Michael.neel

Top 20% of new users paying money on in-app purchases worth 90% of total spending

Edinburgh-based player wins after 150 days and 25 billion cubelets destroyed

What kind of projects will Kickstarter Accept?

I have seen Kickstarter reject 1 project out of 26 personally, though I have heard many more people complain about a rejection. It may be more common under certain categories since I mainly work with Video Game Devs and Tech companies, I may not see it as often.

The Basics

First and foremost you must follow their guidelines. Kickstarter has done a fairly good job of detailing their guidelines in their help sections.

http://www.kickstarter.com/help/guidelines

also review this:

http://www.kickstarter.com/blog/kickstarter-is-not-a-store

The majority of the time, when your project follows those guidelines, you should not have any issues. Double check your project before submission and you may save yourself some hassle in the future.

When “The Basics” Fail

If your project is rejected, but the rejection does not fall into a specific factual area of the guidelines, you may be a part of the Kickstarter “Black Hole”. Here are a few (out of many) people who’s projects were rejected without merit:

http://www.highprogrammer.com/alan/rants/kickstarter.html

http://www.linkedin.com/groups/Hello-I-have-posted-project-4325381.S.113149709

Although the list goes on, you get the idea. It seems that Kickstarter editors can freely reject projects based on their opinions and/or loosely tied to the project guidelines. Mainly their excuses are that the projects do not fit in with the “theme” of Kickstarter. Flexing a little power maybe? Who knows their reasoning, but it is obviously geared toward their brand and how they want the public to view that brand.

Of the projects that I have seen rejected, there really was not a basis in their guidelines, they simply told the creators this:

They do not want to be seen as a “Home shopping network”

or

“Its not in the style of Kickstarter, please review other projects in those categories and it will give you an idea of what we are looking for”

The project that was flat out rejected on my time, was a piece of technology that was available everywhere, but it was combined with clothing to make it more accessible. Kickstarter classified it as a “QVC” type item.  My client ended up launching on IndieGoGo:

http://www.indiegogo.com/projects/cynaps-get-yours-now-at-www-maxvirtual-com

It funded at $40,000 with 611 backers. Though that may have been less than what Kickstarter may have produced, it really confused me as to why they would reject this successful project.

You may be asking “what the heck can I do!?”

Since that rejection, I have learned a few things:

I would try to add elements to your campaign that Kickstarter likes to see: DIY elements, Nostalgia projects,  also it helps to be a famous celebrity (haha), or get a celebrity to back your project. I have never seen a project get rejected that was run by, or backed by a celebrity.

If those don’t work, The best way to proceed in my opinion, is to create a new login for Kickstarter, completely rewrite your project the absolute best that you can based on their guidelines, change the title and resubmit it hoping that it goes to a different editor. They currently have 37 editors, of all of the editors, I would guess that one of them would be a bit more lenient. This way there is a 95% chance you will get a different editor. Make sure you take the time to review the guidelines and eliminate anything from the project that may seem like it won’t pass.

Truthfully, I don’t think that this practice from Kickstarter is as prevalent now than it was in the past. Kickstarter is in the media’s eye now more than ever and if any potentially high profile that gets rejected, it would definitely create some controversy for them.

Best of Luck!!

 

I recently read this piece by Forbes:

http://www.forbes.com/sites/cameronkeng/2013/04/17/warning-kickstarters-policies-cause-irs-tax-audits/

The author dissects Kickstarter’s new tax guide:

http://www.kickstarter.com/help/taxes – Its seems that Kickstarter has since reduced their content to the point of worthlessness, I am assuming to avoid the legal tidal wave of audits from their poor advise.

For prosperity, I will post a link to my article again here,

http://www.guenthertax.com/blog/2012/05/no-kickstarter-project-should-pay-income-tax-in-their-first-year/ (originally posted back in May 2012)

Apparently my article being No. 6 on Google’s search rank for “Kickstarter taxes” was not enough to warrant an inquiry from either party

For shits, I will post a breakdown of how I feel about the Forbes article in question. I am not sure who will benefit from this, maybe other CPAs, but maybe it will clarify it a little more:

1) Kickstarter Campaigns are not businesses

The author of the Forbes article states that Kickstarter Campaigns may not be classified as a business, or at least he alludes to that fact that one out of the many IRS rules on the classification of business may actually make the company a “hobby”. A hobby does not have a simple definition, but the IRS asks: “Does the time and effort put into the activity indicate an intention to make a profit?”

The point that the author made is that most people will need a profit for 3 of the 5 years to be classified as a business. He uses a quote from the IRS website of a way that they determine whether a business is actually a hobby. The quote is meant for that exactly, to determine if a business is actually a hobby, NOT the other way around.

For this reason and more below, I disagree with the author and here is why:

This is a gray area in the IRS code, this is where I tell my clients that the IRS will act based on substance over the form. This means that the IRS will look at the whole picture before determining that the Kickstarter campaign is a trade business or a hobby. Many businesses are opened for one year and then closed down, you dont see the IRS auditing every one of those businesses and saying that they are all hobbies. This is where that substance kicks in, was there any intention of making a profit?

From the IRS:

The term trade or business generally includes any activity carried on for the production of income from selling goods or performing services

I believe that 99% of all Kickstarters intend to make a profit by selling good or performing services, and the IRS will recognize this.

2) Accrual Method

The author mainly gets this right, and it looks like Kickstarter agrees because they removed it from their guide. I do believe that he left out important facts that may benefit people. He left out the information touched in my article, that advanced payments can be classified by electing to do so, and can be postponed until the following year.

He also did not explain GAAP, accrual and tax basis very well. Most people who file a business return as a sole proprietor will never see the “reconciliation” (schedule M1, M2, M3) or GAAP election that is on a partnership or corporate return, yet they are still able to file under the accrual method.

3) Gifts

“A gift is the transfer of property by one individual to another while receiving nothing, or less than full value, in return.”

After writing the first draft of this article, I now realize that this is a pretty big gray area. The code is so simplified that simply stating that a gift is a “detached and disinterested generosity” is WAY to simple to be used as concrete tax advice.

My thoughts on this is that if you can convince the IRS that the backer of a project gives the money to you with NO intentions of getting anything in return and will never use or see the project that you are creating, then it may be a gift. If it falls into any other category, then it is income.

Again, following the concept of “substance over form”, the IRS states in a court case Commissioner v. Duberstein that when determining whether something is a gift for taxation purposes, the critical consideration is the transferor’s intention. This is a question of fact that must be determined on a “case-by-case basis”. This alone allows the IRS to determine the intentions of the gift giver just by evaluating the substance of gift itself, and what the gift giver expects in return of the gift.

I believe that when the IRS sees the intention of someone running a Kickstarter, advertising for money in order to further a personal goal, that will be viewed in substance by the IRS as a generosity that is not detached, and with a potential to be turned into a business. The end result of the project itself is also grounds that the gift giver will get something in return for the gift thereby breaking the IRS rules of classifying it as a gift.

Wow, this one is terrible, I am not sure which smarty came up with this at Kickstarter Legal, you are surely to be busted for this one. In this case the author of the Forbes article gets it mostly right, and I applaud him for being blunt about it.

In conclusion, there may be a project or two that will fall under a category of a gift out of many, but that will be few and far between. I would play the safe card in this instance, and not try and be the first to challenge the IRS. Besides, there are better ways to reduce taxes.

Conclusion

The author gets it right to challenge Kickstarters view of taxation, but he missed a few key concepts that hopefully were explained in more detail above.

Indie developer and publisher Curve is disappointed in Microsoft's stance on supporting indie developers on the Xbox One, according to a statement the company shared with Games Industry International.

Curve has assisted numerous indie developers bring their titles to major platforms, most recently Mike Bithell's Thomas Was Alone to PlayStation 3 and Vita. The company is currently preparing Jasper Bryne's Lone Survivor for launch on both platforms as well.

"Xbox Live Arcade was a trailblazer last generation, so it's sad to see Microsoft not announcing dedicated support for independent developers on the Xbox One," said managing director Jason Perkins.

"Refusing to concentrate on easier submissions and discoverability leaves the way...

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Unity Technologies, the company behind the Unity multi-platform game engine, will provide support for Tizen, the Linux-based open source mobile operating system.

The deployment tools will allow Unity's community of developers to create games for Tizen-operated smartphones and tablets, and publish them to the Tizen Store later this year.

"Unity and Tizen have a lot in common in that they both aim to make the creation and the deployment of games and other apps as easy as possible for developers," Unity Technologies CEO David Helgason said in a statement.

According to The Verge, Samsung is expected to launch multiple Tizen phones later this year, along with a high-end Tizen smartphone due in September.

Earlier this week, Unity...

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Lim is a simple game. It only takes a few minutes to play. You navigate a square through a minimal world. You have not been told what to do, so you just move through the maze. When you are alone in the corridors, you flash with all the colors of the rainbow. But before long, you start to encounter squares of different colors. They don't like you. They ram you. They make progress near impossible. The screen shakes; the white noise is violently nauseating. Your only hope is to hold down Z to "blend in." You turn brown near the brown squares; you turn blue near the blue squares.

But it is an imperfect solution. As you try to blend in, your movement is dramatically slowed, and the camera begins to zoom in. Keep blending and the entire...

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The top 1 percent of monetizers account for 32.68 percent of money spent in "non-arcade" mobile games, according to a report from Playnomics (PDF link).

The company's analysis defines "non-arcade" games as those "designed and intended for longer term play experiences often featuring levels, campaigns and collectables." Playnomics studied more than 1.7 million players, observing spending patters over a three-month period. According to the report, the spending habits represent a "power law distribution," similar to the "whales" who spend disproportionate amounts of money over time in casinos. Playnomics expects 20 percent of monetizers to account for 80 percent of revenue.

Playnomics seeks to find out how and why people play games, and...

Continue reading…

Publisher assures fans series will not be tackling online-only play

US office to work on game engine deployment tools for new platforms

Console giant issues 'content ID match claims' on gameplay videos

I’ve been waiting for this day for a VERY long time, and now I’m finally able to say it: Bombcats is Radiangames’ next game (aka The Big Project), and it’s coming next Thursday, May 16th, to iPad and iPhone. It will be published by Chillingo.

So what is Bombcats?  It’s an action-physics-puzzle game.  It’s not directly comparable to any one game, but the two most influential are Sonic the Hedgehog (style, character, movement) and iBlast Moki (basic level layout).  There will be comparisons to Angry Birds as well because it’s a physics-puzzle game and there are multiple cats with different abilities, but the actual gameplay has a different feel.  This is a lot easier to see in video form:

It’s fun, and massive, and you should try it out for yourself.  In fact, if you have an iOS device (that’s not too old), you have no excuse not to.  Because it’s free.

The Dark Side?

Bombcats is a Free-To-Play game (aka F2P).  If you’ve played a game on Facebook or any of the top grossing games on the App Store, you’ll have an idea of what F2P might mean.  Farmville, Dragonvale, Clash of Clans, Temple Run, and Candy Crush are all examples of popular F2P games.

Bombcats isn’t revolutionary in how it does its F2P mechanics, but it is very fair, and you can play through the whole game (190 levels, 5 modes) without paying for anything, nor are there timers that will stop you from playing. There are also no ads or other grossness sometimes associated with F2P games.  I could go on about how Bombcats is structured, but regardless of whether you have skill, time, or money, the game is fun.  For well-articulated thoughts on how F2P can be done ethically, please read this article by the creator of Shellrazer.

Old School Mode

Bombcats goes even a step further in its fair structure: At any time you can pay $4 to have the game be balanced more like a “premium” game.  The details are too much to get into without a full post, but essentially the game locks out all non-permanent IAP and the in-game balance is shifted in a few places.  This mode is really for two types of gamers: 1) Hardcore players and 2) Children (or parents of children, really). I’ve seen many gamers asking for this kind of unlock in F2P games, and I hope more games will be offering them in the future.

Blast Away!

To recap: Bombcats! Free! Thursday the 16th! (on iOS, coming soon to Android)

And don’t forgot to like Bombcats on Facebook, and follow Bombcats on Twitter.

Techco will host a First Friday Bazaar where local artists have an opportunity to sell their handmade wares.  The public will be able to get more information on what we do, what programs we run, and also experience the unique Old City space that we occupy!
If you are interested in joining us in being a vendor for one of our First Fridays starting May 3rd, we would love to have you.  We are charging a $25.00 fee to set up and sell which 100% of will go to Techco as it is a non profit organization.

 

We will also have for sale the TechcoLamp.  We will have several available and will build/customize to order.  This lamp is created by the Technology Cooperative Staff with all proceeds going directly to Techco!

 

Mike Bithell discusses why Let's Play videos are great for marketing, and why developers shouldn't chase ad revenue from them

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