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."

Comments

Sad to hear...

[SternisheFan]

I had high hopes for the Ouya. Look forward to buying a discounted unsold unit in the future...

Tablets and technology march on

[Big_Breaker]

Ouya has loads of competition now from ARM "sticks" and media adapters like the Fire, Roku or Cu Box. And each year brings more capable hardware while Ouja stays the same. The new raspberry pi 2 or Amazon Fire are arguably superior in all ways. Certainly both those alternatives make excellent XBMC/Kodi boxes.

And competition has also come from tablets in terms of casual gaming. Tablets benefit from huge economies of scale and large online market ecosystems. Ouja was always going to be a niche market appealing to techies and gamers.

Re:"Had to"

[Solandri]

There are some kick starters that deliver nothing to anyone and no refunds...

If you need money to survive, you do not "have to" send money back to backers, especially not if the only problem is that you were late (I expect at least a year delay on Kickstarter hardware by default).

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.

Re:Kickstarter

[Kohath]

That's normal for business in general. Most businesses end in disappointment after a short time.

Why is that a problem?

[SuperKendall]

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.