The world of crowdfunding is full of projects that never quite deliver what they have promised, but how often does a half-million-dollar Kickstarter simply disappear?
Yogventures, an ambitious video game project helmed by a group of YouTubers called The Yogscast, raised over $US567,000 back in 2012 to make what they called “the game you’ve always wanted”.
Last week, the developers of Yogventures announced that they had cancelled the game, and that backers would not be getting refunds. So what happened? Where did the money go? Let’s break it down.
Just what is a Yogscast?
The Yogscast is a group of popular personalities that regularly make videos on YouTube about games like Minecraft and World of Warcraft. They have got a ton of fans — 7sevenmillion subscribers on YouTube alone — and over the years they have evolved into a genuine corporation, with their own forums, store, and podcast that many find funny and entertaining.
But even before this failed Kickstarter, not all has been rosy. Just a couple of weeks ago, Yogscast ran into some controversy when they announced a revenue-sharing program in which their personalities would make videos about games like Space Engineers in exchange for a percentage of revenue from the game. Many saw this as a serious conflict of interest.
Still, a lot of people like them.
Yep — fans dug Yogscast enough to dish out $US567,665 when they launched a Kickstarter for their “open world sandbox game” back in April of 2012. Over 13,000 people donated to the project in hopes of making Yogventures a reality.
So The Yogscast is also a game developer?
Nope! As they wrote on the Kickstarter page:
Lewis and Simon can barely manage a simple jumping puzzle – so the Yogscast aren’t going to be doing any actual coding! We aren’t programmers or artists but luckily we have close friends at Winterkewl Games who are. They are a team of talented indie developers based in and around Hollywood, California. Their artists and programmers are long-time veterans of film and game companies – working at the highest levels of production.
‘Winterkewl’ Games? Really?
Really. This was their first game.
That seems like a red flag.
There were a lot of red flags with this one. For starters, the promises they made were way too ambitious: randomly-generated game worlds, a crafting system, an in-game physics engine, customisable characters, and so forth. “Since we’ll be helping to develop the game we’ll be able to ask YOU the players what features you want and actually have them created,” they wrote. “This game will be the ultimate mod where anything we can dream we can build!”
They also estimated a December 2012 release date.
I’m guessing they didn’t make that.
Right! In March of 2013, the developers announced that they’d entered alpha, and by August of that year, they were already talking about serious financial issues:
Unfortunately, that ate the majority of our budget while we worked in R&D so ever since December 2012 we have had to fund the development of Yogventures! ourselves. “What does that mean?” I can hear you ask. Well it means the team initially all took time off of our “day jobs” to dedicate to Yogventures, it turns out it was no where near enough time and we had to all go back to those day jobs and continue development on nights and weekends and lunch breaks and pretty much anywhere we can fit in a few hours to tackle the enormous amount of work needed. I’m proud of the team for sticking by the project despite our initial set backs and delays. It’s a testament to how much we all believe in this game and how much we really want to do a good job for all of you that helped Kickstart this company and get us off the ground and running! Hopefully in the near future, we will be able to expand even more and put even more time and effort into making Yogventures! what we all know it really can be, which is great fun!
Uh oh!
Did they keep working on the game after that?
Yep. On August 28, 2013, Yogventures entered open beta for Kickstarter backers. If you weren’t a backer, you could pay $US30 for access. Over the next few months, fans played the beta and sent feedback to the developers, and the vibe seemed generally good. Sure, the project was delayed, but at least there was a game there.
Then, in early 2014, Winterkewl went silent. They stopped updating the game, and fans started posting on the forums asking what had happened, and why it seemed like there was no progress.
The beginning of the end.
Yeah. In early July, Winterkewl founder Kris Vale announced that he had shut down the company and turned over all development work back to Yogscast. He said that he had invested $US25,000 of his own money into the game, and that the work had cost him his marriage:
I tried to cut all costs and continue the development even after the heavy losses of 2013 but the stress of trying to work full time and be full time on the game ultimately caused me to ruin my relationship with my wife, and she filed for divorce because I was so obsessed with finishing this game that she couldn’t take not seeing me anymore. When the divorce began I suffered a bit of a crisis personally and had to take a medical leave of absence from work. I almost lost my job too.
I’m deeply sorry that despite our best efforts we never reached a level of play-ability that inspired enough confidence from not only the community but even the Yogscast themselves. This is my fault, I agreed to every feature request we got because I didn’t want to lose the opportunity. I wanted so badly to make this project a reality I ignored the real-world risks to the point that I almost lost everything and worst of all I let you all down.
Whoa.
Yep. A couple of weeks later, Yogscast sent a letter to their backers saying the game had been cancelled. “Although we’re under no obligation to do anything,” they wrote, “instead we’re going to do our best to make this right, and make you really glad that you backed the project!”
Though backers would no longer receive copies of the game as part of the Kickstarter’s rewards — there was no game to give! — Yogscast promised to instead send out codes for a game called TUG, which was made by some of their friends.
(You can read the full letter from Yogscast to backers here.)
Were they really under “no obligation” to do anything?
Nope. From Kickstarter’s FAQ:
Is a creator legally obligated to fulfil the promises of their project?
Yes. Kickstarter’s Terms of Use require creators to fulfil all rewards of their project or refund any backer whose reward they do not or cannot fulfil. (This is what creators see before they launch.) This information can serve as a basis for legal recourse if a creator doesn’t fulfil their promises. We hope that backers will consider using this provision only in cases where they feel that a creator has not made a good faith effort to complete the project and fulfil.
Fans who have asked for refunds have been told by Winterkewl that they have spent all the money on development and won’t be able to give anyone their pledges back, even though they couldn’t deliver on any of those rewards.
Wait a minute. What happened all of that Kickstarter money?
Great question! The most recent update on Yogventure’s Kickstarter has a full breakdown of how Winterkewl claims the money was divvied up once Amazon and Kickstarter had taken their fees:
- $35,000.00 Concept Art / Sky boxes / Environment Textures (Senior matte painter / concept artist from PDI Dreamworks)
- $35,000.00 Concept Art / Character Designs / UI Design (Senior Character Designer Treyarch)
- $35,000.00 Modelling (Senior Modeler from Dreamworks)
- $35,000.00 Textures / Surfacing / Shader development (Senior Surface Artist from Dreamworks)
- $35,000.00 Animation (Senior Animator from Dreamworks)
- $35,000.00 Programming / Unity Development (Myself Unity Developer)
- $15,000.00 Unity Developer part time / intern
- $100,000.00 Programming / Application Architecture / Back-end Server Code / Voxel Engine (TBD, we were courting several programmers with lots of game experience over the course of the Kickstarter)
- $3500.00 Legal Fees Contracts
- $1500.00 Accountant Fees
- $15000.00 Hardware (PC computers)
- $5000.00 Software Licenses
- $15,000.00 Escrow for expenses related to development like buying Unity Assets etc.
- $50,000.00 Physical Rewards creation and Shipping
That was the plan, they say. But then, Winterkewl’s Kris Vale says, one of their artists quit after two weeks to join LucasArts — keeping the $US35,000 lump sum they’d paid him — and his new contract prevented him from working on the Yogventures project.
Yogscast’s Lewis Brindley was upset, wrote Vale, and asked for Winterkewl to send them all of the Kickstarter money they hadn’t already spent.
“In the end we negotiated that $US150,000 would be transferred to the Yogscast with the understanding that they would use that money exclusively to create and ship all the physical rewards, AND they would help hire the main programmer that we still didn’t have on the project,” Vale wrote.
What happened to that $US150,000?
Another great question! Yogscast isn’t saying. On Saturday, Brindley addressed Vale’s most recent update with a post on Reddit that seemed to handwave Winterkewl’s claims:
Hiya,
We’re not ready to make a detailed statement about what happened with Yogventures. Winterkewl’s statement omits much and I would disagree with a number of points, but there’s no value in going into detail. Our only goal right now is to ensure that we provide the best possible experience for the backers that we can. I can honestly say this has been our goal throughout.
To keep things simple, the facts are:
- Winterkewl failed to meet their promises with Yogventures
- The Yogscast are doing their best to rectify this situation – TUG is only the first step
- Any monies the Yogscast have received in connection with this project has been spent on this project
I would just like to say that this project was started when The Yogscast was just me and Simon making videos out of our bedrooms. We met Kris and trusted his qualifications and assertions that we could trust him with our brand and even more importantly, our audience. Needless to say, I’m upset and embarrassed, but strongly believe the backers will end up getting far more value and a far better result than they originally anticipated when they backed this project.
Lewis
Wow, this is really ugly.
Yep. There’s lots of finger-pointing going on here, and more importantly, there are over 13,000 people who aren’t getting the rewards they were promised when they gave their money to this project. The story could get even uglier if one of those Kickstarter backers decides to try to pursue legal action.
For now? Let this be yet another cautionary tale: be careful what you Kickstart.
Comments
35 responses to “How A Successful Kickstarter Lost Half A Million Dollars”
While I understand all this, the terms and conditions of Kickstarter then change the whole advertising of Kickstarter from what it is. You’re not ‘backing’ something when they’re ‘obliged’ to deliver legally. You’re now ‘purchasing’ something as you’re essentially guaranteed legally a product? To me, that’s been such a misadvertised, misunderstood part of the whole kickstarter process from day 1 with people arguiing vehemently both ways?
But you are. The terms don’t contradict each other. Think of it this way. I’m running a telethon. I say ‘anyone who donates over $50 get a free bag’. They’re backing the project but I’m still obligated to deliver the bag to people who donate more than $50.
What throws people around with that concept when applied to Kickstarter is that it’s laid out in a way that you almost always get the game with every tier reward. It makes it look like pre-ordering the game with a bunch of increasingly expensive special editions. Alternatively the word backing makes some people see it as investing in a company with a promise that if the project is successful the backer rewards will be delivered. It’s similar to investing but it isn’t.
One side see it as backing the game’s developers and end it there. The other see it as buying the game and end it there. The reality is that they’re both right. You’re backing development of the game and they’re promising rewards in exchange for your help. If you’ve pledged the right amount they’re obligated to deliver what they agreed upon when you made that pledge. If the money goes up in smoke, which you should consider a possibility when backing, that doesn’t excuse them of any legal obligation to deliver what they promised.
Personally I’m flexible when it comes to that. I understand that regardless of any legal obligations I’m effectively rolling the dice with Kickstarter money, and I’m not going to give anyone grief if it turns out the t-shirt reward isn’t possible, but that’s how I choose to respond not something I’m formally agreeing to.
and I guess producers will now use that to defend their right to charge gamers for pre-alpha, alpha and beta for their games.
Why shouldn’t they have that right? Assuming that their customers are fully informed about the state of the game and the potential risks, what exactly is the problem? It’s not like they’re forcing you to buy it.
As a personal example, I bought Double Fine’s Spacebase DF-9 through Steam Early Access. I understood that the game wasn’t complete, but I was willing to take the risk and have really enjoyed it so far.
These kickstarter projects are too damn risky to back. I backed a Dreamcast game with failed promises..
SCAAAAAM.
Seriously though, it’s a bit dodgy to pull the shell game trick of ‘shut down the separate company, and we’re clear of any responsibility’. If you look at the project page and open the project creator bio, it says yogscast, and it points straight to the yogscast main site. To claim that it was never yogscast now that the money is gone is misleading at best.
So they say they made a mistake with how this project was run – they should pay for their mistake, rather than expecting to just walk away bearing no responsibility to the people they convinced to hand over money in good faith.
(Full disclosure, not a backer, but have backed plenty of other projects)
it actually does sound as though they genuinely did try their best to make this game happen. The alphas are testimony to that. What i find astounding however was the fact that they actually believed they could get a game of this scale finished with a mere half a million dollars. They should have known better.
everything else, including the companies that sprung up, was merely them trying to protect themselves in a worst case scenario…
personally if were to have backed them, i would have asked the question “where do you expect additional funding to come from?”
I think I saw a quote on one of the earlier articles about the plug being pulled when it wasn’t up to acceptable quality for presales model or something. Which suggests they were probably going to go early access for additional funding I guess.
I’m tipping they just wanted an excuse and a cover to build a 15k gaming PC!
I can’t remember where I saw it, so take it with a pinch of salt. But a quote that has been left out of a lot of reports over this. Lewis stated that the project never received the entire amount in the first place as 1 in 5 backers never came through with any money, a lot of the non-payers came from mid to higher tiers.
I don’t believe that at all.
Firstly: If I recall correctly, when I pledged for a Kickstarter, my credit card was charged and the money went into an esccow account run by Amazon awaiting the completion of the campaign.
Secondly: if there was a way for people to withdraw their funding, the campaigners could have cancelled the campaign and reimbursed everyone.
Not saying it happened but Amazon has sat on money and refused to release it in the past
Nah, no escrow – card is charged at the end of the campaign. You could, I guess, use one of those pre-paid gift cards, or just have no money on a debit card, pledge for a huge sum, and then not have the money come through – I’ve never done it, but I see no logical reason why it couldn’t happen.
It’s not quite 1 in 5 but a great many backers were unable or unwilling to complete the purchase when Amazon tried to collect. We’ve detailed it all in an update on the kickstarter page itself.
https://www.kickstarter.com/projects/winterkewlgames/yogventures/posts/919100
If the credit card on file is declined or rejected, it was up to us to contact those backers and let them know. The backer then had 10 days to rectify the situation or was dropped as a backer. It’s a fairly common thing reported by a lot of Kickstarter projects, though ours was slightly higher than average.
Correct. But people would rather create conspiracy theories.
I don’t get why people would have kickstarted this. Yogscast is hilarious – Simon is so good I think he needs his own tv show. But everyone knows that Yogscast aren’t game developers and nobody had heard of this game developer before. The promises were airy fairy and I am always hesitant when I hear a developer say something like “we will make anything you can imagine”.
Also, saying that a developer was paid $35K and then left right after is ludicrous. Maybe they should have spent more than $3,500 on legal contract fees to avoid this.
“I am always hesitant when I hear a developer say something like “we will make anything you can imagine””
I supported the Planetary Annihilation Kickstarter and so have been playing it and following discussions in the forums since the alpha version. While they do try and listen to the community, it is easy to see why it’s a good idea to take the approach they have and be very careful about promising extra things. Sure there are some good ideas (hell, there have been some amazing sounding ideas), but that doesn’t mean they are realistic to implement, or good for the design of the game, or realistic for the budget or timeframe. Promising something so open ended is a huge problem, because people will ask for the world.
Yeah, anyone with any real industry experience would see this as a red flag in the story. Not only would a contractor be obliged to do the work or refund (except for a catastrophic cock-up in the contract), when do contractors EVER get paid even close to on time, let alone in advance?
Hmmm…. Ok…. maybe this kickstarter project should be part of a cautionary tale, plus I see an abc special about these cautionary tales with both the checkout & good game doing it since it fits their expertise consumer affairs & gaming, cue 2 members of the chaser asking yogcast about the $150,000 missing funds
I’m honestly not surprised this never came to fruition, since alarm bells were ringing right from the first Kickstarter video they put. These guys were never game developers, they were Youtube personalities that became internet-famous for making videos in Minecraft. The fact they were partnered with a developer that had zero games to its name didn’t bode well either. I really don’t know how anyone expected this to turn out well.
Also, if I recall correctly, this whole project took off around the time the Yogscast were having a rather public falling out with Notch. It struck me as a very knee-jerk “Fine! We don’t need your Minecraft! We’ll go make our own game!” type situation. They were probably expecting that if they could get the game to a certain standard during beta that it could replace Minecraft as an engine for their Youtube content, and in turn this would further drive sales. Nice in theory, but hardly practical on a budget of $500K when you have absolutely no development experience.
While I understand backers might feel cheated by the whole thing, it really shouldn’t have been funded in the first place. There has always been an abundance of much more sensible projects than this to back.
If all of this is true it reeks of what happens when average Joe’s become minor internet ‘celebrities’ (I’ve never even heard of them) and then try to do something out of their capabilities, hell, something they’ve never even attempted before, but hey, anything’s possible because they’re big on the internet.
It sounds like there’s been no realistic budgeting done throughout the whole project, and what budgeting there was, paying people their whole salary for the project up front is ridiculous, especially if they can run off and not be liable to pay their payment back.
This is why I’ll only consider backing the most serious of Kickstarters, the Star Citizens, the Pillars of Eternity, the Wasteland 2s. While this is a great way for indie developers to get funds for their game/film/music/whatever, the fact is a lot of them don’t know how to use the money to fully deliver their promises. The majority of cases, they’ll budget to the best of their abilities, ask for a certain amount of money, but then realise half way through development that they’ve blown all their money on something shiny they didn’t need, but they had tens/hundreds of thousands of dollars in their hands after a successful Kickstarter and hey, one smallish deviation from the budget can’t hurt right?
This is getting out of hand,
Something needs to be done to protect investors on kick starter, i wonder how much money has gone ‘missing’ this year alone on kick started
I’ve only backed two things on Kickstarter and got them both.
The OUYA and 8-bit lit’s Mario Block light. Happy with both. The OUYA runs all my emulators so I could pack away my retro consoles and the Mario light is my game room night light.
Erm… You need a night light?…
“Game room” night light. Probably not a bad idea really. Sitting in pitch darkness focusing on monitors is bad for your eyesight, ambient light is a good thing.
Not sure what else to call it. It’s a light. I use it at night when playing games.
http://www.8bitlit.com/
Wow. I wish people would pay me my entire freelance fee up front. I need to get in on some of these naive game dev projects with Kickstarter cash-money.
When you think about it Kickstarter is probably a great place to fish for victims if you’re running that scam. If they’re struggling to raise the bare minimum to get the content made odds are they’ll run out of money before they even get a chance to get lawyers together for legal action. String them along for three months and you’re pretty much home free.
7sevenmillion is a strange number
I just want to commend Kotaku and Jason for a really good, thorough and interesting article. These are too few and far between, so well done.
7sevenmillion?
Poor article from start to finish, drummed up to make it appear worse than it is as click bait. Sad to see Kotaku falling into this trap time and again. Shockingly poor journalistic standards at play.
Oh shut up. Why are you here then Mr High Standards?
“drummed up to make it appear worse than it is”
I’m not sure how a half a million dollar kickstarter failing and fingers being pointed is supposed to sound anything but bad?
So they tried to claim that they spent the bulk of cash using Dreamworks, Treyarch etc? Seems legit. Even as popular as they were (Yogscast), pretty sure they wouldn’t have been able to use Dreamworks and Treyarch…