Haunts’ Kickstarter failure highlights the risks of crowdfunding

Haunts’ Kickstarter failure highlights the risks of crowdfunding

Promising game falls apart as money, programmers run out.

Kyle Orland – Oct 19, 2012 11:10 am | 107

Many people seem to treat Kickstarter pledges as a kind of advanced preorder system, a way to register intent to purchase an intriguing project when it’s still in the incredibly early stages of development. But investing in a Kickstarter project is really more like buying into a crazy dream that might not actually come true. That risk was highlighted this week with the unraveling of the development for Kickstarted multiplayer horror game Haunts.

Over 1,200 backers helped Rick Dakan and the development team at Mob Rule Games raise nearly $29,000 through Kickstarter this summer, enough to help recoup some of the $42,500 already invested to that point. But that money apparently wasn’t enough to get Haunts across the finish line. As Dakan notes in a detailed Kickstarter update, the two main programmers on the game have been forced to move on to full-time jobs and will have minimal free time to devote to the final debugging and polish needed to get the game from its current threadbare version to a releasable state. Coding the game in the relatively obscure Go programming language means there’s a limited pool of new programmers who could be brought in for that final push as well.

“This has been an emotionally rough couple of months for me, as I’ve invested almost all of my time for the past year or more in Haunts, along with my own money and reputation,” Dakan writes. “It’s been terrible to watch it fail despite best efforts, but the failure is mine.”

Dakan says he’s still determined to get Haunts released in some form and is in talks with former colleagues at publisher Blue Mammoth Games, which might scoop up the game and finish development. Though the Kickstarter money the team raised has long been spent, Dakan says he’ll personally offer out-of-pocket refunds to any backers who want to reconsider their support at this stage, and he’ll give up any future revenue from the game to the publisher that eventually releases it.

Kickstarter, for its part, makes it clear in its FAQ that it doesn’t guarantee the success of the projects it lists and can’t directly offer refunds to backers of funded projects that are never completed. That said, the Kickstarter terms of use do put project creators under a legal obligation to deliver on their fundraising promises, and backers can theoretically sue.

Legal requirement or not, Haunts is the first in what’s likely to be a wave of Kickstarter-funded games that simply fall apart before they become viable products (many non-game Kickstarters have already faced similar post-funding meltdowns). Much bigger games with much more traditional funding methods are delayed and cancelled all the time, sometimes publicly and sometimes quietly behind the closed doors of a developer. Getting money directly from potential players, and keeping them involved and updated in the development process, doesn’t change the basic risks and uncertainties of the development process, as Haunts aptly demonstrates.

Projects with much bigger funding hauls than Haunts aren’t any less likely to fail, either. Just because games like Double Fine’s Adventure Game Kickstarter or Obsidian’s Project Eternity have millions of crowdfunding dollars behind them, there’s no guarantee that they will actually come out on schedule (or that they will be any good if they do).

Of course, the added press attention and big-name development teams for these massive projects do increase the pressure for the developers to make good on their promises. As Kickstarter notes in its FAQ, “launching a Kickstarter is a very public act, and creators put their reputations at risk when they do.” But as Double Fine’s Tim Schafer admitted up front in his project’s first Kickstarter video, “either the game will be great or it will be a spectacular failure caught on camera for everyone to see. Either way you win.”

If and when one of these massive Kickstarter games does become such a spectacular failure, the bloom may come off the rose for Kickstarter as a popular game-funding mechanism. Any really high-profile disaster is likely to make backers a lot more gun-shy about throwing their money at a project, no matter how safe and surefire it seems. In other words, people might stop seeing the service as a fashionable preorder boutique and more as what it is: an inherently risky investment in a still unproven idea.