As many of you have no doubt heard by now, Facebook has purchased the Oculus Rift startup, which was previously only crowd funded by Kickstarter backers who were mostly enthusiastic for the virtual reality system they were developing in terms of its potential in gaming. You can imagine how those backers felt when the company was purchased by Facebook and, suddenly, there was Zuckerberg talking about social and advertising possibilities for the technology, while making it sound like gaming was just a minor focus that the technology would merely start with. Let the Internet rage begin!

And begin it did. Many backers have been very vocal about their disappointment and at least one developer has backed out of supporting the technology due to Facebook's involvement. After backers had spent millions of dollars supporting the project, the 21 year old developer was happy to sell it to another twenty-something developer for billions of dollars (2 billion, mostly stock but with about 400 million in cash), with now no guarantees that the product's focus will even be gaming anymore. Gosh, I wonder why people might be upset about that?

It all makes me glad that I have never funded any Kickstarters. Some say that consumers should support what they want, instead of pirating everything and then whining about content anyway without ever contributing much. But should they? Stuff like this is big food for thought when considering donating to a crowdfunded project.

Some pundits have declared that the company did not owe its backers anything beyond any backer bonus goodies that were promised. But while this may be true in the legal sense, I think it's clear that there are some ethical issues raised by situations such as these in the realm of crowdfunding, even if project starters make good on delivering a dev kit or a t-shirt to backers.

For one thing, this project, and some others like it, initially advertise themselves as gaming related initiatives and draw their crowdfunding from enthusiasm over their potential for adding to gaming experiences. While I don't think most gamers expect VR to only ever be applied to games, most would still not have contributed funds to this product if they had known that it would turn into a Facebook social interaction and advertising platform. At a time when other crowdfunding products are generating enthusiasm through various very specific claims about what they will be about, this situation casts doubts on the whole concept of crowdfunding for critical thinkers. Yes, the backers should have known what they were getting into, but that's my point. It's time that the fuzziness in our thinking about things like Kickstarter gave way to grim realities about companies and profits.

And yes, Star Citizen, a project for making a next generation space combat simulator, that is being crowdfunded, does come to mind. This is particularly so because that project is doing two things that would make a buyout in this case an even more troubling development from an ethics related perspective - firstly it is openly advertising that is for PC., not consoles etc., with no involvement by a major corporation that might change the so far promised features or take it from the PC platform. And secondly, it is basing what features will be available in the game on how well certain funding goals are met, implying that those features will therefore someday be available to backers if they continue to throw money at the game's development. They have thus far raised over 40 million dollars through crowdfunding.

In the (hopefully) unlikely event that they sold out to a megacorp that then uses the game engine for different purposes, say, a dumbed down console port, and scraps many of the promised features, while pocketing a profit, it would be a bad situation after so many specific claims and promises being used to gain backers. Some may say that this will never happen in this case. But the point is - it could, and there is nothing protecting backers if it does, so long as they get whatever doodads the developer promised based on their donation tier.

Yes, I'm aware of Chris Roberts, their lead designer, promising to never, ever do what I am describing here, and to his credit, he has been very upfront and specific about that. For my part, I believe him. But with no legal protections, how comforting all that is depends on your own feelings and not much else as we have nothing but their word for support of any claims. Remember, it's just a donation, not an investment or a purchase. Though for the record, this is just an example, I actually think Star Citizen will not be betraying anyone.

Kickstarter does offer protection for getting a particular product you were promised upon donating a certain amount, but that's about it. If you were contributing to a larger project and the goodies you got were just a bonus, you have to just accept any loss from failed promises beyond the goodies. As crowdfunding becomes more commonplace, perhaps we will need to rethink how these things work?

And indeed some sites are now already offering the chance to buy into a company's potential future profits. Sites such as Crowdfunder offer the opportunity to back something as an investor, not just a fan. As things like the Oculus matter appear on the crowdfunding scene, there may be a move towards that kind of solution, with Kickstarter just enjoying the fame for now but becoming something for funding your local theater group more than a major development company in the future.

Perhaps that would be right, as, for all the fandom out there, companies are companies, and they exist to make a profit, not just to pursue "dreams" and visions of new games or technology. Of course, it's possible to get swindled through investing as with any other monetary exchange. But at least this leaves the boundaries and expectations clearer for those backing something. Sure there could be big losses, but there could also be big gains beyond a poster or whatever.

Personally, I have actually been happy about the new crowdfunding trend though and have enjoyed seeing some interesting projects get early backing that they might not otherwise have benefited from. I have often thought of crowdfunding as a trend that gave consumers more choices. Therefore, it could only be a good thing, most of the time. But examples like the Oculus Rift saga raise the issue of consumers being misled and then exploited, which is never a good thing no matter how many legal documents allow it to happen.

Some insist that any disappointment can be blamed on consumers unaware of what they were getting into when donating or buying dev kits. But I think that false advertising, even for donations, is troubling in any case. They may get their dev kits from Oculus, sure. But the vision they sold people to help convince them to donate may now be a thing of the past, not because the project failed, but because it chose to unexpectedly take a different direction, and the buyers know that. Sure, Facebook could turn out to be great for VR somehow, and take gaming along for the ride. But the backers are understandably skeptical about that right now.

I know there are as many ways to look at the situation as there are people typing on the Net and the debate rages on. But that's my stance. The backers may not be legally owed anything, but I can certainly understand why they are upset today. And this situation should be a wakeup call for new potential donators to projects on Kickstarter, especially as alternatives to the Kickstarter system begin to appear for crowdfunding that offer more to consumers than just warm fuzzies.

There have a been a few crowdfunded gaming revivals that have attracted my interest, among them Star Citizen itself which was meant to revive Wing Commander style sims, and the Satellite Reign project which is meant to develop a spiritual sequel in the Syndicate series of games which drew on inspiration from the cyberpunk sci-fi genre developed during the 1980's and 1990's. So far, I have only contributed any funds to the Mechwarrior Online game, through purchasing directly from their company early access to an actually playable game along with some in-game items. I have been reluctant to give anything to projects that do not offer me anything that direct in exchange. But even when something is offered, it can feel a bit exploitative.

For example, both Mechwarrior Online and Star Citizen have offered some outrageously high-priced items, such as a $500 gold-plated in-game mech in the case of MWO. Players of the game have scoffed at such offerings and have promised to target and destroy any gold-plated mechs encountered in the field, even if it's a team member's mech. Star Citizen has offered ship packages for as much as $15,000. As for Satellite Reign, though they have since appeared to remove this backer bonus, their offer earlier in the funding setup of a visit with the development team, in exchange for thousands of dollars and with all the trip expenses paid by the backer, left a bad taste in my mouth. Shaking hands with a few developers is now worth thousands? Ack. I know it's a donation, but still.

Crowdfunding CAN be a good thing that results in more choices for consumers and more opportunities for developers in a media environment that is often risk-averse to the point of stagnation and stupidity. As crowdfunding continues to change how companies fund projects and find their early footing, consumers need to be aware of how few protections they have and how their funding can all be for little or nothing when things don't work out.

But Kickstarter and the increasingly large and capable companies that are using it lately had best be aware of how this whole matter made their system look, and of the alternatives for real investment that are coming down the road in the world of crowdfunding. Someday soon, Kickstarter may look like the outmoded way of crowdfunding a project. I look forward to investment, not just charity, opportunities becoming more available to consumers as crowdfunding matures.

Rave