Suitcase full of money

I’d like to start by saying that the initial idea for this article was to do a one-shot article. Just something to talk about the problem that people have been addressing (and some using as an excuse to justify piracy).

After talking to a few developers, though, I have decided to do this in a 2-part article; the second being a sort of an opinion article/interview by/with Sven Borchert from Polychop.

So, read on and stay tuned for part 2, to be published very soon.

Some point out price as one of the main reasons for piracy, usually in a Robin Hood-esque type of situation where folks give companies what they deserve for being greedy. As if it was a great excuse for breaking the law.

It’s not, folks. Piracy has no excuse. Ever. If you illegally download and/or install and use a piece of software, you are still a pirate and breaking the law. No matter what “great” excuse you come up with.

Back on topic and to the price of addons. The idea to write this article come up when me and my grumpy brothers-in-arms did the last episode of the Three Grumpy Simmers. We discussed piracy and eventually leaned out to talk about the price of addons; some of which seem to be insane – US$140 for an aircraft? Ouch!

While we were talking about this matter, I mentioned that I had no idea of how much an addon could cost and how much companies sell, so I could not say if they were overpriced or not.

[caption id="attachment_6625" align="alignleft" width="150"]Bluesky FS' Chris Ellis Bluesky FS' Chris Ellis[/caption]

Most companies are very secretive of this data – most of them, actually – so we will never find out for sure. But some other companies do come up with information on their products and the costs associated to them.

Bluesky FS, for example, is one of those that talk about the cost of development from time to time. In a recently conversation with Chris Ellis, we found out that it cost the company “Roughly $100,000 USD to make the P-40F for FSW”.

That’s a lot of money. And we’re talking about a WWII fighter, not a highly complex airliner. Regarding those, Chris said that “an Airbus with FMC would be way higher”.

How much higher? Perhaps double that? We have to remember such aircraft have a lot of amazingly complex systems that work together to bring the aircraft to live and perform his duties.

[caption id="attachment_6627" align="alignleft" width="150"]DreamFoil Creations' Fred Fernandes DreamFoil Creations' Fred Fernandes[/caption]

And it’s not just the systems that make it expensive. Fred Fernandes, of DreamFoil Creations let us know that the model alone can be quite expensive: “an exclusive 3D model can cost up to US$7,000 to US$15,000”. Just for the model, folks. And it still needs to be rigged and animated which, of course, has its own cost.

So, are addons too expensive? Is that US$140 way overpriced? Well, if you consider that you’ll need to sell over 1,400 of those just to break even things start to look bad for a developer. Or, at least, not as good.

We heard that DCS Hawk, for example, broke even with the sales amount. Not the actual profit but the sales amount: US$150,000 of which they had to pay taxes (and to ED as well, of course). No profit here. Seriously.

Remember these folks still have the daily operation cost of running a business. They need to provide support to their customers, get people to fix bugs and do all the stuff necessary to provide their customers with (hopefully) a good service.

You can say that they are probably selling 5 or 10 thousand copies of their software. Or that they could have if they lowered the price. Perhaps. Perhaps not. They never came forth with their numbers, so we don’t know.

[caption id="attachment_6626" align="alignnone" width="750"]DreamFoil Creations AS350 model wireframe DreamFoil Creations AS350 model wireframe[/caption]

It’s safe to say that they will probably sell more than the necessary 1,400 units to break-even (well, it will be more because of taxes, ongoing expenses, etc.). How much more, I have no idea. But they will break a profit for sure. And that’s why companies exist, right?

All this price thing comes down to a calculated risk the developer must make to try and understand how low it can go to increase sales without losing money. And for $200,000 I understand it’s a risk no one’s willing to take. The problem is that it seems some are not willing to risk at all.

Or perhaps are they risking too much with those high prices. Which still doesn't make piracy right. It will never will.

So, are addons too expensive? It depends. It's hard to know and hard to say. But there is a limit and some developers out there may have already hit it. Hard.

Ready for more? Read part 2.