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The dangers of crowdfunding.

ragz45ragz45 rochester hills, MIPosts: 686Member Uncommon
Frontier Developments (studio behind Elite: Dangerous) announced yesterday that they are going public on the London Stock exchange.  For those not in the know, FD received 1.3mil earlier this year through kickstarter for the production of Elite: Dangerous.  One of the reasons they were asking for crowdfunding was that they didn't want to have to answer to a board of directors or publisher when making the game.

So now they are going to take all of those backers 1.3 mil, and sell the studio on the market.  Which will end up with them having to answer to a board of directors, and could even possibly end up with the studio being bought out by a larger company like EA.

There is absolutely nothing in the kickstarter contract to prevent this.  Nothing to protect the hundreds of thousands of backers.  Yes those backers will still get what ever "backer rewards" were promised them, IF the game ever goes public.  But the knife in the back is still hard to take.

http://www.gamasutra.com/view/news/195992/Frontier_Developments_going_public_with_59M_in_shares.php

Comments

  • DeserttFoxxDeserttFoxx North York, ONPosts: 2,360Member Uncommon

    This is one of the reasons i dont give money to kick starter.

     

    They basically give you a presentation, a promise of a dream they want to bring to reality, and you have to hope they will actually do it after you pay them.

     

    What is the reason for this game to be put on the stock exchange? Seems clear they want to draw salaries, or bigger salaries then they currently earn. So now it isnt about making the game, it is about being legitimized. Now they can say, look we convinced all these people to give us 1.3million now you should see we are worth more then that, so invest in us.

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  • DamonVileDamonVile Vancouver, BCPosts: 4,818Member
    You know what the first conversation is going to be between the new investors and the programers. " have you guys heard of a game called wow" ?
  • SabasSabas herzelePosts: 197Member

    Exellent post.

     

    There isn't much I can contribute beyond, it was to be expected.

     

    I don't want to be negative for the sake of it but what else can you expect from these kind of people?

    I also don't see how anyone could defend this type of action.

    It won't be the last of these types of shady dealings either.

     

    Pretty soon some kickstarter will blow up and run away with a shitload of money, as an example.

     

  • ragz45ragz45 rochester hills, MIPosts: 686Member Uncommon
    Originally posted by Pandamin

    Exellent post.

     

    There isn't much I can contribute beyond, it was to be expected.

     

    I don't want to be negative for the sake of it but what else can you expect from these kind of people?

    I also don't see how anyone could defend this type of action.

    It won't be the last of these types of shady dealings either.

     

    Pretty soon some kickstarter will blow up and run away with a shitload of money, as an example.

     

    Honestly I feel like it would be karma if EA actually did buy them out.  Of course if that did happen the dev's would be walking away millionaires and laughing.

  • kragekrage Miami, FLPosts: 419Member

    Still worth the risk to back game devs. Just because they are going for IPO doesnt mean they are going to get funding from Sauron or some other great evil liek EA lol.

    Kickstarter is what it is, large projects seek seed capital, and then take it to the next level. This whole philanthropic expectation of companies on crowdfunding platforms is just wrong. So you are right that the community "us" need a reality check like this.

    Not to mention Crowdfunding also established expectations, early adopters, and more tangible development guidelines, I doubt any investors will stray far from the early adopters aka customers guidelines/expectations from the kickstarter...well unless they are trying to lose money due to severe money allergies.

    So really the only thing that will change is more rigid timelines, and more capital to make a better game.

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  • RusqueRusque Las Vegas, NVPosts: 2,228Member Uncommon
    Originally posted by Pandamin

    Exellent post.

     

    There isn't much I can contribute beyond, it was to be expected.

     

    I don't want to be negative for the sake of it but what else can you expect from these kind of people?

    I also don't see how anyone could defend this type of action.

    It won't be the last of these types of shady dealings either.

     

    Pretty soon some kickstarter will blow up and run away with a shitload of money, as an example.

     

    Kickstarter will be fine because kickstarter is not "videogame starer" And there are lots of projects out there getting made. Since I'm an all around geek, I also enjoy minis, ccgs and boardgames. Those are some of the best kickstarters you can support. Because they're making a physical product and you often get a huge bargain in terms of value compared to existing major companies.

  • SabasSabas herzelePosts: 197Member
    Originally posted by Rusque
    Originally posted by Pandamin

    Exellent post.

     

    There isn't much I can contribute beyond, it was to be expected.

     

    I don't want to be negative for the sake of it but what else can you expect from these kind of people?

    I also don't see how anyone could defend this type of action.

    It won't be the last of these types of shady dealings either.

     

    Pretty soon some kickstarter will blow up and run away with a shitload of money, as an example.

     

    Kickstarter will be fine because kickstarter is not "videogame starer" And there are lots of projects out there getting made. Since I'm an all around geek, I also enjoy minis, ccgs and boardgames. Those are some of the best kickstarters you can support. Because they're making a physical product and you often get a huge bargain in terms of value compared to existing major companies.

     

    Sure but that doesnt negate anything I said.

    There's no need for white knighting kickstarter here.

  • CrazKanukCrazKanuk Elmira, ONPosts: 2,499Member Uncommon

    I don't know that this is a problem with Kickstarter as much as it is an issue with the studio.

     

    I think that the jury is still out on Kickstarter as a solution for crowdfunding games, but the issue with calling it "dangerous" is simply that there is a really poor sampling of triple-A games that have been funded that way at this point. I think that we'll need to wait and see how these multi-million dollar projects like Camelot Unchained, Double Fine Adventure, Project Eternity, Star Citizen, etc. I mean these are projects which were kickstarted by people who actually know what they're doing, so that should be the gauge. 

     

    That's not to say that the game will be on time :) Where a publisher would have felt that pain before, maybe the crowd funding the game will feel it, but by the end of 2014 I think we should have a much more clear picture about whether crowdfunding provides any sort of real value. 

     

    Oh yeah, but I also don't think this sets a very good precedent, because does this simply mean that more and more people will take our money to get a demo reel that will allow them to simply go public? 

    Crazkanuk

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