KickStarter Hero-U: Rogue to Redemption - adventure-RPG from the creators of Quest for Glory

[Flint]

They gambled. It's not clear whether they lost the bet or not

Don't they have to sell like 30-50k copies at full price to break even? Not likely to happen.

 

[MRY]

It's more complicated than that because it sounds like they have lived tax-free during the development process. I quoted from his 2/2018 Quora post earlier in the thread, which expanded upon his observation in a Kickstarter updated that "Lori and I decided to self-fund the game by means of a personal home-equity loan. We will use that to pay our living expenses so we no longer need a salary." Here's the full thing: https://www.quora.com/Would-it-be-l...-it-when-purchasing-so-I-can-avoid-income-tax

“Would it be legal to direct my income into an account not owned by myself, and deposit it when purchasing, so I can avoid income tax?”

As baldly phrased as that, no, it would be illegal.

But in practice, many people do something similar. TLDR; Corporations pay taxes on net income after expenses, not on gross revenues.

Many lawyers and other consulting professionals have personal corporations. You don’t pay the lawyer; you pay her corporation. They then deduct all of their law practice related expenses - office, utilities, certified mail, office equipment, and so on - from the income before paying tax on the net income.

They rarely avoid all income tax, but they pay much less than you might expect solely based on their income.

Another example is owning rental property - if people had to pay taxes strictly on rents, the taxes would bankrupt them. Instead, they subtract all of their expenses first - mortgage payments, property tax, upkeep, and so on - then pay taxes on the net income.

I partially financed development of a computer game on Kickstarter. At my accountant’s advice, I created an S Corporation to develop the game. In the five years it has taken to develop the game, I haven’t paid any taxes on contributions to it. Next year, when we do the taxes for this year, all of our development costs (paying contractors, lawyers, tools providers, etc.) will be subtracted from the initial donations and first year sales of the game. If we come out ahead, we’ll pay tax; if it’s break-even or worse, we won’t. I’m not sure myself if we’ll be able to carry over some expenses to next year. If not, we’ll pay full taxes on the game’s income minus current expenses (marketing, porting to other platforms, and so on).

By the way, without commenting on the substance, I will say simply that it is probably a bad idea to seek tax/legal advice on Quora, or to take tax/legal advice from lay people on Quora, but what do I know?

 

[daveyd]

Awhile back I saw the Coles say something curious (probably in their Kickstarter comments) that they had to be careful about not making Hero-U "too much" like Quest for Glory. They said smaller indies like Infamous Quests and Crystal Shard could get away with it, but they since they were on Activision's radar, making a game closer in style to QfG could get them hit with a lawsuit.... I don't think they really elaborated on what would be "too similar" would be, but either way I wonder if this is actually true. Obviously using an IP's unique character / location names or mimicking an art style too closely are big no-nos... But gameplay? With all of the clones out there, I've never really heard of that being a problem before. I suppose a big company can sue anyone they want to, and even if the lawsuit has no merit it can drown a smaller company in legal fees. Or maybe this was just an excuse to do things differently.

Anyway, I hope they don't lose their house or anything like that. Even if Shawn is suffering from gingervitis, the game looks decent. I'm not really excited enough about it to buy it now, so I'll probably pick it up when it's around half price on GOG.

 

[Lhynn]

They gambled. It's not clear whether they lost the bet or not, but Corey has written a lot on Quora about the thrills of gambling and why successful people do it even when the odds are long.

I dont really think it was a gamble, youd have to be retarded to think this would sell.
I think they just wanted to make this, so they did, thats the vibe i got from their comments anyway.

 

[MRY]

Lhynn As a young man, while sloshed, I bet a week's worth of house-painting salary behind what I thought was a straight, but it turned out I was missing not one but two cards in the straight. Which is to say, sometimes people make bets that are incomprehensible from the outside, but sensible from the inside. (A straight would've won the pot.)

Bearing that in mind, consider that (as I quoted earlier), Corey Cole said that "pixellated Quest for Glory screen shots" "look terrible next to Hero-U" and that "Diablo [he means the first Diablo here] has decent backgrounds, but our characters look better." He added that Hero-U's combat "looks awesome with the closeup 3D monsters and effects." So I think it is within the realm of possibility that he thought he had all the cards for a straight, as it were.

 

[MRY]

daveyd I found that hard to fathom as well, given that they were quite comfortable prominently featuring characters, creatures, and other elements from QFG (which are presumably subject to copyright) in Hero-U. But from reading Corey's Quora posts, he seems like a polymath genius who would draw connections that would elude me, and he knows the industry vastly better than we do.

 

[Blackthorne]

He's less on Activision's radar than he thinks. Definitely at this point... and not because of anything they did, but Activision gives no shits about "Sierra" any more.

Bt

 

[gaussgunner]

Going near $40 is tricky because that's where you start competing with bigger titles that have far more marketing and/or appeal. Hero-U is a tough sell because at first glance someone might not have a good idea of what the game actually is. The art and character portraits might give a false impression to a passerby that it is a "casual" game. Some reviews and descriptions make Hero-U sound more like a time management sim than an adventure/RPG.

$40 for an indie game? Games that cost 1000 times more to make sell for $60.

For people who played Hero-U, do you think they made the game too big or long? Would the concept and gameplay still have been effective if it was a 10-12 hour experience? It sounds like Hero-U was quite a passion project for the Coles, and they succeeded in achieving their vision, but maybe they would have been better off reducing the scope or size of the game so they wouldn't have to bet the farm on it.

I just skimmed through an LP video. The nicest thing I can say is "not my thing". Yeah, maybe it would be ok if they kept it under 10 hours by increasing the walk speed and leaving out most of the silly jokes and shit. Puns aren't funny when they're shoehorned in everywhere. They really overdid it. It looks infuriating to play.

And I wouldn't want to see that wussy guy's portrait for 30 hours either.

 

[newtmonkey]

I think the theme of the game could have hurt its sales. That sounds retarded considering how popular Harry Potter and Persona 3-5 is/was, but I think if you drew a Venn diagram of "people who even know who the Coles/QFG games are," "people interested in playing a game about young adults in school," and "people interested in adventure/rpg hybrids" you'd have a very small audience.

The school stuff definitely turned me off from the game (I similarly have no interest in Harry Potter or the Persona games or even that Bully game), even though I grew up playing QfG games and should have been the target audience for this game.

 

[Lhynn]

Almost every persona player wouldnt consider playing this game, even for free. This wasnt advertised as a harry potter ripoff and people that enjoyed that retarded shit need to be told its directly inspired on that crap repeatedly to get the hint.
The name of the game is Hero-U and it isnt a game about capeshit, so the name misses its target audience by a mile and will put off anyone that finds it interesting.

Also the protagonist looks like a punchable, asexual cunt, nobody would want to be xir.

This wasnt a gamble, this either was a product of pure stupidity or they knew it wouldnt make enough to cover the food expenses but decided it didnt matter.

 

[Blaine]

How dare you criticize an adventure game? You must be some kind of an asshole.

Don't bother. No one's buying any of this shit anyway, so let the Codex adventure game Gestapo have their delusions in peace.

 

[MRY]

Setting aside all of the vitriol for the moment, what is fascinating is that this game is the Platonic QFG. Quest for Glory is what the Coles had to make when serving a corporate master. This is the game they always wanted to make. Corey describes the art, writing, design, etc. as far superior to QFG in a number of posts. I don't think I agree with him, but if you loved QFG, it turns out that what you loved was the germ of this game. The same is true, obviously, for Jane Jensen's novels, where she was able to tell the stories she wanted to tell without being constrained by adventure gameplay or Sierra oversight. Indeed, the budget for this game was much larger than the budgets for all but the final QFG (which I believe the Coles have described as the truest of the QFGs up to this one).

It's a little bit like the enhanced versions of Star Wars, to be honest, but it's still interesting.

 

[Boleskine]

 

[Mustawd]

They gambled. It's not clear whether they lost the bet or not, but Corey has written a lot on Quora about the thrills of gambling and why successful people do it even when the odds are long.

No. They did not gamble. They were completely delusional.

I mean look at this:

-We needed $800k but asked for $400k

-They couldn’t find 2D animators, but they decided to go 2D for...reasons?

-Also, the above should read “We couldn’t find 2D animators that would work for peanuts” There are plenty of 2D animators. Ofc 3D is now the norm, so any 2D animator is going to be expensive. Supply and demand, etc.

-We assumed QFG dollars were the same as today’s dollars (aka did not take into account inflation) [how do you even do this?]

-Turned down $500k of investment they didn’t even need to pay back as a loan. Think about this: Little downside and huge upside. Compared to an actual loan (ahem...home equity line of credit), it’s a much more desirable situation.Yes, revenye sharing can be expensive, but at least if you don’t make it you have not lost anything personally. If you do kinda well then, sure, bitch about sharing monies. If you do extremely well this matters a lot less.

-Used some seriously tarded logic to outprice themselves out of the market. QFG cost this so we can charge that? What kind of logic is this? Zero understanding of basic market theory. Are you going to also create a beanie babe lne and charge tons of money because they were valuable durig te 90s?

Also, this isnt related to any mistakes, but I found this statement strange:

The roguelike genre has become a pure concept that’s gone in a completely different direction, including things like permadeath that we don’t believe in

It’s sad to see companies fail, and I take no pleasure in it. But there is something reassuring in knowing markets forces still work, and this is a prime example. I hope someone bails them out of their million dollar hole, but with at most ~3000 current original copies sold after release there’s little hope they make it out themselves.

Beware those ignorant fools who encourage you to throw caution to the wind and mortgage your future on wild dreams in hopes of a miracle. Like nature, life is harsh and cold and doesn’t give a fuck about your dreams.

RIP Coles.

 

[Mustawd]

This wasnt a gamble, this either was a product of pure stupidity or they knew it wouldnt make enough to cover the food expenses but decided it didnt matter.

How dare you criticize an adventure game? You must be some kind of an asshole.

Don't bother. No one's buying any of this shit anyway, so let the Codex adventure game Gestapo have their delusions in peace.

Very well said. Agree with both posters.

 

[Mustawd]

From what I can tell(admittedly not much, as this is not a talent I share), Corey also really understands how to move money around, which is perhaps the most important skill a budgeting manager can possess.

Are you kidding? Corey obviously doesn’t know a goddamm thing about budgeting.

 

[MRY]

They gambled. It's not clear whether they lost the bet or not, but Corey has written a lot on Quora about the thrills of gambling and why successful people do it even when the odds are long.

No. They did not gamble. They were completely delusional.

The two things are not mutually exclusive. Still, I don't buy the "completely delusional."

We'll really never know whether the amount they spent on the project (taking into account its potential tax advantages) is more than a trivial amount given their wealth. A lot of what the Corey has written suggests they are, if not fabulously wealthy, at least very comfortably off. Given the blase way he talks about the way the game has shaken out in terms of investment/sales, it seems pretty unlikely that they are looking at foreclosure or any serious consequences. Probably the easiest way to think of this is that a very wealthy retired couple spent ~$80k a year reliving their youthful glory days while hoping they could wind up making a lot of money on the back-end.

All I'm saying is, take them at their word. This is the game they always wanted to make, and they prefer its aesthetics to any of their prior titles except possibly QFG5. They're not financially worried at all. They're disappointed the game had so many bumps in the road, but they're happy with how it came out. Plenty of rich people spend ~$80k a year on sillier pursuits. How much do you think the Williamses spend a year sailing around the world in the largest catamaran ever built?

The only way this is a "delusional" action is if you think they're actually unhappy with how stuff shook out. But since (1) most of the money they spent is other people's money, (2) all of the sales revenue is their money, (3) Corey has determined that they need not pay taxes on the sales revenue, and (4) they are very happy with the end product and had fun making it, it seems to me like a reasonable enough thing to do.

I myself wouldn't have done it, but for all I know, Fallen Gods will be a level-scaled flop.

 

[Mustawd]

It's more complicated than that because it sounds like they have lived tax-free during the development process.

I’m an accountant. The reason they have paid zero taxes is clearly because they have made zero taxable income. I know not everyone here is a business school grad, but not making income now or in the future is not a good business plan. Shocking, I know.


As an aside, I’m usually not this negative. But people ITT sadden me. This project has all the signs of a complete disaster. And what do most of these posts here read of? Sorry excuses for a badly bungled project.

Even assuming the Coles have no idea this thread exists, you do them no favors pretending everything is A-OK. Are there other Kickstarter projects that have struggled? Sure. Copper Dreams is in the middle of still figuring out what art direction it wants. But this thing is on a whole other level. People ITT should at least be honest about it. IMO anyhow.

 

[Mustawd]

The two things are not mutually exclusive. Still, I don't buy the "completely delusional.

I’m using delusional to say that
Their expectations did not meet reality, even being optimistic.

A belief or altered reality that is persistently held despite evidence or agreement to the contrary, generally in reference to a mental disorder.

At the very least their pricing decisions are truly delusional.

Maybe I’m being too harsh here. Maybe “incompetent” is the right word here. Corey does not strike me as a competent project manager. Which is fine. Many people, even in upper management or in Corporate C suites are not good project managers. It’s a skill that requires a sober assesment of how events are progressing rather than optimistic hopes.

 

[MRY]

It's more complicated than that because it sounds like they have lived tax-free during the development process.

I’m an accountant. The reason they have paid zero taxes is clearly because they have made zero taxable income. I know not everyone here is a business school grad, but not making income now or in the future is not a good business plan. Shocking, I know.

I'm not an accountant, but my understanding of what Corey described was:

(1) Take out $X HELOC.
(2) Pay cost-of-living expenses out of $X. Treat salary as a business expense that nets to zero.
(3) Deduct interest on HELOC from other income.
(4) Pay no taxes on sales of Hero-U until revenue exceeds $X (or possibly $X + interest).

Of course living off equity in your home is not a good business plan. But if you're a very wealthy retiree, creating a large tax deduction and a tax-free income stream while maintaining the same standard of living you'd have had otherwise is pretty nifty, if not necessarily kosher. If Hero-U ever makes back the initial investment, the consequence of how he's structured it (or how it sounds like he's structured it?) is that they will have had $400k of tax-free income.

Even assuming the Coles have no idea this thread exists, you do them no favors pretending everything is A-OK. Are there other Kickstarter projects that have struggled? Sure. Copper Dreams is in the middle of still figuring out what art direction it wants. But this thing is on a whole other level. People ITT should at least be honest about it. IMO anyhow.

Again, it all depends on whether the Coles are rich or not. If the $400k is a major chunk of their savings, and if they are not going to make it back, then obviously it was not a great strategy. But Corey's Quora posts don't read like those of someone who is living hand-to-mouth. His father was a millionaire in 1960s dollars and he grew up in Abington, PA, apparently "one of the wealthiest areas in the wealthiest county in PA." He started life with a trust fund and spent years as a famed impresario at one of the most successful video game companies of the era. He's also made a lot of money running online poker sites.

It seems like the people entitled to sympathy are those who backed the project, but given the rave Steam, GOG, and Metacritic reviews for Hero-U, they seem happy, too.

Having work on a Kickstarter project that produced, shall we say, different reactions, I think the Coles are entitled to their pleasure.

 

[Mustawd]

Again, it all depends on whether the Coles are rich or not

This thread is the first I’ve heard of them possibly being rich. But you’ve described Hero U as a passion project; A game they’ve always wanted to make; Something they’re just happy to see realized. (Crispy am I using these right? I can never tell).

I’m sorry, but launching two Kickstarters, the second for merely $100,000, and taking out a HELOC does not strike me as them being rich. Nor does turning down a $500k debt free infusion of cash that could make their passion project even better. Nor does pricing their game at $30-35 to recoup their investment, even though this makes little sense in today’s environment. In addtion, even mentioning that you have taken out a HELOC to finance your game is not something that strikes me as actions of a very wealthy couple. Finally, Corey has already shown he’s willing to bend the truth ($400k budget). It’s not a huge stretch to assume his claims about vast amounts of wealth are also exagerrated.

Now, are they starvng? There’s no way to really know this. But as the old adage goes, “actions speak louder than words” The actions and statements of the coles read to me like losing ~$1 million on this game hurts them, and their eager to recoup as much as they can as quickly as they can.

 

[Lhynn]

Hopefully they arent eating roots.

 

[Mustawd]

I'm not an accountant, but my understanding of what Corey described was:

(1) Take out $X HELOC.
(2) Pay cost-of-living expenses out of $X. Treat salary as a business expense that nets to zero.
(3) Deduct interest on HELOC from other income.
(4) Pay no taxes on sales of Hero-U until revenue exceeds $X (or possibly $X + interest).

You’re still paying interest. Albeit likely low rates if they took it out a few years ago. Also, why are they even takijg out a loan? If you’re rich you just spend your own money and deduct it as a business expense. It’s even cheaper than taking out a loan and payng interest.


EDIT: I’m not a tax weirdo, but pretty sure you can only deduct the interet
Off the HELOC. Maybe someone can provide citation on #2 of what MRY is talking about.

 

[gaussgunner]

If they're retirement age, I assume their fallback plan was to declare bankruptcy and collect social security.

 

[MRY]

I'm not an accountant, but my understanding of what Corey described was:

(1) Take out $X HELOC.
(2) Pay cost-of-living expenses out of $X. Treat salary as a business expense that nets to zero.
(3) Deduct interest on HELOC from other income.
(4) Pay no taxes on sales of Hero-U until revenue exceeds $X (or possibly $X + interest).

You’re still paying interest. Albeit likely low rates if they took it out a few years ago. Also, why are they even takijg out a loan? If you’re rich you just spend your own money and deduct it as a business expense. It’s even cheaper than taking out a loan and payng interest.


EDIT: I’m not a tax weirdo, but pretty sure you can only deduct the interet
Off the HELOC. Maybe someone can provide citation on #2 of what MRY is talking about.

https://www.quora.com/Would-it-be-l...-it-when-purchasing-so-I-can-avoid-income-tax
https://www.kickstarter.com/projects/transolargames/hero-u-adventure-role-playing-game/posts/1233204