Skullgirls crowdfunding stymied by PayPal

Tuesday, 23rd April 2013 06:01 GMT By Brenna Hillier

PayPal has put the brakes on the Indiegogo campaign for Skullgirls, leaving Lab Zero Games unable to pay its staff.

The money transfer service withheld funds, saying it was not willing to take the risk that backers would demand refunds at the end of a poll to select which DLC characters will be developed.

The service offered to unfreeze Lab Zero’s funds if it would agree to take on the burden of providing refunds if necessary, but the developer refused; the point of its crowd-funding campaign is to provide money for development costs, and it’s going to spend it, not fill up a silo and go swimming.

Lab Zero CEO Bartholow took to NeoGAF to vent his frustrations, and in a series of posts collated by GamesIndustry, revealed that PayPal finally unfroze the account but withheld $35,000 as collateral. Other developers have not experienced this problem using rival services like Amazon, Bartholow said, and he has filed a complaint with the Consumer Financial Protection Bureau.

The vast majority of Skullgirls backers used PayPal to donate, so the service was sitting on $700,000 of the $829,000 raised through Indiegogo.

Lab Zero Games originally asked for just $150,000 to develop a single DLC character, but netted enough to make four, with story and stages for three of them, among with a host of other goodies for backers and fans. Skullgirls is available on PlayStation 3 and Xbox 360 and is headed to PC.



  1. JimFear-666


    I dont know why they are afraid to deal with refund… i mean if you do everything correctly, i dont think people will ask for a refund.

    Anyway i hate all this kickstarter bullshit where people ask for money to do a game. I dont have money to buy a ferrari and im not asking for money. i still wonder why i should give them the money to do a game before it come out… Thats not how it work.

    I dont think i will ever get this kickstarter bullshit…

    #1 2 years ago
  2. salarta

    @1: The basic idea of Kickstarter is USUALLY (but not always) “We don’t have the funds to make this thing right now, if you give us money then we can spend the next several months to a couple years making something that otherwise wouldn’t be able to exist.” It’s basically like an advance payment for a product, with the added bonus that the team might of course make more than what the Kickstarter funded once the product is finished and put out there for sale. It’s not much different from giving a writer an advance on a novel, or commissioning an artist for a work of art that they haven’t drawn yet.

    The only downsides are that there could be unexpected mishaps (e.g. a programmer dies or leaves the company, or this Paypal issue), and that consumers need to be a bit more wary of looking into the details to make sure what they’re backing is what they think it is. You’re going to get a lot of marketing spin by eager project owners to get people to buy the product, and it’s easy to get swept up in their enthusiasm without spending enough time to look at possible flaws.

    In short, Kickstarter is good for the industry because it makes it possible for companies to create and put out projects that would never get made otherwise since the publishers are often too narrow-minded toward following trends to make money. But it can also be bad by misleading some people with false promises, but that’s more an issue that hurts the Kickstarter approach to video game creation than something that hurts the medium as a whole.

    #2 2 years ago
  3. Cobra951

    PayPal should be branded a criminal organization. They are basically free to steal from their account holders whenever they feel like it. They can freeze funds for however long they want, without the rightful owners having much legal recourse. How an arrangement like that is even allowable under the law baffles me.

    #3 2 years ago
  4. Clupula

    What happened here, plain and simply, was that a joke character by the name of Stanley was included in the voting for the first DLC character. When he made the top 8, with many better characters eliminated, people got angry. Threats were made by people to delete the game from their HDD’s if Stanley got in and some even went so far as to threaten to demand a refund from Paypal if he got in.

    There’s a post on Eventhubs, where someone describes bringing him into the game as being like LabZero were the Salvation Army, using donated money to buy the homeless cocaine and alcohol.

    Hopefully, they do the smart thing and just exclude Stanley completely from the second round of voting. He was the cause of all of this controversy. His removal will be the end of it.

    #4 2 years ago
  5. DAOWAce

    Paypal froze transfers from my account after I sold a PC for $2,000 on eBay, citing it was due to a ‘sudden increase in funds’, as if I was doing something illegal.

    They completely ignored any of my attempts to contact them to get the freeze removed.

    Eventually, after a few months they removed it on their own.

    Paypal does some really stupid things; claiming ‘protection’ as their excuse. All the more reason to switch to something like Dwolla. Shame it’s not in the same position as Paypal.

    #5 2 years ago
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  8. silkvg247

    So if I am understanding this, PayPal can decide if the money I pay to somebody goes to them or they can decide they will hold it? On what planet is that even legal? I’m sure that’ll do their image wonders once the news goes viral – I certainly feel wary now.

    #8 2 years ago

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