Tag: business

The Math: doing business on itch.io vs. GameMaker Marketplace

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Following up on my previous post comparing itch.io vs. the GameMaker:Marketplace, here’s some math that explains the difference in costs for selling an asset through each store.

YoYo Marketplace Itchi.io
base price  $1.99  $1.99
store’s cut  $0.60  $0.20
paypal’s cut  $0.36
net income  $1.39  $1.43
net income % of gross 70% 72%

As can be seen, the transaction fees are not included in itch.io’s cut, while they are included in YoYoGame’s cut.

For low-cost assets, this eats up much of the 20% difference between YYG’s 30% cut and itch.io’s 10%, resulting in just a 2% difference after the per-payment transaction fees are factored in on a $1.99 asset. A difference of 2% may not sound like much, but in business that’s actually huge.

The gap only widens with more expensive assets:

YoYo Marketplace Itchi.io
base price $19.99 $19.99
store’s cut  $6.00  $2.00
paypal’s cut  $0.88
net income  $13.99  $17.11
net income % of gross 70% 86%

For assets that are priced higher, the cost of transaction fees will be less of a factor, meaning the advantage of itch’s service model will only grow as the sale price increases.

In the end, it will come down to which marketplace is more effective at generating a volume of sales that makes publishing there worthwhile in the first place. With the current glitch affecting the performance of My Library, causing “large” purchase manifests to take several minutes to display in GM:S, it seems to punish GM:S users for purchasing a lot of assets, and this would seem to concede the edge to itch for now. I keep hoping that YYG will fix this bug, but I’ve been waiting over a year since I first reported it.

But clearly, there’s a need for transaction costs to go lower in order for low-cost items to be worth selling. I’ve been waiting for a viable micropayment system for going on two decades now, though, and nothing seems to be going on in that realm. (PayPal does offer a micropayments option to merchants, at $0.05 + 5% per transaction, but it does not appear that this is an option through either itch.io or the GameMaker Marketplace, and this fee schedule replaces ALL transactions paid to the account in question, not just microtransactions, so it’s not really an ideal solution.)

Of course, you can also adjust the cut that itch.io takes from you to as low as 0% if you want, but it seems fair to allow them to have something for the benefit they provide you, so they can keep operating. Bottom line, a 10% cut for the services that itch provides is a very good deal compared to what you can get elsewhere.

Itch.io also offers greater flexibility with payouts, allowing sellers to have access to their money immediately after every transaction if they wish, or to receive a periodic payout. YoYoGames holds seller’s income until it reaches a minimum amount of $100 before you can get paid, so essentially you get paid in $100 chunks, and YYG may end up holding up to $99.99 of your earnings indefinitely. Two years on, and I’m still waiting to collect my first payday from YYG — I’m a little over 3/4 of the way there now.

A great feature that itch.io offers but the GameMaker Marketplace currently doesn’t is bundle sales. Bundle sales can help by cutting many payment transactions for multiple assets down to one. I offered my four paid assets in a bundle at a 33% discount, and so far all of my sales through itch.io have come this way. Such an option would be a welcome improvement to the GameMaker: Marketplace.

Mods for sale

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Valve recently announced and then swiftly retracted that they would be allowing developers of mods for Skyrim to charge for their wares on Steam.

I don’t know a lot about the details of this story — I don’t play Skyrim, and I’m not familiar with the online gaming and modding communities that surround it, but apparently Valve went about it the wrong way and made a lot of people upset. I’d like to know more detail about this before I have an opinion on it, but I can say a few things about the idea of modding in general, and modding for commercial gain.

Update: based on this Forbes article, it does seem that there were a few things that I would agree were objectionable about the particulars of the way Valve and Bethesda went about, in particular the cut they wanted to take from the revenue generated by sales of mods, as well as concerns over modders who appropriated resources in other free mods and repackage them for sale, and so forth.

I’m pretty familiar with the concept and history of modding, and have done some modding of some games, going back to the 1990s, when I dabbled in making maps and physics models for Marathon (Bungie), and modded ships and weapons for Escape Velocity (Ambrosia). I never distributed my mods beyond sharing them with people I knew personally, but I got into the hobby because the tools were free and there was a sense of openness. There were no barriers to entry, and people authored good docs that explained how to use the tools and create good mods. Generally, the spirit of the modding movement has been that it’s something you do out of love and enthusiasm for a game. Licensing and copyright issues that might otherwise be more of a big deal are glossed over because the work is intended as amateur/homage, and not motivated by profit.

Of course, modding is an art and the quality of some of it is astoundingly good. Modding has been the “gateway drug” for many people who wanted to get into game development, and many talented people learned their craft through modding and went on to work in the industry, and even some modding projects have been turned into commercial products, like Team Fortress 2 and Counterstrike. All of this has been realized by the “remix culture” that embraces sharing and openness while eschewing things like ownership, commercialism, and profit. Everyone has benefitted from this: the original game benefits from added interest and lifespan, the players benefit from having lots of mods to play, the modders benefit by learning how to make mods and getting some recognition for their work if it’s good enough, and by having the freedom to mod, and they pay it forward by distributing the mods for free so that they can get free playtesting, etc.

That said, I don’t have any problem with a commercial market for mods, if certain problems can be avoided. I think that if a modder wants to release a mod for a game and charge money for it, that should be their right and their decision to make. In part, it should also be controlled by the original game’s license, but generally speaking I am in favor of permissive licenses that promote freedom and openness. And yes, that includes the freedom (to try) to make money. Game developers are some of the lowest-paid software developers, working in the most crowded and competitive of markets. Considering the amount of work that must go into a mod in order to make it good enough to be worth charging for, I don’t see it as unreasonable — at all — for creator/developers to try to make some money for their work. If some people don’t like it, they don’t have to buy it. Despite there being some pitfalls and areas prone to abuse, the dividing line between a mod and a full game can often be imaginary, but in any case the work that went into building them is real, and if a developer feels that they deserve some consideration for the time they put into crafting them, I see no reason why they shouldn’t be able to set up shop and attempt to get it.