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What the hell these game developers did with your kickstarter money

kotaku.com

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Re: What the hell these game developers did with your kickstarter money

#21

Post by EricDeb »

jay_kyburz wrote: post #6
tptacek wrote: post #2

As they said: they clearly overpaid on company formation ($4000 for legal and accounting, which could have been accomplished to the same effect for around $500 if they were frugal, including filing quarterly estimated returns). But still, they'd have ended up with ~$9000 gross instead of $6000; the point still stands. Some of these Kickstarter numbers look more game-changing than they really are. But whatever, I'm no…

I'm in the indie games business and I can say they overpaid for everything. 6K for music should be 1-2k at most! Poster Art - What's wrong with those awesome sprites that Kotaku used. Should be 0. IPads? More that one? PAX East? - That's a holiday not a legitimate business expense. This is why they say so many people don't make their money back in the App Store any more. You can't spend indie money like you work for…

Agreed. It's not that these weren't legitimate business expenses but if you are trying to start a company on a shoe-string budget you should really spend considerable time trying to get the best deal possible and limit all expenses to the bare minimum.

Re: What the hell these game developers did with your kickstarter money

#22

Post by harlanlewis »

hack_edu wrote: post #13
guelo wrote: post #8

We keep hearing kickstarter projects complaining about tshirt costs, maybe kickstarter should start warning people about this.

Or someone should make a startup that helps startups sell shirts on Kickstartr, a startup!

Kickstarter isn't far from its own optimization industry - like SEO and social media consultants, but guidance for presenting fiscally impossible idea as plausible and tantalizingly close. Then just make a slick concept video, keyword that baby up, and astroturf some buzz. It can't miss!

Re: What the hell these game developers did with your kickstarter money

#23

Post by phaus »

jay_kyburz wrote: post #6
tptacek wrote: post #2

As they said: they clearly overpaid on company formation ($4000 for legal and accounting, which could have been accomplished to the same effect for around $500 if they were frugal, including filing quarterly estimated returns). But still, they'd have ended up with ~$9000 gross instead of $6000; the point still stands. Some of these Kickstarter numbers look more game-changing than they really are. But whatever, I'm no…

I'm in the indie games business and I can say they overpaid for everything. 6K for music should be 1-2k at most! Poster Art - What's wrong with those awesome sprites that Kotaku used. Should be 0. IPads? More that one? PAX East? - That's a holiday not a legitimate business expense. This is why they say so many people don't make their money back in the App Store any more. You can't spend indie money like you work for…

"IPads? More than one?"

A better question might be, "iPads? Why are these people soliciting money from people to make an iPad game when they don't have any experience developing for the iPad?"

Re: What the hell these game developers did with your kickstarter money

#24

Post by FuzzyDunlop »

wilfra wrote: post #16

Ignoring the suspiciously round numbers and the fact that they grossly overpaid for basically everything as an indie dev on a tight budget, here is what they raised money for: "Hire extra talent for things like music, sound effects and additional platform development like Android Promote and market to help sell the game and fund future expansions and possible sequels Localize the game to other regions like Europe and…

"Promote and market to help sell the game and fund future expansions and possible sequels"

Funding the game in development may have been more prudent.

Re: What the hell these game developers did with your kickstarter money

#25

Post by tptacek »

guelo wrote: post #10
tptacek wrote: post #2

As they said: they clearly overpaid on company formation ($4000 for legal and accounting, which could have been accomplished to the same effect for around $500 if they were frugal, including filing quarterly estimated returns). But still, they'd have ended up with ~$9000 gross instead of $6000; the point still stands. Some of these Kickstarter numbers look more game-changing than they really are. But whatever, I'm no…

I think I disagree, for a $30k investment all the paperwork is useless and distracting from getting things done. Just do a handshake agreement with your partners and get down to doing the real work. After the $30k is gone, which will happen surprisingly quickly, you can look at your business more honestly and see if figuring out the paperwork is even worth it. I wouldn't even bother thinking about taxes, screw the IR…

"there is no way for them to know about that $6k salary if you don't tell them"

Best advice ever.

Re: What the hell these game developers did with your kickstarter money

#27

Post by shuzchen »

guelo wrote: post #10
tptacek wrote: post #2

As they said: they clearly overpaid on company formation ($4000 for legal and accounting, which could have been accomplished to the same effect for around $500 if they were frugal, including filing quarterly estimated returns). But still, they'd have ended up with ~$9000 gross instead of $6000; the point still stands. Some of these Kickstarter numbers look more game-changing than they really are. But whatever, I'm no…

I think I disagree, for a $30k investment all the paperwork is useless and distracting from getting things done. Just do a handshake agreement with your partners and get down to doing the real work. After the $30k is gone, which will happen surprisingly quickly, you can look at your business more honestly and see if figuring out the paperwork is even worth it. I wouldn't even bother thinking about taxes, screw the IR…

I don't entirely disagree with your position, but considering the publicity and press coverage they've received (both before and after the kickstarter funding), it's harder from their position to feel like they can safely slip under the radar. Also, from the IRS pov it's not a $6k salary, it's $30k+ income. It's only after you deduct all the business expenses does it come down to $6k profit. I'm not entirely certain how kickstarter works, but I would be surprised if they didn't file paperwork with the IRS when they transfer the $32k-fee to the developers. Vegas casinos report winnings to the IRS at a cut-off point way below that.

Re: What the hell these game developers did with your kickstarter money

#28

Post by forrestthewoods »

Damnit people. I've lost track of how many times the Star Command Kickstarter story has been misrepresented.

The implication is that only $4000 (post tax) was spent on the game and that's an outright lie. They spent 6k on music, 5k on marketing (poster + pax), and 1k to development/demo hardware. That's not necessarily ideal but it's not entirely unreasonable either. You can argue the marketing/hardware issue perhaps, but 6k went directly into the game in the form of music.

The real lesson to take away from Star Command is their under-estimation of time and money required to create, package, and ship backer rewards. That's the real danger that other projects should be wary of.

Re: What the hell these game developers did with your kickstarter money

#29

Post by tptacek »

shuzchen wrote: post #27
guelo wrote: post #10

Earlier quoted context omitted.

I think I disagree, for a $30k investment all the paperwork is useless and distracting from getting things done. Just do a handshake agreement with your partners and get down to doing the real work. After the $30k is gone, which will happen surprisingly quickly, you can look at your business more honestly and see if figuring out the paperwork is even worth it. I wouldn't even bother thinking about taxes, screw the IR…

I don't entirely disagree with your position, but considering the publicity and press coverage they've received (both before and after the kickstarter funding), it's harder from their position to feel like they can safely slip under the radar. Also, from the IRS pov it's not a $6k salary, it's $30k+ income. It's only after you deduct all the business expenses does it come down to $6k profit. I'm not entirely certain…

They file 1099's like everybody else does. If you don't file, the IRS will just impute taxes to you at the least favorable possible rate, and probably not tell you about it until after you've incurred penalties.

Re: What the hell these game developers did with your kickstarter money

#30

Post by marquis »

jay_kyburz wrote: post #6
tptacek wrote: post #2

As they said: they clearly overpaid on company formation ($4000 for legal and accounting, which could have been accomplished to the same effect for around $500 if they were frugal, including filing quarterly estimated returns). But still, they'd have ended up with ~$9000 gross instead of $6000; the point still stands. Some of these Kickstarter numbers look more game-changing than they really are. But whatever, I'm no…

I'm in the indie games business and I can say they overpaid for everything. 6K for music should be 1-2k at most! Poster Art - What's wrong with those awesome sprites that Kotaku used. Should be 0. IPads? More that one? PAX East? - That's a holiday not a legitimate business expense. This is why they say so many people don't make their money back in the App Store any more. You can't spend indie money like you work for…

>6K for music should be 1-2k at most!

For good music? For music that you don't want to turn off the second time you play it? Don't undervalue good production values.

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