Palladium Books Loses Robotech IP License, Cancels Five-Year-Overdue Robotech RPG Tactics Kickstarter

7 Comments

1. A backer on 01.03.2018 at 15:16

   What the article fails to mention is that Palladium Books over-produced the wave one rewards, which included the “core” game, hoping to profit from third party sales using funds that were supposed to go towards backer rewards. This is a violation of the terms they agreed to in their Kickstarter campaign, which forbid project creators from using Kickstarter funds for anything other than backer rewards.

   1. David Miller on 01.03.2018 at 20:55

      That doesn’t sound right. I highly doubt that Kickstarter’s terms limit the use of funds to satisfying backer rewards. In fact, backer rewards may be de rigueur but I don’t think they’re actually required at all. Please provide a citation for your assertion.

      1. A backer on 02.03.2018 at 12:14

         Sure, have a look at the Kickstarter ToS from the time this KS was run. I will quote a couple of passages here:
         “Project Creators agree to make a good faith attempt to fulfill each reward by its Estimated Delivery Date.
         […]
         Kickstarter does not offer refunds. A Project Creator is not required to grant a Backer’s request for a refund unless the Project Creator is unable or unwilling to fulfill the reward.
         Project Creators are required to fulfill all rewards of their successful fundraising campaigns or refund any Backer whose reward they do not or cannot fulfill.”
         So we have three obligations of creators to backers: a ‘good faith’s attempt to fulfil by the time estimated, fulfilment of *all* rewards and refund of outstanding rewards if fulfilment is not possible. In this case, by spending money received from backers on retail stock, PB is in breach of the ‘good faith’ clause as well as the obligation to provide all promised rewards.
         In general, project creators are able to benefit from backers taking over the fixed costs of production but that doesn’t constitute carte blanche to the creator to do whatever they want with the funds.

         1. Thomas Deeny on 02.03.2018 at 12:59

            While I did see this argument being made by some backers at the Kickstarter campaign, it is not my impression that creating additional product to sell via retail channels was in conflict with creating additional reward items. As implied by Palladium in update 217, there simply wasn’t enough money to create the Wave Two product. While it is unclear if Palladium used any funding from the campaign or their own resources to create the additional Wave One product, as the campaign was to create a product line, it is a reasonable assumption that the company would produce more than just the 5000+ sets to fulfill their backers’ rewards. (For instance, once molds are created, individual miniatures are relatively cheap to produce. Going from 5000 to 6000 units may be a matter of hundreds of dollars instead of the multiple thousands a new mold would cost for a different product.)

            Although they may be in violation of the sections of the ToS you quoted, producing more product than the number of backers to sell via traditional means probably isn’t.

            My charitable reading of the situation has Palladium Books realizing the lack of funds means they would have to take the profit from retail sales to fulfill the Wave Two rewards; with poor sales, there was not enough profit to create those rewards.

            1. A backer on 02.03.2018 at 14:19 (Comments won't nest below this level)

               That is exactly the point. Using funds that were provided by backers who were promised a set of rewards to create products unrelated to those rewards is clearly a bad faith action by the project creator. Otherwise anyone could start a Kickstarter, fulfil a fraction of the promised rewards, use the rest of the funds for unrelated things and subsequently claim that they do not have enough funds to fulfil the rest.
               That is leaving aside the dodgy math provided by Palladium and the fact that they were aware of this issue years ago but only admitted as much to their backers when external factors (their license expired) forced them to. Up until a few weeks ago the company “line” was that things are getting “hotter and hotter” for Robotech, they have everything lined up and backers should not worry. That is another bad faith action by the creator. If they are as honest as you “charitably” claim they are, they should release a full accounting of the funds, which they still have not done. That is another obligation of theirs under the ToS, by the way.

         2. David Miller on 02.03.2018 at 15:14

            My comment was meant to address an understanding of the general terms of service. I still see don’t see anything that blanket “forbid[s] project creators from using Kickstarter funds for anything other than backer rewards.” But I believe I understand the rest of your concern. I will not opine on how Palladium handled the project.

            1. A backer on 02.03.2018 at 15:45 (Comments won't nest below this level)

               If you read the Kickstarter ToS, the “contract” entered into between creator and backers is support for rewards. As I said before, at the very least using the funds for things other than backer rewards is at the very least “bad faith” since that means they are prioritizing other things over backer rewards. If they had other funds then it is clearly fine to add their order to the backer order and benefit from lower marginal costs, but given they knew that these funds were all they had, they had no right in good faith to gamble funds which could have gone towards wave 2 rewards for backers.or.at the very least some refunds on the possibility that their game would sell massively.

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