Wolfire Games filed a lawsuit against Valve over abuse of their market position

That's an interesting point, although I think looking at only the cost of duplication might be a little narrow. There's the cost of development. I think, to some extent, this isn't dissimilar to other industries like other media production (wasn't always digital), or R&D.

I would reckon there have always been some industries where production isn't nearly as expensive as the development. I think digital just exaggerates this ratio; although does not eliminate it.

I worked in the business and I can absolutely tell you that Steam sold ads on their home page because I have had developers tell me they did and ask if the gaming store I worked for did the same and we did not

Very interesting. Thank you for sharing. To be honest. I always assumed similar practice for the big online stores in general like Humble, Epic, and GOG (thier self promotion of CP2077 is bordering on ludicrous, lol)

I find it hilarious people are comparing digital copies of games to physical goods in the retail markets like its Apples to Apples comparison. Its just not, too many people clueless about software development and cost/time associated.

That's a really good point. I'm definitely both a culprit and a victim of the "Hey. It should be easy to program ..." in my job and I'm not even a programmer! I can only imagine what real programmers have to put with.

Not trying to make any point but part of the debate.

That's an interesting point, although I think looking at only the cost of duplication might be a little narrow. There's the cost of development. I think, to some extent, this isn't dissimilar to other industries like other media production (wasn't always digital), or R&D.

Oh, I'm not saying that costs don't exist. But the thing is that there's a fundamental mismatch between a cost structure that is almost entirely up front as a sort of single thing, and a revenue structure that is based on price per copy sold, which in one direction or another is likely to bear no resemblance to the costs. Ideally, you'd want some kind of arrangement where proven game developers could be just paid a solid wage to develop games, and then everyone would have the right to download copies of the results for free or some minimal downloading charge. But that would be hard to arrange within the existing structure of markets.

I would reckon there have always been some industries where production isn't nearly as expensive as the development. I think digital just exaggerates this ratio; although does not eliminate it.

The pharmaceutical industry comes fairly close. There are large up-front costs to developing new drugs. As compensation, companies are given a monopoly (patent) on drugs which they invented did the clinical trials for, and charge orders of magnitude more than the cost of production. The resulting compensation tends to be wildly out of proportion to the costs of development--but also, that mismatch between fixed development cost and per-unit revenue leads to perverse incentives. Companies gain hugely if by any means they can sell more units of a given drug rather than start over with a new drug; hence they tend to aggressively push to expand what a drug can be prescribed for whether it's appropriate or not, tend to spin the data to discount dangerous side effects, and pull various tricks to extend the life of their patents. Not to mention the genesis of the opioid crisis. If the drug companies were instead paid lump sums for the drug development, but then were not awarded a monopoly but had to compete, the prices of drugs would fall towards the price of production, and drug companies would gain little from misrepresenting a given drug's capabilities, arranging for it to be prescribed inappropriately, and so on.


Last edited by Purple Library Guy on 7 May 2021 at 8:16 am UTC

Ideally, you'd want some kind of arrangement where proven game developers could be just paid a solid wage to develop games, and then everyone would have the right to download copies of the results for free or some minimal downloading charge.

I think we might be a bit of topic, but likely everyone's moved on to a more recent dumpster fire. I'm interested in how something like that would work in your opinion. I'm most curious about, what makes a proven developer? A license/certificate or something? And if the current can get it for free or very little, who or what is paying the developers wage?

Ideally, you'd want some kind of arrangement where proven game developers could be just paid a solid wage to develop games, and then everyone would have the right to download copies of the results for free or some minimal downloading charge.

I think we might be a bit of topic, but likely everyone's moved on to a more recent dumpster fire. I'm interested in how something like that would work in your opinion. I'm most curious about, what makes a proven developer? A license/certificate or something? And if the current can get it for free or very little, who or what is paying the developers wage?

Let me do a bit of thinking in print. Like thinking out loud but with a keyboard.

Well, it can't even just be proven developers, because otherwise how do you get into the business? So I'm imagining something along the lines of Kickstarter, except instead of people pledging money and getting copies, everyone gets some amount of votes they can put in, to the effect of "These people should get the chance to do their thing". And then once someone has some production under their belt, then maybe they just get paid to develop, or maybe they lose it if it leads to nothing for too long, or if nobody downloads any of their stuff, or if their reviews are too crappy, or some combination of that kind of stuff.

And I'm seeing this as a public thing. Your tax dollars at work. Of course one problem is that governments are national, whereas game sales are normally international (and so are some game development teams). So a given national government doesn't want to be funding foreigners a whole lot, so they'd probably only be funding developers from their country. And if they're funding a bunch of development they don't want to be hosting downloads for the whole world, they're doing this for the benefit of their own citizens using their own citizens' tax revenue. So they'd be restricting it to their own citizens. Problem. But perhaps different national governments working such schemes could come up with something like "trade deals" that worked a bit like patent pools, where they allowed each other's people access to their national schemes, and hopefully it would end up pretty much worldwide like the WTO. It seems a bit weird to think of trying to block people based on what country they're in on the internet, but it hasn't been long since last time I tried to play a video only to be told that I can't watch it because of the country I'm in, so between that and Steam's regional pricing, seems like it's potentially workable.

That general direction of thing.

Thanks for sharing!

It kinda makes me think of grants to develop games? Just with public input on the grant winners?

And then once someone has some production under their belt, then maybe they just get paid to develop, or maybe they lose it if it leads to nothing for too long, or if nobody downloads any of their stuff, or if their reviews are too crappy, or some combination of that kind of stuff

If I were to quibble a bit, and granted I'm putting you under the spot so I mean no offense here, I don't see how the above part is much different than our current market system, just the source of the money had moved. If it's bad, or unpopular, they lose thier funding. In out current system, if it's bad or unpopular, they lose sale revenue.

I can see the possible argument that since it's a grant (or not sales dependant funding), the dev is not having to take out loans and put them in a precarious financial position to generate sales.

Although to get the potential votes to get "greenlighted", I imagine you'd have to do a pretty significant "media blitz", including tech demos, previews, maybe a real demo, etc, to rise above all the other candidates, which might already incur significant financial investments to get to that part. Though it would likely be much less than the full cost of development (I would hope, lol).

Do you worry the voting system could unintentionally consolidate genres? Ie, only big devs with huge PR would dominate, or only very popular genres with a big player base?
I wonder if Small devs or niche games would be left out. Or could we still buy games privately from these smaller devs that couldn't get public funding?

In my head, I'm trying to see how a popular game, like Valheim might have fared with a vote system. I think to get the votes, the devs would have needed to put in the same upfront cost and hours developing the game, so it could become popular enough to get the votes to get the funding. What do you think?

I do find your idea really interesting, it kinda reminds me of a grant or an endowment for the arts, but for games. Actually would that remove the national border problem? An international endowment? I think you could mix public and private funding for more stable revenue and it would eliminate some of the issues of who gets the money.


Last edited by denyasis on 8 May 2021 at 10:05 pm UTC

Thanks for sharing!

It kinda makes me think of grants to develop games? Just with public input on the grant winners?

And then once someone has some production under their belt, then maybe they just get paid to develop, or maybe they lose it if it leads to nothing for too long, or if nobody downloads any of their stuff, or if their reviews are too crappy, or some combination of that kind of stuff

If I were to quibble a bit, and granted I'm putting you under the spot so I mean no offense here, I don't see how the above part is much different than our current market system, just the source of the money had moved. If it's bad, or unpopular, they lose thier funding. In out current system, if it's bad or unpopular, they lose sale revenue.

I can see the possible argument that since it's a grant (or not sales dependant funding), the dev is not having to take out loans and put them in a precarious financial position to generate sales.

Although to get the potential votes to get "greenlighted", I imagine you'd have to do a pretty significant "media blitz", including tech demos, previews, maybe a real demo, etc, to rise above all the other candidates, which might already incur significant financial investments to get to that part. Though it would likely be much less than the full cost of development (I would hope, lol).

Do you worry the voting system could unintentionally consolidate genres? Ie, only big devs with huge PR would dominate, or only very popular genres with a big player base?
I wonder if Small devs or niche games would be left out. Or could we still buy games privately from these smaller devs that couldn't get public funding?

In my head, I'm trying to see how a popular game, like Valheim might have fared with a vote system. I think to get the votes, the devs would have needed to put in the same upfront cost and hours developing the game, so it could become popular enough to get the votes to get the funding. What do you think?

I do find your idea really interesting, it kinda reminds me of a grant or an endowment for the arts, but for games. Actually would that remove the national border problem? An international endowment? I think you could mix public and private funding for more stable revenue and it would eliminate some of the issues of who gets the money.

Well, to me the thing would be, everyone would be an indie. Some of them might be big groups of indies, doing big projects, but they wouldn't have market muscle.
The way things work today, an actor with deep pockets spends a great deal of their money on marketing--advertising, bribing influencers, basically buying media space one way or another, perhaps buying armies of bots to spread the word. This works because if you develop one game and sell ten million copies you make literally a thousand times as much money as if you develop one game and sell ten thousand copies. And this snowballs. You end up with huge companies full of bastards trying to acquire monopolies.

With my scheme, there's a top end. If your game is moderately successful, you get paid a decent wage. If your game is an incredible runaway success . . . you get paid a decent wage, plus you are a social lion, plus maybe some fans just throw you some money via Patreon or something. You likely end up with a bit more money, but you aren't getting paid a thousand times as much, you don't acquire the muscle to mount huge advertising blitzes for the next title, you don't acquire several layers of executives saying we need to shape the games to safely fit the genre and the planned ad campaign so as to guarantee the same sales revenue as last time. Because a huge hit game doesn't actually mean more revenue, it just means more people happily playing the game.
There's also a lower end. As an indie, as long as you're working hard making a decent game, you're not going to find that at the end of it all you didn't have the luck and so you're deep in the hole, which as far as I can tell currently happens to quite a lot of people. And yeah, I can see some kind of system for defraying the costs of getting to the point of being funded . . . but there have to be limits at some point. You can't just have anyone who feels like it get a year's salary to do nothing on the basis that they say they're making a game, right?

I don't think such a voting system would consolidate genres, because you wouldn't need to be the winner to get funded, you'd just need to sort of beat a certain cutoff. And, again, there wouldn't be huge marketing budgets for the behemoth games to drive that kind of consolidation. If there's literally nobody interested in your offbeat thing, well, too bad--this is supposed to be resulting in games that people play. I suppose really big projects would tend to have to be in safer niches because presumably votes required would in some way be proportional to the number of developers (including artists etc.) involved. Likely most of the big projects would be by groups of developers who were already established, getting together to take on bigger challenges. And just by the nature of the compromises involved in a larger group, you'd probably be looking at somewhat safer projects. C'est la vie. But still, I think you'd see a lot less of the creative vitality drained away.

The pharmaceutical industry comes fairly close. There are large up-front costs to developing new drugs. As compensation, companies are given a monopoly (patent) on drugs which they invented did the clinical trials for, and charge orders of magnitude more than the cost of production. The resulting compensation tends to be wildly out of proportion to the costs of development--but also, that mismatch between fixed development cost and per-unit revenue leads to perverse incentives. Companies gain hugely if by any means they can sell more units of a given drug rather than start over with a new drug; hence they tend to aggressively push to expand what a drug can be prescribed for whether it's appropriate or not, tend to spin the data to discount dangerous side effects, and pull various tricks to extend the life of their patents. Not to mention the genesis of the opioid crisis. If the drug companies were instead paid lump sums for the drug development, but then were not awarded a monopoly but had to compete, the prices of drugs would fall towards the price of production, and drug companies would gain little from misrepresenting a given drug's capabilities, arranging for it to be prescribed inappropriately, and so on.

Actually that is incorrect. If you look at all of the pharmaceutical companies you will find they spend more on advertising than they do on R&D. Also if you look at their end of the year filings for those that are public, not only will you see R&D costs versus advertising, but you will see how much they are feeding at the federal trough to develop these medicines and working with Universities that are government funded as well. So pharmaceutical want you to think they spend tons on R&D to develop drugs but most of that money isn't their own money. They feed very heavily at the public/government trough. I have many family members in medicine who have told me all about this and how the pharmaceutical companies wine and dine them and give away drugs to them in order to get them on a doctor's preferred prescription list as well. If a doctor tells you that you need a $300 drug most people just assume, okay that is what I need and I will just have to hope my insurance pays for it.

https://www.pcgamer.com/square-enix-reports-losses-following-release-of-underperforming-marvels-avengers/

Did you read the article?
"Despite the losses, the HD games division did do more business in both quarters of 2020 than in comparable periods in 2019." That's also the entire division, not reporting on just one game. They are not releasing sales number or costs of Avengers. So people are extrapolating ALL the losses are from Avengers and there simply is no data to support that. All you can say for sure is that SquareEnix said Avengers didn't perform as well as they wanted and the company said reviews and users were not responding to it as expected. That is all you can say for sure. Sales were lower than excepted which I would bet money was still a huge pile of cash, just not what they wanted. Clearly they made more money than the year before because SquareEnix said so.

I find it hilarious that you think just because something is digital that is somehow special and different

But it is. The cost of a copy approaching zero makes a fundamental difference. When it comes to physical goods, scarcity is real and costs are based (more or less) on cost of production. When it comes to digital goods, costs are arbitrary and scarcity is entirely a social construct which we have created because we don't understand how to do any other models and anyway we fear trying other models would undermine the status quo.

So what you are saying is people price digital goods like physical goods but in reality are cheaper to produce because they aren't physical and thus don't have to use natural resources to make a copy and expensive shipping and stocking and middle men. Instead they can make 1 or 100 million and costs are exactly the same. Yea digital good are special....NOT! Customers shouldn't be screwed just because you or anyone else thinks digital goods are special and that companies should be able to wave away warranty of fitness and wave away right of first sale. Yes right of first sale is a consumer right in the US. We have the RIGHT to sell stuff we won't want or need anymore that we bought. Software companies are not the first to try that bullshit. Music, books, movies and all kinds of other stuff have tried that in the past but the courts didn't let it fly. Now companies have paid off judges to be friendly to them and convinced judges and people in general that some how digital media is special and different from everything else out there. It isn't and that is a modern corporate invention or what I call a modern corporate lie.


Last edited by Protektor on 11 May 2021 at 2:24 am UTC

The pharmaceutical industry comes fairly close. There are large up-front costs to developing new drugs. As compensation, companies are given a monopoly (patent) on drugs which they invented did the clinical trials for, and charge orders of magnitude more than the cost of production. The resulting compensation tends to be wildly out of proportion to the costs of development--but also, that mismatch between fixed development cost and per-unit revenue leads to perverse incentives. Companies gain hugely if by any means they can sell more units of a given drug rather than start over with a new drug; hence they tend to aggressively push to expand what a drug can be prescribed for whether it's appropriate or not, tend to spin the data to discount dangerous side effects, and pull various tricks to extend the life of their patents. Not to mention the genesis of the opioid crisis. If the drug companies were instead paid lump sums for the drug development, but then were not awarded a monopoly but had to compete, the prices of drugs would fall towards the price of production, and drug companies would gain little from misrepresenting a given drug's capabilities, arranging for it to be prescribed inappropriately, and so on.

Actually that is incorrect. If you look at all of the pharmaceutical companies you will find they spend more on advertising than they do on R&D. Also if you look at their end of the year filings for those that are public, not only will you see R&D costs versus advertising, but you will see how much they are feeding at the federal trough to develop these medicines and working with Universities that are government funded as well. So pharmaceutical want you to think they spend tons on R&D to develop drugs but most of that money isn't their own money. They feed very heavily at the public/government trough. I have many family members in medicine who have told me all about this and how the pharmaceutical companies wine and dine them and give away drugs to them in order to get them on a doctor's preferred prescription list as well. If a doctor tells you that you need a $300 drug most people just assume, okay that is what I need and I will just have to hope my insurance pays for it.

I know all that. It doesn't contradict anything I said, so I'm not sure what you are saying is incorrect. Indeed, I glanced at that stuff when I said "The resulting compensation tends to be wildly out of proportion to the costs of development" . . . that just didn't happen to be what I was talking about.
You appear to have been so busy having a bee in your bonnet about things which I myself have argued strongly when that was the topic, that you did not bother to follow the argument I was actually making.

I find it hilarious that you think just because something is digital that is somehow special and different

But it is. The cost of a copy approaching zero makes a fundamental difference. When it comes to physical goods, scarcity is real and costs are based (more or less) on cost of production. When it comes to digital goods, costs are arbitrary and scarcity is entirely a social construct which we have created because we don't understand how to do any other models and anyway we fear trying other models would undermine the status quo.

So what you are saying is people price digital goods like physical goods but in reality are cheaper to produce because they aren't physical and thus don't have to use natural resources to make a copy and expensive shipping and stocking and middle men. Instead they can make 1 or 100 million and costs are exactly the same. Yea digital good are special....NOT! Customers shouldn't be screwed just because you or anyone else thinks digital goods are special and that companies should be able to wave away warranty of fitness and wave away right of first sale. Yes right of first sale is a consumer right in the US. We have the RIGHT to sell stuff we won't want or need anymore that we bought. Software companies are not the first to try that bullshit. Music, books, movies and all kinds of other stuff have tried that in the past but the courts didn't let it fly. Now companies have paid off judges to be friendly to them and convinced judges and people in general that some how digital media is special and different from everything else out there. It isn't and that is a modern corporate invention or what I call a modern corporate lie.

Dude . . . I'm a lot more politically radical than you, I'd wager. So if you want to look down your nose at someone for not being contemptuous of corporations, you might want to try someone else. You appear to be assuming something about me, extrapolating that into what you assume I must be arguing, and so ignoring the actual line of argument I'm making and its actual implications. I suggest you take a couple of steps back and think about what I'm actually saying, and if you don't get where I'm taking it, maybe you could ask me.