Xenonauts , the indie strategy game inspired by the original X-Com, has recently hit serious funding difficulties. In a post on the Xenonauts blog Goldhawk Interactive explained that they had been forced to stop offering pre-orders after Paypal froze their account. The situation is similar to Indie Stone's problems with Project Zomboid's funding .
Paypal, it seems, object to people selling products that don't actually exist yet. On the basis that they would be liable if the product was never delivered. It's an understandable concern, but one not really compatible with the currently popular model of funding indie games through early pre-orders.
The result is that Xenonaut's Paypal account, which currently contains $4,300, has been put on hold for 180 days to protect Paypal against charges. After this six month period has passed the funds get released to the devs. Without pre-orders they have no incoming money to fund ongoing development.
When Project Zomboid ran into this problem, Indie Stone resorted to selling the world's worst games and bundling in the Project Zomboid license as a free bonus. It wasn't an ideal business plan, but it helped tide them over until a beta version was available, finally giving them a real product to sell.
