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.
I loved The Matrix films too.
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.
You can give people the money and tools to achieve a goal, but that doesn’t mean that they will be successful.
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.
World Class Villains 
Kickstarter when looked at as a funding source for developers has about the same track record as traditional publishers when we look closer – a substantial number of game projects are killed only part of the way through development after a significant investment that is not likely to yield much (if any) ROI. At least two out of three games that are attempted to be made under traditional publishers end up being killed when their costs go out of control, or they have a substantial scaling back of their expected features on delivery. Sometimes lessons and technology are reused in more effective ways, sometimes the lessons just create the ‘second systems effect’ and the creative team enters a death spiral.
I suppose a more realistic look at Kickstarter is that it demonstrates that creative freedom does not yield a better result than traditional project management. It turns out that a lot of artists actually have no real idea how long a project will take, how much it will cost, or how a single minor delay can grow into a crippling halt to all progress if not addressed appropriately. Every new innovator believes themselves immune to classical lessons in project management such as ‘adding resources to a late project only makes it later’.
Kickstarter just makes failures that were formerly buried and absorbed by publishers substantially more public. I think it will take a while before the general public comes to recognize that basic human nature regarding work and art don’t change all that much if you just change how the money gets to people doing work. Unless public shame really takes root I doubt we will see much change in artistic and engineering progress regarding Kickstarter vs more conventional funding approaches.
I agree.
Video games is interesting because a lot of people buy into the simplistic “publishers are bad and they ruin projects”. While that is sometimes true, there are a number of game development post-mortems that also highlight how internal studio politics, failures and delays in developing technology and feature creep all cripple projects. And then there are cases where things just don’t work out.
I’ve been thinking about the source of my Kickstarter video game cynicism and I think it is because I’ve followed MMO development for so long. I’ve seen too many large, appropriately funded projects allegedly run by professionals blow out, cut features, be delayed and even just fall over at launch to think that a small group of inexperienced amateurs is going to have a better success rate.
The real problems of video game project management seem to be the same problems that general software engineering has been experiencing for decades. Getting locked into anti-patterns, a heavy reliance on hero programmers/crunch time, fighting old battles (second systems effect), and the always wonderful aspects of creeping-featuritis are not new problems.
Every new designer and programmer always thinks that their code will be perfect, documentation will flow naturally, collaboration with others is easy or unnecessary, and that the power of their ideas will somehow automagically produce great production values and they will be recognized for the geniuses they are.
It’s easier to sell an idea to a group of people with no knowledge of investing than it is to sell an idea to a group of experienced venture captialists and investors. Kickstarter makes for an easy target for cynicism as a result.
Again, I agree.
I also think that the idea of the Indie Developer has been romanticised to some extent – the small team, working in a garage together, coding late into the night on a passion project that’s quirky and familiar-yet-different. The team doesn’t care about money, just making a good game… which is why they get support for their $10k Kickstarter, when the actual development costs are much higher (especially if they factored in their time costs).
And then the game launches, is played a bit and then forgotten. The Indie team don’t actually make any money, but they are simply proud they got a game out.
It’s a twist on the Starving Artist meme, whereas long-term ability to commit in a creative industry requires someone to be able to make some money from it, or at least cover their expenses. Backers feel good that they are supporting the Indie, while also ignoring that support is attached to a fixed reward level.