inXile funding Torment

Discussion in 'General Gaming and Hardware Forum' started by Jebus, Feb 23, 2013.

  1. Jebus

    Jebus Background Radiant
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    Jan 29, 2004
    Re: Just a general FYI: I work for inXile now

    That's bullshit. Wasn't the big idea to use the revenues from the kickstarted WLII to fund their future projects? Do they really think people are going to keep supporting them for free if they're just going to turn out all profits for themselves, instead of investing it in new projects?

    Money-grabbing assholes. This wasn't how it was supposed to be.

    EDIT: Oh, and congrats on the new job Kharn
     
  2. Yamu

    Yamu Le Fromage Vieux oTO Moderator Orderite

    Jul 26, 2003
    In this case I think it can be justified. WL2 and Project Eternity aren't slated to see any return on investment for awhile now. There aren't any solid dates posted yet, but from the look of things the Torment Kickstarter is probably going to begin and end before either of those projects goes gold.
     
  3. Guiltyofbeingtrite

    Guiltyofbeingtrite Vault Dweller

    751
    Oct 13, 2008
    It isn't supporting for free, you're getting the product in return (unless you kick in $1 or something). For $50 I'm getting a boxed game, map, etc. I'm just giving them the money upfront.
     
  4. Jebus

    Jebus Background Radiant
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    Jan 29, 2004
    Aparently, only completely public companies are obliged to publish balance sheets in the US.

    Heh. That's amazing. How could you ever have any transparency whatsoever if companies don't have to make anything public? In the EU, every company with limited liability is required to publish their yearly balance sheets (on-line, even).

    So, no Inxile balance sheet = I can't see what they intend to do with their Kickstarter money at all. This stinks.
     
  5. Sander

    Sander This ghoul has seen it all
    Staff Member Admin Orderite

    Jul 5, 2003
    Re: Just a general FYI: I work for inXile now

    Was it? And why would that preclude them from going to Kickstarter again?

    Yes. Because people will. Because they can't start up a project now because they have no revenue (it's all in WL2, because that's what the Kickstarter was for, remember?)

    They're spending it on WL2. If you didn't trust the company to do what they said they would with the money, why'd you give them money in the first place?

    I also don't see why you're so outraged about this. InXile used Kickstarter to get funds to create a game. They are using those funds to create said game. Now they want to create a new game but have no revenue stream, so why would Kickstarter not be appropriate here? It's not like they're going to be forcing people to donate to that Kickstarter, either.

    The Kickstarter wasn't "please give InXile funding for every game ever". It was to Kickstart one specific project. Maybe in the future they'll be a self-sustaining company once revenues for WL2 start rolling in -- but that won't happen until the game is actually published, which won't be for another six months or so (I think). Had they used their WL2 Kickstarter money to start Torment, then they'd actually be breaking promises and that's something you could be angry about.

    But now I seriously do not understand what you are angry about. If you thought you were Kickstarting InXile in general instead of just Wasteland 2, you just didn't actually pay attention to what they were pitching.
     
  6. Jebus

    Jebus Background Radiant
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    Jan 29, 2004
    Re: Just a general FYI: I work for inXile now

    Oh really? You seem to be very well-versed in the internal financial housekeeping and budgeting of InXile. You have some information I don't?

    What I see is this: a company that was, prior to the WLII kickstarter, most likely on the verge of collapse. Their one big release of the last years, Choplifter HD, apparently didn't sell well, as can be assumed from the fact that its price dropped from $15 to $10 in just two months after release (source). That price of $15 was widely ridiculed, BTW, but Fargo defended that price by promising free DLC (source). That free DLC has since been delivered, BTW, with a "zombie mode" containing a whopping 5 levels. This next to four other DLC's that cost $1 each. (source).

    Considering Fargo himself stated that development of Choplifter HD cost $1.6 million (source), I'm pretty damn sure they didn't break even. And that's their only release since The Bard's Tale remake in 2005.

    So if a company this inept in budgeting and finances (i.e. spending $1.6 mln on a casual game that they then have to reduce in price 33% from their originally budgetted sale price only two months after launch) starts up a new project only half a year before their current project ends (instead of waiting for the revenues of that title), and then hatches the plan to have this one crowd-funded too, yes I get angry. Budgeting is part of what I do for a living, and I can see that this whole operation has a very bad smell to it. Bad budgeting and trying to juggle to many projects at once is the exact way Fargo (CEO of Interplay from its founding to 2002) brought Interplay to ruin (even before Titus acquired it in 2001) (source). Even in the boom years of Interplay, the second half of the 1990's, Interplay was so badly managed financially that Fargo had to introduce Interplay to the market in 1998 (and eventually see Titus buy most of its stock) because of a dire need for capital. See a repeat of history here? I sure as fucking hell do. He did learn, though, apparently, as now he's funding his over-reaching and project spam not by publicly trading his company, but by making stupid nostalgic sobs like us fund his company (and probably save it from financial ruin) while giving us no say or transparency into his company whatsoever. I'd call it shrewd, but it's probably going to lead to another collapse anyway.

    Anyone who'll spend money 'kickstarting' Torment 2 is a dupe..

    *EDIT*

    Also,

    I never thought I was kickstarting InXile, that's the entire reason I'm mad. I thought I was kickstarting Wasteland II, so InXile could prove old-school gaming isn't dead and make the game. Then, they'd used the profits from WLII create more of these games and *boom* old-school gaming makes its comeback.
    What I foresee happening now, though, is this:
    A) InXile crowd-funds game A
    B) InXile makes game A
    C) InXile crowd-funds game B
    D) InXile finished and sells game A, uses profits (if any) to fill InXile's previous financial holes and, probably, pay didividends to shareholders (=Fargo)
    E) InXile crowd-funds sequel to game A
    (...)
    X) InXile fails to crowd-fund games because people have caught on to their cynical ways, InXile goes the way of Interplay and crowd-sourcing for "indie" (a questioniable term when it comes to Fargo in the first place) games is disreputed forever.

    Consider the term "Kickstarting", Sander. It doesn't mean "recurrent free capital ad infinitum".

    You might have have shifty and hand-waving reasons to believe otherwise, but untill I see a balance sheet or time proves me otherwise my assesment is as valid as yours, probably more so considering Fargo's managing history.
     
  7. Sander

    Sander This ghoul has seen it all
    Staff Member Admin Orderite

    Jul 5, 2003
    Re: Just a general FYI: I work for inXile now

    You don't trust Brian Fargo? That's fine. You can argue that Interplay in the latter years was mismanaged. You can argue that inXile had a poor release in Choplifter HD (though I'd struggle to say that without access to financial/sales data). None of that has anything to do with your complaint, which was that somehow "this wasn't how how it was supposed to be" with regards to WL2/Torment.

    Might I add that if you are only now concerned about this stuff, maybe you just didn't do enough research before investing in WL2? Because these concerns aren't caused by that Kickstarter -- they're all from before that time.


    And inXile was just supposed to lay off everyone while Wasteland 2 wasn't bringing in revenues yet? Did they at any point promise not to start another Kickstarter for a separate project?

    So what part of this is them betraying their promises? In fact, I'm pretty sure Fargo has from the start suggested that he loves the idea of crowd-funding because of the direct feedback from the fans without any publisher interference. If anything, he's doing exactly what he said he would do: start Wasteland 2, and then try to use crowdfunding for future games.


    That's certainly a possibility, but how is that relevant? Wasteland 2 was never pitched as the game that would allow inXile to be a self-sustaining company forever.

    It seems to me that you created an expectation that wasn't actually based on reality, and are now complaining that reality isn't living up to that expectation. That's a bit unfair, isn't it?

    Here's another possibility, by the way:
    A) inXile Kickstarts WL2.
    B) While WL2 isn't bringing in revenue, inXile Kickstarts Torment.
    C) WL2 gets released, starts bringing in revenue
    D) inXile starts on new game with revenues from WL2 sales.
    E) Torment is released, brings in revenues.
    F) inXile starts on new game with revenues from Torment sales.
    G) New game 1 is released, brings in revenues.

    I would guess that this would be their preferred to do business, tough that is admittedly mostly a guess -- as is, I should add, your conjecture.

    But unlike you, I don't see the moral problem of going to Kickstarter to ask for money to fund a project, as long as that money is used to actually create that project and nothing else. People can decide for themselves whether they want to support each project, and as long as inXile isn't misleading its customers/kickstarters I don't understand why we should be outraged. Or why you are.


    Kickstarting Wasteland 2 isn't the equivalent of Kickstarting inXile as a whole, something you seem to have lost sight of.

    Also, to be quite honest, Kickstarting can absolutely be recurrent free capital. As long as you keep producing quality games from Kickstarters and producing exciting pitches for Kickstarter, people will continue to fund your games. Every "donation" is in effect a sale, and there's no pyramid scheme or unsustainable model at the basis of running a Kickstarter. There's an implicit suggestion that at some point, the Kickstarter money is going to run out. But that isn't a necessity or inevitability -- unless you think that at some point, video game buyers are going to stop buying video games.

    Yes, Fargo's awful managing history of producing a major video game company from scratch and then selling it, and running another studio for the past 11 years. Both in what is a notoriously unstable business. It's not a slamdunk success, but your suggestion that he's irresponsible and doesn't know how to run a business seems just a little farfetched. Especially when you consider a simple fact that over multiple decades, failure rates of companies in general (not just in video games) are incredibly high.

    Note that I'm not saying inXile is completely healthy financially and that they'll do fine forever. I just don't see why I should be panicky or outraged about them starting a new Kickstarter for a separate project. I really don't.
     
  8. Jebus

    Jebus Background Radiant
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    Jan 29, 2004
    I don't see why American companies don't have to publish data. Really, I don't get it. It's like that in most civilized countries - corporate secrecy never does anyone any good.

    At any rate, neither of us can prove anything (though I do have some tangeable evidence to support my assumptions, at least). We're going to have to revisit this in five years or when I will be able to sing "I told you so" and dance an annoying little dance.
     
  9. Sander

    Sander This ghoul has seen it all
    Staff Member Admin Orderite

    Jul 5, 2003
    InXile failing wouldn't disprove my point in any way (well, except if they fail before Wasteland 2 is released, I guess). It's not about whether they'll be successful. It's about the moral outrage you seem to feel at them starting another Kickstarter -- something you still haven't been able to explain properly.
     
  10. Jebus

    Jebus Background Radiant
    Orderite

    Jan 29, 2004
    Yes I did, you just choose to misunderstand me and present my case as "you thought you were Kickstarting InXile haha", while that clearly wasn't the case.

    I've known you long enough to know what you're playing at, and I'm not going to go along with your favorite tactic: misdirecting arguments by throwing around strawmen like they're going out of style, and employing reductio ad absurdum as if it's your dying mother's last wish, all the while ensuring everything bogs down into semantic arguments untill nobody reads along anymore except for you, me, and Crni Vuk. I've argued you before, and seen you argue plenty of times, and you never nuance anything or back down from anything no matter what - even with plenty of sources proving you wrong. I don't feel like wasting my time on this.
     
  11. Sander

    Sander This ghoul has seen it all
    Staff Member Admin Orderite

    Jul 5, 2003
    Here's your original argument (emphasis mine):

    You're displaying moral outrage about them starting another Kickstarter. I don't get that moral outrage, because the Wasteland 2 Kickstarter was always just for Wasteland 2 and that was never unclear.

    I'm trying to understand why you are morally outraged by this, because so far you've only argued that inXile is possibly badly run. I don't think that's at all relevant to the moral outrage.
     
  12. Jebus

    Jebus Background Radiant
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    Jan 29, 2004
    As I said before: I'm outraged because Kickstarter isn't 'meant' to provide 'free capital' to large companies: it's for starting companies to get their first leg-up, or the funding of innovative projects in general (I guess WLII falls into the second category).
    InXile GOT their 'kickstart': the funding of their first 'independent' game. The point is they're supposed to use this 'kickstart', and the revenue from the project that was kickstarted, to fund their next ventures.

    As it is, I get the very strong feeling InXile saw Kickstarter as a very, very, very cheap way to finance capital: no intrests, no dividends, no information nor participation has to be given out to anyone. Especially the timing of this Torment kickstarter leaves me very suspicious: half a year (presumably even shorter when the actual Kickstarter launches) before their current project starts generating revenue. Isn't that timing blatantly obvious? What, they can't wait less than half a year before starting their next project, after their current one is wrapped up? It's so they don't have to explain to people why they're launching another Kickstarter instead of using the sales of WLII as funding or leverage for credit.

    Two scenarios are possible: either WLII is succesfull and InXile is decently managed - and then Fargo has absolutely no excuse for asking for hand-outs for Torment when he could've used the revenues from WLII, or credit, or public capital LIKE ALL OTHER COMPANIES IN THE WORLD (in other words: Fargo pockets profits from capital that was provided to him practically for free, which is IMHO morally loathsome in regards to the whole point of their Kickstarter); or WLII is not succesfull or InXile is managed as ineptly as Interplay was, in which case InXile is either going to have to 'kickstart' forever and waste the money of well-meaning people, or go under.

    Either way, this intent of theirs baffles and outrages me, and I'm pretty damn sure a lot of other gamers and game journalist will have a similar reaction to mine. You don't even have to have a working knowledge of finance to get the gut feeling it's not the right thing to do.
     
  13. PlanHex

    PlanHex Legislative Senator oTO Moderator Orderite

    Nov 4, 2007
    Yes, these are the only two possible scenarios. Well done, Jebus.

    Maybe in some different universe revenues from WL2 goes toward WL3 and Torment kickstarter money goes toward Torment, but not in this one because we live in the dichotomy universe.
    In the dichotomy universe, the success of games is wholly dependent on how they are managed and not whether or not they're small games in a unpopular genre.
     
  14. Sander

    Sander This ghoul has seen it all
    Staff Member Admin Orderite

    Jul 5, 2003
    I don't see Kickstarter that way, honestly. As I see it, it's just a platform for crowd-funding for specific projects. From that perspective I don't think there's anything morally wrong with running a second Kickstarter. They're not deceiving people, they appear to be delivering on their promises for Wasteland 2 (that demo was pretty impressive, if you ask me), and they never promised to use future revenues for Wasteland 2 to produce more games (though, you know, they are a game company, so what else are they going to do?)

    I mean, I view my Kickstarter donations as buying a product with uncertainty attached, to an extent. If I don't trust a company enough, I won't give them my money. And if I don't like their proposition, I won't do it either. If their Torment pitch turns out to be shite, or I don't like the pricing for their rewards, I won't give them my money either -- even if that means BN is out of a job.

    Pre-production on Wasteland 2 is currently finished, which means there are a lot of people running around with nothing to do because their role on Wasteland 2 is finished. Not starting a new product means firing all those people right now. That's how things usually work in the video game industry. Instead, they could use this "down" time to start a new product -- which is what they're doing, but you need capital for that. And in fact, as Wasteland 2 nears completion I assume you will see more and more people with their jobs on Wasteland 2 finished, and hence out of a job unless inXile finds a source of revenue and a new product to work on before Wasteland 2 is shipped.

    Half a year is a pretty long time to keep a big staff on hand. Plus, after those six months, you don't know how much revenue really is going to roll in. Even if the product is great and very well-received, which is never a certainty, how many extra people are going to buy it? Maybe most of the market will already have a copy because of Kickstarter. At the very least I would intuitively expect the day one boom to be pretty lackluster, because the most interested parties already have the game. That represents a problem. I don't know if that's their concern, but it would be mine.
    The funding wasn't free, after all: they did give out their product in exchange for the funding.

    As for the issue of using loans to finance a new deal, I have no idea how easy it is to get capital that way for a company like inXile. But I do know this: in the video game industry, that's usually done through publishers. And part of the reason why Fargo went with Kickstarter was exactly because he did not want to go through a publisher and all their requirements. Going to a publisher to get the next game made would completely defeat the purpose of going with Kickstarter in the first place.

    So essentially, inXile has two options, as I see it.

    1) They either wait for Wasteland 2 to ship, to start bringing in revenue, and to then build up enough revenue to start production on another game. This would presumably mean firing a large part of the team, and then re-hiring them once production on the next game starts. It also means more uncertainty, as they can't know how much additional revenue Wasteland 2 is going to bring in beyond the Kickstarter money. This would be your preferred course of action.

    2) They look for a new source of capital to start their new product now, which would allow them to shorten the gap between the publishing of Wasteland 2 and the publishing of Torment, which is probably also healthier for the company in the long-term. Kickstarter really is a logical choice. The downside here is that there's a chance the Kickstarter fails -- but if it does, you still have option 1) as a backup plan. And if Wasteland 2 brings in enough revenue, they can start work on Wasteland 3 without going to Kickstarter (though they still could if necessary).

    Given the fact that they're not misallocating funds from Wasteland 2 to produce Torment and aren't trying to deceive their customers (I thought it was clear what you were getting from the WL2 Kickstarter), and those customers can make their own decisions, I don't have a problem with them choosing option 2. It's probably what I would choose, too.

    Or a third scenario: Wasteland 2 is successful, and they use those revenues to make Wasteland 3, while using Kickstarter revenues for Torment: Tides of Numenera.

    You are right that it's certainly possible they will keep going back to Kickstarter. I think that's an interesting business model, honestly, and I don't think it's inherently unsustainable -- although I would expect resistance to grow with each successive Kickstarter. But I continue to fail to see the moral problem.
     
  15. FearMonkey

    FearMonkey Vault Senior Citizen

    Oct 12, 2011
  16. Crni Vuk

    Crni Vuk M4A3 Oldfag oTO Orderite

    Nov 25, 2008
    Jebus, now I feel honored!

    Anyway, is there some kind of back story to all of this? Considering the first post in this topic well ... doesnt say much.
     
  17. PlanHex

    PlanHex Legislative Senator oTO Moderator Orderite

    Nov 4, 2007
    Jebus derailed the thread BN made in website about his joining InXile
     
  18. Brother None

    Brother None This ghoul has seen it all
    Admin Orderite

    Apr 3, 2003


    Statuette of First Castoff, available in higher tiers. Pretty neat!
     
  19. Crni Vuk

    Crni Vuk M4A3 Oldfag oTO Orderite

    Nov 25, 2008
    and you work for them now? How did I missed that? whats your job anyway, besides of making coffee and the usual services ;)
     
  20. Brother None

    Brother None This ghoul has seen it all
    Admin Orderite

    Apr 3, 2003
    I put up a farewell post on GB which Watch and Codex picked up but I didn't feel like making a big deal out of it here.

    I'm a line producer. Kind of an assistant producer type job, I do a lot of editing and final passes for Kickstarter/PR stuff, assist Kevin Saunders and Chris Keenan on the production end, do some community management stuff. Anything that needs doing really. We're still nailing it down, tho', with Torment's existence still up in the air it's not solidified yet.