Never liked the STEAM concept

[BuddyDog 36]

I can understand PMDG's point of view, as well as people who want to go through Steam for their games.

PMDG certainly does make some complex additions for flight simulation, and IMHO, Steam and DTG want a cut of PMDG's profits, without any investment beyond a hyperlink to the product on their website.  It seems Mr. Randazzo objects to the amount they want for their cut and trying to restrict his access to the "game" marketshare.

So, let's say they release another aircraft, which can go anywhere from $60-$130 (depending on your platform).  Seems Steam and DTG want somewhere between 30-65% (?) to allow you access to the PMDG product through their store.  I think PMDG thinks that is way too big a bite into their margins, rightfully so.  

[n4gix 4,947]

14 minutes ago, BuddyDog said:

PMDG certainly does make some complex additions for flight simulation, and IMHO, Steam and DTG want a cut of PMDG's profits, without any investment beyond a hyperlink to the product on their website. 

That is incorrect. Steam does not "provide a hyperlink to the product..." All products obtained via the Steam portal are hosted on Steam's servers, and Steam pays for the costs of hosting and download. Steam also handles the installation process and provides the DRM protection.

[Silicus 849]

2 hours ago, n4gix said:

DTG has made it clear that any developer can continue to sell via their own online stores, provided they also make that same product available for purchase via the Steam portal.

The point is: why FORCE any developer to sell on steam. Any restrictive business model of a flight sim will have negative effects.

DTG is shooting themselves in the foot with this attitude.

[Dillon 2,197]

2 hours ago, n4gix said:

There seems to be a disconnect with reality in many of these ruminations...

DTG has made it clear that any developer can continue to sell via their own online stores, provided they also make that same product available for purchase via the Steam portal.

From my perspective valued customers will continue to shop at the developer's store. For the most part those who buy via the Steam portal would likely never have become a customer otherwise!

Granted, net-net from Steam sales would be less than selling direct, but it seems to me that even so it's a net win-win for the developer. Revenue earned that otherwise would have never been earned is a plus.

Now if DTG did insist (as MS did!) to limit sales to the Steam portal, that would not be a good deal at all. Fortunately, that is not the case!

 

Didn't think about this and very true.  I guess PMDG can upcharge for sales on Steam and offer a lower price for sales on their own website to make this work.  

[spesimen 135]

1 hour ago, BuddyDog said:

 

PMDG certainly does make some complex additions for flight simulation, and IMHO, Steam and DTG want a cut of PMDG's profits, without any investment beyond a hyperlink to the product on their website.

developing the sim counts as an investment too. not to mention that pmdg has already almost certainly benefited from DTG's continued maintenance of the FSX platform, it has added hundreds of thousands of users well after FSX's original retail life was over. how many people here use the steam version to fly their pmdg stuff? i'd bet it's a fairly high percentage. many of them like me, who has given DTG a total of $5 while spending something like $300 on pmdg stuff....

i'm all for developers getting their fair cut of things but i do think they may be missing the point of steam which is that it makes it easy to expose your products to a mass market that already has their payment info conveniently setup to do a 1 or 2 click purchase of your products, with no need to develop or host any infrastructure on your own. heck it was only a year or two ago that pmdg wouldn't even let you re-download their products, to save on bandwidth costs.

4 minutes ago, Silicus said:

The point is: why FORCE any developer to sell on steam. Any restrictive business model of a flight sim will have negative effects.

DTG is shooting themselves in the foot with this attitude.

you could just as easily argue that any developer who doesn't want their products on steam is shooting themselves in the foot.

it's like saying you don't want walmart selling your product on their shelves because they only pay wholesale prices and you'd rather open your own mom and pop store to compete. maybe your per product profit is much higher but the potential market size is orders of magnitude smaller.

anyway most of this stuff is speculation, without knowing any details about the actual cut they want or what any big name 3rd party dev sales are like, nobody really knows. it would be interesting to compare how many steam versions of products are sold compared to the 3rd party hosted ones for sure ...but probably DTG is the only one with comprehensive numbers on that..

cheers,-andy crosby

 

[skelsey 765]

20 minutes ago, Silicus said:

The point is: why FORCE any developer to sell on steam.

Because sales through the DTG Steam store earn DTG a slice of the profit. Some might argue that this is a good thing, because if DTG can make money out of FS in the long run, they will continue investing and continue developing.

If nobody sells through Steam, DTG -- who will have invested significantly in creating the platform in the first place -- earn nothing in the long term, just like Microsoft discovered with FSX. And if DTG can't make any money, they won't bother sinking any more cash in to updating the platform in future.

The alternative, I guess, could be that DTG demand commercial developers pay them some form of licencing fee. This actually would probably suit a large established outfit like PMDG because a) they could keep 100% of the profit from all of their sales by selling only through their own website, and b) it would likely be a barrier to new entrants to the marketplace who may not be able to afford or be willing to risk the cost of paying some form of commercial licence to DTG without a proven/established product base.

[Silicus 849]

2 minutes ago, skelsey said:

Because sales through the DTG Steam store earn DTG a slice of the profit. Some might argue that this is a good thing, because if DTG can make money out of FS in the long run, they will continue investing and continue developing.

 

Respectfully, I see it the other way around. Flight sims do live from add-ons. Can you image FSX/P3D/X-plane as 'closed' products, no add-ons allowed? They would be nothing. They would be dead.

They are only around, because of endless amounts of free- and payware. Each user can improve the sim according to the liking/budget.

More add-ons = more sales of the core sim = more profit for the core sim developer. To try to get money from add-on developers is just greedy and very short sighted. The more add-ons are available the more sales of the core sim.

 

[spesimen 135]

Just now, Silicus said:

 

More add-ons = more sales of the core sim = more profit for the core sim developer. To try to get money from add-on developers is just greedy and very short sighted. The more add-ons are available the more sales of the core sim.

 

except sales of the core sim aren't what they are going for, that's why they are giving the platform away for free.. they already recognize that the profit comes from adding new content to the platform, they have used this model quite successfully with their train products already. i'd guess that they are doing pretty well with fsx addons too, despite only charging $5 for the sim. it's the loss leader that gets the other stuff going.... and it's not like they are doing anything that isn't happening elsewhere already. simmarket, flightsim store, and various other addon sellers certainly take a cut whenever they sell 3rd party products too.

cheers,-andy crosby

 

[skelsey 765]

3 minutes ago, Silicus said:

Respectfully, I see it the other way around. Flight sims do live from add-ons. Can you image FSX/P3D/X-plane as 'closed' products, no add-ons allowed? They would be nothing. They would be dead.

With respect -- FSX IS dead! 

If it were not dead, Microsoft would have been developing it over the last decade and we would not be sitting here more than ten years later with a platform that is still 32 bit, clock speed bound and with all the rest of the problems it has.

5 minutes ago, Silicus said:

More add-ons = more sales of the core sim

But without a core sim, there can be no add-ons and no sales for the third-party developer. This is why fundamentally it is not unreasonable for a developer who has put a significant amount of resource (I don't know what it has cost DTG to develop FSW, but in the case of MSFS in the Microsoft days I would imagine you could easy be talking millions) in to developing a platform to expect some cash from those who subsequently seek to profit from that platform, whether that be in the form of a commercial use licencing fee or by taking a slice of the profits from those add-ons.

Freeware of course is a different matter and as far as we know DTG have no plans to restrict the way in which freeware developers distribute their products. This is about commercial operations: and let's be honest, PMDG et al, passionate though RSR and co are, if not necessarily in it to get rich are certainly not working purely out of the goodness of their hearts either.

[Silicus 849]

6 minutes ago, spesimen said:

except sales of the core sim aren't what they are going for, that's why they are giving the platform away for free.. they already recognize that the profit comes from adding new content to the platform, they have used this model quite successfully with their train products already.

Yap, and that's why most of their products are of very low quality and riddled with bugs..... I still think flightsimmers are a different kind of crowd that look more for quality.......

[Dillon 2,197]

45 minutes ago, skelsey said:

because if DTG can make money out of FS in the long run, they will continue investing and continue developing.

Very true.  DTG doesn't have MS's wallet and more money counted towards continued development of the platform helps the whole community.  Maybe PMDG should consider this.

[spesimen 135]

42 minutes ago, Silicus said:

Yap, and that's why most of their products are of very low quality and riddled with bugs..... I still think flightsimmers are a different kind of crowd that look more for quality.......

well, everyone here on avsim is a rabid simmer and has higher demands than the average gamer for sure!!!., but of the 90,000 people who flew FSX on steam in the last two weeks i would bet that more than half of them have never even heard of pmdg. 

and comparing quality or bugginess is apples and oranges to the train sim. if you buy an aerosoft plane, or active sky, off of steam, it's the exact same product in either case! it's not like they force them to lower the quality and add bugs. ..and by the way, i don't agree about the train products, they seem fairly high quality to me, although i'm very casual about train sim compared to flight sim so i don't really have a strong opinion there.. i know there are study level trainsim addons available as well, although i haven't delved into them. despite these issues it still has 58,000 users in the last two weeks so somebody out there likes that stuff...

for the 'serious' folks like us, there is always going to be a demand for higher-end addons, companies will still be able to make them, and they'll still be able to sell them on their own stores too, so it's really just about whether they think the lower profit margin on their sales through the steam platform will eat into the other side of it too much. personally i think they are underestimating how powerful the sales boost is when you have DLC content integrated into your platform from the top down. i don't have those numbers though, and i don't think anybody speculating here on this has the kind of data where they can authoritatively answer that one way or another either.. but that's cool, lively discussion and speculation is a lot of the reason why we are here :)

cheers,-andy crosby

 

 

[n4gix 4,947]

1 hour ago, spesimen said:

except sales of the core sim aren't what they are going for, that's why they are giving the platform away for free..

Um Andy, it's only "free" for those of us who took a chance on "Flight School." For everyone else they will be charging something, but we don't know just how much that will be though. Probably a bit higher than the $14.99 for Flight School though...

[WarpD 824]

Doesn't matter what anyone thinks.  Doesn't matter whether you think it's a brilliant idea or the worst idea since canned bread... just doesn't really matter.

To recoup the overhead of Steam the developer must increase prices by 143%.  That $50 addon just became a $72 addon.  That's assuming the overhead is only 30%.  I suspect it's not going to be that low.

[Paraffin 2,197]

2 hours ago, spesimen said:

i'm all for developers getting their fair cut of things but i do think they may be missing the point of steam which is that it makes it easy to expose your products to a mass market that already has their payment info conveniently setup to do a 1 or 2 click purchase of your products, with no need to develop or host any infrastructure on your own. heck it was only a year or two ago that pmdg wouldn't even let you re-download their products, to save on bandwidth costs.

you could just as easily argue that any developer who doesn't want their products on steam is shooting themselves in the foot.

There are still downsides to Steam distribution that may override the upsides (and I've posted about the advantages before). Just to mention a few...

One of the costs of doing business is tech support. PMDG will be doing a lot of tech support with a Steam user base that isn't as aviation-savvy as their current clientele. Tech support for every Steam user will cost them more, because they're getting 60% less per sale.

Steam forums are notoriously fickle and hostile at times. Just take a quick scan through the Flight School forum on Steam. A company with a prestige reputation can take a pretty big PR hit, if Steam users decide they don't like something, think it's too expensive, or a host of other reasons.

PMDG would be able to sell product through their own outlet as well as Steam, but if people are buying DTG's flight sim on Steam, why would they go anywhere else to buy DLC for it? A few hardcore flight simmers might do that to support the developer, but that's not how things usually go on Steam. It's just too convenient to purchase and manage all your DLC through Steam.

Compared to all that, PMDG could develop product for the upcoming 64-bit P3D, or the current XP11 and not have any of these hassles.