We usually write these messages with a desire to be professional and calm about the situation, and the hope that it all might end well. In truth, we have reached the point of having heard enough of the one-sided view of this, and we must respond in this public manner.
We feel that no backer should have had to go through this, but our relative silence has been taken as a sign of our sole guilt in this joint venture. We assure you both parties are at fault here, and we need to tell more of our side of the story.
BUT – we know most of you are fed up with the disagreement, and only care about getting your rewards. So I’ll deal with that first.
The very first thing we need to make crystal clear is that Battlefront has asked repeatedly these past months for a list of ‘Wave Two’ products that have actually been manufactured. Dust Studio has made vague public promises that production was continuing, but has been evasive about the details.
If ‘Wave Two’ products really have been produced, we need to see a list so we can pay for the agreed stock and arrange for it to be collected from Dust Studio and distributed to you, the backers. To date, we have heard nothing more than, “It’s finished. Pay.” from William, or last week a flat-out refusal to deliver stock to us now that their “new plan” is in the works.
I think this needs to be reiterated so no one can misread it. Once we get an itemised list of what is ready to ship, we can send the funds. It is that simple. If this seems reasonable to you, we ask that you please email
william@cathaygames.com and
twistedtoys@gmail.com asking them politely to just send the list.
This is the simplest course of action for all parties. It means that you, the backers, will get the items you paid for at the price you were promised, and not at any additional cost that Dust Studio might be proposing.
We feel it is only prudent to want William to confirm he will release the goods to the shipping agent on receipt of the transferred funds.
If we are given this list we will use the balance of the money remaining to pay for the stock and deliver it to the world, as was always the plan. It will take around six weeks from the stock being released to it arriving with us and starting to ship to you.
Failing that, our alternative plan is to issue backers with a refund.
We have two choices for any customer who backed and paid through the Kickstarter:
1. Cash Refund: We will process your refund based on the funds remaining from the project on a pro-rata basis. We collected $571,937 in total, from the Kickstarter campaign and the Pledge Manager. $50,647 went in fees to Kickstarter and PayPal. We have paid Dust Studio 72.5% of the remaining money, $378,007, and spent another $27,653 on the first wave of shipping. This leaves $115,330, which is then enough to pay for the remaining ‘Wave Two’ stock, assuming it is made.
You will get a portion of this remaining balance, depending on what rewards you have already received in ‘Wave 1’. The processing of these claims will be slow as there is no automated way to do this, so they have to be done one at a time after consultation with each backer. Payments will start to come out from the end of May, and will take about two months to get completed.
2. Stock Credit: If you would prefer to take the balance of your order in existing DUST stock, we will give you 300% of the outstanding value. If we owe you $100, you can have $300 (retail value) worth of DUST items from our inventory, and we ship it to you at our expense. In other words, you can take your credit in DUST stock at a two-thirds discount. We will be offering the rulebook and card packs at 50% discount, as we will have to print some more of those to fill new orders. This is the best way we know to try and give you the fullest value we can for the remaining value of money you contributed to the project.
Just to say once more, the options above can be fully avoided if Dust Studio would just give us an itemised list of what has been made so we can pay them and collect the goods!
For those who backed through a retail store, we will be offering stores several solutions to make sure you are not left out. We are able to resolve this issue with stores quickly, given our ongoing relationship, so if Dust Studio truly force us to go down this path, no retailer or
LGS backer will lose out.
Now that we have dealt with the main issue, we would like to explain more of the background from our perspective, to give you the other side of the story.
Free Upgrades
This dispute between the two of us started with just one issue, which is still unresolved: the free incentives that Paolo Parente promised on behalf of Dust Studio. When the Kickstarter started, we decided the details together - Paolo Parente and me. We came up with the idea together and we were in contact with one another every single day. The video on the front page features Paolo talking. Every new stretch goal was agreed between myself and Paolo before it was announced. Not one single thing in the project was done without Paolo’s knowledge and agreement. Together we agreed on everything from pack contents to pricing.
After a year of working together prior to the Kickstarter, Paolo and I had a good working relationship, or so I thought. In fact, the only time we ever heard from William was when it came time to pay or get the shipping paperwork.
Just ask yourself - if we had been doing this alone, wouldn’t Paolo have raised an issue with what we were doing? He did not. And he has never denied being fully aware of everything going on. When discussing the free incentives that are part of every Kickstarter, we felt it was fair to share the cost of these between us. Battlefront would provide half and Dust Studio the other half. This is very important - at no time was either company expecting to receive payment from Kickstarter funds for these items! They would cost both companies money to supply, but that was an acceptable investment, to ensure a successful Kickstarter. Case in point - Paolo said the Abandoned Well terrain piece would be expensive and slow to produce, which is why we offered to make it for them (and we still intend to, if Dust Studio ever gives us the master models). Everything in the plan went back and forth and nothing was posted without approval, from the first images to the final free upgrade.
At no point throughout the Kickstarter was William Yau our point of contact with Dust Studio. It was always Paolo and me representing each business. Paolo is not “just an artist” as he now keeps claiming, and cannot hide behind that statement. As far as we were concerned, Paolo was our contact for Dust Studio and he spoke on behalf of the business. He is a senior manager and shareholder of that company, just like I am for Battlefront.
Then in November when we submitted the pledge manager orders, William stated that unless we paid for all of the free incentive items at the usual wholes price (this includes production costs and Dust Studio’s profit margin) he would not supply the ‘Wave 2’ products. He claimed that because this was not in the original agreement in writing he never agreed to it. I pointed out that the agreement only had the first twelve items listed and that the line “and anything else agreed to between the two companies during the campaign” covered the 40 new item codes and free upgrades which Paolo and I added together during the project. He said no, that is not true and we had to pay.
We of course balked at this, saying this was not the deal that Paolo and I agreed. Neither of us was being paid, as it was our contribution to the project to make it as successful as it was. At this point Paolo disappeared and was out of contact for over a month, after having sent us an email saying that William was the CEO and what he says goes. This is where the matter has been left. Battlefront shipped out 90% of the free items it promised with ‘Wave 1’ and the last items we owe were intended to ship with ‘Wave 2’. Dust Studio has not supplied a single item on their list, and from what William says, will never do so.
This then led to all sorts of other issues being raised that are not directly part of the Kickstarter. When two companies are contractually tied to one another, one issue often leads to another.
‘Out of the Picture’?
Paolo has pronounced on Facebook, and in an email to some backers, that Battlefront is now ‘out of the picture’.
Both myself and Battlefront’s chairman went back and forth with William for months trying to get a reasonable resolution, asking for mediation all along so that all the issues could get addressed. This is what most reasonable people do when they find themselves at a standstill. William and Paolo, who resurfaced after this went bad and then resorted to making wonderfully colourful claims about everything other than the truth, refused, saying that unless we paid in full they would use this to cancel the contract between us.
We came to accept that an end to the relationship between the two companies might be the outcome after the Kickstarter was delivered. It would be normal in these cases for both parties to list their contractual issues that they felt needed addressing, as a basis for negotiation. We sent such a list to them and invited them to do the same. Instead of seeing that both sides had issues, William and Paolo seem to have got very upset. How dare we say that Battlefront has a stake in products we have made? How dare we want to know what will happen to the nearly 19,000 units of stock we have in our warehouses? How dare we even suggest that they cannot unilaterally decide how the relationship ends? Not one single request for an answer was given. They simply insist we must accept their interpretation of events as law.
This might well be the way William does things but in the rest of the world it is a little more complex than that. Now it is easier for them to claim we ‘blackmailed’ them - a ridiculous claim and one we would like to see proved.
We believed, like a reasonable person might, that because they had already gone through this process with Fantasy Flight, they would be fully aware that cancelling a contract early has ramifications on both sides that must be resolved before the contract is confirmed cancelled. Until these things are agreed Dust Studio and Battlefront are contractually tied to one another, plain and simple. Simply stating it is not the case in a public letter changes very little. But it does suit Dust Studio, as they start to put their new plan into motion before resolving the disagreement with us.
The issues that have come to light because of this conflict are numerous and serious. These are issues which should have been dealt with privately and professionally, but which Paolo has brought into the public eye:
1. The first issue is over the original distribution contract. At the time of signing, Dust Studio failed to disclose a deal they had made that allowed another company to stop them making products for us. This only came to light six months down the path when the new starter sets, planned as key releases for the crucial Christmas period, were blocked from being shipped. The stock that was supposed to be out in October 2013 finally hit the market in February 2014.
The disclosure of this agreement would have meant we would NEVER have signed with Dust Studio in the first place, so you can only imagine how we felt. But by this stage we had invested a great deal of time and effort into DUST and wanted to see it blossom, so we moved forward with new plans in the hope that the future would pay for the past, but having suffered a serious financial loss for our first Christmas as the DUST distributor.
2. The second issue we have is over the licensed products we have made. Part of the agreement right from the start was that the Battlefront studio would create a new version of the DUST rules. This was a big reason they came to us to be their partner, a company who has a proven track record with miniature games. Work in earnest began with the starter set rules and progressed into version two of the rules, a complete graphic overhaul and a brand new way to play: Dust Tactics Battlefield. This work was done by Phil, Casey and Andrew with the help of Olivier. Olivier had a draft of version two already done, as a starting point, but it was not the game we published after the work we did together. The new cards, dice and templates and Battlefield rules were things that Battlefront created, that Paolo did not want to change at all. But, after visiting New Zealand with Olivier, they saw there was merit to the new material, to give the entire game a new lease on life.
This was all done at our cost, as a work under license, where we had to pay Dust Studio a royalty on any of those items we manufactured and sold. Miniatures we simply purchased from them but printed material and other items we created were all made by us in-house. Now it appears that William is claiming he never gave us permission and we are using his copyright without permission. Paolo is now claiming that he and Olivier came to NZ to do the work and the Battlefront guys only did a bit of editing work. This is an outright lie. Phil, Casey and Andrew spent almost 3000 combined hours of time on everything from the start sets to Operation Babylon, compared to the part-time hours of Olivier in France with no graphic input whatsoever. Let me just be clear that Olivier is French, and has not written the finished English text of any product we have produced together. In essence, all the Dust Studio supplied us with were photos – great-looking photos, but that doesn’t make a game. The core Dust Tactics version 2 rules we created together but the new cards, templates, dice and Dust Tactics Battlefield are 100% original creations by Battlefront. This is why our logo and the names of our team are on these products, all of which were seen and approved by Paolo and William before going to print.
Please ask yourselves, if we are lying why is it that Paolo, Olivier or Dust Studio do not have the digital files to print these items themselves? Even if we had ‘just’ edited the work, as Paolo is now alleging, they would need to have the files to supply us to edit. In fact, Paolo even surreptitiously contacted our graphic artist on his personal email address, to ask him to supply the new DUST card files without Battlefront’s knowledge. This can only be seen as underhanded. Because Dust Studio is based in China, we have no practical legal recourse to stop them printing anything locally. But DUST sells in a market that has strong and defendable copyright law, so once the stock leaves the factory, our rights would be acknowledged as soon as any party tried to import our designs without an agreement in place.
Now, none of this mattered while we were in a partnership, and we have never asked for payment for any of our time. It was our contribution to expanding DUST, as an investment in the future. What we did ask is that if the agreement is now going to end, how do we handle the rights for products we made under license? The normal procedure in the world is that at the end of your agreement both parties go their own way and neither can use the licensed work in any way. We understand this well – we make numerous licensed games, and when our license is over we cannot sell any more of the games, and neither can the license owner; the game simply ceases to be a saleable item. Both parties can agree otherwise (for example, an offer to purchase the rights to a product in perpetuity). But without such an agreement, this is how the law works. William has denied this outright and claims it is theirs anyway and they can do what they want with it. This is most definitely not the case.
The claim that we developed DUST material without their knowledge is laughable - we have hundreds of emails back and forth throughout the development process. But the icing on the cake is our fully documented royalty payments, which are all up to date, and which William and Paolo confirmed by email at the time of payment.
3. Payment. On the 21st June I emailed Paolo and William to tell them the good news: the Kickstarter was a hit and had raised enough funds to pay for everything, including the pre-agreed W9.1, W9.2 and W9.3 payment. At this point things are all good and we are just starting to realise how much more work we have to do and we accepted that we would need to do two shipments as the orders were simply too big for Dust Studio to make in one go.
The funds for the first shipment, which we have taken to calling ‘Wave 1’, were wired over as quickly as possible after the Kickstarter ended. At that time, William asked if we could pay the agreed W9.1-3 payment out of order. Seeing no harm in this, as we had sufficient funds to pay for all the stock, we sent the money. So DUST had been paid $360,000 within three weeks of the Kickstarter ending. This payment five months before the issue should not have been sent at that time, but our trust and belief that we had agreed about the free items meant this was okay to do. This has only worked against us as the money paid left us only with the 'Wave 2' stock money left to pay, and no leverage to try and get a resolution.
4. Mediation. With all this going back and forth and neither side getting anywhere, we offered to put it to a mediator. This was refused on multiple occasions. When a company friend of DUST tried to step in and help resolve this, their offer was 10% off the free upgrade items. This was later increased to 40%, (over $50,000) but to reiterate - no money was collected for either side to be paid for their half of the free upgrade items. This is still unresolved, but we feel it should not stand in the way of you the backers getting your paid-for items.
5. The pledge manager delay. This is not a tale of how we did everything right and Dust Studio are bad, etc. We made mistakes here as well. The pledge manager was solely our mistake. It took far too long to get out, it was extremely cumbersome, and the whole process was overly complicated. The way we structured the Kickstarter was just not conducive to collecting information in an automated way. When it closed there were over 300 people who had not completed it. I am not pointing fingers here, but without those finished pledges we were unable to get the final list to William to manufacture in a timely fashion. To those that got it done correctly, I’m very sorry you got caught up in the fallout. To those that didn’t, I’m sorry that we did not figure out an easier way to collect the information. This process has taken months, but Paolo and William did know about this issue as it was happening.
6. Stores have stock. As a Kickstarter backer, one of the most infuriating things is to see stock reach retail stores before you have received your rewards. Some people have been concerned about that with Operation Babylon stock. But the stores in question are those which ordered through the Kickstarter, and they did not receive any special treatment.
7. Hindsight is a marvelous thing, and I wish both parties had been able to keep the business split separate from the Kickstarter. But neither of us did. We both got caught up in the human side of the business dispute and let the Kickstarter backers get dragged in. I apologise for our part in this error.
I will leave you with one last thought. Battlefront has been in business for over 15 years. Our reputation and choices we have made along the way have not always been perfect, but our responsibility and drive to satisfy our customers is unparalleled. We are the company who give away each new edition of the Flames Of War rules when it changes so people don’t have to buy it. We are the company who make our relationship with our stores the first order of business. We are the company who manages multiple relationships with some of the biggest licensing companies in the world, and we are the company who, when we get something wrong, we admit it. We admit our part in not managing the relationship with Dust Studio better, and we have learnt the hard way that trust is earned, not given freely.
This truly is a first for us and we are upset that this has shaken people’s faith in who we are and how we operate. Outside of DUST, this is one of the most exciting times ever for us. I, my partner and the entire staff at Battlefront want nothing more than to get this resolved once and for all, so the stock gets to you and we can move on with a future that has no DUST in it. All we need is the list of what has been made so that at least the Kickstarter part of this saga can be resolved.
Yours,
John-Paul Brisigotti
CEO Battlefront Group.
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