Today I had a bit of a reminder, of something that has been gradually coalescing for some time. And since it got my attention, I thought it might be a good time to talk about some specific things, and some far-ranging points as well.

It started innocently enough… I launched GameMaker Studio 2 today, and got an error message:

I clicked Retry, and was prompted to log in with my YoYo Account. I supplied my credentials, and…

Something must be wrong with their authentication backend for the IDE, perhaps? My login credentials allow me access to the website, so I know that my credentials are good. I logged in there, and reviewed my license, and my license duration says “permanent” although at the moment apparently there’s something wrong and my license is “expired” according to the software.

I eventually got in by doing a password reset. I’m still unclear why I was able to authenticate to the YYG website, but not GMS2, using the same known-good credentials, but resetting did the trick. I’m back in.

All’s well that ends well, right?

Implications

“OK, so what? What does that all mean, and why should I care?” you might ask.

What it means is this: Despite the label saying so, my product activation isn’t permanent. At the very least, it’s subject to YoYoGames continuing to exist, and having their licensing service up and running, and contingent on my software refreshing some authentication token periodically.

If that can’t happen any longer, for whatever reason, then I lose access to the software that I paid for. And that’s disturbing!

(To be fair, this had been the case under GMS1.x as well, all along, although previously in GMS1 license activation wasn’t explicitly tied to a user authentication. GMS1 users had to have a network connection in order to refresh their product license, which needed to happen about once a month.)

Moreover, although YYG have been quiet about it, all the groundwork is laid for them to switch to a subscription-based model, at a point when they decide the time is right. My guess is that probably this will happen a few years from now, once the consumer software market has accepted SaaS — if and when that happens. I believe it is more “when” than “if”, at this point. The average consumer doesn’t care or understand enough to make it a matter of “if” any longer.

We could quibble if we wanted, but what I’m getting at is that what YYG call a “permanent license” I will call a “permanent subscription.” The license is activated by virtue of the account authentication, and if this ever breaks or is revoked, the software is not usable.

The vendor controls the version numbers, so they can play the game that when they want to break the promise of permanent licensing, all they have to do is release “GMS3” which will be a new product, and thus not bound to the old licensing terms in the way that 2.1 or 2.9 or 2.x would have been. YYG have already done this — they amended the terms of the GM:S Master Collection license, which originally had a provision entitling users who purchased Master Collection to all new versions and modules that YYG released, without qualification; later this was changed to “within the 1.x sequence”. So Master Collection owners would have to pay for GMS2 when it came out.

That’s the thing with these license agreements; the vendor can change them at any time, and users have little choice but to go along with it. This is a major reason why I view click-through agreements as false contracts. In real contracts, one party cannot change the terms of the agreement on a whim, without the consent of the other party. In the world of click-through license agreements, this happens all the time, and users have little choice but to accept it, or stop using the product. Very often, users aren’t even aware of the terms, before or after the change. It’s almost meaningless to the user, because they have so little say, so little power, that there is little to no benefit to them in understanding the agreement that they supposedly are agreeing to.

So of course YoYo would amend a previously stupidly over-open agreement to close a loophole and provide necessary limitations. Of course, that’s just the way business is. Businesses need to make money, and if they don’t make money, they stop existing. Restaurants may offer free refills, but if you go back the next day they make you buy a drink again. But you have to be careful when promising things that are unlimited, permanent, or infinite. The reality is, nothing like that ever exists. Customers should know better than that. It doesn’t stop them from complaining when they discover that in reality there are limits, impermanence, and finities.

To be clear, I don’t mind paying for new versions when they are released, just as I don’t mind buying a new car when my current car is worn out and needs to be replaced. I fully recognize that paying the company for new products enables it to continue developing those products, and I want to support that. But I want to own the car that I own! I don’t want to have to buy a new car every single year, regardless of how much use I have gotten out of my car, or how well the car still works. I don’t want to lease or rent a car, or pay a taxi service to drive me about when I need to go somewhere. I don’t mind that these are all options — I simply believe that consumers should be able to choose freely what makes the most sense for them, the choice that provides them with the greatest value.

Subscription-based GameMaker: someday

Nevertheless, it seems very plain that at some point in the future, YYG intend to switch to a subscription model. This could be the day all casual game developers will be done with GameMaker. I expect that YYG are well aware of this, and will be very careful about how and when they do it. Just as it makes little sense to pay for a gym membership that one only uses a few times a year, it will be hard to justify subscribing to GMS as a software as a service if the service is not used often enough. YYG will want to retain those users.

Well, perhaps they’ve thought of that as well. In Help::About, there’s an interesting statistic that they display for you, counting how long you’ve been running the IDE:

Potentially, then, this means that YYG are in a position to offer GMS2 on a metered basis, charging users not on a subscription basis, but on a consumption basis. This could feasibly make it affordable for casual users to pay for the software hourly, and if they use it enough, it could then cap the cost and cut over to a subscription for the whole year.

Let’s say YYG’s business target is to extract, for example, $100/customer/year on average from all users. Professionals will pay considerably more, in order to gain access to “pro” features that they need to do business, such as additional build targets, access to the Marketplace, etc. Pro users are their “bread and butter” so they focus on delivering products with features that will attract and keep the pro segment of the market happy.

These features are by and large attractive to non-professional users as well, and especially to students and other users who have aspirations at turning professional at some point. Cultivating future pro users is very important to the continued success and growth of the product. So YYG will do well to subsidize the student/apprentice developer with professional aspirations.

But a lot of game developers are not releasing games professionally. YYG know this very well. YYG know that casual game developers won’t go for paying an annual subscription that amounts to $100/year. That amount sounds like a lot of money to many people. Many of their users still complain about YYG raising the cost of GM8.x from $25 to $40, and then introducing GM:S at a $99 price point. A lot of GM:S users still only use the free version of the software, and likely will never willingly spend any amount of money on it. YYG know that some users may only use GameMaker for a few hours a year, perhaps amounting to a few days of total usage at the most.

And yet, if you amortize a cost of $100 over the course of a year, it’s just about $0.27/day. In the early 1980s, people would pay quarter just to play one arcade game for a few minutes. $0.27/day sounds much more reasonable than $100/year, even though it’s the same amount. YYG can tap in to the casual developer market as a revenue source by softening the psychological barrier to paying $100 all at once.

So, to bring them in as paying customers, YYG can provide a metered pay option, and if they decided to charge $100/year for the software as a subscription, and to create a perception of “value” for the $100 annual expense, maybe they charge $1/hour or $1/day or $10/month for metered users — something higher than the “bulk” rate of $100/year, but something still reasonable that a casual developer will (perhaps grudgingly at first) accept. At $1/hour, a heavy user would hit 100 hours quickly, and at that point they would be better off cutting over to the annual subscription model (and if YYG wants to keep customers happy, that cutover should happen seamlessly), but a casual user who maybe puts in a weekend game jam or two a year will come close to 100 hours of use in a year, and YYG can still extract close to their goal, by hitting them with the metered cost.

And maybe this is even good. The videogame marketplace is choked with free product produced by, it seems by now, millions of developers, very few of whom are able to make significant income at it. Maybe the barriers to enter that market are too low right now, resulting in glut and pain and low quality products. Maybe easiest to use tool with the largest number of users should be priced out of the reach of people who aren’t really serious and really talented, enough to be able to create truly viable games. Maybe there’s some silver lining to that.

I’m not against YoYo making money, and if this keeps their lights on so they can continue to develop the product, then good for them…

But…

In the pre-SaaS subscription days, software companies would generate the revenue they needed by scheduling a major release to occur (roughly) annually, and sell permanent licenses for that version. More or less users felt forced to upgrade annually in order to stay current, and the vendor would offer an upgrade discount to soften the blow, as well as provide new features, improved user experience, bug fixes and support as the incentive to buy into the annual upgrade.

The crucial difference was that software activation was permanent, and wasn’t dependent upon a service that needed to be up and working. This meant that users could opt not to upgrade, if they didn’t feel that what the vendor was offering was worth upgrading. Often, causal users would choose to remain a few versions behind, rather than pay for the upgrade. In some cases, this was due to not liking the direction the vendor was taking with the product, and very frequently it was due to the fact that software bloat meant that older hardware had a hard time running the latest version of a product, but could run an older version very fast.

The downside of course was that permanently activated licensed software was prone to piracy, and over the years the sales lost to product activation circumvention has been a vast, but literally uncountable figure. Software developers know this and network-managed licenses tied to accounts that are ultimately in the control of the vendor seems to be the final solution.

YoYo have not announced any plan to actually switch to a subscription model, but all the infrastructure is in place for them to switch to it at any time, and I expect that they will at some point. The writing is pretty much on the wall at this point. That day may not be in the near future, but it is probably inevitable that it will happen. Even if it doesn’t happen, users’ “permanent” licenses are anything but, so long as the user must authenticate to YYG’s product activation service on a regular basis, and may be subjected to termination if YYG deems they have violated ToS or EULA provisions. Or if YYG decide they want to stop supporting some old version of the product. Or if they go out of business, or get hacked, or whatever else.

To be clear, it’s not that I have a believe that YYG want to “screw” their customers; it’s that they have the power to do so, whether or not they ever actually exercise this power. No user wants this hanging over their head, and most tolerate it only because they’re unaware, and those who are aware tolerate it only so long as they aren’t bitten by it.

To be sure, it will never be the case that all GameMaker users will agree with every move that YYG will make with the product, and every time they do anything, there will be some users who will complain. Sometimes, some of them will have a valid point, that they are being screwed. Companies inevitably screw customers when it is not profitable to serve them.

My point is, historically it’s always been possible for disgruntled users to continue using the last version of the product that they were happy with. And for now, this continues to remain the case. Only, as of now, it only continues to remain the case for as long as YYG elect to allow it to.

Evolution of the status quo?

And, really, End User License Agreements and Terms of Service Agreements have always held such provisions, haven’t they? Users who do not agree with EULA/TOS are supposed to not use the software. Only, this was less enforceable before use of the software was tied to an account that you have to authenticate. This created both slack which allowed the users to get by even when they didn’t agree to every last term in an agreement, and tension when vendors could discern that agreements were not 100% adhered to, and felt that this was harmful to them.

That unresolved tension is in a slow process of snapping, and it’s the users who are bound to lose. I can say this with certainty, because software users are like any group of consumers, and consumers are averse to becoming organized an acting in solidarity, while businesses can only remain in business by being organized and being focused. Sure, on occasion people may raise their collective voices loud enough to be heard on issues like Network Neutrality and SOPA, but this is always a precarious, ad hoc affair, where the public’s interests are protected at the last minute, as though by a miracle. Companies can afford to play a long waiting game, and like a constrictor snake, squeeze a little bit further each time, never relaxing, until the prey is exhausted and expires. The bottom line is this: computers and software are becoming increasingly more like appliances, and less like tools. The only recourse users have is to stop using; if enough users do that, then they can kill a product. Of course, killing a product in no way creates a better, or more agreeable one. All user “victories” end up being pyrrhic in this sense. So in the end users are still screwed in a “take it or leave it” proposition. At a certain point, the only freedom attainable is to be your own programmer.

The alternative is for vendors and users to respect and support one another. To the extent that this happens, I guess we can say that software-based service companies will be successful. But really, I strongly suspect that users, much like medieval peasants, can tolerate a great deal of oppression and famine before they will revolt. So the existence of a market for software is not by itself sufficient proof of a free or happy market.

EULA/TOS agreements have for a long time now been treated as though they are contracts, even though the reality is that they fall short of being a true contract in numerous ways. Oftentimes, software usage agreements have provisions which are not legally enforceable, but including them is a “nice try” on the part of some lawyer who seeks to erode the public’s rights in some way that allows corporations to consolidate their power over the individual. Very often these “nice try” measures go unchallenged, and once they’ve been around for a while, there’s precedent for them, and suddenly they’re seen as “valid”. They go unchallenged, because users could ignore them without penalty, and pressing the matter in the courts was expensive and risky at best, not because they’re accepted. But by not challenging them, over time they become accepted and normalized.

I’ve never been happy about this state of affairs. Even as a kid, I could always smell something rotten about the idea that you could buy something and not actually own it, but only the limited right to use it under certain specific terms, which you could only agree to or not, with no provision of negotiation. It creates an unequal relationship where one side has nearly all the power, and the other side has very little, other than to boycott.

For this reason, I’ve always felt that licensing was a bogus business model, and that software should be owned outright by a customer who purchases it, with all rights that are implied by that statement. This belief comports much better with the values of the Free Software movement than it does with commercial software, and so for many years I’ve preferred to use Free software. For the most part, though, I’ve been a pragmatic believer in “best tool for the job” and if that meant the best software was commercial/licensed, then ok, but if it was Free/Libre software, then so much the better.

Wider ramifications

I see developments like this taking place in the world of commercial software, and in response I feel more strongly drawn to Libre software. But I don’t think that Libre software is necessarily the right use model for all software development, and I also don’t think that Libre software can protect all users freedoms.

For example, it’s difficult to see how a libre use model would work for entertainment software or art software. Where the point of the software is to provide a very author-controlled experience for the users to enjoy, certain software freedoms may not work. For example, the right to modify and redistribute modified software would mean, effectively, that companies could prey on indie developers who release an innovative game who assume all the risk of creating a novel experience, only to have it ripped off by a company who does very little innovation or risk taking, but positions themselves to exploit the creative work of others. Certainly, some user freedoms are important to preserve, such as the right to port an experience to other hardware, to create archival backup copies, and so forth, but I don’t necessarily feel that all user freedoms must be granted by a developer who is using software as an artistic medium, where the fact that the product is, contains, or uses software is incidental to the product being sold as an experience. It is fun, and allowable, and good, to enable users to create mods of games, but not a requirement or necessary in order for that software to be considered a work of merit. And playing a modded game is not the same experience of playing the original game.

And Libre software doesn’t protect all freedoms: we’ve all seen Libre software used in ways that abuse users rights. For example, much of the internet runs on a platform of Libre software, but provides a closed service to users which does not respect user freedom. I am only able to use Facebook, under Facebook’s terms; I can’t stand up my own Facebook service, which I might modify and redistribute. This despite Facebook being built on a stack of Libre software such as Linux, Apache, PHP, most of which are licensed under terms that say that users have the right to modify and distribute changes made to them, but that the source code must be distributed if the changes are distributed.

Web sites get around this by never distributing — “serving” the software is not “distributing”. You don’t install the source for Facebook on your computer and manage your own Facebook installation; Facebook is a service that you visit, on Facebook’s computer, and log in to it to use Facebook under Facebook’s terms. I’m not just picking on Facebook, they just happen to be the biggest website in the world right now. But pretty much every website ever has always worked this way: you can consume the service it provides, but you can’t own the software that provides the service, can’t install it on your own computer, can’t modify it to work the way you want/need it to, and are therefore subject to the terms under which it is offered by those who do own the service. And so, users are subject to these terms. And their data is collected, harvested, and used in ways that benefit the harvesters, not necessarily the users, and sometimes in ways which harm the users, or are counter to users’ interests.

The Libre software movement recognized a lot of end-user rights that are important, anticipated a lot of ways which those rights may be attacked, eroded, and compromised, but it failed to adequately safeguard all user rights against all possible attacks.

One could argue that by not doing so, it enabled the commercial internet to flourish into what is has become today. And while that’s true, that’s not an all-good proposition.