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Kickstarter Drastically Overhauls Rules And Automates Approval Process

by Mike Futter on Jun 03, 2014 at 02:36 PM

Kickstarter has published new rules that make significant changes to the platform, opening up crowdfunding via the site to more projects. Item prohibitions – like those on beauty products – and restrictions on others (multiple orders for a single hardware project) have been lifted.

Kickstarter rules also used to prohibit funding for ongoing business expenses. While that language no longer appears, the projects still must have some kind of deliverable and have a point at which they are finished.

Everything has been boiled down to three rules now. Projects must create something that is eventually shared with others. This could be a tangible, an experience, or an event. Because these are the only rules now, there is a greater possibility for use of funds for ongoing business expenses if tied to a specific deliverable. 

Project managers must be honest and clear in their presentation. For those creating hardware or gadgets, the pitch must include a working prototype. Photorealistic renderings will not be considered sufficient.

We inquired with Kickstarter about this rule’s impact on software and games. According to a company representative, actual gameplay is not required (nor was it before). “Showing where you are in the development is always a good idea,” they say.

Charity and investments are still prohibited. If you offer a stake in your company or make assertions of donating funds (rather than using them yourself to create and share a project goal), you won’t be in compliance.

Along with the new rules comes a simplified approach to launching projects. Kickstarter is offering human feedback as requested, but otherwise pitches will be checked using a computer algorithm to determine eligibility. 

“The health and integrity of the system are our biggest priorities,” said co-founder and CEO Yancey Strickler in a blog post. “Our Moderation and Trust & Safety teams are working every day to make sure everyone on Kickstarter is following the rules. And these streamlined rules still expect the same things from projects that we did on day one: make something to share with others, and be honest with the people around you.”

[Source: Kickstarter via Polygon]


Our Take
These new rules loosen things up, but they do not change the legal onus on project managers. Delivery is still required, and Kickstarter still is at arms’ length from that part of the relationship. I expect we’ll see some new uses of Kickstarter funding, including more like Penny Arcade’s podcast and year without ads, as a result. This is clearly better for Kickstarter, which takes a portion of successfully funded projects. More pitches mean more potential revenue.