Gabe said that just the additional email they received over a few days cost them a million: "That's like 1% of the cost of the incremental email the program has generated for Valve employees (yes, I mean pissing off the Internet costs you a million bucks in just a couple of days)."
That seemed preposterous to me. It can't be the additional hardware expenses to store/process the mail, those are negligable. I suppose it's simply the time the support staff have to spend to weed out all the irate mails. But can that really amount to a million dollars? Existing solutions for combating spam must be sufficient to classify those mails and throw them away or send out the boilerplate message the support staff would have sent otherwise.
It's probably just a PR move. By pretending to have been financially hurt by this campaign they both stroke the ego of the internet gaming crowd and make it seem that they have been sufficiently punished.
I don't think Gabe's response was the result of a thorough financial analysis or specifically limited to just the costs of email. He probably did some "napkin" math and thought "shit, this probably cost us $1 mil when you add it all up"
> Existing solutions for combating spam must be sufficient to classify those mails and throw them away or send out the boilerplate message the support staff would have sent otherwise.
Except maybe (I haven't tried contacting them) Valve isn't the kind of company that annoys customers even more by bulk classifying their mails and sending generic spam back?
Seems about right, you have to tally up the entire economic cost. Salary costs of everyone handling this issue, the cost of them not performing other tasks due to handling this issue, it is not just weeding through emails.
I've been in an 2 hour long meeting with 8 people who are effectively paid $400hr to talk about how to handle a $58 fee.
A lot of that cost is probably in refunds. They're refunding purchasers of mods, but presumably they're not taking money away from mod makers. That would be 25% of the mod costs that they're eating. I doubt they sold $4m in mods in two days, but that plus other costs makes $1m seem plausible.
It isn't just the time spent sorting/filtering hate emails. It's the impact of time passing on issues in legitimate emails that is wasted. Running a platform on the web that has as large a scope as Steam does is incredibly tenuous (ask anyone that works on SaaS applications), and if you aren't efficiently getting the info you need from outside to identify and fix these issues, then you are going to lose money when those issues inevitably make an impact on functionality. Downtime = lost money
A million is a pretty ass-pull number in an offhand comment, but it wouldn't surprise me if it rang true.
This is probably a back of the napkin calculation of future lost sales and other actions. I could see it adding up to a large number. Valve really is not in a great position now considering the success of Origin and how current and future version of Windows will make further use of the MS store to sell software.
I mean, as a service I don't see any high cost to justify a 75% retain fee. The idea was definitely great, but execution was very poor. I would have been furious with them if I was a modder investing time and, sometimes, money to only get 25% on the price I was deciding for my mod.
This was a huge failure at so many levels... I hope they learned from this lesson.
Valve took their ~30% platform charge, and left the remaining amount to be split per the discretion of the publisher of the game, in this case Bethesda. Bethesda chose to give mod makers roughly 1/3 of the money left, resulting in a final split of Valve 30 / Bethesda 45 / mod author 25.
I can see why Valve deserves a cut, as distributor there are costs associated (though probably not anywhere near 75%). However I don't see why I need to give Bethesda a cut simply because it runs on their platform.
If I develop a Windows application, I don't owe any money to Microsoft. If I make a cocoa app I don't owe money to Apple, There's countless examples of people writing software that runs on top of other peoples copyrighted software. I don't think you can make an argument that it makes your work a derivative work. It's pure crazy to think that I would have to give a substantial cut of my revenues for that "privilege".
The game publisher, Bethesda, determined that amount. I think everyone would agree it's steep but that's what the games publisher wanted. If they rolled out these mods for different games, those publishers could choose a different percentage for splitting it.
Hmm ... the problem is that Bethesda were getting 45% ... which is absurd. I already paid for the game, the publisher should get at most 5-6% ... if the scheme was 10% valve, 10% bethesda, 80% mod creator - it would have been a different reaction.
Why should Bethesda get anything at all? Unless they're going to the trouble of making sure their official patches don't interfere with popular mods or something like that, they aren't providing additional value beyond providing the game that was already paid for. I think one of the issues in this wasn't just that mod creators would have gotten a small fraction of profit, but because Bethesda's behavior was somewhat rent-seeking -- attempting to normalize publishers getting a cut of sales that they hadn't gotten before, for doing no extra work.
Would it? A better cut for the mod publisher does not solve the problem of people taking publicly available mods that they did not make, and submitting them into Valve's system to get paid for work they didn't do.
-Bethesda gets a cut, but offers no guarantees concerning compatibility and user support.
-Mods usually use other mods for back-end functionality or as an augmentation. i.e. using a new cloud generation mod for an overall weather mod. It generally devolves into a legal tangle of who owns what and who gets what.
-The steam green light and early access marketplaces are becoming clogged with low-effort garbage that unscrupulous devs are trying to make a quick cash in. Steam has no structure in place to stop that from happening in the paid mod store.
-They poorly and shoddily introduced monetization in a model that didn't have one already in place, skewing incentives and placing the community under tension.
I really don't understand being mad at having the option to buy things. Don't like it? Don't buy it. What makes me mad is the inability to buy the apps I want as in the Apple App Store.
Most people weren't against the idea of paid mods. They were against the poor execution of it, including but not limited to:
* Stealing free mods and either directly uploading them or making a knockoff paid variant.
* The revenue split (30/45/25 to valve, Bethesda and the modder respectively)
* Resistance to change. Skyrim is old, it's modding scene established and entrenched around nexusmods.com and a certain culture. Valve/Bethesda disrupted it.
That's short-sighted -- one of the largest complaints was nefarious users profiting off of the works of others. From day 1 there were free mods being sold by random jackasses whom have no affiliation with the project.
The only remedy Valve offered was DMCA takedown notices or similar self-directed policing.
The whole Valve team are doing a great job with Steam, I hope gamers get on board with supporting companies that push the realm of gaming platforms, or at leave Valve.
~ When asked how much it would cost to piss off the Internet for 3 days, GabeN was unable to answer, until it was explained to him--yet again--that 3 is the number that lies between 2 and 4. At that time, he replied, "Now you're just making up fake numbers. The only thing I know of that goes between 4 and 2 is 'Dead'." Thus, the Internet remained pissed off, and Valve failed to earn a million bucks. ~
[+] [-] morsch|11 years ago|reply
That seemed preposterous to me. It can't be the additional hardware expenses to store/process the mail, those are negligable. I suppose it's simply the time the support staff have to spend to weed out all the irate mails. But can that really amount to a million dollars? Existing solutions for combating spam must be sufficient to classify those mails and throw them away or send out the boilerplate message the support staff would have sent otherwise.
[+] [-] detrino|11 years ago|reply
[+] [-] josefresco|11 years ago|reply
[+] [-] reitanqild|11 years ago|reply
Except maybe (I haven't tried contacting them) Valve isn't the kind of company that annoys customers even more by bulk classifying their mails and sending generic spam back?
[+] [-] BananaRepub|11 years ago|reply
I've been in an 2 hour long meeting with 8 people who are effectively paid $400hr to talk about how to handle a $58 fee.
[+] [-] delecti|11 years ago|reply
[+] [-] Rooster61|11 years ago|reply
A million is a pretty ass-pull number in an offhand comment, but it wouldn't surprise me if it rang true.
[+] [-] drzaiusapelord|11 years ago|reply
[+] [-] bontoJR|11 years ago|reply
I mean, as a service I don't see any high cost to justify a 75% retain fee. The idea was definitely great, but execution was very poor. I would have been furious with them if I was a modder investing time and, sometimes, money to only get 25% on the price I was deciding for my mod.
This was a huge failure at so many levels... I hope they learned from this lesson.
[+] [-] clinth|11 years ago|reply
Valve took their ~30% platform charge, and left the remaining amount to be split per the discretion of the publisher of the game, in this case Bethesda. Bethesda chose to give mod makers roughly 1/3 of the money left, resulting in a final split of Valve 30 / Bethesda 45 / mod author 25.
[+] [-] swalsh|11 years ago|reply
If I develop a Windows application, I don't owe any money to Microsoft. If I make a cocoa app I don't owe money to Apple, There's countless examples of people writing software that runs on top of other peoples copyrighted software. I don't think you can make an argument that it makes your work a derivative work. It's pure crazy to think that I would have to give a substantial cut of my revenues for that "privilege".
[+] [-] JibberMeTimbers|11 years ago|reply
[+] [-] venomsnake|11 years ago|reply
[+] [-] DanAndersen|11 years ago|reply
[+] [-] snowwrestler|11 years ago|reply
[+] [-] sleepyeng|11 years ago|reply
My big hangups were:
-Bethesda gets a cut, but offers no guarantees concerning compatibility and user support.
-Mods usually use other mods for back-end functionality or as an augmentation. i.e. using a new cloud generation mod for an overall weather mod. It generally devolves into a legal tangle of who owns what and who gets what.
-The steam green light and early access marketplaces are becoming clogged with low-effort garbage that unscrupulous devs are trying to make a quick cash in. Steam has no structure in place to stop that from happening in the paid mod store.
-They poorly and shoddily introduced monetization in a model that didn't have one already in place, skewing incentives and placing the community under tension.
[+] [-] donatj|11 years ago|reply
[+] [-] tehbeard|11 years ago|reply
[+] [-] ihsw|11 years ago|reply
The only remedy Valve offered was DMCA takedown notices or similar self-directed policing.
[+] [-] jebblue|11 years ago|reply
[+] [-] logfromblammo|11 years ago|reply
[+] [-] deathhand|11 years ago|reply