Nanashi

Are we really not supposed to know MCR?

Kickstarter certainly seems to be doing well if they take 5%....

I'm of the opinion that if it works, go with it. So far Kickstarter seems to work a lot better than it doesn't work. I haven't heard of a scam story yet, so obviously that's good news. And a lot of the creators on Kickstarter seem to be well established and professional, and I have little doubt their other projects that aren't funded by Kickstarter are going to do well. That being said, the concerns are fair. I don't see why anyone would worry so much about the welfare of money they aren't going to commit to a project, but it's not like it's anything different in the "normal" way of funding an endeavor. You're just getting loans from tons more people than when you pitch to a few investors. With the additional perk of knowing how many potential buyers you'd have afterwards. Instead of investors having to eat costs and you losing credibility or said investors or both.

@eat it
It's 4 people. 2500/625 = 4 (and the 4 multicolored guys helps).

@sigma8

I'd say there's more to it than that, but you've outlined a pretty good reason with opportunity cost.

Let's say that an independent developer can make $25k profit from a video game over the course of a year, after spending a year to develop it. Assume this profit neither decreases nor increases over the course of a 5 year time span. Assume that it would take about 4x longer for an independent studio to develop the same game if all members were also employed elsewhere. Assume each individual member's salary at their other place of employment is $50k a year. Now when you look at it, over five years, if a studio spent the first year subsisting off of donations or friends and family or saved up money and spend time to develop a game that would make $25k, then over the next four years they would earn a total of $100k from that game.

Seems pretty measly compared to the $50k earned at the regular job, right? After all, three years into their regular job, the devs would be 3/4 of the way through and have made a total of $150k each. But, of course, development studios scarcely release one game then quit. Assuming a one year cycle, the full time developers would create another game in year 2, and still more in years 3 and 4. Year 2's game over the 3 years left in the five year cycle (assuming we start before development of the first game) would earn $75k, and then year 3's would be finishing development in that same year and go on to sell $50k in years 4 and 5, and year 4's game would finish and sell in year five for a total profit for the full time developers of $250k.

About the same amount of money as a developer making games on the side would make after five years ($250k in normal salary + 25k from 4 year developed game's release). Now of course, if you are talking about multiple developers they would have different individual profits that would add up to much more than the devs that don't work outside of their studio, but it's not a collective profit, which is a point I'll expand on later. But back to it, the profits don't seem that different until the next five year cycle, when we'd see a drastic change, even if the first 3 years of games developed stopped making money altogether for studio self-employed.

Year 10 for studio employed's workers (assuming their first game made money all 6 years it was on the market) would see about $700k.

Year 10 profit for an independent developer would be $750k. That's without games 1-3 making profit, and only having 9 games of the 10 developed released.

But even if the math is horribly wrong rather due to my assumptions being wrong (they weren't in 2008 when I was actually going over this with a game developer, albeit not an independent one, and the salary mentioned above for the indie guys seems to be in line with them) or due to my math being that bad (it probably is) the biggest reason to stick to independent development full time, at least if you've already started, is the opposite of irresponsible, even if you have a family.

That reason is the value of the asset (the studio itself) only increases the more money you can push out of it. Which is also why it's not strictly "better" if multiple developers had more money from their regular employment (though if they each decided to submit certain money from their regular employment as donations into their company in some way it's a different story). Posting profits of $50k over 10 years isn't nearly as impressive as $750k+ over 10 years to investors or big name developers that may want to acquire you. Not to mention if you want to sell your studio you can point to your annual profit of over $200k and demand a much higher price for the IPs either individually or as part of the company itself.

But of course the ideal is to not make just steady profits, but to increase your profits and eventually expand into newer markets and develop more interesting and popular games. From a societal standpoint, this would be the ultimate way of "giving back", even if you're just a tiny

Why are people flipping out over people getting upset? I don't have an "entitlement complex" if I think it it would have been nice to use the PSV to play PSP games I've already purchased discounted because Japan got to do the same thing. Am I upset it didn't work out that way? Yes. Am I going to buy a PSV? Yes. Does anyone have the right to complain about how I feel or what I do with my cash? No.

@mahouneko

This may be sort of true, but Japan is quickly moving away from being lawyer deficient, and even if lawsuits aren't as rampant as in the US, I'm sure lawyers are still present at meetings where critical business is done, and I'm fairly sure no critical business is handled in a restaurant. By "critical business" I mean where any documents are signed or even oral agreements made. I've never done business in Japan, but that seems like a bad idea.

As for the US side of things, for big enough clients (EA, Activision, 2K/Rockstar or SEGA) you might get a few attorneys to sit in at just the general contract meeting, but the only reason you'd have more than 2 lawyers is if training is going on (which is a pretty common occurrence, to be fair) and while psychologically it may be intimidating to see 6 lawyers, only two (at most) would be of any importance (senior associates/junior partners) and the others are probably fresh out of law school. But generally, basic contracts (to simplify, let's go with contracts that don't involve selling company equity or property) are just sent to outsourced counsel so in-house can deal with the more important stuff (the aforementioned equity and property contracts).

And you'd have to define "hostile negotiation practices", but since both companies would need to leverage the resources of the other, it's hard for one company to get the other by the balls. You could argue that a game publisher could just go multiplatform, but there would be additional development costs they (probably) don't want to incur, especially if they're working with a new IP. And while Sony could threaten to cut off access for a specific game if the price point doesn't fall in line with them getting a bigger percentage, the company could choose to remove all its titles (or the big sellers, at least) so, again, no leverage for "hostile negotiations".

The UMD trade-in may not come to fruition for the US market, but it won't be because of a cultural difference in contractual arrangements.

@eat it

They'd eat the licensing cost (the money Sony would make per unit of the game sold). Basically, when EA (or any other third party developer) makes the game available via the Vita marketplace, Sony would say "Hey, offer your game for $20 instead of $30, and we just won't take our $10 cut". For games with lower licensing fees they may actually end up paying said companies, but that would, in theory, be okay because of the (likely) limited purchasing via the UMD trade-in program.

I would wager they're avoiding this in NA because larger population means larger percentage participating in the trade in program so they'd suffer larger losses. But that's just my theory.

@Milf Biggenson

I would suspect their research method, but honestly I think it has more to do with the volatility of the market in any industry right now. No one has any money to spend on genuinely great products, so a kind of newbie tablet that fits a very specific (and not particularly "hungry") niche didn't stand a chance. 5 years ago it probably would have done really well (especially since it would have coincided with the launch of the current generation of consoles) but either the tech wasn't there or, more likely, they were just starting their research in this niche.

@arkweld

Being president (or working for the government in almost any capacity other than volunteer, for that matter) gives you a whole slew of other benefits than just salary or stock options. Like job stability (unless you really screw up- like Nixon level), free or far more affordable health care, and, of course, influence.

But anyway, people are paid what they're worth. If Brian Farrell never made a successful business decision in his life then chances are he wouldn't be CEO of THQ and we'd be complaining about someone else. If he's successfully run one or more companies, overseen operations, finances and management of said companies then I'd say there's a big reason he's making the big bucks. There's also the rarity factor-- despite millions of people getting MBAs, MFAs or what have you, few actually either build up a successful business from the ground up or work in one starting at or near the bottom to CEO.

Honestly the bigger problem with the way the economy works isn't that CEOs are paid too much, but that more people either can't afford to get the skill set needed to own their own business or they aren't incentivized enough to do so.

@RockSauron

You don't get paid for doing your job right, actually. Depending on your definition of the word, anyway. If Farrell had done all the market research and what not that the articles linked above said he did before the uDraw failure and similar decision and then said "Screw it, I don't care how promising this looks, I'm not doing it" then their stock would be more stable, but they never would have known that it would have flopped and he'd probably be in much more dire straits as an individual. Now you can argue that his market research and what not was haphazardly conducted, but so long as he acted "in good faith" that his business decision was sound (and with approval of major shareholders or just of those on the board of directors) there's no reason to fire him over a few bad decisions.

Your average Joe working at Burger King would certainly get fired for not coming into work (literally not doing his job) but how many people screw up even a dozen batches of fries and/or miss picking up after the octomom and her gaggle of kids at BK and get fired because of it?

There's also the fact that finding, hiring, and training a new CEO is probably more costly than keeping this guy on too. Farrell is (hopefully) doing his job the correct way and not flipping coins when it comes to major business decisions. The fact that he has to make such decisions, and that he's (hopefully) proven himself qualified to do so in the past is why he's paid so much.

Corn chips and ass. Lots and lots of ass.