The Great Software Payola (Part 2)

11/20/2012 8:50:26 AM

Moves to kill game resales

There are people in the games industry who have convinced themselves that when they sell you a title, they’re not actually doing that; they’re licensing you to use their software, which you never own. The whole sale of goods act has a big issue with this opinion, which they’d like to ignore, but at the heart of it is the entirely upended view that when you resell a game, the original publisher should get a cut of that money. The people who peddle this idea have even deluded themselves to the extent of making up numbers for what cash they’ve lost and tried to lean on game software outlets to stop them marketing second-hand titles.

I’d take this marginally more seriously if any one of the people arguing this could demonstrate to me that throughout the 80s and 90s housing boom that they sold their house at profit and then returned a proportion of that profit to the previous owner (who wasn’t a family member). I’m confident that none exist, because the idea of residual ownership beyond sale isn’t one that most people support. If it was, then Ford would surely be ringing people all the time asking for a portion of scrap page value.

Description: Description: Description: PlaysForSure


However, distracted by the notion of money they’re missing, and entirely ignoring the fact that usually what people do is sell old games to buy new ones, they’ve now started to build mechanisms where titles are downloaded on the internet, and there is no physical ownership to pass on to another party.

This will work in respect of stopping second-hand software, but it doesn’t actually make any more money go around the system, and it might actually put people off entirely if they find that due to a fiscal collapse or communication problem a title they bought no longer works or actually disappears from their system.

If that sounds a bit far-fetched, there have been a number of high-profile situations in respect of the selling of music and media where purchases have effectively vaporized when a company or service has been removed.

Microsoft famously did this with forerunner of the Zune Marketplace. This used a digital rights management (DRM) system called PlaysForSure, which Microsoft then ditched, having convinced a ton of partners to use it. It launched the Zune and abandoned PlaysForSure, leaving those that had purchased music on compatible services with files that wouldn’t be transferable again after August 2008.

This and a number of well-publicized failures of online video purchasing operations in the USA have made people aware that DRM systems are there to advantages the companies that promote them and not the buying public. As such, a move to a wholesale DRM-based game distribution service on a next-generation PlayStation or Xbox might generate some opposition. This is clearly the direction that the game-writing software houses would like, but none of the hardware makers has committed themselves to a disc-free console yet, even if this looks like a distinct possibility.

Micro payments

Small transaction, usually referred to as ‘micro-payments’ are part of a model that some, especially those in the games market, see as the future of software sales. Taking Team Fortress 2 as a classic example, the game is free to download and free to play. Extra weapons and costume items, etc. can be either found in the game, or for those who’d like them without waiting for a fortunate drop, they can buy them through an integrated store. A hat might cost $2.39, so the amounts involved are generally small. What’s nice about that product is that the development tools that allow you to design your own accessories are also free, and if you design something that the developers of the game like, they can add it to the store and you’ll get a cut of the sales made.

Description: Description: Description: Micro payments

This model is the one that’s become successful in the mobile market, where apps for iOS, Android, BlackBerry OS and Windows Phone devices are generally sold at a low price and at volume. That’s not to say you can’t buy some full-price applications for the iPhone; it’s just that the majority of tools cost a maximum of a few pounds.

The advantages of this are that once you’ve bought a software tool, you’re licensed to use it on your current device and usually its replacement (unless it won’t work on that hardware), and you can make an immediate purchase where the software is directly downloaded to you. You also get automatic updates and some support if you have issues. The other side of that coin is that because you never actually own the app, you can’t resell it or transfer the licence to another person. Also, in some cases (particularly with Apple), there’s a chance that someone will withdraw the app at some point without consulting with those who use it.

Micro-payments are the modern equivalent of stack it high and sell it cheap. Volume is the critical factor, and making people part with a small amount is proportionally easier than getting them to invest larger amounts.


In the context of software, this idea only came to the fore in 2010, but the idea of crowd-source funding projects through crowd-sourcing isn’t a new one. Most movies are made by finding a group of financiers prepared to put up the cash and take part of the risk in the success of a film. If not enough money is forthcoming, then the movie isn’t made, and if it does arrive, then it will be.

Kickstarter is just one of a number of websites that aims to do a similar thing. It brings those who want to create a project (which might involve charitable work, hardware, software or some other project) into contact with those willing to fund it.

The way it usually works is that the project has an objective and an amount of money it might reasonably need for it to happen. Say the amount is $40079.9 and the Kickstarter page is looking for contributions of $8 - $80 each from those who would like to see the project happen. If it convinces enough people, then usually the project is completed, and if it’s to make something, those that paid usually get something in return, commensurate with how much they contributed.

Description: Description: Description: Website:


At least that’s how it’s expected to work. It can go wrong, however, even if the projected amount of money is raised from the outset. The system comes with no guarantee that a project will complete, and they can fail if the amount calculated isn’t enough to do the work or if they run into unexpected difficulties. It’s been estimated that in area of games software, less than 50% of all Kickstarter projects actually deliver a completed title, although at this time people still keep investing in software development.

In the top ten biggest Kickstarter projects are three videogames and one games console, and the biggest title ‘Double Fine Adventure’ convinced 87,142 backers to part with $5348863.5 to complete that work. If you have good ideas and can convey them to others, then this is a great way to get backing.

The beauty of Kickstarter for software development is that small teams can get the investment they need to produce work that would not previously be practical, even if from the investor’ perspective there is always a degree of rick involved.

As Kickstarter matures, people will start to look at the track record of project leaders, because they’ll want to back someone who can deliver, rather than those with the biggest ideas. Nonetheless, the Kickstarter model is yet another way to pay for software that does exactly what you’d like it to do.

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