Well I think people are getting the wrong impression here. They started this game in 2013 on their own money, got a subsidy to build a prototype that year, then

Well I think people are getting the wrong impression here. They started this game in 2013 on their own money, got a subsidy to build a prototype that year, then in 2014 raised money from a loan in Belgium to finish the game. They communicated all of this in their Kickstarter. They then asked $50k I guess to finish up the game and expand the scope a little bit, and make some money on various rewards, but mainly I suppose as virtually all kickstarters nowadays: a presales platform. In that regard they succeeded. The game is finished, it's for sale, and the backers got their game. But the sales were also disappointing, and so they declared bankruptcy. The issue here is that they created stickers, dvd crap, soundtracks etc... Kickstarter backer rewards. And they can't ship them as they're bankrupt. The problem obviously is that they didn't earmark funds ahead. I think that's disrespectful towards the backers and it's a genuine complaint, but I don't feel it's very significant in the scheme of things. Kickstarters know the risks. And the creators of the game put their heart and soul into it and ended up bankrupt, yet did deliver the game. I think that's a fair compromise for the backers of the game, even if they don't end up getting their rewards, like an artbook or wallpaper which can be pretty sweet but I doubt anyone will lose sleep over it, while the creators must've lost a lot of sleep going through a bankruptcy. So this notion they raised $50k for 7 people to build a game in two months isn't really the case at all. Beyond that, your point on merchandise rings true but it depends on context. A soundtrack, artbook and wallpaper usually isn't a big deal. After all, the game has a soundtrack regardless, and they'd already produced tons of artwork in the process of modelling, you can see it on the kickstarter. The effort is printing and shipping it. But if someone is giving you a $20 premium to ship him a PDF you already have on your computer, would you say that's bad business? Not really, any smart indie will pay some highschooler $250 to take care of it, a small price to increase your budget by $10k or something to that effect. The issue is that some kickstarters go way overboard, and the reward/effort ratio plummets to below their IRR or even below 1. So it really depends, in this case I think it wasn't a bad decision as they promised rewards for things they already had laying around, they simply should've earmarked the funds.