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California game lawyer Zachary Strebeck examines the cancellation of Kickstarter-funded game Yogventures! from a legal perspective.
Yogventures!, a Kickstarter-funded game developed in conjunction between the creators of YouTube show “The Yogscast” and Winterkewl Games, has been cancelled. In a statement from Yogscast, the creators say that the scope of the project was “too vast” and that developer Winterkewl has abandoned it. As a replacement, Yogscast is working with another developer, Nerd Kingdom, to deliver copies of their game TUG and create in-game items for that title that would be similar to those promised for the Yogventures! game backers.
One look at the comments on the Yogventures! Kickstarter page, however, shows that not everyone is okay with this, and rightly so.
I’ve written before on the topic of what legal liability project creators have toward their backers, on indie game site Ind13.com (check it out!). In addition to that, I’d like to make a few points specific to this project, from a legal perspective.
Yogscast themselves state that they are under no legal obligation to do anything. This may be true, since the project was created by Winterkewl Games, LLC. Therefore, the “contract” would be between Winterkewl and the backers who were promised a reward. However, one look at the Kickstarter page shows that the Yogscast name is all over it. For instance:
“Yogventures! is an open world sandbox adventure game featuring characters developed by Simon and Lewis of The Yogscast!”
“Why are the Yogscast making a game?”
“Winterkewl’s artists, modelers, animators and programmers are partnering with us on this project to create the game our community wants.”
See that “us”? Though the creator is Winterkewl games, the project text is written from the perspective of the Yogscast themselves. This may (but not certainly) could be enough to show that a contract was also formed between the Yogscast and the backers. Additionally, whether or not Yogscast received any of the money from the backers may change the analysis. There’s lots of information that we don’t know, which could help to determine contractual liability for Yogscast.
At the very least, Winterkewl could be on the hook for refunds, though it is not certain they could do so.
They are an LLC, and assuming that there are no “piercing the corporate veil” issues like Alter Ego or undercapitalization, if the money’s gone, the money’s gone (check out my post here to read up on these issues with business entities). It may not be possible to go after the personal assets of Winterkewl’s members.
Besides simply asking for money, since the amount is very small it is possible to file a claim in small claims court or a similar level of the judicial system. In California, the filing fees alone are anywhere from $30 to $100 plus service of process, but if a backer has pledged thousands, it may be worth it. Again, however, the real issue is that there may be no money to get at this point, even if there is a legal judgment against the LLC.
This is one of the truisms regarding backing/donating/investing/gambling into anything; don’t put in more than you can bear to lose. It is just a part of this new reality that actual investors have known forever and new backers will just have to learn. It’s not a perfect situation, but this is the price we pay for donating money to sometimes-untested developers. I, personally, think that it’s worth the risk, though, for the good of the community and the industry.
I don’t know what happened inside Winterkewl. They could have tried their hardest (and probably did) to deliver a product that was top quality and met all of a backer’s expectations. I don't doubt their skill or sincerity in getting the project completed. However, they didn’t, and they’re not delivering what they promised. While there are contract defenses such as impossibility or impracticability, it is unclear whether these would apply.
The object lesson here is that it can be extremely beneficial to bring on the necessary business-minded people to keep the scope of the project within the financial and temporal realities that are allowed. Project planners, lawyers and even marketing people can help – get them on your side before you even start the project.
Also, grab a copy of my eBook to get an overview of the legal issues facing game developers and Kickstarter creators.
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