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What stops a Kickstarter MMO from spending all th emoney on themselves instead of the MMO.

13

Comments

  • PhaserlightPhaserlight Member EpicPosts: 3,075
    Originally posted by Malabooga
    Originally posted by Phaserlight
    I never said it was a scam. You are missing the point; crowdfunding can't be neatly divided into categories with good intentioned developers falling on one side and scam artists on the other. Things come up, promises aren't delivered. I would hazard that it's very difficult if not impossible to tell ahead of time what projects will meet their goals and what projects will fail, flatline, or peter out over time. Therefore, responsibility should not be completely with the consumer in the case of crowdfunding. It's like the dot com bubble of the 90's.

    With KS you have to accept its your responsibility.

    Noone forces you to give money to anyone on KS.

    And yes, even some very solid projects can fail. Its nothing out of ordinary from rest of the world.

    But this thread is about scams, and thats suable.

    It is very out of the ordinary.  In a regular business, one pays for goods and services.  Crowdfunding is more about selling ideas.  It's a new thing, with a whole new set of rules and risks.  Please spare me the gun-to-the-head argument.  People are not rational beings, particularly when it comes to spending.

    And no, the title of this thread is "What stops a Kickstarter MMO from spending all th[e ]money on themselves instead of the MMO[?]".  In the current legal climate, an entrepreneur could get away with a lot while still not delivering an outright scam.  As has been made abundantly clear, the answer to the OP's question is "practically nothing".  Most of these companies have no obligation to disclose how/why money is being spent, and the people have very little recourse.  They must depend solely on the ethics of the person/corporation running the campaign.  It is very different from the "rest of the world".

    "The simple is the seal of the true and beauty is the splendor of truth" -Subrahmanyan Chandrasekhar
    Authored 139 missions in Vendetta Online and 6 tracks in Distance

  • CrazKanukCrazKanuk Member EpicPosts: 6,130
    Originally posted by Phaserlight
    Originally posted by Malabooga
    Originally posted by Phaserlight
    I never said it was a scam. You are missing the point; crowdfunding can't be neatly divided into categories with good intentioned developers falling on one side and scam artists on the other. Things come up, promises aren't delivered. I would hazard that it's very difficult if not impossible to tell ahead of time what projects will meet their goals and what projects will fail, flatline, or peter out over time. Therefore, responsibility should not be completely with the consumer in the case of crowdfunding. It's like the dot com bubble of the 90's.

    With KS you have to accept its your responsibility.

    Noone forces you to give money to anyone on KS.

    And yes, even some very solid projects can fail. Its nothing out of ordinary from rest of the world.

    But this thread is about scams, and thats suable.

    It is very out of the ordinary.  In a regular business, one pays for goods and services.  Crowdfunding is more about selling ideas.  It's a new thing, with a whole new set of rules and risks.  Please spare me the gun-to-the-head argument.  People are not rational beings, particularly when it comes to spending.

    And no, the title of this thread is "What stops a Kickstarter MMO from spending all th[e ]money on themselves instead of the MMO[?]".  In the current legal climate, an entrepreneur could get away with a lot while still not delivering an outright scam.  As has been made abundantly clear, the answer to the OP's question is "practically nothing".  Most of these companies have no obligation to disclose how/why money is being spent, and the people have very little recourse.  They must depend solely on the ethics of the person/corporation running the campaign.  It is very different from the "rest of the world".

    There actually is a case in Washington where the state has taken legal action against the owner of a KS campaign. So that could actually be a good precedent. I'm not sure whether there are other cases like it or not, but it will hopefully set an example that will discourage this type of behaviour. 

    Crazkanuk

    ----------------
    Azarelos - 90 Hunter - Emerald
    Durnzig - 90 Paladin - Emerald
    Demonicron - 90 Death Knight - Emerald Dream - US
    Tankinpain - 90 Monk - Azjol-Nerub - US
    Brindell - 90 Warrior - Emerald Dream - US
    ----------------

  • Stone_FountainStone_Fountain Member UncommonPosts: 233
    I would normally hope some requirements for KS projects to protect from fraud. I.E. Making up bogus KS projects just to get people, however there is a liability disclaimer that basically says KS and the developer themselves are kinda off the hook. Someone might need 15k so they start a KS and then make some crap game over a period of time that was worth maybe $500 and pocket the money and take off. It could happen and has. Unless its a small amount of money or a developer I trust to some degree I do not donate, period.  

    First PC Game: Pool of Radiance July 10th, 1990. First MMO: Everquest April 23, 1999

  • PemminPemmin Member UncommonPosts: 623
    Originally posted by Phaserlight
    Originally posted by Malabooga
    Originally posted by Phaserlight
    I never said it was a scam. You are missing the point; crowdfunding can't be neatly divided into categories with good intentioned developers falling on one side and scam artists on the other. Things come up, promises aren't delivered. I would hazard that it's very difficult if not impossible to tell ahead of time what projects will meet their goals and what projects will fail, flatline, or peter out over time. Therefore, responsibility should not be completely with the consumer in the case of crowdfunding. It's like the dot com bubble of the 90's.

    With KS you have to accept its your responsibility.

    Noone forces you to give money to anyone on KS.

    And yes, even some very solid projects can fail. Its nothing out of ordinary from rest of the world.

    But this thread is about scams, and thats suable.

    It is very out of the ordinary.  In a regular business, one pays for goods and services.  Crowdfunding is more about selling ideas.  It's a new thing, with a whole new set of rules and risks.  Please spare me the gun-to-the-head argument.  People are not rational beings, particularly when it comes to spending.

    And no, the title of this thread is "What stops a Kickstarter MMO from spending all th[e ]money on themselves instead of the MMO[?]".  In the current legal climate, an entrepreneur could get away with a lot while still not delivering an outright scam.  As has been made abundantly clear, the answer to the OP's question is "practically nothing".  Most of these companies have no obligation to disclose how/why money is being spent, and the people have very little recourse.  They must depend solely on the ethics of the person/corporation running the campaign.  It is very different from the "rest of the world".

    kickstarter campaigns aren't selling anything and you aren't investing anything.... they are asking for donations like a charity. Any perks offered are "conditional gifts" as far as the law(in the US) is concerned, with the condition being met only when the product is deemed complete(in the case of mmos release ready). The companies involved in kickstarter campaigns are only obligated to make a "good faith effort" in trying to make the product. The only way people can take legal action at this point in time would be if the person(s) literally pocket the money and run. 

    i think the biggest issue with crowd funding in general is the marketing involved. they use buzz words like "founder" and "backer", and make promises that they aren't under obligation to keep..... to give people feeling of being invested when they are not in anyway shape or form an investor. 

  • DeVoDeVoDeVoDeVo Member UncommonPosts: 106
    Originally posted by slowpoke68

    Actually, if it could be proven that they intentionally defrauded people they would be in violation of a host of federal and state criminal laws.

    So there is that.

     

    ..and there it is.  The key to getting away with the kickstarter money scot free.   You have to make it *appear* that you're working diligently to produce a product.

     

    The final piece of the robbery is, of course, the ending letter about how you gave it your best shot but there just wasn't enough time and money.   Perhaps say the game is on hold while you are procuring more money.

  • CrazKanukCrazKanuk Member EpicPosts: 6,130
    It's much more likely that someone is going to con you in some other way than Kickstarter. Phone scams account for nearly quadruple the revenue than all of Kickstarter each year. Why the HELL would I spend my time and money trying to rip of 1000 people for $5 each? Gawd! Just waaaay too much work. We'll need more than that if we're ever to free the Nigerian Prince fron prison. 

    Crazkanuk

    ----------------
    Azarelos - 90 Hunter - Emerald
    Durnzig - 90 Paladin - Emerald
    Demonicron - 90 Death Knight - Emerald Dream - US
    Tankinpain - 90 Monk - Azjol-Nerub - US
    Brindell - 90 Warrior - Emerald Dream - US
    ----------------

  • TibernicuspaTibernicuspa Member UncommonPosts: 1,199
    Originally posted by PAL-18
    Originally posted by Tibernicuspa
    Originally posted by PAL-18

    Would be nice to see for example how much roberts space industries have paid taxes.

    Their money isn't coming from Kickstarter, so what does it matter?

     

    People are already playing and enjoying that game even though it's in alpha.

    I think tax authorities arent interested measuring someones enjoyment,its the money  and how much of it is actually invested to something .

    Point flew over your head huh. What does it matter is a reference to.. why talk about it in a thread about the evils of Kickstarter scams.

  • PhaserlightPhaserlight Member EpicPosts: 3,075
    Originally posted by CrazKanuk
    It's much more likely that someone is going to con you in some other way than Kickstarter. Phone scams account for nearly quadruple the revenue than all of Kickstarter each year. Why the HELL would I spend my time and money trying to rip of 1000 people for $5 each? Gawd! Just waaaay too much work. We'll need more than that if we're ever to free the Nigerian Prince fron prison. 

    It must happen more often than you think.  This guy looks like he is going to successfully con ~3,000 people out of ~$100 each in 9 days.  He is selling cubes of tungsten for around 5x what it would cost to get the same thing from China.  It's pure arbitrage.

    "The simple is the seal of the true and beauty is the splendor of truth" -Subrahmanyan Chandrasekhar
    Authored 139 missions in Vendetta Online and 6 tracks in Distance

  • MalaboogaMalabooga Member UncommonPosts: 2,977
    Originally posted by Phaserlight
    Originally posted by CrazKanuk
    It's much more likely that someone is going to con you in some other way than Kickstarter. Phone scams account for nearly quadruple the revenue than all of Kickstarter each year. Why the HELL would I spend my time and money trying to rip of 1000 people for $5 each? Gawd! Just waaaay too much work. We'll need more than that if we're ever to free the Nigerian Prince fron prison. 

    It must happen more often than you think.  This guy looks like he is going to successfully con ~3,000 people out of ~$100 each in 9 days.  He is selling cubes of tungsten for around 5x what it would cost to get the same thing from China.  It's pure arbitrage.

    1. People are selling various crap form china for 5x its value in shops.

    2. Hes selling it for 64-69$ free shipping, while it costs 40$+5$ shipping from china

    3. It cost 38$+shipping in bulk from china

    3. of course, you may not receive the cube form KS, but people got whole CONTAINER of DIRT form china instead ordered goods, and your chances of getting your money back are immense in US compared to china where theres NO chance AT ALL

     

     

  • QuizzicalQuizzical Member LegendaryPosts: 25,483

    What makes you think that people running a Kickstarter shouldn't spend the money on themselves?  The sort of skilled labor that it takes to make a good game isn't free, and the time that a good programmer spends working on a game could have been spent drawing a good paycheck elsewhere.  If the people behind a kickstarter use the money to pay their own salaries for the time it takes to create a game rather than having to take other jobs and then deliver the game they promised, wouldn't you call that a success?

    The problem, of course, is what if they spend the money to pay their own salaries, genuinely do work on the game, but are nowhere near finished before the money is gone?  Then they have to set it aside to get a "real" job so that they can eat.  That's not fraud, exactly, but backers won't be happy.  That's a risk you take.  If you don't like it, don't give money to kickstarter MMOs.

  • MalaboogaMalabooga Member UncommonPosts: 2,977
    Originally posted by Quizzical

    What makes you think that people running a Kickstarter shouldn't spend the money on themselves?  The sort of skilled labor that it takes to make a good game isn't free, and the time that a good programmer spends working on a game could have been spent drawing a good paycheck elsewhere.  If the people behind a kickstarter use the money to pay their own salaries for the time it takes to create a game rather than having to take other jobs and then deliver the game they promised, wouldn't you call that a success?

    The problem, of course, is what if they spend the money to pay their own salaries, genuinely do work on the game, but are nowhere near finished before the money is gone?  Then they have to set it aside to get a "real" job so that they can eat.  That's not fraud, exactly, but backers won't be happy.  That's a risk you take.  If you don't like it, don't give money to kickstarter MMOs.

    hes not talking about salaries, hes talking about buying a yacht and sailing away into sunset.

    Since spending money on programmer is spending it on MMO.

  • LoktofeitLoktofeit Member RarePosts: 14,247
    Originally posted by DeVoDeVo
    Originally posted by slowpoke68

    Actually, if it could be proven that they intentionally defrauded people they would be in violation of a host of federal and state criminal laws.

    So there is that.

    ..and there it is.  The key to getting away with the kickstarter money scot free.   You have to make it *appear* that you're working diligently to produce a product.

    The final piece of the robbery is, of course, the ending letter about how you gave it your best shot but there just wasn't enough time and money.   Perhaps say the game is on hold while you are procuring more money.

    Funny... that sounds vaguely familiar. :)

    There isn't a "right" or "wrong" way to play, if you want to use a screwdriver to put nails into wood, have at it, simply don't complain when the guy next to you with the hammer is doing it much better and easier. - Allein
    "Graphics are often supplied by Engines that (some) MMORPG's are built in" - Spuffyre

  • CalmOceansCalmOceans Member UncommonPosts: 2,437

    The problem is that no Kickstarter feels the threat of being sued, since it makes no economical sense for backers to sue when projects take the money and run.

    When someone invested $100 in a project, and the Kickstarter runs with the money, you're not going to start a case and hire a lawyer that could cost you thousands of dollars.

    To me it just makes Kickstarter itself just a scam site, since they themselves never go after people who scam backers.

    Kickstarter also never repays people when they get scammed, they just say "TOUGH LUCK" to those people, while they enjoy the profits behind your back. When a store sells you a faulty product, the store tends to be responsible, and there are enough agencies that will support you if the store doesn't give you your money back.

    But since Kickstarter is new, most of it is based on promises that aren't well defined, the goods are often digital and don't have to adhere to any quality requirements, and because none of the backers hold any power, it's very easy for Kickstarter and it's projects to scam you.

  • CalmOceansCalmOceans Member UncommonPosts: 2,437

    As for the peole who say

    "You should just research which projects you invest in"

    This is a horrible explanation.

    It doesn't address the fact the projects are not forced to disclose financial data, they should, investors should have that data.  (even if you argue it's a donation, even charities have to disclose their financial status and where the money goes)

    It doesn't address the scammers, it doesn't address the fact Kickstarter doesn't take legal action against them, it doesn't address that Kickstarrter never returns money to affected backers when they are scammed, and it doesn't address the wider problem, the fact that none of the backers hold any real power.

  • laokokolaokoko Member UncommonPosts: 2,004

    I would guess most MMORPG take so much money, those kick starter won't even cover the cost.

    So unless those games are scamming people for money purposely with no product.  It don't look like those kick starter even cover that much money.

    I think many legit people are just asking money though, even if they have money.  It is quite risky so they dont' felt like investing too much of their money.

  • psiicpsiic Member RarePosts: 1,642
    Seen a number of high school, college, and tech school game design projects end up as steam games.  I am sure the same thing happens on Kickstarter
  • SephirosoSephiroso Member RarePosts: 2,020
    Originally posted by CalmOceans

    It doesn't address the fact the projects are not forced to disclose financial data, they should, investors should have that data.  (even if you argue it's a donation, even charities have to disclose their financial status and where the money goes)

     

    you are not an investor, you are a donator. charities do not have to disclose their financials to their donators...they disclose it to the IRS.

     

    See the difference?

    image
    Be the Ultimate Ninja! Play Billy Vs. SNAKEMAN today!

  • CalmOceansCalmOceans Member UncommonPosts: 2,437
    Originally posted by Sephiroso
    Originally posted by CalmOceans

    It doesn't address the fact the projects are not forced to disclose financial data, they should, investors should have that data.  (even if you argue it's a donation, even charities have to disclose their financial status and where the money goes)

     

    you are not an investor, you are a donator. charities do not have to disclose their financials to their donators...they disclose it to the IRS.

     

    they do, they are required to do so by law, the IRS discloses them publicly so every donator knows where their money goes, it was agreeed upon over a decade ago:

    "Anyone with access to the Internet will be able to view, compare, and contrast the financial activities of all public charities that file financial disclosure forms annually with the Internal Revenue Service

    A Form 990 provides specific information on a charity's revenues, expenses, executive salaries, board members, programs, and activities. With the exception of religious organizations, any charity with annual gross receipts of more than $25,000 is required to file Form 990 with the IRS."

     

    For example, here is the form 990 filing for doctors wtihout borders, they are required by law, to file it, and by law, it has to be publicly available

    it has all their financial data, all their expenses, wages, cost of goods, extra expenses, everything

    https://www.doctorswithoutborders.org/sites/usa/files/MSF-2012-Form-990.pdf

     

     

     

    Kickstarter on the other hand doesn't give it's backers any information. They don't require projects to fill in any financial form, to tell their backers where the money goes, they just except you to give money, and when something goes wrong, you're on your own while they reap in the cash.

    Kickstarter nor their projects disclose anything, which will lead to more and more distrust, justified distrust, because Kickstarted is rampant with scammers.

     

    Which is why, the argument "just do your research" is ridiculous. Since none of the projects are required to disclose anything.

  • SephirosoSephiroso Member RarePosts: 2,020
    Originally posted by CalmOceans
    Originally posted by Sephiroso
    Originally posted by CalmOceans

    It doesn't address the fact the projects are not forced to disclose financial data, they should, investors should have that data.  (even if you argue it's a donation, even charities have to disclose their financial status and where the money goes)

     

    you are not an investor, you are a donator. charities do not have to disclose their financials to their donators...they disclose it to the IRS.

     

    blahblah

    you do realize there's a thing called public charities and private foundations right? just like there's public traded corporations and privately owned corporations. One is required by law to submit its financials to the public, the other is not.

    image
    Be the Ultimate Ninja! Play Billy Vs. SNAKEMAN today!

  • CalmOceansCalmOceans Member UncommonPosts: 2,437
    Originally posted by Sephiroso
    Originally posted by CalmOceans
    Originally posted by Sephiroso
    Originally posted by CalmOceans

    It doesn't address the fact the projects are not forced to disclose financial data, they should, investors should have that data.  (even if you argue it's a donation, even charities have to disclose their financial status and where the money goes)

     

    you are not an investor, you are a donator. charities do not have to disclose their financials to their donators...they disclose it to the IRS.

     

    blahblah

    you do realize there's a thing called public charities and private foundations right? just like there's public traded corporations and privately owned corporations. One is required by law to submit its financials to the public, the other is not.

    Even though I don't know why I still reply, since you completely ignore my reply and write "blablabla" instead of at least recognsising you made a mistake.

    But even after moving your goalpost, and changing from charity to "private foundation", it still isn't true. Any non-profit that benefits from tax deduction, has to disclose financial data to it's donors, including, private foundations.

    You can read it here:

    http://www.irs.gov/Charities-&-Non-Profits/Public-Disclosure-and-Availability-of-Exempt-Organizations-Returns-and-Applications:-Public-Disclosure-Requirements-in-General

  • LobotomistLobotomist Member EpicPosts: 5,980

    Nothing. There are no rules. They can simply take the money and quit making the game.

    Which has happened many times all ready. Usually they will give some lame excuse, in order to avoid full on rage. But that is all they need to do.

    Here are some funny excuses we got from Kickstarters so far :

    Double Fine: We are decided to stop developing the game because nobody is buying it anymore. ( Ofcourse nobody is buying it , its not released, for crying out loud)

    Jogcast: We have to stop developing game because we payed all the money to artist in front, and than he quit.

    Zombie(something): Our office was broken into and the thief took all the computers and we had no backup.

     

     



  • SephirosoSephiroso Member RarePosts: 2,020
    Originally posted by CalmOceans
    Originally posted by Sephiroso
    Originally posted by CalmOceans
    Originally posted by Sephiroso
    Originally posted by CalmOceans

    It doesn't address the fact the projects are not forced to disclose financial data, they should, investors should have that data.  (even if you argue it's a donation, even charities have to disclose their financial status and where the money goes)

     

    you are not an investor, you are a donator. charities do not have to disclose their financials to their donators...they disclose it to the IRS.

     

    blahblah

    you do realize there's a thing called public charities and private foundations right? just like there's public traded corporations and privately owned corporations. One is required by law to submit its financials to the public, the other is not.

    Even though I don't know why I still reply, since you completely ignore my reply and write "blablabla" instead of at least recognsising you made a mistake.

    But even after moving your goalpost, and changing from charity to "private foundation", it still isn't true. Any non-profit that benefits from tax deduction, has to disclose financial data to it's donors, including, private foundations.

    You can read it here:

    http://www.irs.gov/Charities-&-Non-Profits/Public-Disclosure-and-Availability-of-Exempt-Organizations-Returns-and-Applications:-Public-Disclosure-Requirements-in-General

    Only if they're filing for tax exemption on said donated money.

    image
    Be the Ultimate Ninja! Play Billy Vs. SNAKEMAN today!

  • CrazKanukCrazKanuk Member EpicPosts: 6,130
    Originally posted by Phaserlight
    Originally posted by CrazKanuk
    It's much more likely that someone is going to con you in some other way than Kickstarter. Phone scams account for nearly quadruple the revenue than all of Kickstarter each year. Why the HELL would I spend my time and money trying to rip of 1000 people for $5 each? Gawd! Just waaaay too much work. We'll need more than that if we're ever to free the Nigerian Prince fron prison. 

    It must happen more often than you think.  This guy looks like he is going to successfully con ~3,000 people out of ~$100 each in 9 days.  He is selling cubes of tungsten for around 5x what it would cost to get the same thing from China.  It's pure arbitrage.

    Is that a scam? Or is that someone using KS as their storefront? Also, I didn't see it being 5x the price. The link you gave me was $40 / piece and he's selling for $100? That's just my assumption. Anyway, that's actually reasonable mark-up for retail. Shoot, I had a friend who worked at an electronic retailer, and the mark-up on cables was like 2000% in some cases!!!! Yes, 20 times!!!

     

    I agree, maybe he shouldn't be using KS as a storefront, but I don't really think he's ripping people off, is he? 

    Crazkanuk

    ----------------
    Azarelos - 90 Hunter - Emerald
    Durnzig - 90 Paladin - Emerald
    Demonicron - 90 Death Knight - Emerald Dream - US
    Tankinpain - 90 Monk - Azjol-Nerub - US
    Brindell - 90 Warrior - Emerald Dream - US
    ----------------

  • botrytisbotrytis Member RarePosts: 3,363
    Originally posted by Kiyoris

    Can anyone say what rules are in place for Kickstarter that prevent someone from just putting most of the money in their own pockets?

    I don't see any ways to see where the money goes.

    Can someone just put a large part of the cash in their own pocket and none of the people who gave the money will know about it?

    Yes they can. That is the problem with KS. It has no rules against it. It is a scammers paradise.


  • YumeTsukaiYumeTsukai Member UncommonPosts: 40

    Well, the funny part is that some actually talented RL "Chads" exist in this world. Yeah, guys that  have a great understanding, logic and imagination even if they haven't worked 20 years in game development. And guys that can most likely do better than "old school" devs that are stuck in the past, or new ones that are directing their every effort in copying exising mechanics that are proved to "work" - aka fool the gamers and get profit. That is, assuming the Chads get the required support/guidance. 

    I'm not saying there are no con-Chads over there. What I'm saying is that there are a few guys like you and me, who play games, love them and may be able to bring in the required change we're all waiting for. A spark. A breakthrough. The next step. Evolution.

    Something new.

    But seriously guys. I can fully understand that you want some background/experience as an assurance. But will that be enough ? So far, it looks to me like Kickstarter will eventually end up destroying the trust of gamers and the concept of crowdfunding, Star Citizen being the deciding factor.

    I mean, so far, crowdfunding has already turned out to be a money grab for the most part (sure, a few games were successful, but too few). The concept as I see it, has already been tarnished.

    Shouldn't Kickstarter be a place where people with awesome ideas can get some initial support ? (instead of a place where people that already have funds would rather risk your money than theirs). 

     

    P.S: If any of you would create an MMO, would you need more than 50... or 77 million dollars? 

    "The big thing is the thing that we didn't do," Roberts told Wired. "Most crowdfunding campaigns engage some people, convince them to become backers, and then the campaign stops. We didn't stop."

    I, for one, would focus getting the game done. The profits and further enhancements would come from the success of the first release.

     

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