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The cost of producing an add-on

Featured Replies

It was with great sadness that I read that Ralph Tofflemire's "Ready For Pushback" is not going to be developed much further, and that Ralph has had a belly-full of developing addon's for Flight Simulator.It doesn't take long to figure out why he takes this attitude...There seems to be the perception amongst the FS community that the major payware creators are making a fortune. Therefore they are supposed to be able to take abuse "on the chin". Well, as an exercise in costing, let's look at some (thumbsuck) numbers...(NOTE: I have no inside information at all - all these figures are just reasonable guesses)Development time for creating an aircraft payware add-on of the calibre of "Ready for Pushback":Model = 500 Man-HoursPanels = 500 Man-HoursPanel Programming & Flight Dynamics = 2000 Man-HoursResearch & Photography = 500 Man-HoursDocumentation = 300 Man-HoursMarketing & Web site = 200 Man-HoursBeta testing & Bug fixing = 1000 Man-HoursThat comes to a total of 5000 Man-Hours (and I guess this figure would be on the conservative side)If we now take an hourly rate of US$ 30/hour (This figure is probably very conservative and will vary from country to country) This gives us a development cost of $150000Now when the addon is sold, the distributor is going to take a cut of between 20% and 60%, so let's take an average of 40%.According to Ralph, there are "over 1000 users" of "Ready For Pushback" (including beta-tester's copies and promotional copies) so let' once again be conservative and say that he has sold 1500 copies of RFP at a price of R29.95 That gives us an INCOME OF $45000 less 40% distributors' margin = $27000and an EXPENSE OF $150000 Which leaves a LOSS of $123000!!!!Now the man has to put up with posts on his forum like:QUOTE:" So i download the airlines pak and SF off ur site and now my &^%(@*#%$ video card doesnt work, i need an explanation now! @#$# i spent 300$ on a new card, i need an explanation!!!#$#% ":UNQUOTESo, to get to the point of this long post...I regard FS add-ons as being works of art. Whether they are offered as freeware or payware, there is no way anyone is making pots of money.QUESTION: So what do they do it for?ANSWER: The love of the hobby and the love of creating things.Please, please remember this the next time you want to lash out in anger because there is a problem. If we alienate all the freeware and payware producers, what will happen to this beloved hobby of ours?Dave Britzius(Cape Town)

Very well thought out and written.While I greatly admire folks who push the limit of the envelope and really pour thousands of man-hours into something like the RFP there may be other factors at play here too why they are folding the tent. It may not only be because of abnoxious users but simply the product did not sell too well. Knowing what market will accept is a difficult art but I would say an older generation 747 may be tough sell simply due to complexities of modeling/operating panels designed for 3 people. They probably loved this airplane and decided to do it - I can't blame them for that - but had they poured all this effort into say a Citation 2 Jet the financial payback might have been brighter (just a guess).Michael J.http://www.reality-xp.com/community/nr/rsc/rxp-higher.jpg

Michael J.

Of course poor sales are a perfectly valid reason to close shop, but as Ralph has stated he doesn't need the money.And anyway, why create a complete new product if sales of the previous version were so poor? Why keep selling and supporting that poorly selling product for over a year, and not just cut your losses after a few months?Of course RFP was Ralphs 2nd (or is that 3rd?) 747-200 sim for MSFS, so he'd have known in advance that sales wouldn't be that hot (noone could have expected the popularity of FS2002 and FS2004 in particular compared with the lower sales of FS2000 and earlier versions), which is another indication that money isn't the primary issue here.No, it's the attitude of many users and as Ralph has stated a loss of interest in spending time and money on FS addon development in general.The ongoing discussions with an unnmamed airline and contacts with (possibly) another about turning it into a professional training device for them which would take a massive investment in time is of course another valid reason.But if you take a look at what's currently happening on the RFP support forums you'll notice that an RFP-only virtual airline is being created right now with the active support of Ralph and crew so they're certainly not out of the loop :)

>If we now take an hourly rate of US$ 30/hour >(This figure is probably very conservative and will vary from>country to country) >>This gives us a development cost of $150000>...>Now when the addon is sold, the distributor is going to take a>cut of between 20% and 60%, so let's take an average of 40%.>>According to Ralph, there are "over 1000 users" of "Ready For>Pushback" (including beta-tester's copies and promotional>copies) so let' once again be conservative and say that he has>sold 1500 copies of RFP at a price of R29.95 >>That gives us an INCOME OF $45000 less 40% distributors'>margin = $27000>and an EXPENSE OF $150000 >>Which leaves a LOSS of $123000!!!!>We're all just guessing as to what the actual costs were obviously.But I don't believe his costs were that high.If you spend $150,000 in development, that would mean your are estimating you will produce at least 3 times that amount in sales.If you make $450,000 in sales, then you you earned $270,000 after the distributer gets his 40%,so only $120,000 of that is actual profit for you, and you still have to pay taxes on it.And to even make $450,000 in sales, you'd have to sell 15,000 units, that's an awful lot for an add-on.I believe the development costs for such a project would be closer to the $20,000 ballpark or maybe even less (300 man hours for documentation is very unlikely IMO). But if he has sold 1500 units that's not much of an earning.But I think he probably did better than 1500 units sales wise, but even twice that doesn't earn you that big a profit. Regards.Ernie.

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I wonder if it has much to do with money, really?There is an unbroken expectation in the sim community that developers will operate support forums to provide technical support for their products, and users write any old rubbish and ask for help on any old issue, whether it has anything to do with the product or not. It's just another factor in this blame-everyone-else society we now find ourselves in. Trip and fall because you weren't looking where you were going? Sue the council for the pavement or the shoemaker for the soles of the loafers not being able to prevent stupidity at head level. At all costs NEVER accept personal responsibility. Somebody ELSE must be to blame.I know I've had to learn a lot about FS and computers generally than I ever expected I would have to in order to understand how certain things affect my computers performance. I wasn't a computer illiterate, but I had no desire to get `under the hood` of the computer until I realised that many of the issues I was facing were actually down to me and my computer. So I've learned. For me, it's been a pleasant part of the experience, but you see so many others who can't or won't, and then expect the answer to be handed to them as if they were the first to suffer a problem. As the addons get ever more sophisticated, so should the user. But it seems to be going the other way and that is enough to disillusion any developer.In another industry, a software developer noted that the help desk was receiving a rash of calls about the same issue that seemed to be affecting too many users to be coincidence. In an attempt to discover whether it was a bug that needed fixing they set about contacting 1,200 users and asked them some quick questions about how they used the software. IN 95% OF ANSWERS, THE USERS HAD NEVER READ THE 90 PAGE OPERATING MANUAL, yet 75% thought the software in error. Needless to say, the correct method of operation was located in the manual, and once it was pointed out to the users, the number of technical helpline calls fell by over 80%. It's probably the case that Ralph simply tired of telling people 120 times a day how to open the doors or what EPR stands for.Allcott

most of your estimates appear very off. some are far to much, a few sound just right, you would also be recounting man hours in some cases, beta testing and bug fixing, would also include some time spent on flight dynamics.looking at their website, that is not a 200 hour website, anyone who has any skill making websites could nock that out in a few hours, to a day, not 200i can pretty much say ther is no way he lost that much money. i doubt he lost any

  • Commercial Member

If you are somewhat interested to know, it could cost upwards of $100,000 depending on the product.What does a man year cost from in-house staff and administration... Plus associated federal taxes, fees. On top of that there could be travel, data, software, and equipment expenses.Plus there is overhead from the company which is somewhat fixed... this includes servers, quality bandwidth, office expense, storage, as well as hard production costs.On top of this there is piracy which hurts also. Sometimes pirates do not understand that families, including children, depend on this. We have seen some things that are so unrespecting of the effort we do it is actually sad to a degree.So development in many cases is very expensive. It is just the goal to overall give something that people feel is a good value for what money they are spending.So in a nutshell, I would say that, depending on the product, anywhere from $20,000 to $150,000 needs to be recovered before everything can be considered "break-even" for the company and other team members. This is factoring everything including man-hours and hard expenses.

Thanks,

 

Steve Halpern

Flight One Software

The website probably took that long.YOU think it's simple, but you didn't write it.Also, remember that website is not static. It needs maintenance over the lifetime of the product. Then there's the many hours managing the forums.Oh yes, a website can easily eat up 200 or more hours for a group like Ralph's Panelshop over the course of 2 years.

A couple of things:1. Unless a developer is actually paying him or herself and her programmers salaries, labor is not an actual cost. It is an opportunity cost - that is, what is being forgone by doing this work and not something else. 2. Only the develper can truly value the worth of his or her time based on their interests and values. Time modelling is not time working on paying jobs or time spent with friends and family. How important this is to the developer will vary. 3. Actual out of pocket costs for the vast majority of these add-on companies is the website, travel to take pictures of airplanes, digital cameras, design software and computers. 4. The economics of add-on development are quite similar to most other hobbies that become businesses. Collecting items that increase in value is enormously time consuming and probably far less lucrative than the time invested. 5. When it ceases to be fun, it is probably time to move on from a hobby/business. That is probably what's going on here for all, and probably many more of the reasons discussed. 6. Like it or not, if you start asking people to pay for your product, you take on responsiblities for customer service, customer communication, quality control and doing what you say you will. 7. Like it or not, some customers are pigs, plain and simple, taking out the frustrations, disapointments and fears in their lives on others. Accepting this and simply ignoring these people is not easy -but essential to business. 8. The customer is NOT always right. Southwest Airlines, an outstanding company, puts its employees first, customers second in the belief that an empowered employee will serve the customer better. They also believe that by catering to unrealistic expectatsions is not a good business practice. 9. I did not buy RFP for one reason - very complex plane that in real life requires three crew members. I like flying. I don't like pushing a lot of buttons. Give me a "captain" simulator please, not a systems one. Nothing wrong with that and not a criticism of the product. Just not my cup of tea. Best,

>>1. Unless a developer is actually paying him or herself and>her programmers salaries, labor is not an actual cost. It is>an opportunity cost - that is, what is being forgone by doing>this work and not something else. This is true, but that does factor into the price.Time lost of say a single developer may be nights and weekends, etc.So when that project is done, he may have to make amends to the family. Its not unreasonable for the family to expect some sort of lifestyle improvement in return for the opportunity sacrifices from that product during its development. Else why are they putting up with it ?That improved lifesyle does have a monetary cost, that ends up being an indirect cost of development, cause its gonna come out of the profits.Regards.Ernie.

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>There seems to be the perception amongst the FS community that>the major payware creators are making a fortune. Therefore>they are supposed to be able to take abuse "on the chin". I've been around since FS 1.0 and I've yet to encounter that viewpoint. I HAVE encountered users who are critical of software that doesn't work the way they'd like it to work and expect customer service when they spend their money. The moment you charge for something, the rules change permanently and you had better be willing and able to deal with opinionated customers. If you cannot or will not then this is not the occupational path you should be on.>Development time for creating an aircraft payware add-on of>the calibre of "Ready for Pushback":Your numbers all look way too generic to be of any real use.>Documentation = 300 Man-HoursThis, for example, is ludicrous. 7 1/2 weeks to produce documentation at 40 hours a week? 8 hours a day? Every day? NO WAY. I've written 600 page technical books in less time and not doing it full time. Their manual is 325 pages with a lot of graphics. It's a lot of work, but not nearly 8 weeks of non-stop work.>If we now take an hourly rate of US$ 30/hour Bzzzt, there's another issue. It doesn't work this way. $30 an hour is roughly $60,000 a year, which, right now is a decent salary for an average programmer with full benefits and job security. This is a personal effort that grew from a hobby. It wasn't factored out that way. If a developer expects to make this sort of money for his efforts, again, he's in the wrong business as 90% of these types of efforts will never gain a following large enough to make it worthwhile. Heck, if you just double your number, that would qualify him as being "rich" and you don't get rich in this area.>According to Ralph, there are "over 1000 users" of "Ready For99.999% of the time, you can take developers quoted customer numbers and throw them completely out the window. First, that number is probably heavily inflated. Second, it includes the lifetime of users, many of whom are one-time customers.>QUESTION: So what do they do it for?>ANSWER: The love of the hobby and the love of creating>things.And that's about how it should be.>Please, please remember this the next time you want to lash>out in anger because there is a problem. Goes with the territory. It cannot be helped. You want to producing something for public consumption, you're going to get public commentary.>If we alienate all the freeware and payware producers, what>will happen to this beloved hobby of ours?It will continue on just like it always has. Look at add-ons from just 2 versions ago. Most are now entirely gone. A new crop of people are constantly showing up to replace the older crop.

While your point is well made, I dont think your estimates are accurate. I think they are high in a few respects. It doesnt take 300 hours to do documentation. I'd be surprised if it took 50. Most of the web sites are also not a big deal. However they do cost money.I'd say most of the time is in research and in the panel programming and the FDE. However that also depends on the airplane. Eric

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  • Commercial Member

I do want to point out that some companies have full time staff on payroll. If a year's worth of man hours of this staff goes into a product, you can imagine the cost.I wanted to raise this scenario because there are many cases where money could actually be lost, rather than money not being realized because a developer worked on this in spare time that has no "cost" to it.

Thanks,

 

Steve Halpern

Flight One Software

I can certainly appreciate such a loss. The market is small in the first place. So would seem critical to have a LOT of products out to spread the cost of overhead and to keep prices as reasonable as possible for all concerned. I can also imagine that most of the staff is multi-tasking on multiple products etc. Eric

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