True, I did skim over those three words :)

I guess it depends on your circumstances. As an employed young adult in Perth, Australia I, and most of my friends have a heap of disposable income to burn. It is easy to forget that others may not.

I agree that people shouldn't be funding Kickstarter projects without being aware of the risks. However I think that most people who fund have disposable income to burn and correctly assess the risk, which is pretty low. The risks on Kickstarter (for backers) are:

- The product will be late. This is true in most cases. If you're impatient, don't pledge on Kickstarter.
- The product will not turn out as good as backers had hoped or expected. This happens, but it also happens the other way (the products ends up better than originally described). The risk is IMO not much higher than the normal risk when buying most products, even those which have already been released.
- The product will not materialise at all. This happens rarely.

In the end I think that the trust people have in project creators is normally justified. People who are cynical or very risk averse shouldn't pledge on Kickstarter. For most other people Kickstarter is perfectly fine, they just need to accept that there's a small risk factor involved.

Well it's a good thing then that they don't take money from failed projects. They are a donation drive facilitation service, and they take 5% from successful pledge drives.

Kickstarter doesn't take 10%, only 5%, but Amazon takes another 5%, so in all the the projects do loose 10%. But many designers have said, that its actually more toleratable sum than what publishers would take from the potential earnings of the game.

Yes - they take money from successful pledge drives.

Meaning, when the developer raises the amount asked for, or more than, as soon as the campaign closes, the developer gets his money. Amazon gets 3-5 percent, and Kickstarter gets 5 percent.

From then on, Kickstarter washes their hands of the whole thing. They have even said, while they hope the projects ARE successful and backers get what they pay for, once the initial 30 day pledge drive (the period where the developer is asking for money) is over, they no longer have any involvement with it. Why would they? They already have their 5 percent.

So what you are quoting has NOTHING to do with whether the developer actually delivers the project that was funded, and EVERYTHING to do with whether Kickstarter takes 5 percent from what could very well be an unsuccessful project and where thousands of backers lose all the money they gave. You are misunderstanding what you are reading..
Yes, I corrected myself in an earlier post :

5 percent is still a lot of money, though. Look at the Doom That Came to Atlantic City, or whatever the game was called, for instance.

Kickstarter made over $6,100 from that campaign alone. And that was not developer money that was money from backers.

That money is now sitting in Kickstarter's bank accounts (or more likely, already spent), while the backers are railing on the developer for 'scamming them'. Why aren't they also railing on Kickstarter? They're holding onto $6,100 from what increasingly looks like a 'scam campaign'. That $6,100 could have paid back a fair number of backers.

But which backers? There were 1,246 of them. Now they could give each one just under $5 each, or do they do it percentage based on how much they donated, in which case the lowest backers get a few cents... Or given that a company has generously promised to give backers a copy of the game, do you refund only to those who pledged more than $50? No matter what, someone will feel cheated.

So why would it fold, you said yourself that they rake in way to much money without doing much.

They could start with the ones who gave a big chunk of money -- one person gave $2,500 and three others gave $1,000. That's a lot of money to lose to a board game.

However, they chose to do it, even if it was only $6 to each person or by lottery, at least it would be a start -- and there are always ways to figure these things out so that the vast majority of people are a little less pissed off. But, of course, it's easier just to pocket the money yourself. I know that.
Less and less projects are being backed, and that decline is likely to continue, which will also stop more people from attempting it as they realize the vast majority don't get funding. Even second-time Kickstarters are saying they get much less money the second time around, even the very popular ones.

Look at Double Fine for instance. They had a massive first Kickstarter, but barely made a third of that amount on their second one (and it was a bit of a scam it seems like, as it appears they may be using that money to keep funding the first game?).

Gamers are getting tired of funding these seemingly endless Kickstarters that then take eons to complete, and that's if they complete at all. As for other types of projects (ie: non-games) a huge percentage of those don't fund either, or they don't complete.

To me Kickstarter was a novel idea at first. Now it's just another of those places that seemed 'cool' when it started and then gave up the ghost a few years later. I'm guessing it will eventually be the MySpace of crowdfunding, as people move onto 'the next big thing'.

Just my opinion, of course, but I'm often quite good at predicting a company's demise as so much of business is just common sense :)

The question with second time KS you should as is: how was their first project received? Did it get good reviews, or were people disappointed? And then there's the question of do people want to back same people all over again. Brian Fargo managed to break a bank with Torment, partly because the original game is such a great game, but partly because he''s one of the few KS project leaders that actually seem to know what he is doing.

Personally Fargo is the only person I've backed twice. Despite Wasteland 2 hasn't been released yet, it looks like he doesn't just talk the talk, but walk the walk as well.

And as for Double Fine, you can follow the production of Massive Chalice at their forums. From the looks of no scamming was done there, as money to Broken Age is gathered from sales of DF's other games. Why they didn't get as much money with Chalice might be that the idea didn't sink in as well with people.

Hello,

Tim Schäfer and Double Fine had problems with budget, overspending and deadline with publisher watchdogs preying down their neck. Now without the evil presence lurking in the dark: How could they possibly become more disciplined when there is no one watching them? And the fanbase is not actually repremanding them for overspending the budget. Everyone is perfectly fine with Double Fine not delivering a 400.000 $ budget game when they got 1,8 million. The only lesson learned by Schafer & Friends is , spent all the money there will be more morons giving us what we deserve.

It will be a fabulous shitstorm when the Double Fine Bubble bursts. But i hope not. Eventually a good adventure game could be created.

Have a nice weekend.

I'm curious as to what you would suggest as an alternative. (Note: I'm not saying you're not allowed to point out problems unless you have a solution, I'm just curious to know your thoughts.) Off the top of my head, I can think of three ways of handling this, each of them presenting its own difficulties. I doubt KS would ever do any of these; I'm just kicking some ideas around.

1. Kickstarter doesn't get their "cut" until the project is complete. Presumably either they or the developer would have to hold that portion of the money in trust until completion; if the project fails, the money instead goes towards compensating the backers. Advantages: this ties KS's profitability to the success rate of their pledge drives, it builds some trust in the sense that "they suffer too" when a project fails, and it gives them some incentive to ensure that projects keep to their deadlines. Problems: it creates some difficulties about defining the "completion point" (if the devs discover that they cannot deliver on a particular feature that was promised, is the product ever "complete"?); completion could in any case drag on for years, making it much harder for KS to predict its cashflow; and in response to these concerns, KS would probably build in some sort of contractual control enabling them force a dev to "shove something half-finished out the door" and call it done once the deadline was past, which is one of the aspects of publisher-driven development that KS is trying to get away from.

2. Kickstarter gets their cut right away, but assumes a share of the liability for failed projects. Advantages: if a project fails, there is someone with deeper pockets for the backers to sue; effectively forces KS to screen applications and block the dodgy ones. Disadvantages: No way in hell would KS ever agree to assume such liability; even if they did, they would have to take a much larger cut of the pledge drive to make it worthwhile, and would probably insist on more publisher-like control of projects; KS would be far more reluctant to allow kickstarters from the "little guy with a big idea", which is a big part philosophically of why KS exists in the first place.

3. Kickstarter establishes a mandatory insurance fund to pay out backers of failed projects. Everyone running a pledge drive has to pay into the fund at a rate determined partly by the amount of money they're asking for, and partly by their proven track-record (a starry-eyed first-timer with nothing but a dream would pay higher premiums than an established member of the relevant industry, and those who have successfully delivered on a previous Kickstarter get a further discount.) Advantages: provides some protection for backers without derailing the profit model of Kickstarter (the business) itself. Disadvantages: raises the cost of entry, especially for the little guy; might make some devs a bit more reckless, since "if they fail the insurance will cover it"; may induce some devs to "lowball" how much they're asking for so as to pay a lower premium.

I think you are looking at it a bit too short term, huge projects were just funded. Kickstarter has existed for many years, 2 months of normal activity during high summer is no reason to see a downtrend. And even if there is a downtrend that is no reason to expect it to fold.
I would much rather see only small projects there anyway.

Kickstarter provides a service, a portal for investors like you to invest into companies that make products or services. In the world of product, service and company investments, you are bound to either win some or lose some. This has nothing to do with the portal that is providing the platform for these projects to potentially happen or fail.

Think of Kickstarter like a Starbucks. Starbucks has these rooms in the back where you can reserve for meetings. Let's say Starbucks charges you $10 per hour to use the rooms. Let's say a bunch of people (investors) go into the rooms to meet with a company and then invest into their project. Let's say that company failed that project and nothing was delivered. Does it make sense for those investors to go to Starbucks and demand their $10/hr back in using the meeting rooms? No, because Starbucks had nothing to do with the project failing. All they did was provide a portal, a platform, a meeting room.

Like playing the Stock Market and Venture Capital listings, potential investors need to do their research into the company and come to their own conscious decision whether that project is worth the risk. So far, I've invested in Hero-U and Universim. Both have fantastic backings. If they fail, then it's a learning experience for me to invest more wisely and if not, then I will never invest into a project again.

Wow, total dick move. I'm glad I've only supported a few major Kickstarter projects. I feel bad for those that lost their pledges.