Code Hero, one year later: Money, lawsuits and poker

"It's been a year since we ran out of money," Alex Peake told me at the end of a long day he said was spent building a level in the latest version of Code Hero.

The Code Hero Kickstarter ended on February 24, 2012, raising $170,000 of a requested $100,000. The campaign, run by Peake and his Primer Labs studio, promised a full game in six months that would teach K-12 students how to write Unity code. With the over-funding, Peake tacked on "multiplayer MMO" features and a documentary about the crowdfunding process.

Peake promised a new, alpha version of Code Hero would launch during PAX Prime 2012. It didn't. The game didn't come out on any of its following release dates either, and Peake stopped posting updates on the Kickstarter page. Backers, angry and disappointed, took to the comments section, murmuring about refunds and lawsuits.

Today, the Code Hero and Primer Labs websites just recovered from weeks of downtime and include links for "beta preview" builds. It's been five months since Peake posted an update on Kickstarter, he's out of money, backers openly discuss the logistics of lawsuits and they have no idea what's going on with the game. Peake says a new, beta version should launch in September, around PAX Prime.

Déjà vu.

I spoke with Peake last week. At the time, he wasn't sure when the sites would be back up or when he'd communicate with backers again. He was confident a full beta would launch around September 1.

A few things are different, one year on – for more than two weeks, the Code Hero website and the site for Peake's development studio, Primer Labs, resolved to pages for Check and Raise Poker, an odd online gambling hub. Today, the sites came back online with a message from Peake that they're undergoing maintenance, and with download links for a fresh beta preview of Code Hero. This is the first beta build released since the project collected funding in February 2012.

This game of website hot potato had a simple explanation, Peake said: He didn't have any money and he was behind on paying his host. Primer Labs received free hosting in the past, but the representative who used to make that happen recently jumped ship, so the sites did, too.

"We ran out of money," he reiterated. "We've been building the website without asking for more and building the game without asking for more because we're getting close to finishing a lot of it and putting out a beta."

None of the Kickstarter backers have received their rewards for donating.

By February 2012, Code Hero had received pledges from 7,459 people, some looking to cash in on the education-based rewards:

• 61 backers pledged $133 or more to receive one-on-one online mentorship with a Code Hero developer

• 6 backers pledged $1,012 or more to give Code Hero, complete with teacher training, to K-12 schools of their choosing

• 9 backers paid $1,337 or more to intern with the Code Hero development team

• 2 backers pledged $10,000 to become a character in Code Hero and have a role in level design

On July 4, 2012, Peake announced the alpha version would launch somewhere between August 31 and September 2 of that year.

That's when the Kickstarter money disappeared.

"It paid developers for nine months of development," Peake said. "Code Hero is not a simple game ... It's pretty ambitious stuff."

Peake paid between $4,000 and $5,000 a month for each programmer, up to $60,000 a year. The $170,000 was actually $150,000, after "fees," Peake said, and "it basically just paid living expenses and wages for the rest of the team." Primer Labs hired 10 people to work on Code Hero after its crowdfunding windfall, though not all of them were programmers and salaries varied, he said.

One of these new employees was David Lopez, a game designer from California; he quit his job at Red Giant Studios after Peake recruited him for Code Hero. Peake offered Lopez $55,000 a year.

"I never got paid for the majority of my work, which was tons of money," Lopez said.

Lopez said Peake tried to pay him at first, giving him a $400 check from Primer Labs. It bounced. A second Primer Labs check for $800 (to make up for the denied one), Peake didn't sign and Lopez couldn't deposit. Eventually, Peake wrote Lopez a personal check for $800. That's all he was ever paid.

"I gave him tons of time," Lopez said. "I quit my job in the gaming industry to come help this dude out. A couple weeks later, he disappears and drops the whole project."

Peake didn't remember Lopez's situation.

"I don't remember that, but yeah, there were people that wanted to get paid more," Peake said. "It sucks that we didn't make enough money by releasing and finishing the game or getting it out sooner to be able to increase the rewards for people who worked hard on the early stages," Peake said.

Lopez said he didn't know where the money went, but he "guaranteed" it didn't go to properly compensating the team.

"I think the money just magically disappeared," Lopez said.

If that was a magic trick, Peake said he saw through the illusion.

"The last month or so that we were working, we pretty much knew that we were running out of money," he said. He asked people to keep working for free while he talked to investors. "Some people I wanted to pay more and have work for very little for a while. That's pretty common for a project like this. You don't pay a salary that a big game company would pay; you pay what people need to live and what's reasonable."

Lopez described the working conditions at Primer Labs as unprofessional. Peake didn't have a game design document – an essential aspect of development – and would change mechanics or the art style without warning, after the team had already drawn up concepts for another approach, he said. The team was never the problem.

Now, Peake said he has a team of volunteers working on Code Hero and he would gladly take more. A September launch lines up with the start of the school year, and Peake said teachers were reaching out, wanting to use it in their classrooms.

"As humble as the first beta of Code Hero is going to be, it's going to be the first time that K-12 teachers and kids will be right at home, just like they are in something like Minecraft, making their first video games with Unity," Peake said.

But before kids can learn to code, he'll have to finish the game.

"I'm putting all of my energy and my time into finishing Code Hero and to getting the game out to the people who need it most, which is people who backed it and people who haven't heard of it yet," Peake said.

One of the most active backers on the Kickstarter comments page, Dustin Deckard, sent Peake an official request for payment through the mail, as instructed by the California court system when money is owed for failure to provide goods or services. Peake didn't respond to it.

"The idea of a class action lawsuit is still present and being discussed - unfortunately it's become more clear that Kickstarter projects are in murky territory when it comes to that sort of thing," Deckard says. "Realistically, I have hundreds of people that have contacted me with interest in joining a class action lawsuit. But that's only around 4 percent of the 7,459 backers. Granted, 2,700 of those only pledged a dollar, and another 2,800 pledged for the discounted $13 copy of the game. Those of us who are making noise represent a very small portion of the backer community around this game. Unfortunately, most of the others are just not out enough money to care."

Legally, backers and campaign owners enter into a contract on Kickstarter, and those terms are clear that the project may crash and burn, attorney Mark Methenitis said. Some states may provide recourse under a deceptive trade practices statue – most likely against the project owner, not Kickstarter itself – but even then, the creator would need assets to forfeit.

Peake, at least, made it clear that he had no more money.

"This is a very litigious country and [being sued] is a very scary prospect," Peake said. "I don't think that it's the right thing to do when someone is trying to do a good thing and has released versions of the project that took nine months to make. It seems like it would be a better idea to ask how to help finish the project."

Kickstarter's official stance on failed projects, provided in December, was less litigious: "Communication is vital from creators. It makes sure everyone knows what's going on, and it gives backers a window into the creative process."

Communication was one of Peake's main problems, and he knows it.

"A lot of games are labors of love that take years to finish before the creator is ready," Peake said. "But when you do a Kickstarter, you agree to meet your backers' expectations and communicate a lot, and do everything on a schedule, and that was my failing, to not be able to deliver on time or with enough communication."

People who have asked for refunds, whether they donated on Kickstarter or directly through the Primer Labs website, will get those as soon as Peake finishes the game, he said – even though he knows there's no reason for backers to trust him on any of these promises.

"Honestly, I don't think the ones who are angry will [believe me], and I'm to blame for that," Peake said. Later in our conversation, he continued the thought: "A lot of people feel like they've been burned."

Peake said his time in the spotlight has taught him a lot about the difficulties of game development and cultivating a public persona.

"Everybody has a different opinion of how well you're doing," he said. "I personally got very discouraged by the amount of negative comments. It's hard when you make a game and you want it to be awesome, and people want to see all the early versions of it, but you don't necessarily want to share them until they're good."

Peake recognized that he'll have to share Code Hero eventually – but that's a scary prospect for him. In the middle of our conversation, he quoted one of the rules for writing from American author Robert Heinlein: "You must finish what you write."

"That's terrifying," Peake said.