Business Model Discussion

[TVR]

I have some serious concerns about Corporate Command and other paid DLC for Transcendence, chiefly: How will mods that interface with or integrate paid extension code be distributed?

A huge part of the Transcedence community is based around mod-sharing, and most modders continously learn from and build upon the free and open-source code and resources of the base game and xelerus mods. I am absolutely certain that introducing a commercial and proprietary component will greatly hamper that process, possibly affecting its very existence.

I also strongly fear that monetization by traditional monopolized distribution of the DLC will lead to many other significant changes in the structure of the Transcendence community.

Almost everyone on this board practices file-sharing, and I strongly doubt the DLC will be an exception. This will almost certainly lead to a reactionary change to moderation policy so that all talk of file-sharing or DLC modification is silenced. A previous case in which this has happened was when a topic on using CheatEngine (realtime memory injection program, "Memory trainer") with Transcendence was silently deleted; it was a type of topic that would have been tolerated before the introduction of an online Multiverse leaderboard to what was formerly a game with zero player-to-player interaction.

Another effect I fear is a decrease in the amount of support provided to third-party amateur or professional mod developers, as their extensions will always be competing with yours.

What I suggest to deal with all these issues is a pledge-based funding model, where you develop the content and set the total amount you wish to be receive, and we collectively pledge money until that amount is reached, at which point you release the extension with the source code included to public domain for free distribution to everyone.

This funding model will strongly BENEFIT from file-sharing, as an increased install-base from wide-spread distribution will lead to more demand, and thus, more funders. In fact, you will not need to pay for advertising - the players themselves will advertise it to their friends in the interest of getting more pledgers to fund the development of extensions.

Of course, setting up a pledge system may be complicated, but its benefits can also be achieved through freely releasing the extension after a minimum number of sales.

For payment, another suggestion is to accept Bitcoins, a decentralized, pseudo-anonymous, digital currency very much like the Commonwealth Credit. Besides being a significant technical development, what may interest you the most about them is ZERO TRANSACTION FEES. This quality makes it uniquely suited to low-cost purchases such as Transcendence extensions. The only downside is a 10 minute payment confirmation delay, but that is a non-issue for internet transactions.

In case these reasons alone are not enough, I'm willing to cover the cost of both establishing this type of marketplace and releasing Corporate Command for free as part of Transcendence. I sincerely wish to keep Transcendence free and open-source, while establishing a sustainable, future-proof market for consumer software in a friendly and open community. Please PM me if interested so we can discuss details securely.

[george moromisato]

Thanks--your feedback is well thought out and I really appreciate your passion for the game. In deciding on the future of Transcendence (and my future) I considered many business models, including the one you propose. But I've chosen a commercial model because I believe it gives us the greatest chance to grow and nurture the community and to have a meaningful impact on the world.

The most important thing to remember about the business model I've chosen is that it's additive. That is, it does not subtract from the rights you currently enjoy: the core Transcendence engine is free and will remain free. The core adventure is free and will remain free. Modding is free and will remain free. We have lost nothing.

It's true that we've banned discussion of cheat engines. But there is no need for them in the game: you can create (or download) a mod to give yourself whatever powers you want--you don't need a cheat engine. And Corporate Command will not use DRM or other copy-protection, so you don't need to break the encryption. [I leave it to your conscience and character to not use it without paying.]

The only protected element is the Multiverse. If you want to compete with others for a high-score then it makes sense to protect the playing field from cheaters. But that is true regardless of business model. Even in your proposed business model we would have to protect the Multiverse from cheaters (or not have a high-score list). [And even the Multiverse is not a monopoly--I fully envision other people creating free services to compete with the Multiverse.]

The business model that you propose--pledge-supported development--is certainly viable. What you're suggesting is that a small group of (relatively) wealthy individuals donate sufficiently ($50-100 per individual) to the benefit of a larger majority of players ($0 per individual). My business model is the opposite: the majority of players support the game ($3-10 per individual). In my model, everyone invests in the game and everyone benefits. I personally like the democratic and community aspects of my model better.

Ever since I decided to work on Transcendence (and Anacreon) full time, I've loved my job. I realize I'm lucky. Not everyone can say that. One of my goals is to spread that opportunity. Some people have learned how to program by modding Transcendence--they've gone on to professional IT careers. Someday, we will hire people to support and grow the community: artists and musicians creating new content, evangelists promoting the community, and of course, developers creating new extensions and adventures --I hope they will love their jobs as much as I do.

Someday, I hope, we will have a thriving marketplace of mods, much like Steam, supporting dozens of independent game studios. Then we will have built something much more important than a business. I don't know if or when we'll get there, but that's my path and I hope to convince you all to support me.

[pixelfck]

I share your concerns.

I wondered myself how the new and locked down DLC would interact with both mods and the ability to learn from the sourcecode.
I'm willing to contribute money to the game development, that is not the issue at all.

For me, the fun in this game is in modding; I hardly ever play the game. As I see it, paid extensions accomplish two things:
1. they offer a method of monitizing the many hours of work invested into writing both the game engine and the Stars of the Pilgrim adventure (good).
2. they make me doubt if I want to invest my time into modding this game: I'm happy to contribute to any open source project. I'm not quite sure I want to contribute to a partly closed source project.

My observation is that the longevity of this game is *only* because of the modding opportunities and the friendly community surrounding it.

What I suggest to deal with all these issues is a pledge-based funding model, where you develop the content and set the total amount you wish to be receive, and we collectively pledge money until that amount is reached, at which point you release the extension with the source code included to public domain for free distribution to everyone.

This is, as far as I'm concerned, a very good proposal. I've been amazed by the amount of income that has been generated by pledge-based funding models in the past, be it on webcomics, (table-top) game development or major open source projects. It achieves the monitizing part of the equation, while keeping the content open source. In addition, it also allows for people with more money to contribute more, while people with less money are not left behind (some of us are 15, some of us are 35; the difference in income can be enormous).

[edit: I wrote this reply before George's response]

[the_Butler]

I used to be a very avid modder for Oblivion and Fallout 3. The modding community thrives with Bethsoft games despite the fact you have to pay for the game and all the DLCs. It can work here as well.

Very rarely did I ever made a mod that required a DLC as I rarely ever bought them, but of the few I did buy I never used resources from them. Plus, I always figured there were people like me that didn't see much use for the DLCs so I made sure that my stuff was accessible to as many people as possiible.

My modding days are now over thanks to my health, but honestly considering the modding community for other games, The Sims, Bethesda games, The Guild 2 etc there shouldn't be a problem.

[sun1404]

Still, I'd say none is like our modding community here. I think a pledge model would be better, considering how many people are willing to pay.

[TVR]

I feel that this may need some more consideration:

Someday, I hope, we will have a thriving marketplace of mods, much like Steam, supporting dozens of independent game studios.

Steam already does that, very well if I might add. Competing with Steam is just unrealistic; the Kronosaur Multiverse will have to carve out another niche to survive.

I think it's a mistake to believe your source of funding will come from a majority of individuals paying $3-10 in EITHER model - independent game developers routinely report copyright infringement rates in the range of 80-95%, a famous example being World of Goo: http://arstechnica.com/gaming/2008/11/a ... e-near-90/. It is completely normal human behavior to only pay for something if the risk (of not paying) exceeds the cost, therefore people will buy (very) expensive computer hardware rather than steal it from the store, but will pirate the crap out of software.

As such, software as a commodity - "Intellectual Property" - is now unsustainable as a result of technical advancements in telecommunications. Yes, it made sense to distribute Anacreon under this model 26 years ago in 1987, before the advent of the internet, but so much has changed since then. It is no longer physically possible to restrict the flow of information, thus business models that operate on that basis are no longer sound - no amount of law nor client-side DRM will change that. http://www.pcgamer.com/2012/08/22/pc-ga ... isoft-ceo/

In the People's Republic of China, not even military force can stop it.

Therefore, it is exceptionally unwise to rely on the honor system to stop unauthorized redistribution of IP. I sincerely hope you are not relying on the Multiverse leaderboard to serve as a key value-add for paying customers - hackers can (and inevitably will) reverse-engineer it and destroy it to demonstrate their 1337 }{4XX0R skills. This motive is extremely widespread and is used to explain why warez groups crack DRM for free.

Resentment is assured once folks start talking about torrenting the extensions while having the sheer audacity to discuss it on the official forums, and that will drive you to ban discussion of file-sharing and violators of that rule. This in turn will lead to a two-tier caste of buyers (haves) and freeloaders/pirates (have-nots), the latter of which will be treated like trash because they do not contribute money, regardless of anything else they could contribute (time, feedback, advertising, etc.). It'll be something that makes our little community a little more closed.

This leaves only two viable software development business models, software as a service (SaaS), and the pledge-based pre-order model. Make no mistake, both of these are commercial - the primary purpose of a business is to generate profit, after all. I personally believe SaaS (whether as "Freemium" AKA "Pay2Win" or Onlive-style streaming) is a dead-end, because centralization ("Always connected" AKA "Always-on DRM") goes against the distributed structure of the internet, and leads to censorship, ridiculous politics, inflated prices, longer downtimes, admin abuses, legal wrangling and government surveillance, all of which suck balls in the NSA-in-your-underpants kind of way. Whereas the pledge model is almost as democratic as the commodity model, still requiring people to pay for projects they like, but suffers from absolutely none of the latter's or SaaS' technical, legal and social shortcomings.

Mr. Moromisato, I understand how unbelievable it can be, to have to suddenly reformat your entire life... but you MUST acknowledge the distinctions between enterprise and consumer software markets if you wish to survive and thrive! Licensing database and productivity systems to public companies and corporations, who would rather pay a fee than risk litigation and/or brand damage from copyright infringement, is behind you, and the path you now lead, developing entertainment software for various anonymous (English-speaking) individuals over the internet and around the world, will require much more than just wishful thinking - it'll take real, entrepreneural innovation, and the future of community-driven, pledge-funded free-and-open-source software development looks bright. Think carefully of everything I've proposed, of whether you find the basis behind them to be valid or not, because this opportunity could be the start of something much, much bigger than you've ever dreamed. Carpe Diem?

[Jay2Jay]

I agree with TVR. I am a teenager, so my parents control monetary transactions, its not that I don't have the money, its simply because my parents (ages 66, cuz I was adopted) don't trust monetary transactions online. I would love to buy corporate command, and donate perhaps hundreds, no thousands of dollars to you, but I am limited in resources, which is what brought me to T in the first place, its free. I must shamefully admit that I too am a pirate, though I have since stopped since the FBI called... simply because I cant afford the cost, and because the only games I pirate are from a faceless mega-company like EA, so I have no qualms about taking from them. But rest assured, there is no way I could pirate from you Mr. Moromisato, I respect you too much, plus you are a private individual and you need the money to survive. All that aside, you are like a small god to me, why you may ask? Because you released Transcendence as a free indie game, and it is one of the most amazing games ever. I have been following T's development since I was eleven, and modding T has been the motivation I needed to become interested in programming. I now wish to grow up and be like you, doing what I love and making people happy doing it. Transcendence motivated me, and has kept me interested for years, no other game that I have ever played in my life has kept me interested for more than a few months, usually weeks.

[george moromisato]

Steam already does that, very well if I might add. Competing with Steam is just unrealistic; the Kronosaur Multiverse will have to carve out another niche to survive.

One does not need compete with Steam to have a marketplace. There are already dozens of broad marketplaces and hundreds of game-specific marketplaces (every single tiny little free-to-play game has its own mini marketplace).

The issue isn't competing with Steam. It's about creating a marketplace that allows for our content to thrive. BTW: I fully expect the Multiverse marketplace to support pledge-based models. As I said, I think pledge-based models are perfectly viable. If you want to create a Transcendence extension and distributed it on a pledge-based model, the Multiverse will support that.

I think it's a mistake to believe your source of funding will come from a majority of individuals paying $3-10 in EITHER model - independent game developers routinely report copyright infringement rates in the range of 80-95%, a famous example being World of Goo: http://arstechnica.com/gaming/2008/11/a ... e-near-90/. It is completely normal human behavior to only pay for something if the risk (of not paying) exceeds the cost, therefore people will buy (very) expensive computer hardware rather than steal it from the store, but will pirate the crap out of software.

You're right, of course. The only difference in our two models is in the distribution of paying customers. I believe my model will result in a larger number of small contributions. I personally think that's better for the community.

As such, software as a commodity - "Intellectual Property" - is now unsustainable as a result of technical advancements in telecommunications. Yes, it made sense to distribute Anacreon under this model 26 years ago in 1987, before the advent of the internet, but so much has changed since then. It is no longer physically possible to restrict the flow of information, thus business models that operate on that basis are no longer sound - no amount of law nor client-side DRM will change that. http://www.pcgamer.com/2012/08/22/pc-ga ... isoft-ceo/

In the People's Republic of China, not even military force can stop it.

If I understand correctly, you're arguing that it is impossible to prevent software piracy therefore no consumer will pay for software. I agree with the first, but not the second. For example, it is impossible to prevent someone from breaking into your house, but you lock your doors anyway.

I believe people will pay for something if the value they get is large enough. I don't think it matters whether it's a pledge model or not. No one is going to pledge if the game sucks. Conversely, if the game is good enough, people will be willing to pay regardless of whether you pledge or not.

Therefore, it is exceptionally unwise to rely on the honor system to stop unauthorized redistribution of IP. I sincerely hope you are not relying on the Multiverse leaderboard to serve as a key value-add for paying customers - hackers can (and inevitably will) reverse-engineer it and destroy it to demonstrate their 1337 }{4XX0R skills. This motive is extremely widespread and is used to explain why warez groups crack DRM for free.

I agree with you. But I'm doing the leaderboard (and other cloud-based features) not primarily to make money but to provide fun activities for players. Transcendence is a single-player game. But there are still many things that we can do across players. The leaderboard is one of those things. I've got several other things in mind (check out Spelunky's Daily Challenge).

Whether or not hackers will try to break in is orthogonal. That will happen regardless of funding model.

Resentment is assured once folks start talking about torrenting the extensions while having the sheer audacity to discuss it on the official forums, and that will drive you to ban discussion of file-sharing and violators of that rule. This in turn will lead to a two-tier caste of buyers (haves) and freeloaders/pirates (have-nots), the latter of which will be treated like trash because they do not contribute money, regardless of anything else they could contribute (time, feedback, advertising, etc.). It'll be something that makes our little community a little more closed.

I believe you are making an unfair assumption about me. People who contribute their time to mod, help in the community, or whatever, are just as valuable to me as people who contribute money. Both are necessary to have a thriving community.

Moreover, you are assuming that people who contribute time and other things will NOT get free copies of paid extensions. That is an incorrect assumption.

I really don't think we disagree as much as you think we do. The things that make the pledge model work are also possible in the software-sale model.

This leaves only two viable software development business models, software as a service (SaaS), and the pledge-based pre-order model. Make no mistake, both of these are commercial - the primary purpose of a business is to generate profit, after all. I personally believe SaaS (whether as "Freemium" AKA "Pay2Win" or Onlive-style streaming) is a dead-end, because centralization ("Always connected" AKA "Always-on DRM") goes against the distributed structure of the internet, and leads to censorship, ridiculous politics, inflated prices, longer downtimes, admin abuses, legal wrangling and government surveillance, all of which suck balls in the NSA-in-your-underpants kind of way. Whereas the pledge model is almost as democratic as the commodity model, still requiring people to pay for projects they like, but suffers from absolutely none of the latter's or SaaS' technical, legal and social shortcomings.

This remains to be seen.

All models fail in the long run. I'm going to try this model for the next few years. If it works, great. If it doesn't, then I'll try something different. If the world changes, then I'll have to change with it. But to be honest, I don't think I can predict the future well enough to influence my present decisions. Yes, SaaS may go the way of 3D movies. Or maybe it will thrive. Who knows?

Mr. Moromisato, I understand how unbelievable it can be, to have to suddenly reformat your entire life... but you MUST acknowledge the distinctions between enterprise and consumer software markets if you wish to survive and thrive! Licensing database and productivity systems to public companies and corporations, who would rather pay a fee than risk litigation and/or brand damage from copyright infringement, is behind you, and the path you now lead, developing entertainment software for various anonymous (English-speaking) individuals over the internet and around the world, will require much more than just wishful thinking - it'll take real, entrepreneural innovation, and the future of community-driven, pledge-funded free-and-open-source software development looks bright. Think carefully of everything I've proposed, of whether you find the basis behind them to be valid or not, because this opportunity could be the start of something much, much bigger than you've ever dreamed. Carpe Diem?

Again, I suspect we agree more than disagree.

But the key issue in the revolution that you talk about is NOT the funding model--it's the community-driven piece. The community is the high-order bit and whatever helps the community thrive is what will lead to a sustainable business model. Those are things like making good games that people want to be active in (by modding, documenting, etc.) and things like getting players to interact (by doing multiplayer in Anacreon and leaderboard/etc in Transcendence).

Getting those things right are much more important, in my opinion, than the specifics of the funding model. The funding model can change easily. The community will take lots and lots of work and innovation to nurture.

I very much appreciate your arguments. They have helped me to refine my model and ideas. Thank you.

[george moromisato]

I agree with TVR. I am a teenager, so my parents control monetary transactions, its not that I don't have the money, its simply because my parents (ages 66, cuz I was adopted) don't trust monetary transactions online. I would love to buy corporate command, and donate perhaps hundreds, no thousands of dollars to you, but I am limited in resources, which is what brought me to T in the first place, its free. I must shamefully admit that I too am a pirate, though I have since stopped since the FBI called... simply because I cant afford the cost, and because the only games I pirate are from a faceless mega-company like EA, so I have no qualms about taking from them. But rest assured, there is no way I could pirate from you Mr. Moromisato, I respect you too much, plus you are a private individual and you need the money to survive. All that aside, you are like a small god to me, why you may ask? Because you released Transcendence as a free indie game, and it is one of the most amazing games ever. I have been following T's development since I was eleven, and modding T has been the motivation I needed to become interested in programming. I now wish to grow up and be like you, doing what I love and making people happy doing it. Transcendence motivated me, and has kept me interested for years, no other game that I have ever played in my life has kept me interested for more than a few months, usually weeks.

Thank you for your kind words.

There will be many ways for you to acquire paid extensions without money. There will be contests, give-aways, and opportunities to earn extensions through modding, helping in the community, or whatever. I don't think you'll have to worry about that.

[Jay2Jay]

[TVR]

The only difference in our two models is in the distribution of paying customers. I believe my model will result in a larger number of small contributions. I personally think that's better for the community.

There's another factor, specifically how the total number of contributions could be higher under a pledge-model (due to a wider playerbase due to exposure by file-sharing and unrestricted distribution).

If I understand correctly, you're arguing that it is impossible to prevent software piracy therefore no consumer will pay for software. I agree with the first, but not the second. For example, it is impossible to prevent someone from breaking into your house, but you lock your doors anyway.

This is a terrible analogy... let's reverse it for a moment:

You lock your doors, even though it's impossible to prevent someone from breaking into your house. You do this to make it more difficult for opportunists gain unauthorized access.

Companies use DRM, even though it's impossible to prevent someone from cracking it. They do this to make it more difficult for opportunists to gain unauthorized access(???) Well, they must do it for the same reason doors are locked, that's certain.

A better physical analogy would be placing locks on airline luggage - The TSA and other state customs inspectors are just going to cut it off unless you provide them the key. And they reserve the right to take away anything they want, legal recourses be damned.

In this scenario, a smart fellow would not bother placing a lock, but an even smarter fellow would not NEED a lock in the first place.

Why would someone need to prevent unauthorized access to their valuable data? Because they are trying to monetize the DISTRIBUTION of it, which requires a state-granted monopoly (copyright enforcement). Instead, they should be monetizing the DEVELOPMENT of it, which DOES NOT require the involvement of the state at all - it is simply impossible to replicate an author's software development talents!

Replicating data is trivial, whereas replicating human talent is impossible. Choose the one to sell carefully.

I believe people will pay for something if the value they get is large enough. I don't think it matters whether it's a pledge model or not. No one is going to pledge if the game sucks. Conversely, if the game is good enough, people will be willing to pay regardless of whether you pledge or not.

One of the reasons I'm suggesting this is that I predict that your total profit will be greater with a pledge model (due to a wider playerbase due to exposure by file-sharing and unrestricted distribution).

Whether or not hackers will try to break in is orthogonal. That will happen regardless of funding model.

No - the probability can be quantified as proportional to the value of the thing being hacked. The more value you and paying customers assign to the leaderboard (and other Multiverse services), the more likely it is to be hacked!

Moreover, you are assuming that people who contribute time and other things will NOT get free copies of paid extensions. That is an incorrect assumption.

Do not treat extensions as a reward, because they are a requirement for participating in the community. You can't discuss (nor mod, nor debug, nor advertise) something you don't have, and so this will not prevent people from being locked out.

But the key issue in the revolution that you talk about is NOT the funding model--it's the community-driven piece. The community is the high-order bit and whatever helps the community thrive is what will lead to a sustainable business model. Those are things like making good games that people want to be active in (by modding, documenting, etc.) and things like getting players to interact (by doing multiplayer in Anacreon and leaderboard/etc in Transcendence).

The transition from free to paid will be a rough one for the community, because it was built for a non-commercial game. There's no need to claim that it'll be the same, that we have lost nothing...

In addition, I will continue adding free content to vanilla (though perhaps not as quickly).

All I can ask for at this point is for you to consider releasing each paid extension for free after a certain quota of sales or period of time. This is because the value of entertainment software drops over time to nil, as demonstrated by AAA games going to $5 after a year, so there will come a time that you might as well reap the benefits of an improved base game instead of exponentially decreasing profits.

[Jay2Jay]

Why not go the democratic way and release everything for free, then simply ask for donations? People who appreciate it and have money will donate, and the others (like me) will appreciate it and do our best in the community. Its a win-win scenario and I think you would get more money this way.

[pixelfck]

I think a lot has already been said on the topic, and I can only assume you did your homework on the subject before you made a decision to go for the model you've announced.

The one thing I wanted to add to the discussion is this:

By developing something and monetizing it afterwards (in whatever way) you risk having developed something for which there was no (or not enough) demand. In other words, you risk investing time and resources into the development of something that will not return the value invested; you run the risk of losing on it.

In the pledge based model, the development gets financed up front. With this, you gain some additional value: you know, before you start the major part of the investment of time and resources, whether or not your work will be in demand; if it was not, it would not reach the minimum pledge limit.
A side effect of this is that the customer feels more connected to the released product; they feel they are part of it and will advertise the result in a way that reflects this connection: they will not only tell their friends: 'try this game, it's good', they will vigorously defend how good the game is. After all, they are not only defending how good the game is, but also their own good judgement of where they invested their money in. (with the added bonus that the development has already been paid for and can now be distributed for free).

~Pixelfck

[Atarlost]

The only difference in our two models is in the distribution of paying customers. I believe my model will result in a larger number of small contributions. I personally think that's better for the community.

There's another factor, specifically how the total number of contributions could be higher under a pledge-model (due to a wider playerbase due to exposure by file-sharing and unrestricted distribution).

If I understand correctly, you're arguing that it is impossible to prevent software piracy therefore no consumer will pay for software. I agree with the first, but not the second. For example, it is impossible to prevent someone from breaking into your house, but you lock your doors anyway.

This is a terrible analogy... let's reverse it for a moment:

You lock your doors, even though it's impossible to prevent someone from breaking into your house. You do this to make it more difficult for opportunists gain unauthorized access.

Companies use DRM, even though it's impossible to prevent someone from cracking it. They do this to make it more difficult for opportunists to gain unauthorized access(???) Well, they must do it for the same reason doors are locked, that's certain.

A better physical analogy would be placing locks on airline luggage - The TSA and other state customs inspectors are just going to cut it off unless you provide them the key. And they reserve the right to take away anything they want, legal recourses be damned.

Pirates are not the TSA. If you cannot distinguish between a government organ and lawless Internet freeloaders you really have no business trying to dictate business models.

[Jay2Jay]

Pirates are not the TSA. If you cannot distinguish between a government organ and lawless Internet freeloaders you really have no business trying to dictate business models.

And if you cannot distinguish between an analogy and real life, then you don't belong here either.