Kickstarter: Investment or Purchase?

Started by nomadseifer, October 11, 2013, 12:01:18 PM

Previous topic - Next topic

nomadseifer

So the kickstarter is approaching 100k and will probably go way over that before the end.  My question to everyone is:  Do you think Ludeon, or any developer, is obligated to put all of the kickstarter funds-over-goal directly towards the game?

In this case there have been no stretch goals announced, so I think not.  As far as I'm concerned any money that goes in after the original $20,000 is someone making a purchase, not an investment. 

Thoughts?
Love of an Idea is love of god - FLLW

Spike

Once the purchase goes through, it's his money.  Up to him if he decides to buy a pizza, or hire art design.  Actually, considering the quality of the game so far, and the updates I've seen from the videos, I hope he buys a pint and takes an evening off. :P

That's part of the problem of Kickstarter, from a contributor standpoint.  For example, I backed Clang, which has been "put on pause".  My money is gone, and I will probably get nothing for it.  That is a risk I decided to take.  With Rimworld, I'm confident that if nothing else, I will get a fun, playable version of the alpha as it is now.  Yes, I really hope that Tynan continues to develop it for a long time.  But if not, I think he'll still develop it to the point of a solid release.

Zorbane

1st question:  The money's going to go to Tynan which allows him to do this as a full time job.  If for example the Kickstarter "only" hit 20k (and money only trickled in from later purchases) he'd need to take up a job somewhere else and RimWorld would be come a part time job.  Updates would appear less regularly.

2nd:  To me it's a purchase.  Investing would mean you expect some kind of return for investing your money (fun times spent playing not included)

Semmy

A kickstarter is both i thinkt.


And to the TS stretchgoals were invented by projects wich went way over there needed amount.

Tynan in this case already stated he would use it to enhance the game.
Read the Q&A more about thatt in there.
The only thing necessary for the triumph of evil is for good men to do nothing.
Edmund Burke

Enjou

Yeah, it's a bit of both. You are investing in a product that you believe has the potential to be good, but you are also purchasing that product when or if it releases.

As to spending the money on the project vs. getting paid, the developer isn't necessarily obligated to spend more that they said was required on the project, but it would be foolish not to invest at least some portion of that back into the project to get better tools, better devs and artists, etc. so as to produce a better product that more people will buy after the product is made available to everyone to purchase. But if the dev wants to spend a little extra on themselves that's fine, so long as the obligation of delivering the product is met.

Dejix

As an avid Kickstarter I always view backing a project as both and investment and a purchase. I invest in projects and, should it succeed, get a product as a purchase for the return of my investment. If it were solely a purchase then a product would be guaranteed in return. As, in most cases, there is no finished product when pledging on Kickstarter this can't be true. I have backed a few successful projects that have, in the end, failed even when funding was 700% of the goal.

Now, with regards to where the money goes, I believe it is completely up to all developers to put as much of the funds as necessary to follow through on what was promised. Above and beyond that it is completely up to the developer. With a huge success in funding I would hope that it goes towards either expanding the promised product (before or after release) or making future products that I might be interested in.

Stretch goals don't have much to do with over-funding other acting like a carrot on a stick for those who invest. If the promised expansions to the project aren't planned to be a reality from the beginning, without the stretch goal being achieved, it will only delay the final release. In some cases it can turn a succinct project into a bloated monster where good design choices are tossed out the window to make everything work before the end of time.

wtb

Nah, a Kickstarter is always an investment. I think that's not debatable.
As a backer you have absolutely no guarantee that a project will become a product and overfunding does not change that. You don't have any legal rights to claim a product or sue someone or whatever, if the developer/the studio doesn't deliver. I think, far too many people do not realize that.

Same goes for the dollars: it's Tynans' choice alone what to do with the money. If he finds an artist who does the job for 2.000 instead of 20.000, he can decide to go cheapo and put the rest in his pocket. The backers would have no right to complain.

All that said: I think crowdfunding is a fantastic idea and I backed Rimworld via paypal. But it is all about trust and it's important to keep that in mind.

Haplo

My opinion on this is that everything he gets, exceeding the target goal, is mostly to make it easier for the developer to do his job.
By going though Kickstarter or PayPal, he provided a specific goal thta he likes to reach and you're paying him to support his way there. (You're his bank, giving him a kredit for his proposal.)
Everything additional to the target goal will most likely do something to make it a bit easier, to reach his goal or maybe even go further onward. But there isn't a definite promise for this.
Even if he goes and buys himself a home from all the money he'll be swimming in, (before taxes, expenses and everything else that tries to bankrupt you,) even that will most likely, maybe even indirectly, help going further on his way.

But I think 'break' is (mostly) right: You shouldn't forget that you have no real legal claim to get anything (more) for your money.
I'm not sure if it is really advisable to get the money without delivering at least the promised part (here: the game in the alpha version).
That may end in court as it could be seen as a sales contract. But I'm no lawyer, I don't know this for sure..  :)

Semmy

We should keep in mind that whatever extra the kickstarter gets is money that Tynan "might" use to enhance the game.

And he might be able to work on the game for a longer period of time without worrying about income.
You must see the money from the Kickstarter as a 1 time salary. He has a house car living expenses maybe even a way to expensive wife like me d-; just kidding incase my wife reads this and he must be able to support himself to be able to support the game for a longer period of time.
The only thing necessary for the triumph of evil is for good men to do nothing.
Edmund Burke

Pheanox

Kickstarter is an investment for sure.  Yes, Tynan is well over his goal, but that doesn't mean you are purchasing the game.  (Though I suppose in this case you technically are, since you get the pre-alpha around November with a certain tier).

The more money given to Tynan should be considered as an investment for Tynan to make more of the game, to be able to support it longer on his own without having to get a job at another developer.

Ben

You've got to remember that the Kick Starter gives you a copy of the game for every purchase over $20 so technically it's both. Whilst it's being funded back into the game he is obviously in the right to take profit for himself, or he's just given away $90,000 + worth of his game away for free, if he invests every single dollar. We all hope for a great game, and as long as we get that I couldn't care less where the spare money ends up.

Nero

In my business law class we discussed this. My teacher (a former practicing attorney) that legally it would most likely be considered an investment. You're receiving a fixed RoI. The money pledged to a game I expect to go into working on that game alone, not doing anything else. I am investing in a particular game and not a business entity.

It's like in the Shark Tank where a lot of times the investors are only investing in products and not businesses.

wtb

Quote from: Ben on October 11, 2013, 02:40:19 PM
You've got to remember that the Kick Starter gives you a copy of the game for every purchase over $20 so technically it's both.

No, it's really not. People are not purchasing something for $20, they are investing $20. The game you hopefully receive in the end is not a product you purchased, it is a "thank you" of the devs for funding the development.
It looks like a purchase, but it's not.

Seems like nitpicking, but purchasing and investing are really different things.

nomadseifer

Quote from: Nero on October 11, 2013, 03:23:53 PM
In my business law class we discussed this. My teacher (a former practicing attorney) that legally it would most likely be considered an investment. You're receiving a fixed RoI. The money pledged to a game I expect to go into working on that game alone, not doing anything else. I am investing in a particular game and not a business entity.

It's like in the Shark Tank where a lot of times the investors are only investing in products and not businesses.

Interesting point.  Only thing here I think is that the investment can not be fixed.  As far as I know, Tynan can not stop the kickstarter at any point, and just collect what hes at so far.  And he can not stop people from donating.  So even if he had a 'limit' in mind that he is going to use on the game exclusively, he could not stop more money than that from coming in.  So it may not be reasonable for him to use every dollar gained on this game. 

I find it interesting that Kickstarter can be used to simultaneously finance and sell a game. 

QuoteSeems like nitpicking, but purchasing and investing are really different things.

Well its a bit more complicated than that...

FROM KICKSTARTER
QuoteIs 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.) We crafted these terms to create a legal requirement for creators to follow through on their projects, and to give backers a recourse if they don't. 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.

I'm not trying to get into some huge debate that I've seen all over the internet already.  But basically, yes, there is legal recourse but it would not likely ever be financially viable or reasonable to actually employ it.  For example, if a developer just bought a fancy car and completely stopped production, maybe there'd be good reason to do something.  But that scenario is very very unlikely.  More likely, the developer just runs out of money to bring the product to a finished state (double fine adventure).  Suing someone in that case would be very inappropriate, and if they are incorporated, there would probably not be anything to be gained anyway. 

So, its an investment with some risk, but the reward tiers are definitely more than a 'thank you'. 
Love of an Idea is love of god - FLLW

wtb

I don't want to debate this either. Thanks for pointing out, that I oversimplified this a bit, although - like you already said - the legal obligation for the developer exists merely on paper.

I posted in the first place, because I read several times in the last month that people were complaining about some crowdfunding and early-access titles as if they were in the traditional customer role (while they are not). So when I read this threads' title, I needed to put my two cents here... :)