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Crowdfunded Android Console Ouya Reportedly Seeking Buyout
An anonymous reader writes: Ouya, the Android-based games console, enjoyed one of the most successful crowdfunding campaigns to date, raising $8.6 million after asking for only $960,000. But now that the console has been on the market for a while, the company is struggling. After borrowing roughly $25 million from investors to keep it going, they're now trying to restructure the debt, and reportedly seeking a buyout. "Interest in Ouya's microconsole has dropped considerably since its launch back in 2013, where it had to offer store credit to dissatisfied Kickstarter backers for failing to deliver devices on time. Following disappointing sales figures for early games, the company has tried several times to turn its fortunes around."
I had high hopes for the Ouya. Look forward to buying a discounted unsold unit in the future...
It's not a business it's a collection of bad debt. They'd need to be a bank in order to con people into buying that.
Seven puppies were harmed during the making of this post.
The problem is that that Kickstarter is really nothing more than distributed venture capital. Except that normal venture capital gives you a share of the company or future profits. That two-way exchange makes it clear what you are getting for your money - part ownership of the company. As a part-owner/investor, you're fully aware of the risk that comes with it - you know you could lose all your money and have nothing to show for it if the company should fail.
You don't get that with Kickstarter. All you get is a promise for a future product. Consequently, the "investors" see themselves (accurately) as customers. And with that perception comes certain expectations, like wanting to get your money back if the product is not delivered or not delivered on time.
Kickstarter opened up the crowd-funding market but I think this is what's going to trip them up - discontent among users about failed projects. The eventual winner in the crowd-funding market is going to be a company which recognizes that this is nothing more than distributed venture capital, and treats it as such by letting "investors" buy "shares" of the companies seeking funding thus making it obvious that they are also buying all the risk that comes with that. And if the company promises to deliver sample products to shareholders, that's all it is - a promise. Not a contractual obligation.
The problem is that that Kickstarter is really nothing more than distributed venture capital. Except that normal venture capital gives you a share of the company or future profits.
Here's a thought - what if that is OK? What if someone is OK being a venture capitalist whose only return is to possibly get a cool product they would like to see exist?
I think the real "problem" if there is one, is people who think of Kickstarter as a store instead of venture capital with product as a return.
All you get is a promise for a future product.
You don't get that; you get a promise they will *try to create* the product. The work Kickstarter has done in terms of validation and required disclosure is to try and make it as clear as possible, how likely that promise is to be kept.
discontent among users about failed projects
Those users can go take a flying leap as far as I'm concerned. I think there are enough people that understand what Kickstarter is, that it will continue to do well.
treats it as such by letting "investors" buy "shares" of the companies seeking funding thus making it obvious that they are also buying all the risk that comes with that
Sorry but I wouldn't touch that nebulous piece of crap with a ten foot pole. What Kickstarter is now is pretty clear I think, at this point everyone knows Kickstarters can fail, so they know there is risk. The disclosure items at the bottom give a good amount of information to fairly evaluate that risk.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Recent consoles have a fair amount of support for the kind of indie games that Ouya was hoping would form the backbone of their library
Would the console makers be as open to indies as they are today if OUYA had never shipped? Before OUYA gained momentum on Kickstarter, Nintendo still had ban on home offices in the developer requirements it posted on WarioWorld.com. This provision caused problems for Robert Pelloni's company when he wanted to bring Bob's Game to Nintendo DS because the company was operating out of an office in Pelloni's home. And before OUYA gained momentum on Kickstarter, Microsoft was going to require indie developers on Xbox One to work through an established publisher big enough to get retail discs into Walmart. OUYA showed that demand for smaller scale games on television monitors existed.