I hate being disappointed. I doubt I’m alone. In general, I try to temper my expectations and accept negative outcomes just as much as positive outcomes. But it doesn’t always work. One particular case is with Nerd Kingdom and TUG. I am very disappointed that TUG never really saw the light of day. The vision the Nerd Kingdom sold me in 2013 during its Kickstarter is one I’m still very much sold on. But it’s a pipe dream now as Nerd Kingdom, the company behind TUG, is no more. Nerd Kingdom’s parent company, IGG, dissolved the studio in May of 2019.
Given the circumstances of how this game took money from the public and then went belly up within a few short years, I thought this would be a great topic for Lawful Neutral, so I went researching to try to figure out what exactly happened to Nerd Kingdom and where it all went so wrong. What I found disappointed me a second time, this time not because TUG never saw the light of day but because Nerd Kingdom was not, and might not have ever been, the kind of company it presented itself to be. There are two stories of the history of Nerd Kingdom, the one that company told and the real story happening behind the scenes. The result is that Nerd Kingdom was a great deal more shady than I ever knew.
For a quick background overview of the history of TUG, check out MassivelyOP’s retrospectives from 2017 and the more recent one from 2018. Nerd Kingdom did not reply to our request for comment for our previous piece.
Trouble at the NK Corral
Nerd Kingdom’s meandering and sad history could take up the entire article, so I’m going to cut through to the salient bits. Nerd Kingdom was founded in 2012 in Texas and launched a successful Kickstarter in 2013 for TUG to supplement existing investment money. The founders said they’re making a different kind of survival game and boasted of the scientists and academics on staff to show just how different it would be. Gamers were on-board with the idea too, and they generated $300,000 on Kickstarter.
By 2014, Nerd Kingdom had an alpha version up on Steam and seemed to be cruising along fine. But then in late 2014, an investor unexpectedly pulled out, forcing Nerd Kingdom into a massive layoff to make ends meet and try to finish the game. By December 2014, Nerd Kingdom had found a replacement investor and things were trending positive again. At the time, Nerd Kingdom was quiet about who exactly the investor was. Investigative Journalism to the rescue: Chinese mobile developer I Got Games (IGG) was the investor.
From associate to acquisition
Now this is where things start to get interesting. According to IGG’s 2014 Annual Report, in addition to picking up 61.7% of NK’s shares, IGG also got two Director seats out of five in the investment. At this point, IGG didn’t consider its current role in Nerd Kingdom to be a controlling interest; it characterized NK as an “associate” of IGG, as opposed to a subsidiary. While on paper this meant that Nerd Kingdom maintained creative control, it’s the kind of control that comes with a wink and a nudge. IGG was basically keeping the company afloat at this point and paying most of the company’s salary. It’s creative control in the way that my dog has creative control of where he runs when he’s on a leash.
With this new influx of money, Nerd Kingdom seemed to make a recovery, putting out a few patches here and there until 2016, when it announced it had a received a $8.5 million from an investor who respected the vision for the game and allowed Nerd Kingdom to maintain control of the company. The reason for this sudden influx of money is a bit up in the air, but it’s probably safe to assume that Nerd Kingdom was, again, out of money. Who was that investor, you’re surely asking yourself? Why, it’s our old friend IGG! According to IGG’s 2015 Annual Report, on November 13th, 2015, IGG gained a controlling interest in Nerd Kingdom in the form of a third Director slot. I want to note here that in Nerd Kingdom’s announcement about the new money, the studio conveniently left out that it was now a subsidiary of IGG and that IGG was now officially calling the shots.
That’s especially interesting when you consider that in the same announcement, Nerd Kingdom started floating the idea of free-to-play for TUG. IGG, being a mobile developer and now in control of Nerd Kingdom, likely had a hand in that push, though of course NK wouldn’t have admitted to that since it was apparently trying to suppress the fact that it had been acquired. I think it did so successfully did for the most part. Until I started researching, I myself was unaware that IGG’s involvement extended as far back in Nerd Kingdom’s life as it actually does.
After this announcement of new funds and new directions, Nerd Kingdom went largely silent for a year. It finally resurfaced in February 2017 to announce that prototyping had begun! But after that point everything was largely silent again. Gamers had virtually no insight into what was happening. There were a few posts to social media until September 1st, 2017, but all those accounts have since been deleted. After that point, we never heard anything official again from Nerd Kingdom. The final reference I could find was at some point in 2018, TUG was “put back to development after an unsatisfactory internal test…” according to an Equity Research report.
And at that point, the trail dries up. There are only token references in the Board of Directors to Nerd Kingdom in the 2017 Annual report, and no references to Nerd Kingdom in the 2018 Annual Report. The next piece I found was the dissolution paperwork. Over on the TUG subreddit, there’s some speculation about what happened between 2017 and 2019, specifically in reference to the team and assets being used in a new game called Best Buds. Outside of a few random references on YouTube, that game doesn’t show up in any of IGG’s financials or anywhere else. (The subreddit community is working hard to try to keep TUG alive and elicit some kind of response from IGG. Bounce on over if you’d like to join them.)
MassivelyOP reached out to IGG and IGG’s counsel for comment on the situation for this piece, but at the time of publication, IGG hasn’t responded. We reached out to Nerd Kingdom’s lawyers as well, with the same result.
Riding off into the dissolution sunset
I don’t know what actually happened to Nerd Kingdom and TUG, and the people who do know aren’t talking. Whatever good intentions Nerd Kingdom started out with, it definitely appears that it turned pretty shady pretty fast, between deliberately hiding its acquisition and refusing to deliver the transparency it had promised to its player backers.
My original hope for this article was to find out what recourse Kickstarter backers (including me) have since we never saw a finished product or even an explanation for what had happened. Unfortunately, I wasn’t able to come up with anything, and with IGG ignoring our request for comment, I wasn’t able to confirm or deny that IGG assumed Nerd Kingdom’s Kickstarter liabilities in the acquisition.
At the moment, Nerd Kingdom and TUG function best as a cautionary tale for putting money into Kickstarter and a reminder at how easy it is for game companies to make off with crowdfunds without any legal recourse for the donors – ’cause, you know, we needed another one of those.
Every other week, Andy McAdams braves the swarms of buzzwords and esoteric legalese of the genre to bring you Massively OP’s Lawful Neutral column, an in-depth analysis of the legal and business issues facing MMOs. Have a topic you want to see covered? Shoot him an email!
