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The cost of producing an add-on

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Eric,I thought long and hard about joining this thread, but I can't resist. I guess I might ask when was the lsat time you tested and documented a very detailed software project? Preparation of the documentation for Ralph Tofflemire's excellent 742 took over 9 months of weekends and hours of testing, rewriting, flying a little, testing and rewriting to make the documentation worked and reflected the software. And then again more and more hours fixing and revising for the Version 2 product.I never asked for a penny, nor did I receive a penny for my efforts .. and I am very sure that most of the people involved with RFP were involved as a labor of love, not for big bucks, or any bucks for that matter. I bought the original 747-200 documentation from ESSCO and spent lots of $$$ of paper and ink-jet carts preparing the doc. Not being an engineer or aeronautics expert of any kind, I had to learn all of this stuff before writing. For years I was a PS1.3 flyer, so my main techincal "knowledge" was of the -400 series and not its predecessor and it's automated "non-automation." For me this was the project of a lifetime, taking the time, diving into the complexities and gory details of a very wonderful airliner and all of its moving and non moving parts. Pure knowledge and learning for the sake of learning something totally different than any other thing in my otherwise mundane life I have no clue about the sales or finances of the RFP project, and all speculation here is simply useless silliness. Suffice it to say, there were many people involved for a very long time in the development and testing of RFP.Steve Halpern and Lou Betti know more than any of us about the economics of the add-on business ... and I believe they are certainly EXPERTS at balancing a life and the demands of this business ... and, as Steve has pointed out, experiencing the "sadness" of seeing huge amounts of work and intellectual property being ripped off, complained about and generally disrespected.O wellHappy Memorial Day!!!! (to the US readers)Happy Weekend (to everyone else)

Well, there's a good deal of interesting commentary and food for thought in the thread.Here's my two cents as a nonremunerated hobbyist with a very expensive masters degree in business...The chasm between hobby and business is wide and deep. When talented designers, programmers, and flight dynamicists produce a freeware add-on, they're absolutely entitled to oohs and ahhhs and praise heaped on praise...it is, after a gift to us all. And from my experience, mostly with production of compatibility mods and re-engineered FDEs intended to replace faulty commercial releases, 90% of the feedback is thankful, and reward enough for the effort made. And I can look past the other 10% with the knowledge there are buttheads everywhere, and the internet seems to attract that crowd in greater proportions than they exist in the general population.But when the endeavor turns into a business, the users are no longer doting and thankful giftees, but intead now rise to the rank of customer. Customers have expectations...often varied, and often unreasonable, but they have expectations. The manner in which their expectations are met is what decides the success or failure of a business. A good business should set reasonable expectations from the outset...and must deal professionally with even the rudest and most unreasonable customers. I think that many payware developers that make the leap from hobby to business are just not prepared for the fundamentally different nature of a paying customer vice a grateful gift recipient. In business one needs a thick skin, the ability to deal fairly and unemotionally with customers and their expectations, and the ability to deal with adversity without taking things personal. And if the motivation behind producing a quality add-on is the need for recognition or appreciation, it's quite likely to be a disappointment once commercialization occurs. Many--in fact probably most--people do not feel that they need thank a commercial supplier for the privelege of buying something from them...even if it's an incredibly good value. Some will express their customer satisfaction, but most people, when they go into customer mode, tend to feel that payment rendered should be thanks enough. That's bidness...like it or not.I think there are a fair number of folks that enter the payware arena, not to make a living, but to be able to show something for their efforts, and possibly to defray non-labor development expenses like software tools, hardware etc. Those folks place themselves in a particularly difficult position, because they're trying to be half-hobbyist and half-business, and may not realize that once money changes hands, it's virtually impossible to shed the mantle of businesshood when dealing with their clientele.IMHO, the FS add-on market is dominated by business amateurs, with a few notable professional organizations dotting the landscape (like PMDG and Flight1). It's pretty evident when you go to a support forum whether you're dealing with the business pros or the amateurs. Support forum postings and e-mails that exude no apparent sense of responsibility to help satisfy a customer are far too prevalent, as are emotional "back in your face" replies to the unhappy campers. Support answers like "Gee, it works on our system here" are tantamount to telling a customer "go away with your silly problem." The "we're right and you're wrong" approach is another horrendous business practice, like PSS's proclamations of flight testing by a real XXX pilot in an effort to to deflect legitimate criticism of some obvious and very poor flight characteristics in several of their add-ons. Likewise, intentionally placing mechanisms into products to limit how the customer might use them (like the RFP2 attempt to make the panel operate only with their own model) is an antagonistic practice from a customer viewpoint, and likely to draw the unabated ire of even otherwise satisfied customers. It's one thing to decline support for modifications made by a customer...quite another to attempt to tell a paying customer that you are doing your best to actively prevent them from modifying the product to better meet their needs.Anyway, we'll miss Ralph's presence in the hobby, but nobody, except possibly Pete Dowson, is irreplaceable. There will be others. In the meantime, the professional businesses seem to be flourishing just fine. And the freeware makers continue to expand the possibilities by leaps and bounds. And I'm sure Ralph won't be the last hobbyist-gone-commercial to fall into the trap. Some sage old advice says not to try and turn your life's loves into your life's vocation.CheersBob ScottATP IMEL Gulfstream II-III-IV-V L-300Washington, DC

Bob Scott | President and CEO, AVSIM Inc
ATP Gulfstream II-III-IV-V

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Hi Paul,I will take this opportunity to say "Thank you!" for a truly comprehensive, exhaustive and beautifully written manual! I'm still learning the B-742 systems and I have yet to find something that isn't covered in the manuals. It is great to have manuals which do not simply tell you to push this and that button, follow the checklists, but actually explain the whole (sub)system and it's inner workings. Superb! Regards,Jurehttp://www.panelshop.com/RFP_Junior_Pilot.jpg

We must agree with Steve Halpern and Lou Betti on this one....Steves numbers may be a bit conservative...depends on the project:-)It's easy to think that developers "have it made" when it really is a ton of work:-)Sorry to see good people dropping out though:-(

  • Moderator

The concept of "opportunity cost" has been introduced into this discussion. Unless the modeler is on a salary, or guaranteed minimum + commission on sales, then the entire amount of time spent on any aspect of a project is indeed, an "opportunity cost," not only for the employer, but also for the employee!During the course of my latest project work, I've devoted an enormous amount of time on development and testing, which COULD have been spent working for an employer who provides salary + benefits. So ultimately, this "opportunity income" was never realized.What I am banking on (pun intended) is that the sales of my work will - over time - provide at least some small percentage of the lost "opportunity income."But, I am here to tell you folks, when I go to the grocery store or buy gas for the car, I don't get a discount... It's deucedly difficult to pay recurring expenses such as food, clothing and shelter based on potential future "opportunity income..." :)

Fr. Bill    

AOPA Member: 07141481 AARP Member: 3209010556


     Avsim Board of Directors | Avsim Forums Moderator
  • Author

"I wonder if it has much to do with money, really?"I don't know Ralph all that well, and even then, only remotely - i have never personally met him that I can remember (and Ralph, if that is incorrect, my apologies and chalk it up to my senility quotient). But, I doubt that money is the issue. I wonder why people cannot accept the concept that somethings people do are a labor of love, and if you can earn additional income in doing so, then that is just gravy on the meatloaf, so to speak. Some decide to seek a little return on their time and others freely share with the community. IMHO, there is nothing wrong with either (or someone trying to make a living out of the hobby as a full time job - that's okay too!).AVSIM doesn't produce software or add-on's for flight simulation. For most users, we seem to be "just there"; a presence that is not recognized as a "product", whether it be shareware, freeware or commercial. Just there. Again in my humble opinion, we are just as substantially a "product" as any add-on to your flight sim and maybe even more so. And, were I to calculate the hours our volunteers spend creating and maintaining this site, day in and day out, 24 x 7 x 365, there is no producer of freeware, commercial or shareware products that would come close in time invested in their "product". Not even by half.Let's do a mental exercise for a second; were I to guess at the number of hours all AVSIM volunteers spend a week in writing reviews, doing news items, maintaining the site and the servers, moderating the forums, and all the thousand little minutia that we have to deal with daily, I would guess that you are looking at somewhere in the vicinity of 500 to 750 hours of man hours a week. Let's be conservative and use the 500 number. Now, if (and we don't, so let's be clear about that) we were to pay our staff at a typical average professional rate of $45.00 and hour for their time, that works out to be $22,500 a week in labor charges alone. Now let's use the typical formula for additional costs such as health insurance, etc. and you apply 45%. So, $22,500 + 45% = $36,626. That's just cost of labor. Now amortize other costs such as server purchases and bandwidth, and you have approximately $50,000 divided by 52 weeks. That equals $961.54 a week in amortized expenses. Add the two and you get $37,587 and some change to add content, keep the servers up and stay connected to the Internet with the labor thrown in. And that's without profit; just covering the expenses. And no company should go into business without making a profit, so let's add a conservative 20% on top of our expenses, and we come to $45,105 and some change, a week, to operate and profit from AVSIM. If I assume that there are 50,000 people out there willing to pay for access to AVSIM, that's $0.90 a week or $46.90 a year per person to keep AVSIM going and to make a profit. And if you do the math, that works out to over 2.3 million dollars a year in keeping AVSIM at its current level of serving, reviews, bandwidth, etc. If you are a marketing or business management type, you will recognize that there is a missing number in there; G&A. General and Administrative costs are for secretaries, heat and light, building rental or mortage payments, etc. Typically, G&A expenses add 25 to 32 percent to the number BEFORE profit. So, that number could be much higher were AVSIM not a disbursed, work from home, entity.I think we know the answer to the question; would the community in total, be willing to spend that kind of money to keep a web site going via memberships, or some other "pay for" mechanism? The answer is a resounding no. But more importantly, by going through the above mental exercise, I am re-emphasizing my point; most who do this (and specifically the AVSIM team) do it out of a labor of love, and if they can get a small return on their investment in time and effort, so much the better. In our case, we do it out of a labor of love, and are able to cover the expenses via our various fund raising efforts (thank you advertisers and all who attend our conferences, buy from our store and contribute when they are able - we love you!!!). And that is our only financial goal - cover the costs and keep the site free.So there you have AVSIM's perspective as far as Tom A. is concerned. Going back to the developers; I know quite a few of the folks in the commercial development community, at least here in the U.S., and I can tell you that none of them make an income from producing add-on's that would tempt me to leave my real job. Truth is, there are probably not four groups that added together would cause me to leave my day job... :) Just about every developer (MS not included) I know has a second job to back stop them on their income. So, that leads me to suspect that their efforts find their origins in the "labor of love" category, with a "if I can make a little money on the side doing it, great" outlook on life.As for your comments on the lack of responsibility of users, great timing... I am writing an editorial on the very subject. Keep your eyes peeled for it. :)

Hi Tom,Interesting statistics regarding Avsim, and believable too.I think the only developer-related people making any real cash are the distributors and affiliate marketers. They do so by selling small number of individual titles, but have lots of titles to sell. But I doubt whether they make a fortune, and even some of these are struggling.For the average addon developer, 3000 copies of a product nowadays is an exceptional number. The norm is more like 1000. A truly exceptional addon might exceed the first figure but that is extremely rare.For a developer working freelance for distributors there appears to be a wild variation in fees. Some offer fair and reasonable renumeration. Others, frankly, offer insultingly low fees and yet another category (mercifully few) offer to buy projects outright for appallingly low sums and then proceed to make a bit of a killing themselves.In short, this business can be absolutely cut throat. I would guess that overwhelmingly, due to high supply and limited demand, the consumer gets fantastic value compared with other conventional goods. And if he doesn't think that is the case he can, on any day, download truck loads of free software.In conclusion, as Harold Macmillon used to say: "You've never had it so good!"Kind Regards,Rob Young - RealAir Simulations

Robert Young - retired full time developer - see my Nexus Mod Page and my GitHub Mod page

  • Author

"For a developer working freelance for distributors there appears to be a wild variation in fees. Some offer fair and reasonable renumeration. Others, frankly, offer insultingly low fees and yet another category (mercifully few) offer to buy projects outright for appallingly low sums and then proceed to make a bit of a killing themselves."Rob, and that was one of the reasons we want to open the AVSIM download store (as separate from the AVSIM Store and packaged products). What we would like to do is provide a download system that users can purchase from, and give to the developer the maximum amount on their product we can. What we have said is that we would like to give every author 80% of the purchase price back to them. We might even consider more for exclusivity. Since we are not trying to make a living off of something like this, we don't need to demand 40% or more as some are doing and we see it as an opportunity to encourage those that wish to supliment their income with more of a return on their development efforts.Unfortunately, we have stalled on developing the Download Store because of the server issues, library redesign and what have you since March when we announced the effort. But, we will shortly pick up that effort and hopefully have a better "mouse trap" for both authors and consumers.

HI Tom,If you can offer 80% that is indeed a pretty competitive figure, and much better than shall we say the "industry standard". Sounds like a good idea. Hope it comes to fruition!Kind Regards,Rob

Robert Young - retired full time developer - see my Nexus Mod Page and my GitHub Mod page

Here are a couple of "truths" which may help clarify some things.1) RFP was developed from the original AETI 747-200 classic. The development cycle represents something well over 4 years.2) While it is a commerical product, most of the team are compensated only by the fact that we get a copy of the product and the satisfaction of having given something back to the hobby that we all enjoy. The team is a very close-knit group of dedicated simmers and I, for one, am very proud to be a part of this group. Ralph might disagree ( he gets all the bills), but I think that the satifaction of contributing is what the team is about.3) To my knowledge, none of the team members is "leaving the hobby". I certainly plan to be part of this community for a long time and I'm pretty sure that the others will also.4) RFP has reached a point where it isn't practical to develop it further at the present state of the art. Of course, variations on the theme could be done, but it really doesn't seem worthwhile to do them at this time; we've pretty well done what we set out to do and the team is proud of the results. In other words, the project is really completed as far as the team is concerned. Further development, of say a GE or RR engined variant for example, would require essentially a parallel step and just isn't where we want to go at this time. Could this change? Certainly. Will it? Probably not.Who knows?5)To my knowledge, no one, from Ralph on down the team, is "mad" at anyone. We have seen some fairly pointless comments on our own as well as the more general boards; most of those have been related to either not really understanding what the intent of the program was, or not reading the directions. In general, we've considered the sources and not been overly upset. It takes all kinds so I am told (that's one thing that no one has ever explained to my satisfaction!)The things that have given me the most pleasure in doing support for RFP both on our forum and the general boards have been what I have learned from others ( a huge amount that gets bigger every day) and the satisfaction ( on occasion) when I can help someone else solve a problem or resolve an issue. Spending a lifetime doing diagnosis is a habit that dies hard, I guess, and it still feels good to correctly identify and to solve a problem. Lot's of people helped me when I was a novice and it's nice to be able to pay them back by passing along what I've learned. That's the beauty of this hobby; it really is a community which everyone contributes in their own way. Sure, there are "grumps, etc." but even they probably have their place.6) Hope this has helped to clarify some of the issues in this thread. The RFP team will be around for quite a while and as for the future; well, who knows which way the wheel will turn.Best Regards to AllEd GreenKCLThttp://www.panelshop.com/DEV.jpg:-)

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