The Escapist is reporting a story of a Kickstarter video game project where the project leader may have spent all the raised money and halted the project. Code Hero managed to raise US$170k in crowdsourced funds on the back of offering a title that would let players learn to develop a game while also playing a game.
Backers have become concerned that Alex Peake, leader of Primer Labs, has gone into radio silence. The promised Kickstarter rewards for the project have failed to materialise. Recent comments by Peake that he is talking to “interested investors, philanthropists and foundations, and it looks like they’re going to be willing to help us finish the job” in releasing a beta version of Code Hero raised concerns because it was believed the original crowdfunded amount was more than enough to complete that task.
A number of backers who have invesigated Peake further have indicated he has a history of half-finishing projects and may have already spent all of the Code Hero Kickstarter funds.
Working As Expected
The sad reality is that the above scenario is crowdfunding in action. The project lead doesn’t appear to have deliberately aimed to defraud anyone; if the allegations are true, Peake is just terrible at managing projects and money. (It’s also interesting to note that it is only now, when the money is allegedly all gone, that backers are actively looking at who they gave their cash to.) If Code Hero is to come out, he needs extra funding.
Big publishers face these kind of issues regularly when their titles run over-budget. It’s possibly one of the reasons that they have grown to be so ironfisted with developers – it’s very easy for a lot of money to disappear in wages, equipment and general costs in return for very little actual completed output. So publishers force developers through hoops, requiring milestones be met, in order to try to see that progress is occurring and to justify more payment of developer expenses.
Crowdfunding doesn’t have that protection. It just gives developers a lump sum of money and leaves them to it. If a developer doesn’t have the financial discipline to manage those funds over a period of months (or even years) up to the release of the project, then it’s bye-bye backer funds into god-knows-where.
Some Code Hero backers are considering legal action against Peake, but unless he’s invested that cash elsewhere or has a lot of assets, it’s very likely that money is gone. Suing him is unlikely to recover much, particularly if he’s able to point to where the money was actually spent on Code Hero’s development and make a good case that he’d just underestimated expenses.
Kickstarter (and other crowdfunding systems) is seen as a way of cutting out publishers and giving gamers the ability to support the ideas they really want to see made. That’s true to an extent, but it also exposes backers to the same risks that publishers face – a development studio may take their money, spend it and still not be able to complete the title. With only 1 in 3 Kickstarter video game projects having actually delivered what they promised, it will be interesting to see how long gamers en masse are willing to bear that kind of risk.
UPDATE 14 Dec 2012: Primer Labs has responded to the article with a “we’re not dead, just really bad at communicating” set of comments. Of concern to me within their comments are things like, “[W]e’re behind schedule and solving technical challenges to add player level creation [is] much harder than the already huge creative challenge we set ourselves to begin with,” because they sound a lot like feature creep.