MyEmail {l Wrote}:An outdated video with poor-graphics is hardly an example of success. Perhaps you could come up with something meaningful, say a videogame with 250k+ sales?
The most basic common sense should illustrate to yourself how a product's licensing affects its value.
Marketing Cygnus Support
Cygnus Support was a small company founded to support and improve free software. We started with three people -- Michael Tiemann, David Vinayak Wallace, and John Gilmore. (David's nickname from MIT was "Gumby", and many people know him that way. After David married Silke Henkel, he became David Henkel-Wallace.) It grew to employ more than 120 people, with annual revenues over $20,000,000, ten years later. It was merged into Red Hat Software as Red Hat's second acquisition, in a time when Red Hat's revenues were much smaller, but its market capitalization was much greater (due to the tech and Linux stock market bubbles). The company was sold for about $600 million, making all of its early employees into millionaires.
[...]
We had the grandiose idea that major computer companies like Sun, SGI, and DEC would fire their compiler departments and use our free compilers and debuggers instead, paying us a million dollars a year for support and development. That wasn't quite right, but before we starved, we stumbled into the embedded systems market, doing jobs for Intel (the i960, a now-forgotten RISC chip), AMD (their now-forgotten but nice 29000 RISC), and various companies like 3Com and Adobe who had to port major pieces of code to these chips. In that market, once we fixed the tools to support cross-compiling, we had major advantages over the existing competitors, and we swarmed right through the market for 32-bit embedded system programming tools. And ultimately, we did get million-dollar contracts, such as one from Sony for building Playstation compilers and emulators. This allowed game developers to start working a year before the Playstation hardware was available. This enabled the Playstation to come to market sooner, with more and better games.
[...]
Our marketing message was "Freedom". Freedom from restrictive software licenses, and technological license managers that would make your compiler refuse to run. (Yes, "DRM" was alive and well in the early 1990s, but only on expensive commercial software, not on music, movies, and books.) Freedom from lock-in to a specific vendor. Freedom from the constraints of currently available products: we were happy to modify them for you, for a price, and if you didn't like our price or our work, you could do it yourself, or hire anybody else to modify them for you.
[...]
Our pricing was initially created by our inexperience. We were good businessmen, but not good marketers. We started by estimating what it would cost us to do a given development job, or provide a year's support to a particular company or department. Then we'd add a percentage for our overhead and profit, and that would be the price we'd quote them. (We aimed to grow the company using only revenues from customers, and turn a small profit every year -- and we largely succeeded at both.) This formula priced us well below much of the competition, and we were still making money. It appeared to us that the embedded system compiler market was full of "fat and lazy" little companies. We blew through it pretty well, and much of the time were getting as much business as we could handle. Many of those companies, such as Green Hills, died, or were bought and brought in-house by one of their big customers.
Later, after hiring more experienced executives, we discovered that our pricing was "leaving money on the table". We still needed to estimate our own costs and overheads and profits -- but we also needed to estimate how much money our work would SAVE our customer, or MAKE FOR our customer. When there was a big discrepancy in those two numbers, we could raise our price significantly, and the customer would still be happy. For example, the Sony PlayStation contract enabled Sony to ship the PlayStation months earlier (with working third party game software). Even a single month earlier of shipments would result in hundreds of millions of dollars of income for Sony. Similarly, big networking vendors like Cisco had tens or hundreds of millions of dollars riding on the introduction dates of their new products. We were selling them "insurance": if any big problems came up in the development software as they worked on the product, we'd fix them rapidly so their engineers would be able to deliver the product on time. Chip vendors, for whom we built many compilers, were betting big money on getting at least one large customer for their latest chip. Early availability of our tools allowed their customers to reliably prototype large, complex products with the chip. Our pricing gradually grew to include a percentage of the value that our work was creating out in the world, for our customers.
Since I obviously have to spell it out for you: Lets say you create a videogame. It took an invested 5mil (which is rather low) to create. In scenario A you release it proprietary and sell it in stores, and make 20mil over the next five years. In scenario B you release it as FOSS and still sell it in stores, but everyone just downloads it for free (because you have licensed it saying that was Ok to do) and you make $0, zip, null. The only thing that changed in these two scenarios is the licensing, hence the licensing is directly related to the value of the software.
Like I was telling Knitter it is possible to make money through secondary sources that are completely separate from the software itself. But the monetary value of the actual software is still nill. This is where you are getting confused. Consider Android and cellphones. Anyone can get the Android OS for free, without price. The Android OS's monetary value is nothing. HOWEVER, money can be made through a secondary source by selling cellphones with Android pre-installed. Its the cellphone that produces income, not the FOSS/FREE Android OS.
And as far as piracy goes companies have found a simple solution that works very well: The game does not work unless you have a active internet connection and can login to their server with your account. The only way you get an account is by purchasing it from them (if you purchase the game you automatically purchase an account too). With this it is entirely futile to pirate a game--in order to play you still have to purchase the account. If you pirate you still end up paying.
Despite the stream of lawsuits and site closures, we see no evidence—and indeed very few claims—that these efforts have had any measurable impact on online piracy. The costs and technical requirements of running a torrent tracker or indexing site are modest, and new sites have quickly emerged to replace old ones. P2P continues to account for a high percentage of total bandwidth utilization in most parts of the world, and infringing files represent, by most accounts, a very high percentage of P2P content (Felton 2010; IFPI 2006). ISP-traffic-monitoring firm ipoque put P2P use in 2009 at roughly 70% of total bandwidth in Eastern Europe, 60% in South America, and slightly lower percentages in northern and southern Europe (Schulze and Mochalski 2009).27 US rates are generally estimated at 25%–30%, reflecting not so much lower utilization of P2P as higher utilization of streaming video services such as YouTube and Hulu. Rates of use of cyberlocker sites like RapidShare have grown rapidly, leading to pressure on those companies to monitor file uploads and sign deals with content providers.
MPEE, P. 44, Sec2:30
By most industry accounts, video-game piracy is concentrated within the traditional stand-alone PC-game market, resulting in pressure on developers to abandon the PC in favour of console-only titles. PC games with cracked serial numbers or activation codes are widely available online and in pirate optical disc markets. Unlike record companies or film studios, PC-game developers and publishers have a variety of ways of estimating the prevalence of pirated copies of their games, such as tracking the percentage of calls to technical support from gamers playing with pirated copies (Ghazi 2009). For popular games, reported ratios of ten pirated copies for every purchased copy are routine.
MPEE, P. 63, Sec2:49
Despite the prominence of modding in enforcement conversations, we are aware of no research on the prevalence of mod chips or modded systems and cannot find a credible estimate of how far the practice goes beyond tech-hobbyist communities. In 2007, Nintendo claimed that some seven million DS handhelds had been modded via a widely available Chinese-produced chip, contributing what Nintendo characterized as losses of $975 million across platforms (Nintendo 2009). Nintendo’s USTR submission for 2009 singled out Mexico, Brazil, China, Paraguay, and South Korea as hot spots for game piracy. The major US enforcement action against modding in recent years—Operation Tangled Web in 2007—netted just 61,000 mod chips, however, suggesting a problem on a much smaller scale, at least in the United States (Associated Press 2007a).45 The ESA, for its part, indicates that its analysis of online distribution finds comparable numbers of pirated console and PC games—challenging conventional wisdom on this point and pointing to a mass-market phenomenon. Clearly, this is a subject requiring more detailed study.
MPEE, P. 63, Sec2:49
“Having a connected platform on the PC is raising everything. Raising retail sales.”
Digital sales do NOT harm retail sales say Valve. When they have a free weekend, in this example with Day of Defeat, both types of sales – Steam and retail – spiked. In fact, 28% more unites were sold at retail than sold through Steam. “Startling” says Holtman. “We were just inviting people to play.”
14.38. “Rampant piracy is just unserved customers,” says Jason Holtman.
He then goes on to discuss the advantage of real-time sales data. It makes you “really smart” about what you can do with your game.
14.32. Steamworks, of course, is free. And this Holtman states, is essential. Anything else that would put a barrier in would take it away from the advantages of the PC.
http://www.rockpapershotgun.com/2008/05 ... alve-live/
"We learned that open source software is still commercially viable. After open sourcing a number of games in the bundle, none of our sales were negatively affected."
http://arstechnica.com/gaming/news/2010 ... u-want.ars
With FOSS however it is so vulnerable to competition even this isn't plausible. Even if you where to make income from a secondary source, there is nothing to stop someone else from doing the same, or even offering the same for free. While this is definitely Ok at a corporate scale for things like Android, it is nowhere near acceptable for a small (<10 devs) FOSS project. Consider a mmo-game that is FOSS and makes money from the online service they provide. While they can make money and the software is FOSS, anyone who didn't invest a dime can do the same. I could copy the mmo-game, setup a new server, and charge $5 less than the original developers. Heck, I could even offer the service for free. Either way it ruins their income. Either way the software's value is nil, and its the service provided that produces the income.
It's different though - with non-open games, the only way to obtain it is downloading off bittorrent etc. With open source games, it is entirely legal for people, including companies, to stick up websites, to put it on download stores, to even sell it in stores. They can advertise it. If you are doing open source because you want more people to play your game, that's great; but if you're trying to make money, you can be facing legal competition from other people or companies. Now sure, you can argue that won't happen so much, but this is nothing like the situation with piracy.Modplan Man {l Wrote}:Once again you conveniently ignore the existence of piracy in the proprietary market which provides exactly the same effect as you describe in your FOSS example, in which much software is widely available for free, where DRM is regularly ineffective, and threats of legal action are ignored as major publishers regularly shouting about how piracy is supposedly destroying their business.
I'm not sure how that changes my argument - if you're saying that no one buys the official version, then that's not arguing you can make money from open source; you're arguing that no one can make any money at all.FreakNigh {l Wrote}:I agree with modplan. The real world circumstances are effectively the same. And no it is not illegal everywhere to sell and distribute pirated software. These kinds of morals are only humored in richer first world countries. I'm living in india right now and spent some time in Nepal. They don't buy the official version of software here and trust me they are not morally ashamed (quite the opposite actually).
What if they take it and give it away for free?Legally FOSS lets anyone essentially resell the source / executables. However people are going to buy it from whoever distributes and supports it best. This is almost always going to be the original developing group. If people are going to buy it, they aren't going to buy it from someone who just took it and is reselling it lol.
seriously, I'm a great fan of open source, but it seems odd to claim that this would have no effect on sales.
MCMic {l Wrote}:Hey! Have you guys heard of https://elveos.org/ ?
What do you think of this system to finance free software development?
Do you think it can work for games?
charlie {l Wrote}:Unfortunately in FOSS gaming, I think making money will be the exception rather than the rule.
Yes, it is possible. No, it won't happen for most of us. What makes FOSS interesting is that people do it out of passion.
charlie {l Wrote}:Some people do other jobs altogether. Not all FOSS programmers are software engineers.
- Distributions of the source: Build versions of the source code, tools, etc that people can work with. If they are modifying the source themselves then this won't help them, but if they just want to include a dll for example, this can simply things especially if your build process is complex. Another options is to sell incremental revisions of the source and open source previous versions.
- Art, Basic Levels, etc: As mentioned above, providing art resources and building block maps, objects, and other assets simplify development for others.
- Server Rental: If your game is an open source multiplayer game, you can rent out time on servers you run. This makes supporting the game easier for people building off of your game, and ensures stability (this relies on you of course) for multiplayer games.
- Advertising: A no brainer, advertising on your site and support forums could earn you something
- Support: While I generally view selling support as evil, perhaps selling room in online training sessions, access to advanced tutorials, or "1 on 1"-ish support wouldn't be so bad (likely more like 1-or-2-on-team but hopefully you get the idea).
- Microtransactions: You could sell content in game, or only provide certain content in the "premium" version of the game that YOU built. People building off of the game would have to either go without said content or pay you to include it.
- Commercial Licences: While your game could be open sourced for non-commerical purposes, you could require that you be paid a certain amount or a cut of the profits for people planning to sell derivatives of your work.
- Promotional Items: If your game gets popular enough, you could sell T-Shirts, etc relating to the original game.
- Sponsorship Period: Following along the lines of point 1, you could sell the game for a certain amount of time and THEN open source it.
- Donations: Simple--ask for donations to your project (this would probably look bad if you were doing too many of the other things but it may be worth a shot).
Evropi {l Wrote}:Just wondering. why don't people ever recommend straight-up selling the source code and executable versions in these types of topics? It is allowed in all open source licenses as far as I know.
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