Code Hero Kickstarter Goes Bad - UPDATED

[Andrew_C]

A scam artist wouldn't have had one alpha build already and been publicly working on the project over a year (he posted several times for help in the Unity forums). We really jump on anything that says "scam" too fast these days.

Thing is, no-one calls Moller Flying Cars nothing but a scam these days, despite the fact that over the last 40 years Moller has produced several semi-functional prototypes. The only surprising thing is that it took the SEC so long to crack down on him.

So it's not surprising that some people are still sceptical about this project, despite the guys activity on the Unity Forums and the presence of an alpha build. Although perhaps the problem here was a lack of publlic communications. A lot of projects seem to forget the importance of communication, or think that everyone is willing to sign up for yet another damn forum when Kickstarter is perfectly adequate for keeping your backers up to date with project news.

 

[Dryk]

I didn't back this but I thought it was a neat concept, I really want to see it come out (and be not shit)

 

[jmarquiso]

A scam artist wouldn't have had one alpha build already and been publicly working on the project over a year (he posted several times for help in the Unity forums). We really jump on anything that says "scam" too fast these days.

Thing is, no-one calls Moller Flying Cars nothing but a scam these days, despite the fact that over the last 40 years Moller has produced several semi-functional prototypes. The only surprising thing is that it took the SEC so long to crack down on him.

So it's not surprising that some people are still sceptical about this project, despite the guys activity on the Unity Forums and the presence of an alpha build. Although perhaps the problem here was a lack of publlic communications. A lot of projects seem to forget the importance of communication, or think that everyone is willing to sign up for yet another damn forum when Kickstarter is perfectly adequate for keeping your backers up to date with project news.

I don't disagree, but we also expect too much public communication before being ready to jump on people. Fact is the Escapist jumped on this story without sufficient investigation, and had a damning headline to boot. If they were more conservative and simply said "we haven't had contact with the dev", we'd have at least a more fleshed out story than what we got, which focused on a possible civil action.

He's a first time dev, making a complicated project, and mainly worked alone until successfully funded. There are probably worse "possible scams" (btw, I'm not saying the following is or isn't, my jury's still out): http://forum.wurmonline.com/index.php?/topic/69845-greed-monger/#entry688923

I'd say it's more naivite and inexperience rather than anything else. I wouldn't call it *scam* at all, especially when work obviously went into it.

 

[Baresark]

This whole concept is somewhat idiotic. I don't see any kind of class action lawsuit working out here, regardless of what people think they were promised. It basically states in the Kickstarter backer agreement that if you don't get a finished product, you ate the cost. I also loved the allegations of the developer recklessly spending the money without any kind of proof or examples of said recklessness. But, I'm glad the developer came forward and stated he is still working on this game and is making progress. The last thing I would care to see is a judge intervening on behalf of anyone towards Kickstarter and messing up their reasonably good setup. I think that gamers can be an immature crowd and they forget that while games are Kickstarted, there are a lot of other things that are Kickstarted that any rules forced on them by a judge could adversely affect. Those things include various types of films, books, comics, business endeavors, etc.

 

[Baresark]

I'm not sure if it works like that. He registered on Kickstarter as Alex Peake, and signed the Terms of Use that he understands that his pitch means a legally binding financial transaction.

Like you said, Kickstarted games are pre-orders. If I offer to sell you a product for money, after a given time, and then I fail to send it for too long after I get the money, then I owe you the money. Whether I planned to make my product through a company, and wheher it went bankrupt doesn't matter. It doesn't even matter if I don't actually have the money, so I can't actually pay your few bucks, I will still legally continue to be indebted to you, and the other backers, which is not a profitable place to be on the long term.

I'm not sure you grasp the concept of a LLC or "Limited Liability Company", which basically means that said person is liable for all risks with the wealth and assets of the company but NOT with his own. If there's nothing to get from the company after bankrupting it and selling whatever assets it might've had (which would primarily go to banks and other creditors and only if there's something left would reach "Backers") then tough luck. (you've likely just lost a few dozen dollars)

I understand the concept of a LLC, I'm just not sure that it applies here. If I walk up to you on the street, I offer to sell you a bridge, we sign a contract, and then you give me money and I give you no bridge, I can't just bring up some LLC that I own, file bankrupcy for it, and avoid paying you back that way.

First of all, because you made a contract with ME personally, not with an LLC in which I'm a shareholder. The two are separate legal entities. If you look at the Kickstarter page, Alex Peake sold the game under his own name.

Second, there is such a legal action as Piercing the corporate veil [http://en.wikipedia.org/wiki/Piercing_the_corporate_veil], which means that if it appears like a LLC was used as just a front by a single person, or if an LLC's main shareholder committed fraud, then the court can destroy the legal fiction of the LLC and let the owner be sued as an individual.

As far as we know just some guy who has a great idea, even if he steal money from the gamers he can just declare it as a bad investment and declare bankruptcy. He'll never work in the game industry again, but would he care? probably not

Third, a Kickstarter project is not an "investment" on the backer's part, it's a contract. If you are a construction company, and I pay you $200.000 to build me a house, and you accept the contract, then you can't just change your mind and not build the house after all, because it's a "bad investment". I don't give a fuck about your investment plans, I'm not your shareholder, I'm your contractor, and we had a deal.

Just because the time frame is longer in these cases like constructions or game developments, where the final subject of the transaction needs to get made, ultimately it is not different from pre-orders, r any other sale for that matter. Person asks for money, promises product for it. If erson doesn't deliver the product, then person is guilty of breach of contract.

As Additions to both of your statements:

1. Being responsible for the money is dependent on a couple of things.
- Did the backer offer a finished product as a reward?
- Can the backer prove in court that a project is not coming to fruition?
- it states specifically in the terms of use that the time frame is a best estimate and nothing more
- it also states that the company need only make a best effort attempt to provide the rewards. A successful Kickstarter does not guarantee a product.
- with the above stated, that means that the burden of proof still falls on the accusers and not the accused. Meaning that they would have to prove in a court of law that the creator did not make a substantial effort to provide the rewards listed.

2. Regarding LLC's - They are only protected under LLC licensing if they in fact registered a company and trademark as an LLC. This process can take several months and cost several thousand dollars in lawyer fees.
- not sure if this is how it was intended or just sounded, but a single individual owned company CAN be an LLC.
- it does not need to be beyond a single investor to form an LLC, LLC's are basically intended for this use. With multiple financial investors there are better company options.

That said, have at it fellas/ladies.

Edit: OOOOH, I forgot something. The contract in question is mediated through a third party, in this case Kickstarter. Meaning that both parties are stuck to the agreement outlined in the terms of service for Kickstarter.

 

[Aethren]

Ah, good old Escapist. When Cracked isn't enough for my daily humor fix, I can just come here and read similarly-hilarious articles written by people I can only imagine are also writers for Cracked, sharing the same level of journalistic integrity.

And the comments to said articles are arguably even more hilarious on this site.

 

[Andrew_C]

I don't disagree, but we also expect too much public communication before being ready to jump on people. Fact is the Escapist jumped on this story without sufficient investigation, and had a damning headline to boot. If they were more conservative and simply said "we haven't had contact with the dev", we'd have at least a more fleshed out story than what we got, which focused on a possible civil action.

He's a first time dev, making a complicated project, and mainly worked alone until successfully funded. There are probably worse "possible scams" (btw, I'm not saying the following is or isn't, my jury's still out): http://forum.wurmonline.com/index.php?/topic/69845-greed-monger/#entry688923

I'd say it's more naivite and inexperience rather than anything else. I wouldn't call it *scam* at all, especially when work obviously went into it.

Thing is, you shouldn't have to threaten lawsuits and go to the press to get a response out of a developer. I don't care how snowed under he is. It doesn't take long to put up a post on the project blog or Kickstarter, apologising for the lack of communication and explaining the project is still underway but you haven't had time to update the project news.

 

[jmarquiso]

Thing is, you shouldn't have to threaten lawsuits and go to the press to get a response out of a developer. I don't care how snowed under he is. It doesn't take long to put up a post on the project blog or Kickstarter, apologising for the lack of communication and explaining the project is still underway but you haven't had time to update the project news.

I don't disagree, and I think future devs should take such things under consideration in the future.

I should point out that even Deckard points out he isn't pursuing a lawsuit or threatening one. He was merely investigating if it was worth pursuing.

 

[Azuaron]

Even if he did fly private jets and host parties all over the place, he can probably just bankrupt his company and be off the hook for all the money.

I'm not sure if it works like that. He registered on Kickstarter as Alex Peake, and signed the Terms of Use that he understands that his pitch means a legally binding financial transaction.

Like you said, Kickstarted games are pre-orders. If I offer to sell you a product for money, after a given time, and then I fail to send it for too long after I get the money, then I owe you the money. Whether I planned to make my product through a company, and wheher it went bankrupt doesn't matter. It doesn't even matter if I don't actually have the money, so I can't actually pay your few bucks, I will still legally continue to be indebted to you, and the other backers, which is not a profitable place to be on the long term.

How he signed up for Kickstarter (as an individual or as a representative of his LLC) is the only relevant part of this, and I'm betting he signed up as a representative of his LLC. In which case, the corporation has a "responsibility" to refund the money, but it can't give back what it no longer has, and it can just bankrupt with no consequences to Peake.

If he did sign up for Kickstarter as an individual, he's screwed, and stupid enough to deserve it. Unless the recent update shows he's actually going to finish Code Hero, though even if he does, there's no way it's going to be any good. Be prepared for disappointment, backers!

 

[tautologico]

Inexperienced developers should start with less ambitious goals, maybe side projects, and then progress to their complete visions when they feel they're ready. Considering all I've read about this project, I don't think it's a scam but I doubt it will be delivered in good shape, and it may not be delivered at all.

 

[Callate]

"...And I am most certainly not booking first-class plane fare to Argentina while I write this reassuring statement."

 

[Entitled]

the corporation has a "responsibility" to refund the money, but it can't give back what it no longer has, and it can just bankrupt with no consequences to Peake.

Unless, like I said, the plaintiffs would just ask the court to lift the corporate veil [http://en.wikipedia.org/wiki/Piercing_the_corporate_veil#United_States], and treat the company and Peake as legally the same person, on the account of it "being used as a "façade" for dominant shareholder(s) personal dealings", for "wrongful conduct", and "siphoning of corporate funds". (and probably lots of other faults as well, assuming that he didn't actually bother to perfectly simulate a functioning company).

Fraud is not as easy as formally registering an LLC, and then getting a "scam everyone without consequences" card for it.
If the company doesn't really act the way as a business that is separate from the shareholder should, then by common law, it doesn't get the same protection either.

Though of course, probably people won't get back their money even if that guy gets left wearing nothing but a barrel, but at least it will warn other Kickstarters that they better deliver something if they don't want to end up like this.

 

[Azuaron]

the corporation has a "responsibility" to refund the money, but it can't give back what it no longer has, and it can just bankrupt with no consequences to Peake.

Unless, like I said, the plaintiffs would just ask the court to lift the corporate veil [http://en.wikipedia.org/wiki/Piercing_the_corporate_veil#United_States], and treat the company and Peake as legally the same person, on the account of it "being used as a "façade" for dominant shareholder(s) personal dealings", for "wrongful conduct", and "siphoning of corporate funds". (and probably lots of other faults as well, assuming that he didn't actually bother to perfectly simulate a functioning company).

Fraud is not as easy as formally registering an LLC, and then getting a "scam everyone without consequences" card for it.
If the company doesn't really act the way as a business that is separate from the shareholder should, then by common law, it doesn't get the same protection either.

Though of course, probably people won't get back their money even if that guy gets left wearing nothing but a barrel, but at least it will warn other Kickstarters that they better deliver something if they don't want to end up like this.

Piercing the corporate veil on an LLC is nearly impossible as long as the owner isn't intentionally stupid. He obviously has been doing some work on the game, and if the game goes under, it's going to be because he knows jack about budgeting, not because he grabbed everyone's money and sailed off into the sunset, perpetrating blatant fraud.

And even if he does end up with just a barrel, all it will tell other potential Kickstarters is that they should be more careful forming their LLC, since it really isn't hard to keep the veil intact.

 

[Gennadios]

So it's not surprising that some people are still sceptical about this project, despite the guys activity on the Unity Forums and the presence of an alpha build.

Code Hero is a Unity game? My mind is blown. So he's taking the most hobbyist friendly full-feature game engine out there and is trying to make it accessible to people that can't even work with that?

This is like inception.

 

[Andrew_C]

Code Hero is a Unity game? My mind is blown. So he's taking the most hobbyist friendly full-feature game engine out there and is trying to make it accessible to people that can't even work with that?

This is like inception.

Yeah, I think he's taken on a far bigger task than he realised.

IMHO if you want to learn the principles of programming but are intimidated by Python and company, something like Scratch or Alice would be more suitable, and are designed academics to teach those principles. On the other hand if you want to get into 3D programming, there are no real short cuts. You are going to have to learn C# or C++ eventually.

Still, it would be cool if he succeeded.

 

[grigjd3]

"...And I am most certainly not booking first-class plane fare to Argentina while I write this reassuring statement."

"Though I am having a hard time getting the sand out of my hair after burying myself in a box..."

 

[Icehearted]

Wait, you mean a kickstarter went BAD?! Please, pardon my shock.

Spoiler: My usual reaction to when people back or promote anything on kickstarter

 

[Schadrach]

This was bound to happen. And I'm sure it will happen again. Kickstarters are risky investments in general.

Pretty much. The moral of the story is don't throw money at a Kickstarter unless you are willing to accept the possibility of losing it. I've had pretty good luck with the ones I've backed though, excepting this one and the fact that no one ever ships on time. Ever.

I limit my game KS to small pledges on games by teams that either might actually succeed or are doing something sufficiently out there but technically feasible that tossing them $5-10 isn't a huge loss to see it probably made. I get quite a bit looser with my money for physical products.

The way I look at it, Kickstarter is basically crowd-sourced Venture Capitalism. It's a high risk investment, particularly backing video games. I don't expect every project to deliver what it promises, but those that do will hopefully make up for those that failed.

I backed 5 computer game projects on Kickstarter this year, I only expect 1 of them to succeed. That one being The Banner Saga and so far it is turning out to be a very different game than I expected, but still good. I have high hopes for Wasteland 2 and Project Eternity, but both have still to produce anything tangible.

The other 2 I have written off to experience.

However I can understand people who pledged hundreds, or even thousands feeling pissed off.

You pretty much summed up how I feel about KS, except I've thrown money at more projects than you, and significantly larger amounts at some of the non-software ones.

I'd be interested to know which games you have "written off to experience".

I've supported 2 Kickstarts, and only at the 10 or 15 dollar level. I would never invest heavily in a project unless I'm going to get some return on it. Who are these people who donate thousands of dollars anyway? Optimistic to say the least. Remember, inside every cynic there is a dead idealist.

I've never donated thousands, but I've donated into the triple digits on a few projects. One was making fancy dice, and I preordered several sets (Artisan Dice, I'm in the last few people to ship outside of grab bags and random sets [Purple Heart Oak FUDGE dice were low on his priority list]), another was the Ouya, and another was Serpent's Tongue (a CCG with an unusual twist that will probably both be awesome and render it comparatively unpopular, relegated to an exceptionally geeky niche -- though I might if I ever get a group who would be amenable to it, manhandle ST into a magic system in a FUDGE based tabletop game -- I think it could shine in that capacity)

170000 only? meh the guy fail at scamming. its not worth runing with the money untill you reach at least 500000.
Its not like he raised much anyway, ive seen kcikstarters raise over 2 millions.

Ouya raised over 8.5 mil.

 

[Moonlight Butterfly]

This is going to come off meaner than I want it to, but the first thing to catch my eye on the front page of the original kickstarter states: 'A game that teaches you how to make games with a 3d code gun!'

Which makes me think, why stop there? Why not a game that teaches you about feudal japan with a 3d samurai banana... just seems a bit overly hopeful IMO.

Yeah the premise seems totally unrealistic to me.