Scam? Ouya, oder nein?10 minute read

Scam or truth? A look into the commercial failure, flaws and controversies of Ouya.

It was 2012, July 3rd when Boxer8, Inc announced a home console that was set to change the face of home video gaming. The mission statement was to create Ouya, the worlds first mainstream micro-console. There was a working prototype, housing an Nvidia Tegra 3 chip and a whole lot of swagger. Julie Uhrman, the chief executive of Boxer8, Inc., which later became Ouya, Inc., announced the Kickstarter campaign that had a target goal of $950,000 and a pledge to change the world.

“Press a button and reset an entire industry.”

The initial statement from Ouya was that they “created a gateway to the independent gaming revolution.” With the basis of a small, streaming media box with gaming functionality in the living room it was not too ingenious an idea. However, the price tag being £99/$99 at launch did make this interesting to the consumer. But the consumer wasn’t the main driving force behind creating a full-fledged gaming community – it was the developers.

Developers initially flocked to the Ouya Kickstarter campaign which boasted full development capabilities on each console. Requiring an initial $950,000 to get this project up and running Ouya soon had a staggering $8,595,475 from a Kickstarter campaign that holds the record for the best first-day performance.

Ouya then announced their “Free the Games Fund” which meant that developers could gain financial support, dollar-for-dollar, from Ouya if a minimum $50,000 was raised and the game would be an Ouya exclusive for a minimum of six months. A community was emerging from this small and shiny box.

Between the console launch in 2013 and 2014 proposed upgrades to the Ouya and it’s controller were implemented. A limited edition white variant was released, then discontinued, and subsequently a limited edition black variant released afterwards. These retailed originally for £129/$129, showing some added investment in their consumer groups with only a small increase in the price tags.

“Ouya, start pushing buttons.”

Business appeared to be booming, at least from a media perspective. January 2015 arrived and Ouya received a $10 million investment from Alibaba with possibilities arising from adding the Ouya system into their set-top boxes. Now, with hindsight we can see that this generally does not work as a substantial gaming platform. Amazon already have gaming capabilities in their Fire TV Stick’s, and at one point a controller was available for this. But it is a flawed design, as the games themselves have to be small and simplistic enough to run on such limited technology.

April 2015 came about and Ouya announced publicly that they were attempting to sell the company because of their debts. Wait, what? They got nine times the amount from a Kickstarter campaign, and an additional $10 million from Alibaba, and were showing signs of upgrading their technological cubes, how had their debt never come to light before?

The Razors edge

July 27 2015 was the day that Ouya officially ceased to exist as a company. Razor Inc. had acquired all their assets and employees, as well as the entire content library. The deal however, did not include any hardware-based assets and Razor tried to encourage consumers to migrate to Forge, their very own micro-console. Ouya’s library was to be integrated into their own ecosystem, with the Ouya brand only existing as a standalone publishing platform for Android TV and Android consoles.

A technical team from the original Ouya soon joined Razor to develop what was known as Forge TV. This failed incredibly quick and was discontinued in 2016. In 2019 Razor released a press statement advising how all online accounts and services would cease. This meant that all applications on the previous iterations of the platform would become entirely unusable. Some games were transferable to other storefronts, if the developers agreed.

A mastermind development?

This is a standard story of a company that has tried to bring invention and technology to the forefront of society and failed. But in my mind I cannot ignore the possibility that it was actually a very well crafted scam.

Looking into the origins logically, a small box and controller model that is based on an Android operating system would see $950,000 as a very well-sized investment. It was all the company required, yet the campaign went on to more than $8 million. Ouya soon developed the consoles and made 200,000 console sales at £99/$99 a unit. If the original costs was accurate, presuming they kept within budgets, they should have been around $27 million in profit at this point in time.

Then Alibaba gives them another $10 million, so we are nearing the $40 million mark. More news arrived regarding Ouya, such as a further $12 million investment from Nvidia during it’s infancy stages. The income was definitely stacking up, but there was still no sign of this so-called debt.

Now this is where the tactics seem to muddy the water. Ouya were willing to set aside $1 million for developers of games on their platforms. Paid upon the launch of a game, the developer would double their investments into that title – bravo!

However, Ouya did not pay the majority of these developers, as reported on my multiple news outlets such as Kotaku. Once Ouya had announced its “debts” they subsequently stated that the funds were no longer available. Razor Inc. tried to pick up the pieces, and they offered to honour Ouya’s previous commitments to the developers, but with strange clauses. Such as a developer promised $5000 would have to give away 500 copies of his $10 game on Razor’s storefront to obtain the funds. A strange clause, but the money would be transferred none the less. And let’s be honest – Razor Inc. was not the attacker here, they were a victim to this issue as well.

“The Free the Games initiative was put forth by the original OUYA and that program was NOT part of the acquisition by Razer”

Razor, 28th July 2015

The Risk Factor

In 2012, in the days of the Ouya Kickstarter campaign, of the 21 most funded technology-based projects only four was in production. Most projects sit in preorder, which basically means that they are taking funds without having produced the article.

The issue with Kickstarter and technology is that it has never had a good track record. 33% of projects make it to production, which to an investor is a good hit, but to a consumer that is a 33% chance that you will get the product you backed at some point. However – crowdfunding comes with the issue that, if you do not get said product, you cannot ask for a refund – it’s investing from the community, which is basically charity to the so-called corporations.

The interesting part of Kickstarter and Ouya‘s relationship is that most people (other than the suppliers of the near $9 million) were sceptical. There were various news reports, reddit feeds and articles all pertaining to the same subject. Unreality Magazine published an article named Ouya: Innovative Idea or Sleazy Scam? PC Magazine joined the movement with their article Why Kickstarter’s Ouya Looks Like a Scam. Escapist and various forums saw discussions, such as The Ouya Scam.

Now let that sink in for a while – various outlets and forums were all discussing why Ouya appeared to be a scam before it’s launch. The Escapist forums however highlight an issue at the time of launch – Ouya did not honour the backers console purchases (not immediately anyway) and instead send their production line itinerary to retailers instead. The biggest question around this was, why didn’t large media outlets question Ouya when the proverbial began to hit the fan? Why was everyone silent?

A shroud of deceit

Ouya is the same company that lied about why it had no stand at E3 – when the truth was they failed to fill out the paperwork required. This same company is the brains behind putting the Tegra 3 chipset, a phone chip from 2011, into the console that would “reset an entire industry.” One could argue that the design and the company behind the design was flawed and suspicious from the start, themselves buying into cheap and slow tech to drive a huge marketing campaign.

Then came the gaming scandals. These were unexplained dubious Kickstarter campaigns that were created for games being developed on the Ouya. One game, Gridiron Thunder, gained a lot of suspicion when just 126 backers raised $78,259. That is an average of $600 each, which is suspicious in its own right for a small-time game, and not one backer requested the awards for their pledges to the project.

More questions were raised when it was noticed that many of the accounts were new accounts that seemingly were created to back this project, with duplicate names and false avatars. Now thinking back to Ouya’s business model and incentive scheme – the “Free the Game Fund,” – Ouya would pay out a matched dollar-for-dollar transaction to video game developers upon the release of a game, if it reached more than $50,000 in funding.

The game eventually saw another 57 backers increasing the pot to $171,009, meaning they would receive $342,018 in total for their game. The project was investigated but Kickstarter said they found nothing wrong with the transactions – but how could they? Looking into the developer, MotoTXT, they have only released two games – the fore mentioned and Fullcourt Thunder. Both of these were reviewed as “shockingly bad” and no further developments were made. The company no longer exists and there is no information about who owned it nor where it disappeared to. Was it a relative of the Ouya family? Was it a means for Ouya to keep hold of their $1 million pledge prior to Razor acquiring them?

Unanswered questions

The truth is – no one can answer these questions. But when you look at the history of an initial Kickstarter campaign that was questioned to be a scam, large amounts of money being gifted to the company and the subsequent failings to commit to the backers purchases, things start to look strange.

The subsequent and sudden announcement of debt, the fact that games being crowdfunded for the platform were investigated and the mess that Razor was left with, it is safe to say that Ouya was either a company that couldn’t organise itself, or they were always out to make away with a vast amount of money at other peoples expense. I will leave this to you to make your own opinion based on these events.

Playboy Shoot Location in London - SHOOTFACTORY

In other news, two years ago Julie Uhrman was hired by Playboy as President of Media. Whether or not she pitched a £99 erotic toy for a crowdfunding campaign and named it the OuYeah is yet to be confirmed.