dsears@CIE.UOREGON.EDU (02/16/90)
The open letter below was on a local BBS, and I pass it on because I think
some net.programmers might find it interesting and useful.
=============================
The Puzzle Factory, Inc.
P.O. Box 986
Veneta, OR 97487
(503) 935-3709
08 February 1990
Dear fellow Amigan,
For several years I had pondered the state of the software industry from
the point of view of a programmer developing a new program, and what I
saw bothered me quite a bit. They had several choices: all bad!
They can go the traditional route and sell it to a Software house.
Software houses may buy the program outright if they think it's a real
killer. In one typical story a programmer was overjoyed to receive $75K
for their program only to later learn that the company already had a
marketing slot for it, and made over $2M in the first year of sales.
On the other hand they may elect to pay the programmer royalties -
typically 5-15% of the *net*. Guess how small the net is by the time
they get down to figuring royalties?!?
If this isn't appealing, they can give shareware a try. We all know how
honest users are, and how they all promptly send in their checks, and
how profitable shareware is. A very well known Amiga programmer wrote a
much needed and very well written utility. It soon reached market
saturation, with an estimated 50,000 copies in daily use. After less
than 1/10 of 1% of its users sent in checks, he gave up on the shareware
market and is now marketing other programs commercially. Writing and
mailing a check is *hard work*! 'Nuff said.
A third choice is trying to market your creation yourself. Given the
need to have a fair amount of expertise in publishing, packaging,
marketing, and other esoteric callings, not to mention the inordinate
amount of time and energy needed to get a new product off the ground,
this is obviously something that is *not* for everyone.
I thought this was all pretty dismal, and for a long time I pondered
what I (or anyone) might do about it. Programmers spend a lot of time
and effort learning a system, and writing that great new program. They
should profit from this work. I finally came up with what I felt was an
innovative idea, and it became The Puzzle Factory.
We look for excellent tools for the Amiga. When a program is found, we
develop it into a commercial product, and promote it to appropriate
markets. We split the expenses and the profits equally with the
program's creator. We sell direct to keep down expenses, and pass these
savings on to the buyer. Because of our interaction with the program's
author, we are able to give an outstanding level of customer support.
Our first program was ReSource, an intelligent, interactive
disassembler, written by Glen McDiarmid of Queensland, Australia.
Without undue modesty, this is *the* best disassembler available for
*any* personal computer.
ReSource was a shareware program when we got involved. It was a great
program, but needed to be developed into a commercial product. We
worked with the author to get the documentation into shape, printed the
manual, and designed the package. We have also been aggressively
marketing ReSource to the Amiga programming community.
The Puzzle Factory has a current need for excellent productivity and
development tools for the Amiga. If you have such a program with
commercial potential, please contact us. We'd like to add you to our
family. If you know of a programmer in your area that has a diamond in
the rough, please share this letter with them.
We feel that The Puzzle Factory is an excellent alternative to shareware
or customary commercial marketing. Please feel free to contact us with
any questions you might have.
Jeff Lavin, President
The Puzzle Factory, Inc.
--
===================================
Doug Sears dsears@cie.uoregon.edu
===================================news@tcr.UUCP (John B. Sobernheim) (02/17/90)
In article <9002160434.AA12227@cie.uoregon.edu>, dsears@CIE.UOREGON.EDU writes: > The open letter below was on a local BBS, and I pass it on because I think > some net.programmers might find it interesting and useful. > ============================= > The Puzzle Factory, Inc. > Dear fellow Amigan, > For several years I had pondered the state of the software industry from > the point of view of a programmer developing a new program, and what I > saw bothered me quite a bit. They had several choices: all bad! [his views of different marketing solutions edited] > should profit from this work. I finally came up with what I felt was an > innovative idea, and it became The Puzzle Factory. [description of Puzzle Factory concept deleted] > program's creator. We sell direct to keep down expenses, and pass these ^^^^ ^^^^^^ This is where I have a problem with your idea. By selling direct to the end user, you are limiting your market to the few that actually see your advertisements or download your demos. With an excellent product like ReSource, you will get some extra business from word of mouth, but nothing like the kind of exposure you can get by making just one store employee excited about your product. The result is that you are losing sales. > Our first program was ReSource, an intelligent, interactive [information about the author of ReSource deleted] It IS very good, however, we sell DSM. The profit motive and all that, you know. We can stock it, demonstrate it in action, fix defective copies quickly, and allow the users to peruse the manuals before making an informed purchase decision. [plea for new software titles deleted] > We feel that The Puzzle Factory is an excellent alternative to shareware > or customary commercial marketing. Please feel free to contact us with > any questions you might have. > I feel that marketing software direct to the end user results in a loss of sales due to the limited exposure available via such routes as advertising and downloadable demos and the loss of the exposure that can be generated by computer software and hardware dealers. > Jeff Lavin, President > The Puzzle Factory, Inc. > -- > =================================== > Doug Sears dsears@cie.uoregon.edu > =================================== -- John Sobernheim ...boulder!tcr!news || news@tcr.UUCP The Computer Room ...CIS 76625,1210 Denver, Colorado ...But moma, that's where the fun is! (Manfred Man)
richard@stb.uucp (Richard Conner) (02/20/90)
In article <9002160434.AA12227@cie.uoregon.edu> dsears@CIE.UOREGON.EDU writes: >The open letter below was on a local BBS, and I pass it on because I think >some net.programmers might find it interesting and useful. > >For several years I had pondered the state of the software industry from >the point of view of a programmer developing a new program, and what I >saw bothered me quite a bit. They had several choices: all bad! We tend to agree. >They can go the traditional route and sell it to a Software house. >Software houses may buy the program outright if they think it's a real >killer. In one typical story a programmer was overjoyed to receive $75K >for their program only to later learn that the company already had a >marketing slot for it, and made over $2M in the first year of sales. "Typical" horror story... the "Software House" basically "buys off" someone they know to have a product that could be sold very succesfully for a "pitiful" amount compared to what the program will earn for the company. >On the other hand they may elect to pay the programmer royalties - >typically 5-15% of the *net*. Guess how small the net is by the time >they get down to figuring royalties?!? I keep hearing this 5-15% royalty number everywhere also. "ooh how generous." >A third choice is trying to market your creation yourself. Given the >need to have a fair amount of expertise in publishing, packaging, >marketing, and other esoteric callings, not to mention the inordinate >amount of time and energy needed to get a new product off the ground, >this is obviously something that is *not* for everyone. Obviously this takes alot of time and energy, not to mention resources and contacts. Well, before you "commit" to some other "Software House" contact as many as you can, and be sure to find out details about what each will give you as far as one-time payoff, or royalties. Then... talk to us. We don't believe 5-15% royalties are quite fair to someone who may have worked quite awhile on something. Especially considering the fact that "games" are almost guaranteed to sell more in the Amiga market than "utilities." We are interested in helping provide the non-game market with as much quality and usefull product as possible. This is what will help sell the Amiga into the larger businesses. We have contacts with the two largest Amiga distributors in America, and smaller distributors as well. We also have on hand a full-time Artist as well as printing, and packaging contacts. We also have the advertising contacts. So instead of going shareware, or settling for "generous" 5-15% royalties - talk to us, depending on the quality of your product we may offer royalties upwards from 25% (or higher depending on quality and saleability of your programs) We also have on hand Full-time expert Amiga programmers available to perhaps add that final polish to your program. We felt you'd like to know of "other" alternatives. -Richard Conner Conceptually Advanced Technologies P.O. Box 3302 Santa Monica, CA 90403 213/452-1732 -- [ .signature under construction - turn back before it's too late ]
peter@sugar.hackercorp.com (Peter da Silva) (02/22/90)
For Tracers, we got 12% of gross receipts. Sounds good, no? None of this "net"
stuff. Trouble is, they got a second company to do all the production work,
which cut the gross receipts way down. They also promised they'd do ports of
the game. So here I am corresponding with the programmer doing the IBM-PC port
and she stops writing. So I call her up on the phone "Oh, they cancelled the
port, didn't they tell you?".
Alternative marketing sounds more and more desirable.
--
_--_|\ Peter da Silva <peter@sugar.hackercorp.com>.
/ \
\_.--._/ I haven't lost my mind, it's backed up on tape somewhere!
v "Have you hugged your wolf today?" `-_-'mike@ames.arc.nasa.gov (Mike Smithwick) (02/25/90)
In article <5194@sugar.hackercorp.com> peter@sugar.hackercorp.com (Peter da Silva) writes: >For Tracers, we got 12% of gross receipts. Sounds good, no? None of this "net" >stuff. Trouble is, they got a second company to do all the production work, >which cut the gross receipts way down. They also promised they'd do ports of >the game. So here I am corresponding with the programmer doing the IBM-PC port >and she stops writing. So I call her up on the phone "Oh, they cancelled the >port, didn't they tell you?". > >Alternative marketing sounds more and more desirable. >-- > _--_|\ Peter da Silva <peter@sugar.hackercorp.com>. >/ \ >\_.--._/ I haven't lost my mind, it's backed up on tape somewhere! > v "Have you hugged your wolf today?" `-_-' Peter didn't mention the terms of the contract regarding ports, but always specify ports in the agreement. The contract should say if it covers licensing rights for just the Amiga version, or all versions. And if it covers all, make sure those scoundrels have a strong incentive to do the ports. That is, if a Mac port isn't completed within XXX months, they loose the rights to it, or perhaps the entire product. Never assume anything no matter how sincere the publisher is. The agreement should also specify royalites for ports as well. This could also be applied to foreign language versions. My previous publisher floundered around whenever the discussion turned to doing a German version of Galileo. I put a German language clause in my new contract and it shipped two weeks ago, only 6 months after signing. *** mike smithwick *** "E Pluribus Unix!" [disclaimer : nope, I don't work for NASA, I take full blame for my ideas]
mike@ames.arc.nasa.gov (Mike Smithwick) (02/25/90)
In article <1990Feb19.233223.11341@stb.uucp> richard@stb.uucp (Richard Conner) writes: >In article <9002160434.AA12227@cie.uoregon.edu> dsears@CIE.UOREGON.EDU writes: >>The open letter below was on a local BBS, and I pass it on because I think >>some net.programmers might find it interesting and useful. >> >>For several years I had pondered the state of the software industry from >>the point of view of a programmer developing a new program, and what I >>saw bothered me quite a bit. They had several choices: all bad! > >>They can go the traditional route and sell it to a Software house. >>Software houses may buy the program outright if they think it's a real >>killer. In one typical story a programmer was overjoyed to receive $75K >>for their program only to later learn that the company already had a >>marketing slot for it, and made over $2M in the first year of sales. > > "Typical" horror story... the "Software House" basically > "buys off" someone they know to have a product that could > be sold very succesfully for a "pitiful" amount compared > to what the program will earn for the company. Developer beware! If the developer was willing to accept $75K for his program, so be it. That's why I caution people against selling their software outright. They should always retain some level of ownership in the package if the sales go well. On the other hand, what if the company failed? What if they sold only $200K and then withdrew the product? The $75K would have been a real good deal then. (Even then, partial ownership might permit the developer to regain his rights so he could then go to another company). > >>On the other hand they may elect to pay the programmer royalties - >>typically 5-15% of the *net*. Guess how small the net is by the time >>they get down to figuring royalties?!? > > I keep hearing this 5-15% royalty number everywhere also. > "ooh how generous." > First you don't accept royalties based on net, ever. A company could hire "uncle Ned" as a special consultant to marketing your product, pay him thousands and say, "Well, I sorry, but we just didn't make any profit this quarter. . ." The 5% to 15% rate is pretty standard, depending on how finished the final product is. If you come to the company with a slick Object oriented drawing program which still needs postscript support. And the company foots the bill for hiring some hotshot PS jocks to finish it, don't expect 15% royalties. Otherwise if you program is completed, debugged, and with manual, don't be afraid to argue for 18% or more. Now, if you have a known product with a good reputation and established user base, you can probably talk the publisher into substantially higher figures. (Another argument for jumping to another publisher the moment your current one screws up.) Also, note the economics of publishing. Introducing a game for instance, into the Amiga market will take $15K to $30K. And since distributers work generally on a 90 to 120 payback plan the publisher may not see any money for 3 months or more from shipping date. Plus they must buy ads 2 or 3 months ahead of time in the major magazines (perhaps the largest single expendature), so they're out thousands of $$ for at least 5 months before anything comes back in. With an I*M or Mack product its much worse since the ad costs are so much higher (a full page ad in a major magazine might run $8K to $10K or more!). Once you subtract packaging cost, your royalties, advertising, tech support, and general office help, the publisher may end up with only a few bucks profit on a game. Not much more than the developer's own 15% royalty. >>A third choice is trying to market your creation yourself. Given the >>need to have a fair amount of expertise in publishing, packaging, >>marketing, and other esoteric callings, not to mention the inordinate >>amount of time and energy needed to get a new product off the ground, >>this is obviously something that is *not* for everyone. > > Obviously this takes alot of time and energy, not to mention > resources and contacts. Well, before you "commit" to some > other "Software House" contact as many as you can, and be > sure to find out details about what each will give you as > far as one-time payoff, or royalties. > Amen brother! I talked to a dozen different places, Epyx, Antic, Discovery, etc, and each had their own potiential sales figures, policies on advances and so on. The going rate of advances on royalties on Amiga products with Epyx was around $15K to $20K. Most of the other other companies, both large and small said "advances? What are they?". If a company says that they want to market you product, you already know that it is good enough to be a commercial money-maker. So don't fall down and kiss their feet, since if they think it will sell, chances are other firms will feel the same way. So take your time, don't sign the first contract that comes along. It may take months, but it will be worth it if you link up with a real first rate publisher. >Then... talk to us. Sure, why not. >We don't believe 5-15% royalties are quite fair to someone who may have >worked quite awhile on something. Especially considering the fact that >"games" are almost guaranteed to sell more in the Amiga market than >"utilities." Not necessarliy. The average game will sell 85% of it's potiential in 4 months. The average Amiga product sells about 4000 copies. Since games are generally one-shot deals, expect to sell about 3400 units, with another 600 in residule sales. If a utility or business package is any good, its liftime will probably be much longer then 4 months. Witness Lotus, Weirdperfect, Aztec-C. So even if it sells only 2000 copies a year, within 2 years you would have beaten the "average" game. And considering the fact that untilities, et al generally cost more then games, that is, earn bigger profits, you'd be ahead. Also since non-game software will probably be upgraded every 1 to 2 years, it can continue earning money thru upgrade fees long after the original sale. >We are interested in helping provide the non-game market >with as much quality and usefull product as possible. This is what will >help sell the Amiga into the larger businesses. Great! We need that!! >We have contacts with the two largest Amiga distributors in America, and >smaller distributors as well. We also have on hand a full-time Artist >as well as printing, and packaging contacts. We also have the advertising >contacts. So instead of going shareware, or settling for "generous" >5-15% royalties - talk to us, depending on the quality of your product >we may offer royalties upwards from 25% (or higher depending on quality >and saleability of your programs) We also have on hand Full-time expert >Amiga programmers available to perhaps add that final polish to your >program. We felt you'd like to know of "other" alternatives. > >-Richard Conner >Conceptually Advanced Technologies >P.O. Box 3302 >Santa Monica, CA 90403 >213/452-1732 If a company comes to you and offers 25% royalties and promises massive sales (to make it worth their while),, you can conclude three things : a) They don't know what they're talking about b) They trying to take you for a ride c) They don't want to earn money Chances are it'll be a or b. So be careful. If they offer you a contract, make sure to hold them up to their original promises and think twice about giving them slack. The idea is to be able to go somewhere else the moment reality hits. (If you think that someone else can do a better job that is). Don't be afraid interview prospective publishers about financing, outstanding debts, previous funky goings on, sales plans. . .. Get names of their other developers and call them up to find out about their experiences. Call up distributers to see how reliable these guys are. Even if it all checks out, I would still be a bit wary. The company may be sound and may be able to operate and earn money with generous royalties. But what happens if a software slump comes for a few months (witness Epyx downfall), will they have been able to make enough to get through it? What happens if they start new development, and it takes alot longer and costs alot more then estimated? Would they have $100K extra if they needed it? Would they be able to secure bank loans? Working with a publisher can be a real nightmare. I know! It can also be a real dream if you find the right one. After talking with all of these other publishers for 8 months and collecting extensive notes, I think I found the best of the lot for my software. It took time and it was well worth it. I with the best of luck to Richard and Co. and look foward to seeing what wonderful products they have in store for us. More ramblings from. . . *** mike smithwick *** "E Pluribus Unix!" [disclaimer : nope, I don't work for NASA, I take full blame for my ideas]
peter@sugar.hackercorp.com (Peter da Silva) (02/26/90)
In article <43591@ames.arc.nasa.gov> mike@ames.arc.nasa.gov (Mike Smithwick) writes: > Peter didn't mention the terms of the contract regarding ports, but always > specify ports in the agreement. Yeh. Next time (if there is a next time) we be sure we dot the ts and cross the is. But alternative marketing still sounds desirable. -- _--_|\ Peter da Silva <peter@sugar.hackercorp.com>. / \ \_.--._/ I haven't lost my mind, it's backed up on tape somewhere! v "Have you hugged your wolf today?" `-_-'