Kuro5hin.org: technology and culture, from the trenches
create account | help/FAQ | contact | links | search | IRC | site news
[ Everything | Diaries | Technology | Science | Culture | Politics | Media | News | Internet | Op-Ed | Fiction | Meta | MLP ]
We need your support: buy an ad | premium membership

[P]
All you need is imagination

By hardburn in Op-Ed
Sun Apr 01, 2001 at 11:31:15 AM EST
Tags: Software (all tags)
Software

By now, you've probably all heard of TransGaming and their goal to create a DirectX API for WINE. Their business plan illustrates that all you really need to make money off Free Software is a little imagination.


Games have always been a special case for Free Software because, as RMS freely admits, they combine elements of books and music which do not apply to many of the GNU general rules about keeping software Free.

"You can't make money off free!" the pundits say, confusing "free" with price. Still, people are going to want to make money off it. We need to ask ourselves just how we can still make money off software when it has all been liberated, as the FSF hopes.

In reality, there are many ways to make money off of Free Software. Donations, selling extras (T-Shirts, posters, etc.), charging for updates, and so on. All these ideas have problems of one form or another, especially when applied to a for-profit business, although lots of non-profits have been doing similar things for a long time.

What about games? They are a special case, remember? You might try the "selling extras" path (who wants an action figure of their favorite Quake/UT Warrior?), or perhaps giving away the game and charging for new levels (which isn't a very purist way of going about the problem). What else is there?

TransGaming is showing what is needed: Imagination. Perhaps many people suspected it all along, but I think now their claims can be solidified. Their plan, as I understand it, works like this:

People want games to run on GNU/Linux. Getting individual companies to port each individual game is a lot of effort. However, if we could get the WINE project to run those games reliably and without a noticable difference in speed than the Windows alternative, then we would have the whole bundle. What is needed to run most Windows games? DirectX. Recreate a DirectX API for GNU/Linux and you've got your games. So, to make money, we will ask people to subscribe to our service for x dollars a month. The benefit of subscribing is that you can vote on which games should be focused on first. With time, the DirectX API on GNU/Linux will be more and more complete, eventualy hitting 100% of the available Windows games. All the code can (eventualy) be released as Free Software, since we don't make money on it directly.

The only hole I see in this plan is that once you get 100% of the games and all your code is released, where do you go from there? This is a long term problem, and one I'm sure the company will have to deal with eventually. At this point, they will need to come up with some other way of making money. However, in the short term, I believe they will do quite well.

I always laugh when I hear some pundit say "All the good ideas in the 'New Economy' are taken! All you can do now is copy what everybody else is doing!" Then I hear about some other company doing some brilliant new idea on the Internet, at which point the pundits say "Now all the good ideas are taken!"

No, all the good ideas are not taken. It's just that no one has discovered the next Big Thing yet.

Sponsors

Voxel dot net
o Managed Hosting
o VoxCAST Content Delivery
o Raw Infrastructure

Login

Poll
Are all the good ideas taken?
o Yes 14%
o No 68%
o Inshiro 17%

Votes: 76
Results | Other Polls

Related Links
o TransGamin g
o charging for updates
o special case
o Also by hardburn


Display: Sort:
All you need is imagination | 25 comments (20 topical, 5 editorial, 0 hidden)
Change my Vote (2.50 / 2) (#1)
by Ratnik on Mon Mar 26, 2001 at 02:29:22 PM EST

Damn, i meant to dump this, but voted +1. You got a freebie on this one. As to your premise, you aren't going to make squat if you give the software away.

which is why (5.00 / 1) (#3)
by alprazolam on Mon Mar 26, 2001 at 02:35:46 PM EST

you don't do free when the product is the code. rest of the time though...

[ Parent ]
GPL corporation = uneconomical (4.14 / 7) (#5)
by rebelcool on Mon Mar 26, 2001 at 02:39:50 PM EST

"In reality, there are many ways to make money off of Free Software. Donations, selling extras (T-Shirts, posters, etc.), charging for updates, and so on. All these ideas have problems of one form or another, especialy when applied to a for-profit buissness, although lots of non-profits have been doing similar things for a long time."

And none of these work. Here's why. Developing software is extremely expensive. The gaming industry probably has it the easiest, since you can develop games with a pretty small team. A couple of programmers, a few artists and a sound engineer and a production manager to put it all together. Still though, these people cost thousands upon thousands of dollars in salaries.

Most games these days take over a year to create. A game can easily cost millions in simple wages, not to mention all the fixed costs related to running a business.

Selling t-shirts, asking for donations and updates simply does not reap in enough to turn a substantial profit. Any economics dictate, that its not the fact you make a profit thats good (though thats better than a loss), you are judged by HOW MUCH profit you make (aka, Rate of Return). A traditional software company, which charges for software, along with t-shirts and all the other insundry crap, is always going to make more money than a GPL company which does not sell the software itself.

Investors do not care about the "moral" side of the business or about some kind of doctrine that says "free software is ethically better"..they care about money. And they will always choose a higher rate of return. This is reality.

A company based on GPL'd software, simply does not reap in enough money using their various "plans" for making money. Redhat and the various linux-only corps are proof of that. However, a company can make use of GPL software very well - as long as it's a division of a company that makes lots of profit in other means. Usually this requires a very large company.

Take IBM for example. They build server systems, and load linux on it. It works out well, becauase they dont have to pay a licensing cost, and they can turn a tidy profit from selling the hardware itself. They also make enough money from their other ventures that using GPL is more economical for them. This would only be the case in enormous corporations though.

heh, one reason why i believe red hat is going to get bought up by someone big. Whether it be ibm or microsoft (wouldnt surprise me a bit, it would be a brilliant business decision) or someone else.

COG. Build your own community. Free, easy, powerful. Demo site

Wow, they might have a chance, then! (3.66 / 3) (#7)
by regeya on Mon Mar 26, 2001 at 03:21:55 PM EST

If business plans based on services for GPLed software fail, then they may have a chance, as WINE is not GPLed.

[ yokelpunk | kuro5hin diary ]
[ Parent ]

One quick nit (none / 0) (#16)
by Wah on Tue Mar 27, 2001 at 03:44:21 PM EST

A company based on GPL'd software, simply does not reap in enough money using their various "plans" for making money. Redhat and the various linux-only corps are proof of that.

Personally I still think it is a bit early to tell that this is true. One thing they really need is a bunch for people using Linux. If you sell support for software you need a lot of people using it, more precisely, you need a lot of clueless people using it. This has been, IMHO, the biggest thing holding Linux companies back. One of the big draws is the community, but it's a community that doesn't like clueless members, but the companies need clueless memebers to sell support to. I think there is a contradiction in there somewhere. Anyway, my point is that they need a much larger marketshare to make big money. Give it ten years. Then you can charge X times as many people for a service (updates) that has a fairly steady cost, mainly because of the developer's ideals (GPL).
--
Fail to Obey?
[ Parent ]

linux is bad for consumers (none / 0) (#19)
by rebelcool on Wed Mar 28, 2001 at 09:00:46 PM EST

it's simply too arcane. It was never meant to be used by Joe Blow's grandmother.

Honestly, linux is a great server os. But not in much else. Specialization is a beautiful thing and has done society in general wonderful things. The OS market should follow suit. Linux can focus on server apps where it performs *great*.

COG. Build your own community. Free, easy, powerful. Demo site
[ Parent ]

Taking "not Slashdot" too far, perhaps? (3.50 / 2) (#6)
by regeya on Mon Mar 26, 2001 at 03:18:05 PM EST

(yeah, there's some editorial-like commentary here...well, it seemed more like a topical comment. :-)

Really, it's nice to point out when businesses have stupid business plans, but this story seems to be more in the vein of one type I've noticed lately: take a story that's been posted on Slashdot, look at what stance they're taking on the news item, say "I disagree," then write a story about why you disagree for kuro5hin. Maybe that's not what your intention was, but it sure seems like it.

Look, if I've pegged it right, maybe you're taking the notSlashdot bit too seriously. The "that other site" remark was a joke, as was (I'm assuming) the "Not Slashdot" remarks made in the past...some people take it way too seriously, though. I usually have a fit when people complain about Slashdot stories coming to k5, but heck, I've had a change of heart.

My take on the story and the business plan: I don't see anything here to discuss here other than "ayuh, that's a dumb business plan" or to have Joe College and Wally Whitecollar explain why they think the plan is bad, despite the fact that they don't run a business, don't plan to run a business, and probably don't have a head for business themselves. Heck, I admire this company just because they got off their duffs and decided to do something, despite the fact that it's a dumb plan (well, that respect would disappear if I found out it was a front to fleece unsuspecting investors. :-/)

Just my $0.02US.

[ yokelpunk | kuro5hin diary ]

Not Really A Hole (4.00 / 1) (#8)
by emo on Mon Mar 26, 2001 at 03:40:00 PM EST

The only hole I see in this plan is that once you get 100% of the games and all your code is released, where do you go from there?

This will never be a problem because there will always be a new version of DirectX/WINE/X Window System/[Insert Game Title Here] that will cause a need for an updated version of the software. Games are constantly in development and as they are released,this code will require modification. This is an interesting new idea, but it is not revolutionary, and will not scale well to certain projects. Although, it would be interesting to see Linux/*BSD/[Insert OS Here] adopt a model like this and allow members to vote on what hardware drivers are written first, etc.

GPL Games -- Bah! (4.50 / 2) (#9)
by br284 on Mon Mar 26, 2001 at 05:15:19 PM EST

Their buissness plan illuistrates that all you really need to make money off Free Software is a little imagination.
Did I miss something or are you jumping the gun? Even their site says that they are still looking for equity financing. Doesn't sound like they even have a project out yet. How can they be making money? I guess if you count scamming investors for cash as making money, then they may have...

Another little thing that you have missed. Switching price. For anyone who would play a Windows game, they probably already have a copy of Windows that allows them to play the games. Does the promise of being able to play the game slower on Linux exceed the switching price that would have to be paid for someone switching to Linux?

What exactly is this price? First of all -- cash to this company to pay them to work on their Wine/DX project. Secondly -- the speed cost that is incurred as you must run the games essentially on an emulator. As far as I recall, gamers make up a market that will pay an ungodly amount of money for the newest video card and do all sorts of evil things to their processors in the name of a few more MHz. Third, the cost of running the game on a buggy system. I make this last statement as a result of my experience with the Bleem emulator for the PC. While I love Bleem and really appreciate the work that has gone into it, I eventually went out and bought a proper PlayStation so that I coule play FFVII without all the artifacts, and with all the original media. Now, the hardware wise, the PlayStation is a fixed target. It should be easy to emulate. Bleem has shown otherwise. Now, look at the Windows platform that these people are looking to clone. Many versions of DirectX, Glide, EAX, etc. Hell, these things don't always run 100% on their native platform. What hope do some emulater's have? While I think the concept is a novel one, I believe that it is technically unfeasible.

And from a market perspective, this is definately infeasible. The market isn't there, and the people who would be interested in this technology will not sacrifice their speed and performance in the name of open source. This idea, while cool, is DOA.

-Chris

One obvious conclusion missing... (4.00 / 1) (#10)
by RareHeintz on Mon Mar 26, 2001 at 05:35:13 PM EST

In response to "where do you go after you have 100% of the games running?", I offer the obvious answer: You will never have 100% of the games running, because if this ever gets popular, Microsloth will start releasing incompatible versions of DirectX. To keep this effort worthwhile, it will have to continue a constant chase to keep pace with incompatible upgrades.

That said, I hope they do make that effort, as I'd love to not have to dual-boot in order to play UT and Midtown Madness.

OK,
- B
--
http://www.bradheintz.com/ - updated kind of daily

This is a business plan? (4.50 / 4) (#11)
by Carnage4Life on Mon Mar 26, 2001 at 05:37:39 PM EST

Recreate a DirectX API for GNU/Linux and you've got your games. So, to make money, we will ask people to subscribe to our service for x dollars a month. The benifit of subscribing is that you can vote on which games should be focused on first. With time, the DirectX API on GNU/Linux will be more and more complete, eventualy hitting 100% of the available Windows games. All the code can (eventualy) be released as Free Software, since we don't make money on it directly.

This is not a good business plan. What you have described is usually called consulting but in your case you are hoping to have some amorphous grouping of Linux users be your clients instead of a real customer. Frankly I can't see any reason why anyone would pay to be able to have their vote tallied on which direction the project should go in. This is actually a notch below charging people to be on your mailing list.

You seem to have made a classic mistake of the "New Economy" which is overestimating your potential market and the amount of revenue that it can generate.

Is it "their" or "our"? (3.00 / 3) (#14)
by streetlawyer on Tue Mar 27, 2001 at 03:01:35 AM EST

You seem to either be confused as to the correct use of English pronouns, or trying to misleadingly present yourself as a party not connected to this for-profit business. I'd happily forgive the first, but am not inclined to take chances on the second.

--
Just because things have been nonergodic so far, doesn't mean that they'll be nonergodic forever
I have no connections (none / 0) (#18)
by hardburn on Wed Mar 28, 2001 at 08:57:10 AM EST

For the record, I have no connections to the company. I'm just a supporter of Free Software who thinks they might have a good idea on how to make money off libreware.


----
while($story = K5::Story->new()) { $story->vote(-1) if($story->section() == $POLITICS); }


[ Parent ]
goals & perspective (4.75 / 4) (#15)
by SEAL on Tue Mar 27, 2001 at 03:05:47 PM EST

With time, the DirectX API on GNU/Linux will be more and more complete, eventualy hitting 100% of the available Windows games.

You'll never hit 100%. How can the DirectX API on Linux be complete when it's never even complete on Microsoft?

See, you have to understand how the game industry works with the hardware industry. Right now, there are basically two places on the software side which lobby the consumer hardware manufacturers for new features: Microsoft, and John Carmack.

Luckily for Linux users, Mr. Carmack likes OpenGL and he is in large part responsible for its continued existence in the consumer market.

This, along with portable APIs like Loki's SDL are the way to go. I'm not saying it's bad to have a DirectX emulation, but it should be in addition to native game support. Development shops should be gently encouraged to use portable APIs so that even if their game is released for Win32, Linux users can download a separate binary.

Relying 100% on DirectX emulation relegates you to playing catchup with Microsoft. That's not a good position to be in.

Best regards,

SEAL

It's only after we've lost everything that we're free to do anything.

The other point to make- (4.00 / 1) (#20)
by ramses0 on Thu Mar 29, 2001 at 03:03:00 AM EST

is that the GPL never promises you that you can take a vacation from working and let the money roll in (as it seems you can do with proprietary applications).

The whole point of the GPL is that once you've written the code, it is of no value to you- you've already written it, and (maybe) got paid to write it, but unless you're physically writing code that is filling a need, you're not 'working', and thus you shouldn't be paid.

So, perhaps TransGaming can support themselves for the first X amount of time, but if they're using the GPL once they *do* reach 100%, if they're not writing code, they don't deserve to be making money. At that time, best to hope that they have covered their costs during development, and that they have a backup business plan and/or other sources of revenue.

--Robert
[ rate all comments , for great justice | sell.com ]
[ Parent ]

GPL (5.00 / 1) (#24)
by prs24 on Mon Apr 02, 2001 at 12:26:27 PM EST

The GPL has a curious business model that you get paid for doing work - not for having done work in the past.

[ Parent ]
Exactly (none / 0) (#25)
by MrAcheson on Mon Apr 02, 2001 at 12:58:06 PM EST

The only problem is that in the normal software business, you are essentially getting paid for the work you have already done while you're developing what comes next. Or to put it differently, revenue for your current products support your development of the next generation product. It is a business model that works pretty well.

The only problem is that under GPL you are most likely not getting paid for writing the code and you essentially aren't going to get paid once its done. This forms a wicked cycle were you can never get paid to write whatever this code is for a living.


These opinions do not represent those of the US Army, DoD, or US Government.


[ Parent ]
This would really help (3.50 / 2) (#21)
by Pedro Picasso on Fri Mar 30, 2001 at 08:40:12 AM EST

...Indrema out. They're the ones making the Linux console system featured in NextGen. The guy says in a chat log on the developer pages that he's having trouble securing more funding, and might not last more than a month longer. He also says that the kick ass shot on the web page is an actual prototype and not a rendering. So good luck Wine, good luck Indrema.

"I want Star Craft on a Linux console, dammit!"
-the Pedro Picasso

Cult of the Flaky Hardware
[ (sourceCode == freeSpeech) | kakkune.com ]

Pure Fantasy (2.00 / 2) (#22)
by DeadBaby on Sun Apr 01, 2001 at 11:54:26 AM EST

Come on, you can't fund software development selling t-shirts to less than 1% of the computer market. It's insane to even repeat such a outright fantasy.

The current economic down turn is making A LOT of open source programmers wake up and realize freedom is secondary to cashing in your (and your family's) meal ticket each night.

"Our planet is a lonely speck in the great enveloping cosmic dark. In our obscurity -- in all this vastness -- there is no hint that help will come from elsewhere to save us from ourselves. It is up to us." - Carl Sagan
Not 100% accurate about payment... (none / 0) (#23)
by Daemin on Sun Apr 01, 2001 at 03:24:29 PM EST

The benfits of paying are not just thast you get to vote. The idea is they will keep working.

They intend to provide incremental releases that improve compatability, but will only continue to do so as long as they recive support. No one pays, and the project will stagnate, and you dont get to play your games.

Trying to get people to pay just so they can vote on what games to do would be doomed to failure. Im not sure how valid this approach is, but i would be willing to fund someone to be able to play games on BSD and dump windows from all my computers.

All you need is imagination | 25 comments (20 topical, 5 editorial, 0 hidden)
Display: Sort:

kuro5hin.org

[XML]
All trademarks and copyrights on this page are owned by their respective companies. The Rest 2000 - Present Kuro5hin.org Inc.
See our legalese page for copyright policies. Please also read our Privacy Policy.
Kuro5hin.org is powered by Free Software, including Apache, Perl, and Linux, The Scoop Engine that runs this site is freely available, under the terms of the GPL.
Need some help? Email help@kuro5hin.org.
My heart's the long stairs.

Powered by Scoop create account | help/FAQ | mission | links | search | IRC | YOU choose the stories!