Pre-Order Pinball is dead

2015 is without a doubt one for the history books in our small world of pinball, plagued by drama, scandal and possibly outright fraud, among some of the boutique pinball vendors that sprang up in recent years.  One thing, at least to me, is certain: the crowd-sourced “pre-order” model for funding boutique pinball makers is dead. Dead as disco. Dead as Christian Slater’s acting career.  Really, really dead.

Two ventures have outright failed: Skit-B, which sought to build Predator pinball machines, and John Popadiuk’s Zidware Inc, which promised three machines: Magic Girl (MG), Retro-Atomic Zombie Adventureland (RAZA), and Alice in Wonderland (AIW).

To put these disasters in perspective, both of these companies took in hundreds of thousands of dollars (likely in excess of a million dollars each) in pre-order money from hopeful customers, thus making these failures unprecedented in size.  In several cases, I’ve read of individual customers with an excess of $20,000 in pre-order money to Jpop/Zidware alone!  Dollar amounts of this magnitude are hard to comprehend.

In the case of Predator, Kevin Kulek flagrantly lied about possessing a license for the title in online posts and seminars at shows.  When this fact finally came to light, the project collapsed and justifiable outrage ensued. Some customers have gotten refunds via charge-backs through their credit cards, and at least one person has sued Kevin in small-claims court and won a judgement (collecting may be a different matter, though).

I, myself, was “in” on Predator, but about a year ago I saw no evidence they could produce the machines.  No pictures of a manufacturing space, no staff, no tooling, no “real” timelines (just vague “coming soon”-style statements). Initially, Skit-B said when it was time to build my machine, I’d have to pay about half the total amount, and since I was way down the build list, I figured I’d know the project was “real” because machines would already have come off the line.  Seeing none of that, when they requested half of the total cost of the machine to stay in the project, it was too much of a gamble and I got a refund on my $250 ‘intent’ deposit.

The most recent bombshell concerns John Popadiuk’s Zidware.  Particularly in the wake of Skit-B’s failure, speculation that Zidware was headed down a similar path reached a fever pitch. People began demanding answers and the silence was deafening (ultimately telling).

Finally, just a couple days ago, John sent an email to pre-order customers admitting that he doesn’t have the money or expertise to actually produce the games.  This, by the way, is on the heels of four years of supposed development of the games, many missed dates, promised “reveals” and total ignorance of customer inquiries, including refund requests, for months.  Oh, and several vendors and contractors not being paid.

In a “hail mary” attempt to put the proverbial radioactive fallout back in the nuke, John said he’s licensed the intellectual property of the three games to an as-yet unknown third party, who may be able to complete the games (“may” being the operable word).  Customers were sent an email explaining their options.

Some key points:

• John Popadiuk would be a contractor to the new party.
• Magic Girl’s new production deadline is another two years out. RAZA and AIW are two to FIVE years AFTER MG. Yes, up to seven years!  Which, including the two or three years that RAZA and AIW have been advertised/sold, puts this at nearly a 10-year venture for some!
• Non-MG (RAZA, AIW) buyers are encouraged to switch their pre-order moneys to Magic Girl LE, at which point most need to come up with nearly $10,000 additional (MG LE sale price is $16,000). Also, MG LE quantity will increase from whatever it is currently to 199. Remember, the original run of MG was supposed to be a tiny 13, the built-in rareness of which in some ways justified it’s insanely high price tag.
• Non-MG (RAZA, AIW) buyers can optionally roll over their money to Magic Girl “Classic” edition, a new edition of Magic Girl whose specs, differences, etc. to the LE version have not really been explained, and which will be sold for an estimated $10,000 – $12,000.  But here’s the kicker, if that option is selected, only HALF of existing money paid will be credited.  That’s right: if you paid $5000 in pre-order money for RAZA, you only get $2500 in credit to MG Classic!
• By signing the agreement, the customer agrees not to pursue legal action against Zidware, the new licensee, the manufacturer and others involved, for four years!
• The new licensee/manufacturer has not been revealed yet. This alone is incomprehensible. I can’t believe anyone would gamble thousands of additional dollars on an unknown, unproven entity, with an anti-litigation clause.
• If the collective pre-order customers do not agree to the above, Zidware will pursue Chapter 7 bankruptcy.
• There is no solid accounting of Zidware’s current finances.
• There is no solid accounting of exactly where in development the games are at. Will it take one year to finish them?  Two years?  No one knows.

The full letter here.

To me, personally, the “options” boggle belief.  This arrangement, to my eyes, only transfers 100% of the risk to pre-orderers who have already waited patiently for as much as four years.  In exchange for a lot more money (for many, more than 150% of their current investment above and beyond what they already paid) and only a chance at receiving a game, they’re being asked to waive their legal rights to sue for non-performance, breach of contract, etc.

I’m not a lawyer, but I’m not sure if such a clause is even legal. I’ve certainly seen contracts where both parties agree to formal Arbitration before going to Court, but to waive all legal rights entirely?  However, if enforceable, this puts the new licensee in a position to deliver absolutely nothing. And currently, this new party hasn’t even been revealed. They have no proof of their ability to make the games.  They have no track record.

If you’re reading all this in wide-eyed disbelief, that’s the correct reaction.

Can this mystery licensee save these games? If you asked me five years ago if I thought hundreds of people would send thousands of dollars to someone to make a pinball game, sight unseen with no track record, I would have said you were crazy. So anything is possible.  Hope springs eternal, after all.  Would I ever bet on it, personally?

Oh hell no.

Will it ever happen again, though?  Will anyone risk thousands on a years-away game they’ve never seen and may never see?  That brings me back to the original point: pre-order pinball is dead.

Taking a step back from all this, I’ve never quite understood crowd-sourcing.  Maybe I’m just jaded, but the idea of sending a random stranger money on the hope they might deliver has never made sense to me. The possibility of 100% loss was never a “remote possibility” but a real danger that seemed glossed over amid the enthusiasm of being “in” on what might turn out to be an exclusive game. It always surprised me that some claimed there was no risk because “they said deposits are fully refundable!”  How can they refund you if they’re broke?  And we’re not talking about a pizza that might arrive cold or a bag of chips that turned out to be stale, but many thousands of dollars at risk, almost as if the enormity of the money at play was somehow an assurance of legitimacy.  I was wondering when the hammer would fall, and now here we are, right in the shit-nado.

As for my opinion of the perpetrators involved, I think they’re scumbags.  There are some who maintain that Kevin and John got into these projects with “good intentions” and simply got in over their heads, but I don’t accept that.  For one, when you’re talking about dollar amounts on this scale, the “oopsie, tee hee, my bad!” excuse is not available.  You have an obligation to deliver, both financially and ethically.  For two, both have made extremely misleading statements or outright lied about the status of the projects.  Any claim of ignorance, little that’s it worth, goes out the window at that point.  Both projects were in serious jeopardy for a long time and neither was forthcoming.

Not all of 2015 has been a giant pile of fail, though.  Planetary Pinball and Spooky Pinball, both also “boutique” makers, have actually built and shipped games.  Two other boutique builders, Heighway Pinball and Dutch Pinball, also appear to be in good hands despite not having shipped a game yet.  Time will tell.  But with such a famous name as John Popadiuk now going down in flames, I don’t see how any new venture could step forward to solicit up-front money from the community and not be immediately shot down.