Kickstarter Not Built for Ouya Failure

Karloff

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Kickstarter Not Built for Ouya Failure



Kickstarter advises people to use "internet street smarts" when deciding which projects to back.

It started as a question about the Ouya, but the conversation soon ended up in uncharted country. The question was simple enough; if Ouya never materialized, would backers of Ouya's very successful Kickstarter campaign [http://www.escapistmagazine.com/news/view/118982-Ouya-Kickstarter-Ends-with-900-of-Goal-Raised] get their money back? Ouya wasn't sure, but said that the matter was ultimately a question of Kickstarter policy and not Ouya's call to make. And that is where the train went off the rails, as Kickstarter's founder Yancey Strickler admitted that there was no policy in place for Kickstarter failures, let alone refunds.

"You know, that would be new ground," said Strickler. "I don't know. I mean, no, I don't think that we would. But certainly, the kind of thing you're talking about is not a bridge that has been crossed yet. Someday it will. And you know, I think if something did go awry, it would be ... it wouldn't be my favorite day." It certainly wouldn't; and if you had been one of those who, say, plunked down $10,000 or more - $10,000 was the top tier Ouya pledge level - on a dud, it wouldn't be your favorite day either.

Kickstarter's Terms of Service [http://www.kickstarter.com/help/faq/backers#Acco] are somewhat less fluffy: "The Company does not guarantee that any Content will be made available through the Service. The Company has no obligation to monitor the Service or Content ... Kickstarter does not offer refunds. A Project Creator is not required to grant a Backer's request for a refund unless the Project Creator is unable or unwilling to fulfil the reward." In the case of a campaign like Ouya, where the console was part of the reward for those who pledged $95 or more, presumably this translates to 'anyone whose reward package includes a console is entitled to a refund if no console is forthcoming,' But as Kickstarter has no means of facilitating this process it will be up to the goodwill and resources of the Project Creator, which may or may not be able to meet refund demands. In the event of fraud - internet street smarts sometimes aren't enough, after all - it would seem backers will be left out of pocket.

Whether or not Ouya becomes Kickstarter's first high profile failure doesn't really matter. What matters is that one of these days a major Kickstarter project will get funding and then implode; demands for repayment will follow. Strickler's least favorite day will have arrived, and what happens after that will probably determine whether Kickstarter retains its reputation as a trusted crowdfunder or vanishes like the works of Ozymandias.

Source: Kickstarter [http://www.npr.org/blogs/alltechconsidered/2012/09/03/160505449/when-a-kickstarter-campaign-fails-does-anyone-get-their-money-back]

UPDATE: Kickstarter representative Justin Kazmark has contacted me and advised that the NPR quote replicated here was, as Kazmark puts it, "a bit confusing." Kickstarter co-founder Yancey Strickler was responding to a question about the Ouya console itself, and whether or not Kickstarter would get involved if the console failed to materialize. Cash refunds are handled as per Kickstarter's Terms of Service, as mentioned above.


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Fappy

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An investment is an investment. Sometimes it fails and you lose out. I don't think backing a product on Kickstarter should really be considered a proper "pre-order" so to speak.
 

Kordie

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I'm reminded of "The Producers". With this news, I am waiting to see someone orchestrate a high profile flop and try to run away with the investments.
 

Rainboq

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Fappy said:
An investment is an investment. Sometimes it fails and you lose out. I don't think backing a product on Kickstarter should really be considered a proper "pre-order" so to speak.
Pretty much this. Kickstarter is a way to invest. Investing is risky, and its easy to loose your shirt.
 

JediMB

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Yeah, what Fappy said. Kickstarter gives the public a chance to play investor for projects that can't be funded through traditional means.

Asking for money back if the project fails isn't how this works.
 

Something Amyss

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Kordie said:
I'm reminded of "The Producers". With this news, I am waiting to see someone orchestrate a high profile flop and try to run away with the investments.
Haven't we had oen already?

Anyway, this really is an investment and should be treated as such. But shouldn't Kickstarter have some policy to say that (or not)? I mean, they're the facilitator of the whole deal, and whatnot.
 

Kordie

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Zachary Amaranth said:
Kordie said:
I'm reminded of "The Producers". With this news, I am waiting to see someone orchestrate a high profile flop and try to run away with the investments.
Haven't we had oen already?

Anyway, this really is an investment and should be treated as such. But shouldn't Kickstarter have some policy to say that (or not)? I mean, they're the facilitator of the whole deal, and whatnot.
Apparantly not, or this issue would already have a solution.

I can agree that as an investment no one should be entitled a refund (unless, as kickstarted said they made a specific promise and failed to deliver i.e. the rewards). Someone does need to keep track of this though, if Ouya manages to fail while having not used up all the kickstarted capital where does it go?
 

Ragsnstitches

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Fappy said:
An investment is an investment. Sometimes it fails and you lose out. I don't think backing a product on Kickstarter should really be considered a proper "pre-order" so to speak.
This is it, I'm honestly not sure if people, as a collective whole, are competent when it comes to investment. "Internet Street Smarts" sounds about as good of advice as telling someone to use "common sense".

What's worse is the numbers of people drawn to Crowd funded projects because of current day trends. They aren't aware of what this system entails. This is not the removal of high powered investors making demands to fit the market, this is the market taking the place of the investors.

People do think that funding a kickstarter is equivalent to purchasing a product. I'm sure people tossing thousands into these projects are aware of this, but the people funding just enough for the product as a reward might think they are paying for a product.

It worries me that when the shit does hit the fan, these people will end up turning on the concept of crowdfunding, which would be depressing since it's a great practice. It rejuvenates niche markets and is a great place to get a small project off the ground.

This could kill crowdfunding if it or something as big as it bombs.
 

Fappy

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Ragsnstitches said:
Fappy said:
An investment is an investment. Sometimes it fails and you lose out. I don't think backing a product on Kickstarter should really be considered a proper "pre-order" so to speak.
This is it, I'm honestly not sure if people, as a collective whole, are competent when it comes to investment. "Internet Street Smarts" sounds about as good of advice as telling someone to use "common sense".

What's worse is the numbers of people drawn to Crowd funded projects because of current day trends. They aren't aware of what this system entails. This is not the removal of high powered investors making demands to fit the market, this is the market taking the place of the investors.

People do think that funding a kickstarter is equivalent to purchasing a product. I'm sure people tossing thousands into these projects are aware of this, but the people funding just enough for the product as a reward might think they are paying for a product.

It worries me that when the shit does hit the fan, these people will end up turning on the concept of crowdfunding, which would be depressing since it's a great practice. It rejuvenates niche markets and is a great place to get a small project off the ground.

This could kill crowdfunding if it or something as big as it bombs.
The best we can do is yell louder than they do when they start bitching. Then again... telling people they are idiots on the internet rarely works out for anyone.
 

Twilight_guy

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Nov 24, 2008
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Yeah, and water is wet too.

Someday a kicksarter is going to go bust and everyone is going to see its not a magical infinite funds box made of puppies and rainbows. I look forward to that day because of how much self-delusion is floating around about kickstarter. Yes, its a cool platform, no its not some pace that you can do anything on.
 

StriderShinryu

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Outrage is guaranteed, even if the outcome isn't actually a failure. We already see how supposedly rational and sane people react when all they have invested is interest and time. We have games and movies coming out on a regular basis that, while solid enough and true enough to the actual creators vision, just don't do exactly what the "fan" wanted and so a rage storm ensues. Now add potentially years of anticipation and the belief of having a personal say in the outcome via early monetary investment to the mix.

Yeah, something's gonna blow up real good.
 

GiantRaven

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Well, this article has pretty much put me off ever using Kickstarter again. I'm not willing to take the chance of being scammed out of my money.

Zachary Amaranth said:
Haven't we had oen already?
Yes [http://www.kickstarter.com/projects/zioneyez/eyeztm-by-zioneyez-hd-video-recording-glasses-for]
 

The Random One

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A Project Creator is not required to
grant a Backer's request for a refund unless the
Project Creator is unable or unwilling to fulfil the
reward.
Wait. My legalese may be a tad rusty, but isn't this saying a creator doesn't have to refund a backer, but if he doesn't want to (is unwilling), then he has to?


Zachary Amaranth said:
Kordie said:
I'm reminded of "The Producers". With this news, I am waiting to see someone orchestrate a high profile flop and try to run away with the investments.
Haven't we had oen already?
No. We've had scams, but those people didn't plan to deliver, and Kickstarter had tools to deal with them. A project like The Producers - in which the illusion of work happens followed by the illusion of failure so people never learn they've been had - would be... well, hilarious if I'm being perfectly honest.
 

Kapol

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May 2, 2010
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I didn't think this was really news to anyone. That's been my main problem with Kickstarter since day 1 and one of the main reasons I don't donate unless I think the people making it are trustworthy. Shadowrun Returns and Wasteland 2 come to mind. The risky ones are just that, risky. I backed The Dead Linger even though the creators only other game was Detour. But at least they made another game on the market. I likely wouldn't back anyone who hasn't actually produced a game before (at least for game kickstarters, similar rules apply for music, artists/story-writers, etc).
 

Karloff

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The Random One said:
A Project Creator is not required to
grant a Backer's request for a refund unless the
Project Creator is unable or unwilling to fulfil the
reward.
Wait. My legalese may be a tad rusty, but isn't this saying a creator doesn't have to refund a backer, but if he doesn't want to (is unwilling), then he has to?
"to fulfil the reward" is the part you're missing. ie, some project creator says that if you pop in X amount, they'll personally come buy you dinner. However, you happen to live in Alert, Nunavut, and the when creator sees that they're like, "Oh, no way in hell am I going there!" Kickstarter says they have to refund your money.

On the other hand, if they fulfil the reward, then whether or not they deliver on the project is irrelevant.

And the added wrinkle is that if the rewards include the project being funded, then technically if the project doesn't get completed for some reason, the refund for the donations kicks in.

Of course, where it gets sticky is enforcing the refund policy once the funds have been handed over. Good luck with that.
 

chadachada123

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Last I checked, Kickstarter is essentially a lower-risk version of the stock market, where people can only buy stock in a new business or opportunity if enough money is guaranteed to be chipped in.

Like the stock market, though, there is no guarantee that the final product or worth will be a net gain.

That said, I feel that the headline is pretty damn inflammatory/insinuative, since it implies that Ouya is ALREADY a failure, despite no evidence for this. Poor choice of headline.
 

ANImaniac89

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I'm fairly sure that in the states at least there is tax relief failed investments.
So that might help ease the burn of a failed kickstater.