30/03/2010

Ideas To Fund FOSS Games

There's a tendency for people to side with the assumption that there's no way that game makers can make money with an open source/Free software model, or that to make higher quality games you need to sell them. I hope to dispel that idea by showing and coming up with models in which selling access to the game itself isn't a necessity, or only forms a small part. More ideas and improvements upon existing ones are welcome and encouraged - I'm sure plenty of you have your own ideas.

Support


I thought I'd get the most obvious out of the way first. There is a large market in video games for pre-made, powerful, flexible and easy to use game engines that take can take a lot of the work out of getting started and moving on to creating good, meaningful content. Most companies at the moment rely on selling access to the engine itself as far as I understand it, but in the same way as Red Hat is to Microsoft, an enterprising video game company could be the Red Hat equivalent to Unreal in selling support and documentation, customisation etc.

In such a model, in the same way Red Hat and others use it, sharing the software (game engine in this case) is more beneficial, as it becomes easier for more people to access and use the tool, instigating network effects, providing free feedback to improve said tools, and an already existing captive audience that may go on to use the tools in business or suggest such tools, which in such a case provides the need for the support and other services. In fact, there are already one or two projects like Ogre3D trying this to a certain extent, and has already been used in some commercial games.

A very insightful view of this model during its inception is the history of Cygnus, the first company that based its business on Free software by selling developer time and expertise as competitors were trying to sell the software.

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.

[...]

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.

Marketing Cygnus Support

This can go hand in hand with the next model...

Self-Improvement


Blender - a 3D modelling and creation tool that can be used for film/TV work and also games - has actually produced its own short films and a game, Yo Frankie!. These projects were created as a means to show that Blender is capable of producing professional quality work, and improving Blender itself in the process through adding new features needed by the project, which would make the project easier to do or to improve the work flow. Blender then both sold DVD copies of the works, alongside its sales of various DVD's on 3D modelling and how to use Blender.

Such a model could be done by other tool makers. It benefits them by helping improve their own tools they're hoping others will use, by which they may be able to make money off of the other end by sales of DVD versions, scarce "special editions" and merchandising, or even as commission work (talked about later) for an event. This would also help further other models like support, by increasing quality of the tools and acting as marketing that would help spread word about this fantastic amazing all-in-one saves the world product.

Commission


With commission work, you get paid not for the already produced end result being distributed on a shiny plastic disc, but to produce the work in the first place. Someone - an individual, group, company or government body - pays you to produce content that may or may not have to fit a certain criteria, and may be part of a larger model like advertising supported.

For example, music produced in films are commission work - the payment is for production, not distribution of end result (even if they get a cut of the films revenue), though the model at large does depend on that. From the perspective of the creators, TV in general is effectively commission work, with which the network hopes the end result of that work will bring in audiences that allow them to charge more for the advertising space allotted to each show. They may receive further payment based on DVD sales and the like.

In some cases, simply the production of a work itself may considered enough. For example, a game that may help illustrate to students in a college or university the laws of gravity. It may be produced in a way that is genuinely fun and at first, doesn't represent a typical "edutainment" game, but would be an idea based around fairly realistic physics. It wouldn't have to be earth based either, whether as means to show different effects of gravity or simply to use a setting more fun. Often the government and private sector have used or expressed interest in using and/or integrating very realistic simulator type games to help with training. There are countless other examples, but the basic point remains the same - payment for production, not end result.

Advertising


The game itself may be an advertisement for a product, like a racing game paid for by a car company that would advertise its products, or paid for by a particular racing organisation that would help promote its sport, both of which overlaps nicely with the commission model.

A second way of approaching this would be product placement. Drinks in a game may be of a particular brand which has been paid for by said company, branded clothing, etc. Though both require smarter approaches than rather garish and upfront signs, pop-ups and other such things that may be too distracting. Preferably these placements would be designed in a way that would fit in with the game world, not distract from it, or in the prior example create a new world in itself.

In some cases, this may also form part of a larger model. Major Hollywood blockbusters are often supported by product placement in one form or another, which helps reduce risk and take the edge off of the huge budgets these films now have, for example Transformers was partially supported by the manufacturers of the cars featured in the film.

The best opportunities will likely present themselves in areas such as sporting events, where games focused around these may be able to command support due to the advertising the sport may get out of it alongside the sponsors of that sporting event. Currently however the most dominant form in these areas is exclusives licenses for likeness and name to games companies creating a bidding war. However, these are already dominant sports and events, rather than ones trying to create larger recognition who may find the opposite more attractive.

A lot of other games may not fit well. Sci-fi games set years into the future where Pepsi still exists may confuse more than a few players.

Subscription


A game may sell a particular service as part of a subscription. In this model, it's irrelevant about the software itself being distributed, but about related services you produce. From guaranteed, high quality servers to ongoing production of new missions and updated content. Do not think of the subscription as paying for the already created content, but paying for ongoing production, and the maintenance of related things that keep the game experience going, like servers for MMO/online FPS. Guaranteed stability and regular addition of new and/or local servers, servers that support higher amounts of players, etc.

Free and non-official servers may still be created with no artificial blocks on the creation of them, as a way to promote competition and community goodwill. Perhaps allowing and even promoting community created content alongside "official" content would further help promote the game, goodwill and generally give even more reason to buy. Subscribers may get regular access to chat rooms and Q&A's with the developers, sent complementary media like comics set within the game world and other such things.

Other ideas discussed have been providing subscribers with first opportunity at things like news on upcoming additions to the game or pre-built beta versions. The results could still be distributed, but as noted, it's about first opportunity, not exclusive opportunity. Also ideas involving creating a store for merchandise where buyers are given a months subscription, whilst subscribers already get some of the merchandise or get a discount.

Pay As Much As You Want


This model has been tried various times in gaming and other areas, often to great success, whether it be as a temporary promotion or as the definitive way to get the content. In this, the customer is first presented with an empty box by which they can enter any amount they wish to pay to the project - from £0.00 to $1,000,000. This model shares similarities with donation in that payment may be based on good will, or on a more general understanding that this will further the project. However, this will most likely work best when combined with other incentives - paying over a certain amount may get you a guaranteed slot in all or certain official servers, get to see a sneak preview of new content being put forth, printed versions of the game and merchandise, a Q&A with the developers, etc.

Areas in other media where this has been tried has most prominently been music. The band Wheatus now sell they're latest albums with a PAMAYW model, providing incentives to pay over certain amounts. If you pay over $25, you get the CD, DVD with various footage and a "making of" documentary, complimentary comics related to the albums, along side the package being signed and numbered by the band.

The most recent example of this being greatly successful is the Humble Indie Bundle, which included 5 indie games (including World of Goo and Penumbra: Overture) that could be bought at any price, for all major operating systems with some of the proceeds going to charities. They earned over $,1000,000 in one week, and as a reward for all the money they received they open sourced the game engines (with differing licenses for art assets).

Micro-Payment


This is where a game sells various virtual (in-game only) items, rather than access to the game itself. Typically this hasn't been received that well, partially due to it being used as a means to sell content someone already technically owns or the items being sold having other advantages with no other way to get them through normal play time, creating a sense of unfairness on the part of players reluctant to spend money on items that didn't hold much genuine worth outside of the game and the disconnect between players who paid and those who only played.

More recent takes on the model however have focused on time saving as the reason to buy, vs the usual benefits like power, health or appearance. With this, allowing players to obtain items in other ways is perfectly compatible, as what you're effectively buying is time - buying the item may leave you out of pocket, but is more convenient by not requiring the normal amount of time required to get something, especially if you've been busy lately, or enjoy the game but end up with the lack of ability to play it to a degree that's normally necessary.

A Free software game (though sadly non-distributable art work) that already has a micro-payment model is the MMORPG Eternal Lands, where you can buy various items from their shop.

A good and recent example of this is Dungeons and Dragons Online, which is (kind of) free to play. They introduced a model involving "turbine points", things you can either earn during normal play or pay for. They still offer a subscription model, which doesn't just offer game access but free monthly turbine points, free immediate access to all existing content, access to beta and priority in login.

Another example would be the pets system Blizzard added to World of Warcraft, where selling creature known as the Celestial Steed brought in $2 million in roughly four hours (priced at $25). It offers little to no in-game benefit, though does require a large amount of control over how users can trade and sell items to others if you want to keep it a rare, prized item.

Crowd Funding


Similar to subscription, in this instance people are paying to fund the creation of the content before it has been made or finished, once again combining with other incentives to give people a reason to pre-order. The developer earns money to fund the creation of the game, whilst customers get both the game and other benefits which may be conducive to allowing the game to be distributed freely.

In this instance, there is a clear understanding of paying for production, not already existing content. You can also provide benefits from first opportunity at news and upcoming versions, private forum sections for subscribers etc.

Examples of this being tried in the proprietary world would be Overgrowth, another example from Wolfire games. By pre-ordering the game, you get access to a special forum to discuss the game, access to weekly alpha builds giving you first chance to try out the new features added alongside the understanding of funding the continual development of a game that you'll get at the end. After finishing the game, this could indeed be easily transitioned to the PAMAYW model, where the game could be distributed freely and you'd still be relying on further incentives to get people to pay higher amounts.

Another example of this working but in the free software world itself is Diaspora, a project to create a decentralised and more secure version of Facebook built entirely as free (as in freedom) software that would allow profiles and services to be hosted by different people but still work in a similar/same way as centralised social networking site. Using Kickstarter, they were able to raise the money to pay for the work on this project. In fact, they raised $200,000, with the initial goal simply being $10,000 thanks to a bunch of press talking up the project.

What's Best For My Game?


There isn't really a single answer to this question. It's all a part of the question "What's unique about my game?", along side what fits with the kind of game you're making. A subscription model won't work well with a one time story focused single player game, but may indeed work well with PAMAYW, crowd funding or otherwise. Conversely, a sprawling MMO containing thousands or so players at a time fits much better with subscription due to the ongoing and demanding requirements of creating and maintaining such an infrastructure, along with consistent demand for new content within the game world.

Support for example works better for game companies more focused on the tools, rather than the games themselves. This may work for high end simulations that have the possibility of getting used in the military, but these may be lucrative yet less common opportunities. The main issue here is not falling into the trap of "open core" as I've seen it termed. The temptation to let the engine go free, but sell proprietary extensions. This model still fundamentally relies on selling access to software, when one of the advantages in a free software world of using the support model is that the software being freely distributed acts as advertising in itself for your services. Bundling the freely distributable software as part of a larger bundle of support services would be a good idea, like Red Hat bundles packaging and distribution of updates as part of its services, still allowing source redistribution.

This works better for tool makers as you're saving time and money of others - helping other game companies reach their goals and ship their games by the date specified. Instead of working around bugs and wasting days and weeks on the problem, you're at their beck and call to fix them there and then if need be. With games focused at general consumers, this doesn't work. They don't necessarily have the same complexity in needs, nor is time as much of a critical issue.

When adding on the self-improvement aspect, this creates a secondary revenue source and acts as good marketing for your tools. You show your tools are ready for serious work and create a captive audience for merchandising and other related goods, whilst increasing mindshare. This would be more advantageous to smaller companies trying to break in against established players who have to work more to prove themselves and get known.

Another example, commission, is about being paid to create something that doesn't already exist. It's perfectly allowable to distribute the end result freely as you've already been paid for the work, though there might be cases where the receiving party feels they want to keep it locked up. A lot of opportunities may exist for this in education and creation tools, or in working for specific events. In these instances, you're less informed by your own ideas and more taking other peoples and working to fit them to the circumstance. If you're a visionary who has plenty of their own ideas already, it may be better to stay away from here, or use it as an in-between source of sustenance.

What are the needs of your game? What do people want from your game, and how can you find ways that gives them more of that? What incentives in line with the aims of this game can convince people to pay?

Why Not Just Sell The Game Upfront?


This brings us back to the fundamental question of all business - what are you providing that customers can't do on their own?

Selling access to a game on its own is only going to become harder to do. Digital distribution creates a situation where customers can distribute your game entirely by themselves. Basing your business on that is trying to sell people something they can already do themselves for free. In spite of free music on radio, various free content on TV and otherwise, people still paid for that content when it came to cinema or DVD. Why? They were buying capabilities they couldn't provide themselves. In movie theatres you have giant screens and far better audio and visual quality, along side the social experience of going to see a film at a theatre. With Vinyl, Cassette, CD and DVD, you sold them the ability to play and access that content whenever they wanted, as compared to when that content was on TV or Radio. Now they can provide those themselves, and do so in a model that involves little cost to them and no cost to you. Focus on that last part - that's an advantage - that's an efficiency. Use that as an input to something else.

Paper becoming a commodity facilitated huge markets for printers, pencils, pens and other such things. The ability for paper demand to be more than adequately met produced huge demand for tools to do things with that paper, to fulfil jobs and tasks that people need done. The ease of modern distribution, combined with Free Software development models facilitates markets based around time saving, and providing other things they can't do themselves. The same applies to games.

The Humble Indie Bundle contained a series of games that had already been out for significant periods of time, yet many people donated money for games they could gain access to by other means. Why? Part of that was the understanding that some of that money would go to charity. Part of that was funding more creative indie games and development. That last point is driven home with the Linux user donations being nearly double that of Windows users. Linux users understood that by paying more, they were funding the incentive to put out more games on Linux, a market more starved than Windows and even Mac. Humble Indie Bundle didn't sell people access, though that may have been part of it - it sold people the idea that this would spur more games from these creative indies, and in the case of Mac and Linux, sold people the creation of more games for their system, things that not every user could do themselves. Combine that with a charitable cause and it's easy to see why they reached $1,000,000 in a week.

It's doubtful that any individual model will be a complete solution. It will require all sorts of experimentation and mixing and matching, but there certainly are ways to fund and make money with FOSS games, and do so in ways that don't undermine the GPL and free culture movements.


Further Resources


Kickstarter -
What is Kickstarter?

Kickstarter is a new way to fund creative ideas and ambitious endeavors.

We believe that...

• A good idea, communicated well, can spread fast and wide.
• A large group of people can be a tremendous source of money and encouragement.

Kickstarter is powered by a unique all-or-nothing funding method where projects must be fully-funded or no money changes hands.

All-or-nothing funding?

Every Kickstarter project must be fully funded before its time expires or no money changes hands.

Why?

1. It's less risk for everyone. If you need $5,000, it's tough having $2,000 and a bunch of people expecting you to complete a $5,000 project.

2. It allows people to test concepts (or conditionally sell stuff) without risk. If you don't receive the support you want, you're not compelled to follow through. This is huge!

3. It motivates. If people want to see a project come to life, they're going to spread the word.

flattr - flattr allows people to set up an account with x amount of money per month, which when they flattr things (press a flattr widget associated with something), money will be automatically given each month to the creator/project. When more than one thing is flatrr'd by someone, the money is shared out equally amongst the recipients.

Jamendo - liberal CC focused music service.

Open Game Art - An open directory of art and assets licensed under liberal/FOSS terms specifically for games (including commissioned for the site and donated works).

http://media.ryzom.com - Resources freed as part of the FSF's opening up of MMORPG ryzom. Reusable GPL'D/liberal CC'd works (most suitable for fantasy and sci-fi, but undoubtedly useful for others with tweaking and some cool ideas).

Crystal Space 3D - Powerful 3D free software engine.

www.ogre3d.org - Another powerful 3D free software engine.

http://sauerbraten.org - Yet another powerful 3D free software engine (more FPS orientated it seems).

Creative Commons - Information on CC licenses and ability to search for media based on CC license.

http://mocap.cs.cmu.edu - A large resource of motion captured animations available in multiple formats.

Free Game Dev Forum - General discussion on FOSS game development and certain projects.

Against Intellectual Monoploy -
It is common to argue that intellectual property in the form of copyright and patent is necessary for the innovation and creation of ideas and inventions such as machines, drugs, computer software, books, music, literature and movies. In fact intellectual property is a government grant of a costly and dangerous private monopoly over ideas. We show through theory and example that intellectual monopoly is not necessary for innovation and as a practical matter is damaging to growth, prosperity and liberty.
- Helpful to understand the true nature and history of copyright and patents, along side understanding and envisioning how to make money without relying on them.

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Suffice to say, this isn't every idea, nor are the individual ideas themselves perfect. Do you have any further ideas or improvements? Feel free to comment or write a reply post (just make sure to notify me). Maybe we can dispel the assumption once and for all, and help improve FOSS gaming as a whole in the process.

For further ideas and inspiration, see the Techdirt blog, specifically their Cwf + Rtb (Connect with fans + Reason to buy) post and the Grand Unified Theory on the Economics of Free.

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