Possible C2 License System

Discussion and feedback on Construct 2

Post » Sat Apr 16, 2011 1:49 am

I came across a pretty interesting licensing method recently, that being the Unreal Development Kit (UDK) license. You may already be familiar with it.
I figured it would be worth mentioning since it sounds like you guys are still surveying your options.

Bellow is a summary, followed by some thoughts on the pros and cons of the main aspects of the model. It's a little long, but I hope it'll be helpful.



In summary, the UDK is licensed like this:

* 1: The UDK development tool is closed source.

* 2: It's free to use for non-commercial purposes, for as long as you want.

* 3: You can also buy a 99$ license, which grants you the ability to sell games commercially.

In this case, as you accrue revenue from selling your game, you would pay nothing to Epic Games, up until you make your first $50,000.

After your first $50,000, you would begin paying 25% of any additional revenue to Epic Games, keeping the remaining 75% for yourself. Obviously, for Scirra's purposes that royalty threshold of $50,000 should probably be a little lower, if you want to include that aspect of the license.


I don't know how effective this kind of license model would be for Scirra, (obviously Epic Games is quite different from Scirra structurally), but it has some interesting properties.



* 1: The tool remains closed source. (Strictly speaking this is optional.)

Pros:

You don't have to worry about a nefarious third party stealing it, modifying it, repackaging it, and selling it out from underneath you, as a form of direct competition with your business. Granted, making it closed source would not protect you from such a miscreant stealing it, NOT modifying it, repackaging it, and selling it out from underneath you, as a form of direct competition with your business. This has happened even to products where the legitimate version is freeware. Though in the case of freeware, the legitimate authors don't have to worry about the bad guys undercutting their price. That threat of theft and price undercutting might be a valid reason for Scirra to consider closed source, at least initially.

Cons:

Good third party developers won't be able to help out as much, and this might slow the development of the software. This tradeoff is explained at length in Eric Raymond's well-known analysis of open source phenomena "The Cathedral and the Bazaar", available online. Additionally there will undoubtedly be some community resistance to a change from open source to closed source.



* 2: It's free to try the full version, for as long as you want, for non-commercial purposes.

Pros:

New users have no entry cost to trying out and experimenting with your software. (No monetary entry cost at least. There's still time and learning involved.) This gives new users the unusual opportunity to see first-hand how useful the fully functional software will be to them.

Because they arent stuck with a time-limited trial, they can learn the software at their leisure. This non-rushed atmosphere is especially welcome to people who have a strong interest in the product, but have many other obligations occupying their time, or an otherwise unpredictable schedule. In effect, the time-limited trial adds an additional (non-monetary) cost onto trying out a product, and that is the commitment to spending the next X days learning it to the best of your ability, while not daring to actually start a real project in it, on the off-chance that it's ultimately not worth it. Understandably this cripples a new user's ability to truly get a feel for using the product.

(That's not to say that time-limited trial's are all bad, but anecdotally, I wouldn't even have considered investing the time to learn UDK had it been a time-limited trial. I simply had too many other things consuming my time. As it turned out, it was a full 6 months after I downloaded it before I finally got time to work with it. And when I finally did, I was able to begin building something worth while to me, in broken patches of time over a few months, as I wasn't looking at potentially losing all my work after 30 days. )

Some users have more free time and some have less, but by and large, they all have a willingness to pay for software that they come to like and enjoy using, especially if they can make a business of it.

Cons:

If you release the software for free, there is a chance that some nefarious so-and-sos will use it to produce and sell games without buying a proper license. This is less of a problem for Epic Games, as their engine has a distinctly recognizable look to it, and I assume they also have a sizable legal staff. To my knowledge, Scirra unfortunately lacks these things, although it is conceivably possible that some kind of encrypted watermark could be included in the exported files. Though this would not be entirely tamper proof, and in the case of HTML 5 the code would be openly viewable and editable, pretty much eliminating the purpose of an embedded watermark in the code.

Again anecdotally, I myself am interested in starting a business in the near (hopefully) future, and I ran into the same kind of dilemma. I spent quite a while thinking about how I might surmount such an issue, and finally it occurred to me that doing nothing may actually have a better cost to benefit ratio than any of the other only theoretically effective solutions I considered. This is because it only takes a single person to bypass the security measures on a piece of software for it to become downloadable by anyone. If super-massive industry giants can't thwart this phenomenon, then

(A) I can't expect to do much better;

(B) all the time and effort I spend learning and perfecting the "completely-unrelated-to-my-actual-business" skill set needed to safeguard my software, could be better spent growing the functionality and value of my software; and

(C) there are oceans of people who devote all their time to reverse engineering software, and I, as a single individual, have no interest in spending an equal or greater amount of time learning how to stay a step ahead of all of them, in a futile mental arms-race which will likely only serve to make my software harder to use for my actual customers.

This is not really as bad as it sounds though. All it really means is that most honest people will be honest, most dishonest people will be dishonest, and no matter what kind of security system I add to my software, I'm not going to get the dishonest people to buy it. When you think about it, that's not really much of a revelation. On reflection, I realized that I really didn't feel too broken up about not being able to capture the dishonest-people corner of the market. Practically speaking, when you start a business, instead of asking, "Are there enough people interested in my product to support it?" you should instead ask, "Are there enough honest people interested in my product to support it?"

In Scirra's case, given the support and impressively helpful and kind nature of the community on the forums, I would guess that there are by far more than enough honest and well-meaning people to keep Scirra going as a business.

It's hard to imagine that anyone reading this is unfamiliar with Minecraft, but that is perhaps the pinnacle example of the influence honest users can bring to bear on the success of a small business with a good product. (Admittedly, Minecraft is something of an outlier, in that there is scarcely anything else quite like it, but the same can be said of an HTML 5 compliant Construct 2.)



* 3: To sell games commercially, users simply buy an inexpensive commercial license with a royalty threshold.

Cons:

(Yeah, I'm doing the pros and cons in reverse for this one.)

As a business, Scirra wouldn't necessarily begin getting buyers right at the outset of C2's development. This is because even buyers who are strongly considering buying it could hold off for quite a while as they continue working on their projects. For a massive company like Epic Games, this initial lag in sales is likely easily absorbed. For Scirra though, this could potentially be a bigger problem. Although, C1 has been free for 4 years, so Scirra might be able to stand waiting for revenue for another few months even after starting up the official C2 license model.

Pros:

That said, with people already looking to become paying early adopters, the future looks bright for Scirra indeed. As new users spend more time with C2, their ability to leverage its capabilities will increase, and it will literally become more valuable to them. However, before the value of C2 has grown on them, you might run the risk of chasing them off by requiring an upfront payment of a tool they have no practical experience with. Likewise, those with commercial games in the works will almost certainly have no problem buying a license whose cost they can expect to make back in a few sales.

Additionally, for new users who start out making games for free, the software itself will train them for as long as they wish, at whatever rate their comfortable with, until if they're persistent, they reach a point where they could actually make a commercial game, and buy a license to sell it.

The strange beauty of this system, is that since the user is in control of that entire progression, it doesn't matter how fast they learn, if they have unlimited free time, or almost no free time; once they feel they've reach the commercial-capable threshold, that is exactly the same time they will be willing to buy a commercial license. They will know the software inside and out, and they won't ever have needed to take anyone's word that someday they'll know it well enough to be a commercial developer. This is even true of user's who start out not expecting to ever make it to that level. Users who might otherwise shy away from trying to in the first place as a result of the price. It's oddly self regulating. Or more accurately, its user regulated.



Interestingly, UDK has been using this license for a while now, though they actually recently raised the royalty threshold at which sellers start paying royalties from $5,000 to the $50,000 quoted at the top of this post. That would seem to indicate that Epic Games is becoming more confident in this model.

Having said all that, (certainly more than I was expecting to when I started writing), I'm not trying to say that this is the best model for Scirra. You guys have a birds-eye view of Scirra's specific assets and limitations that I don't have. So you'll ultimately be a better judge of what looks viable, but I figured that at least presenting this as a possibility, and explaining my thoughts on it, might help to provide one more option to the pool of things to consider.

Take care.
-fisholith
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Post » Sat Apr 16, 2011 10:43 am

Actually, I'm okay with your system. I will be a better solution for me ! I have to admit that first I choose Construct instead of Multimedia Fusion 2 because it was free.
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Post » Sat Apr 16, 2011 11:26 am

Ugh... paying a percentage off the earning after reaching the limmit or any at all is what makes me uninterested in buying a product in the first place. It is only extra complication for the creators of the program to get the money. The license you seem to point out like the unreal pack is more for companies than proffesionals.

But you could question yourself, do you make this program for game creators, or just to get money out from everywhere posible? Its not easy for me to explain...

You see, I for example am a freelance animator and not only purchased but also crossgraded to toonboom animate PRO2 mainly, because aside of tools that i need, its license after purchasing it once, allows me to use the program for anything i want without any further dealing.

And that is what i preffer on a product that i pay for.
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Post » Sat Apr 16, 2011 2:39 pm

It's an interesting idea, but the main problem I see is I get the impression UDK is a specifically designed for professional teams working on major titles, so the main users are commercial users. C2 is a much "smaller" tool, meaning it sees a lot of home, hobbyist and non-commercial use - more like Adobe Flash. There is some commercial use, but it's the minority.

If only commercial users are paying, I think we run the risk of having a lot of users, but none of them commercial - so we don't make a penny!
Scirra Founder
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Post » Sat Apr 16, 2011 2:54 pm

[first, sorry for poor english... my language comes Object first and after verb.(kr) and my english ability is not good... sorry :) ]

How about using both of them?

I just scolled down the UDK license because it is too long for me ^^;
but now i can see the core thanks to summary.
and I thougth licenses like that before. (just my imaginary license was non-first-paying, and monthly paying some % of the income...)

First case, Compeletely buyer, and Second case, Free user for free(fee) creation and UDK like license.

1. completely buying Construct 2
_ a. no more paying for using construct 2 on commercial and free creation
_ b. for personal only, no company

2. Free for free creation type buying style
_ a. free creation(no fee&Opensource) will be with splash that project used construct 2
_ b. for both of persona(e?)l, and also company
_ c. If you want to export game to commercial, you need to join the ID for enroll that "this game is for sale".
_ d. Testing version of saling game is alowded, but they have 10 days expireing
_ e. If you choosed this license, you can't change license to completely buying construct 2 on current licensed game. next game is aviliable


oh.. i'm worried of spellings :) ;;

[quote:3jn2r9l4]
If only commercial users are paying, I think we run the risk of having a lot of users, but none of them commercial - so we don't make a penny![/quote:3jn2r9l4]
now I want remove my reply but Its also... oh... no vocabulary for that;(???)
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