pitched at - backlash seems inevitable. After all, that money, while used to pay for posters, t-shirts, and the dev kits that got sent out, effectively afforded no further interest to the people who made Oculus what it was today.

After Oculus

But here's the thing: Oculus had multiple funding rounds from more traditional sources for startups. Essentially, all Kickstarer wound up being was a PR campaign that more than paid for itself.

When push came to shove, the company made a self-serving move because it could afford to: Kickstarter proffers no equity.

This isn't to say that those behind the company made the wrong move. The challenges that come with life as a startup combined with the threat of Sony's Project Morpheus mean a move to secure its long term future might have been a necessity.

And Facebook may truly offer Oculus the best opportunities. The acquisition may have been unexpected, but Mark Zuckerberg has been aggressive in ensuring that Facebook will go broke before it becomes irrelevant. Indeed, previous acquisition Instagram is yet to be 'ruined' by Facebook as many predicted just yet.

Previous acquisition Instagram is yet to be 'ruined' by Facebook as many predicted just yet.

But still, why does this sort of thing feel like a violation to users? Because it impacts their trust. Essentially, Oculus' promises came off as empty promises. Is it irrational? Sure. But giving money to a project months or years ahead of its eventual completion is not necessarily a prudent thing, either.

Companies that want to take advantage of crowdfunding need to keep this in mind: they don't have to necessarily play to reality, but rather to the expectations that their audience will have.

When a company decides to effectively just use crowdfunding as nothing but free PR, people are going to start to recognise this. It's something that threatens the future of crowdfunding as a legitimate funding tool, even if – on a case-by-case basis – it doesn't hurt the next glitz and glamorous startup like Oculus.

It's the smaller developers who need both the tangible and intangible benefits of crowdfunding that it will hit hardest.

What do you want?

See, there are plenty of projects from upstarts and small teams that legitimately need money from users to fund their projects. And they need users to trust that they're making an impossible dream come true - they need it to be fostered, because they need the intangible benefits of promotion and outreach that large companies can misuse.

Megan Fox of Glass Bottom Games pointed this out in a recent tweet:

Granted, the more than $25,000 she raised for Hot Tin Roof's Kickstarter helps too, but the campaign served as invaluable PR that she and her team were able to use to build up future hype for the game that could help its chances of being a success.

For independent developers, these resources that crowdfunding can provide are invaluable. And they shouldn't go away because others can exploit them for their own gain.

And it's not just large companies that run the risk of exploiting the benefits of crowdfunding. Plenty of smaller titles are put on Kickstarter and the like not because they necessarily need the money to exist, but because they serve the more nebulous goal of improving an unfinished product. This can even happen shortly before a release, when the money has no effective purpose beyond just being a glorified preorder campaign and opportunities to get PR.

Heck, with Patreon, now anyone, from developers to unscrupulous journalists can raise money for nebulous purposes, not even for the promotion of a particular project. Heck, just say you need help paying off your debts, or you'd like to carry on living in one of the world's most expensive cities, and money can come your way.

This era where anyone can ask for free money devalues those who could make the most use out of crowdfunding.

The end is nigh?

The end result? I think that there's a fatigue with crowdfunding. The PR benefits are shrinking, because who doesn't have a campaign to promote? And if the attitude among the ones holding the purse strings becomes one of scepticism, then crowdfunding has a bleak future.

It's also why two of my favourite projects are Dino Run 2 and the Ubuntu Edge. Both raised relatively-large sums of money that others would kill to have, especially in the case of the Ubuntu Edge, which is one of the biggest crowdfunding projects of all time. But because they fell short of what they needed, the projects never came to fruition.

Misuse breeds scepticism, and scepticism hurts those who really need crowdfunding.

They prove that crowdfunding can live up to the perception: that the creators really do need the money they're asking for.

And really, crowdfunding can do with realism on the part of backers, too: Double Fine was criticised by many, including me, for its Broken Age release plans, but its two-part release strategy has worked

No one complained about how Double Fine was raising money, given the positive critical reaction to the first act. Plus, another one of its games, Spacebase DF-9 - controversially funded through Indie Fund - has already recouped its investment.

Who knows, maybe Facebook will cause Oculus to live up to the very potential its Kickstarter campaign was sold on - and the anger over the buyout will just be a distant memory.

Still, I think those who partake in crowdfunding need to take their backers seriously, and realise that consumer perception of the way crowdfunding has gone needs to guide how they operate if they choose to use this funding model.

Misuse breeds scepticism, and scepticism hurts those who really need crowdfunding.

Chicago-based Carter Dotson is a senior writer at 148Apps.com, which was acquired by PocketGamer.biz publisher Steel Media in 2012.


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Freelance writer covering mobile and gaming for @toucharcade, @Gamezebo, and more!

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promoteindiegames hello@promoteindiegames.com
I've been thinking of setting up a crowdfunding platform specifically for indie game devs for some time now (I own www.fundindiegames.com and the same on Twitter), precisely because I wanted to give a space not only for the devs to fund their projects but to provide a space that perhaps would help foster a less cynical community towards helping the people who really need it.

Times have been financially though for me over the past few years, so I've not been able to get FundIndieGames built yet, but it still remains a plan of mine to do so (maybe I need to run a KickStarter to create the site :) )

I'm also in the midst of upgrading promoteindiegames.com to a "Crowdspeaking" platform.

The reason I am/want to do these things is to try and help foster the talent and hard working indie devs out there who are struggling to make their dreams reality, and to try to connect them with the people who want that too.

To me that's what indie game dev crowdfunding is all about, connecting the people who have a passion for making games to the people who have the same passion for playing them. I'm trying in my currently very small way to try to make that happen, because there's nothing that rubs me the wrong way more than talent not being realised or commitment not being helped.

The Patreon model is an interesting one. As has been already voiced, if people want to back or support individuals for whatever reasons, then what's wrong with that? I think there needs to be more of that. I'm not saying that either crowdfunding model is not open to misuse there will always be people who want to "game" the system but both these methods allow people to directly influence projects and individuals lives in a positive way and that to me is a good thing.
Tadhg Kelly
This article is conflating two very different things.

The first is the argument about campaign crowdfunding, as seen on Kickstarter and Indiegogo, and is essentially about both the inherent trust relationship, and how it's abused. It's fair to assess that in some cases campaigns go awry, or that the nature of the subsequent business changes.

In some cases that's down to pure necessity though. It is very hard to predict what a game, say, will actually cost to make before it's done because game production is just not easy to predict. It's not a case of being given a bowl made of money and making enough content to fill the bowl and presto.

In other cases it's down to the project being kickstarted actually being kickstarted. Oculus, for example, is in that vein. It needed the money to get underway but nobody seriously thought that Palmer and the boys and girls at Oculus would complete the mission with 2.5 measly million dollars. The anger there is more about who they chose to sell to, not that they got themselves bought. Had Valve or Google bought Oculus nobody would have minded at alll.

Then the second thing is mixing that argument up with Patreon. Why? Because Patreon is a fundamentally different model, one that I think is even more transparent. Y'see rather than front all of the needed cash from backers to developers and then hope, the maker is in constant communication with the audience and the audience for its part can pull out if it doesn't like what it sees. That to me is how it should be.

The last part of my comment is this: Carter seems to judge from the outset that both models are essentially sleazy (with the swipe at Laura and Tim most especially) and so his argument is largely about how less sleazy it needs to become from his standpoint before it's kosher. I challenge that assumption directly.

Aside from talk about how things must change "or else" (people have been saying that about every digital economic model for years, from free-to-play games through eBay auctions to AirBnB, and it hasn't happened), consider instead that there's a reason they work in the first place. Consider that crowdfunding is in fact inherently noble (certainly more so than many a free-to-play game, yet PG is generally quite supportive of f2p). Consider that the number of stories of Kickstarters actually gone awry is very low, of scam campaigns (scampaigns?) equally so. Consider that maybe it's actually not the end of decency for a jobbing writer to find some supporters to help pay her bills so that she can continue to produce the content that they value.

And then write an article about the pitfalls from that positive perspective. Lighten up Carter!
Carter Dotson
Well, here's the thing, Tadhg: the sleaziness is more of a slow erosion than anything. Consider the low delivery rates for one: http://kotaku.com/study-finds-kickstarter-games-arent-getting-finished-1509429821 - Kickstarters don't go wildly awry so much as they drift very slowly off the road. And when you're making promises to the general public in exchange for their money, I think there's a standard that entities should be subject to, because this slow erosion does ultimately hurt the ones who can make valid use of it. So yes, I think it's - if not sleazy, then at least rather suspect - that Oculus can receive vast financial support and then act against the public interest. Perhaps people need to accept this, but I'm far more willing to criticize the actions of the people asking for the public's money than the public who are buying in on the ideas and promises set forth.

As far as Patreon goes, I take big issue with it because at least Kickstarter et al are so much more product-based and concretely-outlined. Now, campaigns for a specific purpose that people can get something out of that they have an incentive to deliver on the money. And I think "fund my life" campaigns are better for people who actually NEED the money, like Brandon Boyer needing money for his cancer bills, versus "I can't manage my money, solve that problem for me." It's the triviality that bothers me because there are people and projects that shouldn't fall victim to the "yet another campaign" effect that's developing.

Perhaps this all isn't leading to a life-or-death situation for the business models, but the "else" still is going to harm worthy people.

Plus, I'm with Keith in a sense about journalists taking payments: it's best to keep them as far away from the paying audience as possible, and I think transactions are best served as a product-based service (like selling a newsletter subscription, like what baseball writer Joe Sheehan does), instead of being an open-ended thing where someone can give as much money as they want to an opinion maker.

As far as early access goes, I hope to be writing about it in length soon so I can't give my opinion away here. :-)

Thanks for commenting, Tadhg.
Keith Andrew
Likewise, I don't think sticking our fingers in our ears and pretending there hasn't been something of a reality check about crowdfunding in recent months gets us very far.

I've never been every keen on crowdfunding full stop - I've only contributed to one campaign to date - because it seemed to me that, even from the start, developers that could have gone to a publisher instead chose to go directly to their audience. That sounds great, but the relationship a publisher has with a developer is different to the one backers have with a developer - in the latter, the developer has turned the tables and has all the power.

Most devs deliver on their promises but I think it changed the relationship far too much - it tipped the balance. On that score, I think platforms like Patreon have the potential to be even worse. Doubtless, it plays host to correct and valuable causes, but I think it also runs the risk of taking 'advantage' of backers in much a similar manner.

Carter's take is an opinion, of course, but I think he's caught the mood post Oculus. Crowdfunding isn't an investment, it's a donation, and consumers need to be aware of this.
Tadhg Kelly
Where do you (or Carter) sit on paid alphas/early-access games?
ek mcalpine
Why are we mad at people for using crowdfunding for personal reasons? No one is forcing anyone to donate. Linking to someone who asked friends for money is a pretty shitty thing to do. Why take a dig at a talented, under-appreciated writer?
Carter Dotson
If she "asked friends" in a private and controlled setting, that would be one thing. But she used the outlet for her public persona as a member of the gaming media to promote her personal fundraising attempt to a wide audience. And yes, when you are a writer, you exist in the public sphere and thus what you make publicly available is thus ultimately fair game for criticism, regardless of intended audience. I found Russ Pitts' complaints about Jason Rohrer quoting his public tweets sent to others to be ultimately baseless because his Twitter serves as an outlet for his public persona as a writer. (Though Rohrer was certainly not acting in good faith with what he did, either. Life is shades of gray.) I hold Laura Kate Dale, and any other writer, to this standard, especially considering that a key tenet of journalism is bringing to light things that people don't want to be known.

And she's certainly renowned enough that I can merely link to her blog without mentioning anything about her person and a wave of defenders can come in criticizing me for attacking her, rather than discussing the merits of my argument So I hardly think it's punching downward. I imagine she's a good enough person to have gotten so much support and to have people willing to vehemently defend her. But such defenses of her are not defenses of her actions in this specific circumstance which I am criticizing.
Keith Andrew
Wow. Brilliant.
Rebecca Tilley
Okay, this is a fucking awful example of journalism. Who gives a shit if people are asking their followers for money, no one's forcing them to pay. You need to remove the links to those articles as you are making already vulnerable people more unsafe. I'm not sure about the other person but Laura Kate has been the target several times of online vitriol and this would cause more distress to someone you already know is in distress (you obviously know about her gender issues, even if you did remove it from the article.) This is wrong and I am pretty disgusted.
Keith Andrew
Nothing has been 'removed from the article.'
Rebecca Tilley
NOT. THE. POINT.
Keith Andrew
It's not a lie. No edits have been made. This is how the article went live at 6.30 pm. I cannot stress this enough.
Rebecca Tilley
That's a lie because I saw it myself. Even so, that wasn't the point. It's disgusting punching downwards at people who don't deserve it and it should never have made it through editing.
Keith Andrew
Rebecca, I say again, this article has not been edited since it went live.

It's not a case of 'not remembering'. I'm the editor of the site, and I can tell you, no edits have been made.
Rebecca Tilley
Even without that fact, they are both low, inappropriate digs at struggling writers who don't deserve it. Awful.
Rebecca Tilley
I don't have proof but I do know that it pointed out the fact that she was trans when saying that she asked for help with her debts. If you don't remember that, cool, but it said that and it was removed about 20 minutes ago.
Keith Andrew
You've lost me, Rebecca. This is the original version of the article - it went live about an hour ago. No edit has been made to it and nothing removed.
Rebecca Tilley
Hmmmm I disagree cos it definitely mentioned that fact that she was trans. Like trans people don't deserve help or are supposed to be held to a higher standard? Mmmmm wrong