Skullgirls Dev Knocked Around By PayPal

on Tuesday, Apr. 23rd

PayPal temporarily suspended the account of an indie game developer who used IndieGoGo to successfully fund their fighting game. Mike Williams of gamesindustry International reports:

Earlier this morning Skullgirls developer Lab Zero Games was faced with the inability to pay its employees, despite an IndieGoGo funding campaign that totaled $829,049. The problem stemmed from PayPal, the money-transfer service used for most of the backer contributions. PayPal froze Lab Zero's account because it feared a large number of chargebacks if backers didn't get their favorite characters in the final DLC roster.

The online wallet site has since unfrozen the account, but has held on to $35,000 as collateral.

This one is tricky, as the crowdsourced voting for the downloadble content lineup is still ongoing, and it is theoretically possible that disappointed gamers could cancel their pledges if they don't get what they want.

We are talking about gamers, after all. They have been known to take unreasonable positions from time to time.

Farther down in William's article Lab Zero CEO Peter Batholow is cited as saying that he "spoke to developers at inXile – who successfully funded Wasteland 2 and Torment: Tides of Numenera through Kickstarter – and they said that Amazon Payments did not have the same issues as PayPal."

I will note, however, that inXile did not have an active vote going on to determine which major pieces of content would be present in their release. While all crowdfunding game projects have at least the appearance of a feedback loop between developers and backers, Lab Zero was–to their credit–taking a creative risk by putting the roster up to a vote.

It just so happens that PayPal saw that creative risk as a financial one as well.

We're still in the early years of crowdfunding and transparent development as a model, and my money is on there being more situations like this one in the months and years ahead.

h/t Caitlin Burns

Follow Noah Nelson on Twitter (@noahjnelson)


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