Yet Another Reminder That Crowdfunding Isn't A Guarantee

The Omni was supposed to let you walk around in VR, but due to money problems, international backers who've been waiting three years will have to move on.
December 6, 2016, 7:00pm

By now, most people should understand that backing a crowdfunding project, on Kickstarter or another service, isn't a guarantee you'll end up with anything. Instead, like investing, it's a roll of the dice. But that doesn't make disappointment any easier to swallow, as international backers of the Virtuix Omni, a device that allows folks to walk around in virtual reality, have learned. When a new round of funding for the company fell through, it ran some numbers and had to tell backers, some of whom had been waiting years, harsh news: it's not gonna happen.

"After much internal debate and soul-searching," the company said in an update issued to backers yesterday, "we have concluded that as a small U.S. based startup, we unfortunately do not have the resources to deliver and service units in every country. Our dream of shipping the Omni to Backers all over the world has proven naive and unfeasible."

Virtuix raised $1,109,351 in June 13 to produce the Omni, pledging it would arrive in June 2014, just one year later. Like many crowdfunding projects, that shipping estimate proved terribly inaccurate; right now, it's looking like most people will receive it starting in early 2017.

By "most people," of course, I mean folks who live in the United States. In the backer update, Virtuix pointed to the increased complexity of building, producing, shipping, and servicing the Omni as the primary reason they would be unable to fulfill orders for people around the world, but if you dig into their message boards, the company illustrates a much simpler reason for the change.

"We did not raise a $15MM-$20MM financing round," the company wrote in a message board post, "as we had intended, that would give us enough resources to try to tackle this challenge."

In other words: back in 2013, the numbers made sense. But in 2016, years after they had intended to deliver the device, as the Omni becomes a reality, they no longer make sense, and their attempts to secure outside funding fell through. Something had to give.

Miscalculating how much a project will cost to finish is not exclusive to crowdfunding, but the mistakes are public during crowdfunding, leading to additional scrutiny. When a video game is delayed—like, say, how Uncharted 4 was delayed over and over again before it finally shipped earlier this year—that doesn't just mean more time is being put into it; it's lots of money, too. Another crowdfunding project, Double Fine's adventure game Broken Age, ran out of crowdfunding money midway through development, forcing them to sell the first half of the game, in order to finish the rest.

International backers are getting more than a refund, though. Virtuix is actually offering a 3% interest payment, compounded monthly, for anyone who will no longer be receiving an Omni. That's little consolation, of course, who've been patiently waiting.

"I'm really sad to read these news," wrote one backer. "I've been eagerly waiting for the last 3 years to get my hands on the product you have promised. I do understand that I wasn't purchasing an already final thing when making my pledge on Kickstarter, but basically funding its development, with the promise of getting a reward at the end in form of the final thing, once it is ready. That is what actually kept me to be patient during this long time."

Our thanks goes to Waypoint reader Henry Prescott for the heads upon this.