andy (02/14/83)
I am writing in response to a note requesting information about selling
independently developed software in the current personal computer marketplace.
Having developed and sold two products ("Wizardry" and "Knight of Diamonds"),
I have the following suggestions to individuals wishing to market software.
Today's recreational software for the Apple, Atari, and IBM PC computers
is a two-tiered market. Most authors usually license a software "manufacturer"
exclusive distribution rights for a particular program, computer, and medium.
The manufacturer duplicates, packages, and advertises the product, paying the
author a royalty (usually between 10-25% of manufacturer's gross). The
manufacturer sells most software to the large distributors (such as
SOFTSEL, Micro D, Eastern, and the like) who sell to the software dealers.
Although some authors, such as (Raster Blaster) Bill Budge have been
successful in manufacturing their own software, it is a full-time occupation
and not a pleasant one for potential authors. (whose time is better spent
coding than copying disks) Furthermore, even big names like (Snack Attack)
Dan Illowski and (Ultima II) Richard Garriot are finding it hard to break
in at this late date. Distributors are particularly hard on these new
companies, having obtained a stranglehold on the distribution networks.
(SOFTSEL being the most effective at this)
Thus, I would recommend that new authors look to the larger,
already established companies to manufacture their software. Companies
such as Sir-Tech, Sierra On-Line, and Sirius Software have earned good
reputations in the industry for being reliable and prompt with royalty
payments. They are also far better equipped in getting products on the
market quickly than individuals.
I would recommend that the prospective author write each of these
companies and others (see the advertiser's index in Softalk, Softline, Byte,
Creative Computing, etc for names and addresses) and ask for a non-disclosure
agreement and standard contract. Compare these and don't be afraid to
try to negotiate better terms. Be sure to retain residual rights for
things such as translations to new machines, cable distribution, new
media, and so forth. Make certain the royalty is not based on
"profit", "net income", or the like. Don't be afraid to shop around,
it will substantially improve the royalty offered. If a company wants
your software in this competitive market (and its getting VERY competitive)
they will usually be flexible for a few points of royalties. There most
certainly is no standard rates yet in this young market.
But be CERTAIN to obtain that non-disclosure before sending a disk!
There has already been some litigation in this industry for companies
offing with evaluation products....
Good Luck,
Andrew Greenberg
Dept. Computer Science
Cornell University
Ithaca, New York 14850
andy@cornell -or- cornell!andy