Free Money: When $500,000 Simply isn't Enough

The problems facing Neal Stephenson's Clang show that good intentions are crowd-funding's biggest threat

Clang. Is it the sound of the piercing, insistent spark of steel-on-steel, the audible manifestation of two blades locked in furious combat? Or is it the sound of half-a-million in silver dollars, skittering towards the nearest drain?

Today, some 9,000 people may be asking themselves that very question, and their disdain is entirely justified. Clang, the fanciful sword-fighting simulator fronted by the impressively bearded and bestselling author Neal Stephenson, has fallen on hard times. Subutai Corporation, the development company co-founded by Stephenson, has burned through every gnarled shilling of the $526,125 pledged to its Kickstarter campaign, and, after a series of corporate dead-ends, must now shelve the project until it stumbles into another haystack of cash. Verily, the heart bleeds.

"The Subutai Corporation's grasping explanations offer little in the way of comfort or even humility"

By any measure, this is a sorry affair, and Subutai Corporation's grasping explanations offer little in the way of comfort or even humility. This, the company proclaims, is the fault of a struggling industry, one where trying economic times have turned those holding the keys to the safe into obstinate penny-pinchers. The regrettable bankruptcy of THQ and the closure of the once vital LucasArts are also referenced, extra ballast against what they no doubt anticipate is a storm of disapproval forming on the horizon.

"The overall climate in the industry has become risk-averse to a degree that is difficult to appreciate until you've seen it," Subutai claims, and that comment highlights its gravest dereliction of duty. The 7,000 or so backers that pledged $50 or less to Clang aren't likely to be budding investors or industry analysts; just Neal Stephenson fans eager to see more ripened fruit from his estimable imagination. It's not their responsibility to see the tensions at the heart of the modern games business, but one would hope that Subutai had at least looked before taking 500,000 of the easiest possible dollars.

The problem is, of course, that anybody working in or around the games industry at any point in the last five years has seen it. Frankly, it's been pretty difficult to miss. The stability and influence of practically every established publisher has been consistently and rigorously tested for more than five years. THQ didn't sneak up on anybody. It was a car crash in slow motion.

And yet Subutai overlooked this seemingly vital perspective while asking the general public to contribute to a concept whose lofty ambitions were never in balance with its commercial appeal. Now, not only is that project on hiatus while much of the core team takes temporary work elsewhere, but Subutai recommends that its backers donate to yet another Kickstarter to fill up some of that "indeterminate" period in limbo. This time, it's for STEM, the equally ambitious motion-control system for which Clang was designed.

"In the right hands, crowd-funding is a revolution is how games are made and sold; in the wrong hands, it's free money"

Expensive, bespoke peripherals - a real seller's market. The mind reels.

This is the sort of cautionary tale that advocates of funding platforms like Kickstarter had hoped might never emerge, and yet there are more of them all the time. Ambient Studios closed before Death Inc. could reach its army of patrons, Shadow of the Eternals trudged a winding path towards collapse, and Ouya seemed to design its Free The Games initiative specifically for opportunists out to make a quick buck. Even Tim Schafer, who did more than anyone to raise the profile of Kickstarter for game developers, couldn't finish Broken Age with that initial $3.3 million haul - news that broke just days after Double Fine launched a second Kickstarter campaign for Massive Chalice.

And yet of all the disappointments, it is those involving Schafer and Stephenson that grate the most. In both cases, a beloved figure with a hard-won reputation pitched a passion-project that simply wouldn't be possible working within the system, and yet even with vast sums of money pledged in good faith - to a large extent by their most loyal fans - neither managed to find the frictionless creative nirvana they promised, and neither expressed a suitable degree of remorse or regret when they veered off course.

In truth, the similarities end there. Subutai's apparent ignorance of even the most fundamental market forces, and flagrant use of Stephenson's celebrity to raise consequence-free dollars for a risky project, set it apart from Double Fine's apparent satisfaction at its own ill discipline. Tim Schafer's backers will get their game eventually, and it may prove to be worth the wait, but Subutai's backers are already six months past the promised delivery date of February 2013 with no end in sight. In the right hands, crowd-funding is a revolution is how games are made and sold; in the wrong hands, it's free money.

"I would never question the value of good ideas. Making a game is no small task, but finishing one is an altogether more daunting challenge"

The act of creation lends itself to romantic sentiment. We are drawn to the concept of the artist as an elemental force - visionaries forsaking all in the name of their integrity and ideals. Equally appealing is the idea that these Byronic dreamers are shackled by the demands of vast corporate structures, forced to compromise and capitulate at every turn. It is only once you've seen behind the curtain of a creative industry that you realise the absurdity of such notions. I would never question the value of good ideas. Making a game is no small task, but finishing one is an altogether more daunting challenge. Not everybody possesses the skills to make that happen, and those that do are rarely described in terms of genius or artistry. More's the pity, because they, more than the day-dreaming visionaries, make the truly great games possible.

This kind of pragmatism seems to be the quality most obviously lacking among Kickstarter's growing community of disappointments and failures. Could Neal Stephenson have used some of the earnings from his long career as a best-selling author to fund the prototype for Clang? Would Clang have raised more money with a working prototype rather than a sackful of good intentions? Could that working prototype and larger pool of development capital have made the whole proposition more attractive to those curmudgeonly publishers? Perhaps, but then it would have been Subutai that stood to lose half-a-million dollars, and I don't need to elaborate on why that's the less attractive option.

These days, I make a point of asking any well-known developer using Kickstarter to get a passion project off the ground the same question: If the game is a success, and makes enough money to capably fund the development of new projects, will you return to the crowd for funding? The immediate response, always and without exception, is yes.

I have no axe to grind, but something about that answer makes me uncomfortable.

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Latest comments (25)

Alan Wilson Vice President, Tripwire Interactive8 years ago
This: "Kickstarter is amazing, but one of the hidden catches is that once you have taken a bunch of people's money to do a thing, you have to actually do that thing, and not some other thing that you thought up in the meantime."

Now, I for one am very glad I didn't put any money into this project. These guys need, at best, a severe slap upside the head. The sheer disregard for all the people who gave them money in that statement above disgusts me. And blaming the industry, next-gen consoles and pretty much anything except yourself in this mess just deserves another slap. We built 2 (two) games for PC for about this amount, released them through Steam and other outlets and have gone on to sell over 3 million game units, plus many millions of units of DLC.

Its (yet) another case of a bunch of people taking on something they don't understand properly - and doing it with the fans' hard-earned money. They could at least make SOME attempt at showing a little humility and remorse. But I guess that would be beyond them.
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what does the state of industry have to do with this? You have secured the funding, so what happens at THQ should have no effect, if anything the industries hard times should be helpful to those who can secure funding. More talent available means you are likely to get great talent at a reasonable rate. This doesnt pass the smell test at all. If you cant make the game for 500k, dont ask for 500k. If you dont know if you can or cant make the game for 500k, dont ask for 500k.

Edited 1 times. Last edit by Todd Weidner on 20th September 2013 4:28pm

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Michael Guenther CPA 8 years ago
I would love to see larger kickstarters like this one post "open source" detailed financial statements, that way the backers can see how their money is being used. I can't tell you how many times I have seen start-ups pay their founders salaries of $80k from investment capital while the project suffers (not that I think Clang did that).
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Show all comments (25)
James Boulton Owner, Retro HQ Ltd8 years ago
Oh dear. Another kick in the nuts for crowd funded games. :(
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Paul Johnson Managing Director / Lead code monkey, Rubicon Development8 years ago
Nobody say "Fraud".

This is totally unacceptable.
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Lewis Pulsipher Game Designer, Author, Teacher 8 years ago
Such moral indignation! Kickstarter is inherently risky, and I don't think the KS people hide that. You have to know that when you support a KS, things might turn out badly. Any other position is the equivalent of the monkeys who hear, see, and speak no evil. (Spoken as someone who has not yet supported any KS.)
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Steve Peterson Marketing Consultant 8 years ago
I think this will make people look more closely at the track record of those behind a Kickstarter campaign, and look for campaigns that have a good likelihood of getting to the finish line. After all, people won't give money just to support the idea -- they do expect to get a product at the end of the process. It will be interesting to see how the people who put up this money react to the news.
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James Berg Games User Researcher 8 years ago
Kickstarter is not a pre-order system. I backed this, and bought a Razer Hydra to go with it, because the idea was awesome, and they had a shot at succeeding. I pitched in $25 to give them that shot, and while I'm disappointed that they failed, the vitriol here is, imho, rather misplaced. Folks should read the other Clang article up, which actually presents information.
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Greg Wilcox Creator, Destroy All Fanboys! 8 years ago
Heh. I wonder id folks would be upset if this has Oculus Rift support. I'd bet you'd see more money flood in if they suddenly noted that "hey, we're baaaaaack!" and started passing the hat around...

@James Berg: FIRST impressions are important, and that initial non-apology "Ooops! It's NOT our fault!" post didn't do anything to make those who pain in thinking this would get DONE any happier. You're out, what $25 and whatever a Razer Hydra costs (but you can use that Hydra for something else, correct). Some folks are out MORE money and probably feel burned despite and fine print in that pledge agreement.
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I am less frustrated that this group tried something and failed than by their ridiculous claims that this is somehow because of market conditions that are completely outside the scope of what they are trying to do.

THQ was an unmitigated disaster in recent years, and nobody was surprised when they finally went up in smoke. LucasArts didn't fail; they were acquired and then shut down. Neither of these have any negative impact on your ability as an independent game developer to create and deliver what you have promised for the funding that you were pledged.

If you just didn't know enough at the outset, and after getting started you then realized that, "Oh crap, we need more money," then just own up to your own failings and move on. I'll have a hell of a lot more respect for you, and would consider putting funding behind a second venture because you have obviously lived and learned. As is, no, there's no way I can trust anything else you have to say moving forward. (Don't even get me started on Tim Schafer, ugh.)
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Diego Santos Lećo Creative Director, GameBlox Interactive8 years ago
Ok... let us overreact at the fundamentals of Kickstarter, over, and over, and over again. That's productive...

I see your point, but you lost me at the "(...) cautionary tale (...)" paragraph. Are there supporters who think kickstarter projects can't fail? As risky enterprises as they all are? Its part of the system, its part of the whole point of Kickstarter, actually.

You are not buying, you are backing. And hoping. You are giving money to a stranger: they might just run with it (although Kickstarter does have _some_ level of accountability in its rules).

Can't we take the system as it is - a functional one - and report the miserable failures, the triumphan successes, and be done with this discussion?

PS: Tim Schafer is putting his own money to finish his game, why the hell are people still complaining? I don't get it.

Edited 2 times. Last edit by Diego Santos Lećo on 21st September 2013 5:48am

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John Cook Senior Partner, Bad Management8 years ago
"Making a game is no small task, but finishing one is an altogether more daunting challenge"

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Eyal Teler Programmer 8 years ago
Diego, you are right of course, but I think that a lot of people, perhaps even most people, are starting to face the realities of Kickstarter that they previously thought of as only theoretical.

A lot of people do view Kickstarter as pre-order. Others just want to support their favourite creator. And then there are Kickstarter fans. Kickstarter fans are not there just for the products. A lot of them are there because they want developers to remain independent, because they want to encourage developers to distribute their games DRM-free , or other such agenda.

All these people will be disappointed, but as a Kickstarter fan I know that one of my fundamental wishes turned out to fail in many cases, as it did in the Double Fine case. I support Kickstarter because I want developers to be independent. I want them to have the money to produce a game, and then hopefully make money off it and make another game using that money.

That's why I don't like the Double Fine situation. People gave them around $3m to produce a game and now they're spending more millions of their own money to produce it. Instead of making them more independent, they become more vulnerable. Other projects end up getting investors (Shadowrun Online is a recent example), again losing their independent status. Most projects go way over budget.

I still see the benefits of Kickstarter. I does allow creating projects which otherwise would not see the light of day. It does have successes, and it does help small indie devs get off the ground. There's still a need to adjust expectations. I think that the Kickstarter bubble is starting to burst, and it will make people reevaluate their pledges.

I'm looking forward to Wasteland 2. I still have some trust in Brian Fargo, and how this project turns out will likely determine how I feel about big Kickstarter projects.

Edited 1 times. Last edit by Eyal Teler on 21st September 2013 9:45pm

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Sean Kauppinen Founder & CEO, IDEA8 years ago
@Erin - best assessment yet. You're completely correct here. Blaming THQ and LucasArts? Apparently they legalized weed in Washington state and this may be the first effect of that!
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Successful Kickstarter bids, should have better accountability and transparency with regards to the use of its funds. A good ethical template should be proposed, whereby a development plan is available to backers, and the usage of funds are released for each objective/milestone
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Adam Campbell Product Manager, Azoomee8 years ago
Kickstarter and other modern crowd funding platforms are an incredible gift to the games industry. People need to exercise great caution and responsibility when it comes to asking for money and promising great projects.

I would not call the whole thing a 'fraud' we just need more sensible approaches, better education and good project planning when it comes to this area of business.

Edited 1 times. Last edit by Adam Campbell on 23rd September 2013 10:21am

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I.e accountable (currently when debs max their credit line from a Kickstarter fund, there is zero recrimination except street cred somewhat)
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Tameem Antoniades Creative Director & Co-founder, Ninja Theory Ltd8 years ago
Bad investments are hardly new and not automatically fraudulent. This is why VC's and publishers look for proven track records, experienced teams, a great idea that fills a need and a working prototype, none of which were apparent in this Kickstarter campaign.

"a foole and his money is soone parted" comes to mind.

Are there investment guidelines for investors on Kickstarter?
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Bruce Everiss Marketing Consultant 8 years ago
Easy come easy go.
What was this? Arrogance, ineptitude or just having a laugh?
The fundamental of running a business (other than making a profit) is to cut your suit according to the cloth available.
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Sandy Lobban Founder, Noise Me Up8 years ago
Some financial background info should be provided with kickstarter projects. Im sure it will evolve as a platform and become a bit more watertight in future. Shame that it gets abused though. Greed knows no bounds with some people.
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Darren Adams Managing Director, ChaosTrend8 years ago
Well you know what they say;

"Creatives usually make shit business people"

I would tend to agree with that.
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Bruce Everiss Marketing Consultant 8 years ago
Lots of creatives are very good at business.
Spielberg, Hirst, Molyneux, Walter Scott, George Lucas, Jez San, The Stampers, Vettriano, Jagger, McCartney, Lloyd Webber, Billy Connolly. I could easily name 100 just off the top of my head.
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Tameem Antoniades Creative Director & Co-founder, Ninja Theory Ltd8 years ago
Shit business people make shit business people. How dare you discriminate against creatives! ;)
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Darren Adams Managing Director, ChaosTrend8 years ago
Thank you for providing me with a pointless list Bruce, but artistic success does not equate to business acumen. I would argue that 90% of the people you just quoted don't actually do the business side of it themselves and hire someone else to do it.

Tameem took it in the spirit it was meant in. :)
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Sandy Lobban Founder, Noise Me Up8 years ago
Business - The art of taking money from people without resorting to violence.

At least the majority of us in this industry aim to make the process fun! :)

Edited 2 times. Last edit by Sandy Lobban on 23rd September 2013 3:46pm

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