"Nothing will change in the short term" is the story of every acquisition, almost all of which end up with major changes for the worse at some point. (So yes, I agree with you.)
People concerned over the "Exclusivity deals" on the game store end aren't looking at the "Developer" acquisitions which have rarely lead to the kinds of ends that, say, Google's Aquisitions have.
They made a lot of money.
> it only buys popular software, because it's goal is getting more people locked into it's walled garden Epic store.
The rev stream is royalties from engine use since the free tiers are locked to UE, not EGS.
> They made a lot of money.
They reportedly worked with Epic Games on technical support for PUBG features, and Epic Games may've ended up using some of them in their own Battle Royale mode:
> Notably, Epic Games updated their in-development title Fortnite, a sandbox-based survival game that included the ability to construct fortifications, to include a battle royale mode that retained the fortification aspects. Known as Fortnite Battle Royale, Epic later released it as a standalone free-to-play game in September 2017. Shortly after its release, Bluehole expressed concerns about the game, acknowledging that while they cannot claim ownership of the battle royale genre, they feared that since they had been working with Epic for technical support of the Unreal engine, that they may have had a heads-up on planned features they wanted to bring to Battlegrounds and could release it first.
Quote: https://en.wikipedia.org/wiki/PUBG:_Battlegrounds#Epic_Games...
Article: https://www.pcgamer.com/pubg-exec-clarifies-objection-to-for...
[1] https://www.theverge.com/2018/6/27/17509114/pubg-fortnite-la...
There lawsuits seem a bit empty
Personally, I'm all against what they did with Fortnite and PUBG - they didn't broke any laws, but the surely reworked Fortnite into PUBG,instead of creating their own thing (it is now). But that's a long shot from saying they committed a crime or that their acquisitions turn up bad.
Maybe. But Unity is technically still used in more games and is being just as aggressive in acquisitions between Parsec, Syncsketch, Ziva, and even Weta Digital. It's definitely not going to be a battle won by outspending the competition.
I wouldn't be surprised if the acquisition is to provide royalty free music to the games industry via Unreal Engine, as was the case for Quixel, but none of this is really good news for artists trying to make money unless Bandcamp plans to pay the artists out of their own pocket for a royalty free side.
All of that is speculation of course, we'll see where it goes. It's just a weird acquisition if it's not for integration I feel.
To be honest, I wouldn't be surprised if that's Epic's endgoal. But the music industry is a gargantuan behemoth with paper thin profit margins, and Epic is already struggling enough battling the mobile market (a much more lucrative market where the fight makes sense).
I can't see any significant push like that happening for a decade+. This and the harmonix aquisition are probably just the foot in the door needed for those plans should they want to push one day.
I don't see why that's the case? Just give Bandcamp artists the tools to set their own royalty structure (In the same way they price their own songs) and integrate this marketplace into Unreal or wherever else. Self published artists get a source of revenue typically reserved for labels and Bandcamp gets the cut instead of someone else.
Bandcamp was already profitable and has been for years. The pandemic dramatically increased their sales. They were doing fine.
Why did they need an exit?
That is the real flaw of SV thinking: that simply being a profitable, going concern is somehow inadequate. The result is monopoly accretion as small companies are repeatedly swallowed up by bigger ones.
If you look at their staff growth, it's been very slow and very steady. At the time of acquisition they were sitting in the 100-150 headcount range, which is modest for a company that's almost 15 years old. Given their claim of 207M to artists last year and their touted 18% average rev share, we can guess they were generating around 50M per year gross, which is a very healthy cashflow for a company that size.
Their strategy was clearly not to take over the world, but to carve out a niche and not bother to directly compete with the streaming platforms (which helps to explain, for instance, the incredibly rudimentary mobile player app).
As for the senior management, Diamond had already previously started and sold a company. I'm sure he was doing fine. The same is true of Mark Hall, their VP of Product (who started 5-ish years ago, if I recall). The technical founders I'm less sure about, though apparently at least one of them had already moved on.
I'd absolutely describe it as a sustainable lifestyle business that had a good long-term trajectory. It was never going to be a unicorn, but who cares?
A company with 100 employee isn't a lifestyle business. The term we used to use for that before VC swallowed the world and decided that anything less than a billion is chump change was simply "business". A 100-person company with millions in revenue is a successful medium-sized business.
The only reason it doesn't feel successful and stable today is because we live in a unprotected corporate environment where any of the giant behemoths may anti-competitively crush a smaller business if they so choose to and there won't be any repercussions.
I wouldn't be surprised if the main motivation for Bandcamp selling was simply the fear of being either bought out by someone worse, or crushed by them. (Likely Spotify, which is two orders of magnitude larger than them.)
Notably, Bandcamp absolutely encourages purchasing individual tracks, so for folks who, unlike me, tend to build mixed playlists, it's even more annoying that this feature doesn't exist.
In fact, they only very recently (as in last month!) added basic queuing support:
https://blog.bandcamp.com/2022/02/10/the-bandcamp-app-now-su...
Which is pretty incredible as I view that as a core feature of any music player.
Bandcamp is 100% a bonafide operating business. I don't want to put words in your mouth, but perhaps you're seeing that they were just trying to run "Business as usual" and equating that to a lifestyle business as they weren't chasing growth.
That, and/or they were not interested in running a company that is finally getting too large to feel like a family / tight-knit community. The kind of person who likes running a 20 person outfit is very plausibly someone who gets no joy out of running a 200 person one or even actively hates the idea.
So they sold to someone they liked well enough, or in any case someone they distrust less than others to have the expertise and values to scale the business in a way that doesn't COMPLETELY destroy what made it special
Because the people who like to start new companies and take lots of risks generally tend to not like running stable businesses and dealing with FP&A managers, lawyers, compliance and tax experts
... in SV/the tech industry.
That's kinda my entire point.
Stealing someone else's analogy: If you went to a bank to get a small business loan to open up a coffee shop, and you told them "Yeah, I'm hoping to take a bunch of your money, open a coffee shop, never return a profit, and then sell it to Starbucks", you'd get laughed out of the room.
In SV that's a business model.
There aren't many "startup industrial companies"
There’s a few smaller operations doing it as well.
The big one, Merivale, seems to have practically unlimited money to throw at interesting or struggling venues. While I really don’t like the changes they eventually make to most places they buy, I have a grudging respect for the business acumen of Justin Hemmes the owner.
He seems to have an uncanny knack for having bought a good sized venue a year or two before, in every area that becomes cool and popular. Often they’ll barely change for a few years, while the demographics around them shift, then one day they’ve suddenly been renovated and there’s a queue of b-grade celebrities all dressed up and lined up around the block waiting to get in every weekend for a month or two.
I totally get that my demographic spends less over the bar than the crowd he’s so good at attracting, but he’s ruined two of my local ex-favourite pubs in the last few years, and over decades he’s turned some of my favourite music venues in things like trashy Mexican restaurant/bars.
But yeah, even as successful as he is in his field, I doubt it’ll get him into the three comma club.
Almost, but it's these guys:
No, everyone is free to start a bandcamp alternative that does not sell out. But the probability of people wanting to "cash out" or trade equity for other things they want is pretty high. And so that is the world that we see, because it is a reflection of what people want.
I don’t know how to combat the shift to a single monopoly/duopoly in every market though, but it’s definitely going to make our lives worse. Especially with the erosion of private ownership for us plebeians.
Bandcamp is absolutely a company I would've considered working for. I'm long past the point in my career where I care about a lottery ticket. They were profitable, big enough to be sustainable, but small enough to be nimble. The management seemed to make all the right noises regarding their values and motivations.
I'll take that over a massive tech company or a tiny startup any day of the week.
They're not a startup. They're a profitable, mature, 15 year old company of 100-150 people. Working there isn't "taking a risk", so there's no need to entice people with hazard pay.
I never thought I’d see the day where hacker news, of all places, forgot how this works.
I was interpreting the original comment that kicked this off ("Would they have ever managed to hire anyone if they didn't?") as referring to their hiring practices now, not 15 years ago when they were first starting up. Granted I may have misinterpreted the nature of their remark.
Obviously back then, yeah, folks would probably have been given an equity stake.
So we're arguing different points.
What I personally don't know is if they were continuing to give out options to new hires to this day. Based on my own experience in a startup-now-going-concern, my bet is "no", given that it would no longer be strictly necessary to entice folks to join the company, but I could be wrong.
Looking at Crunchbase's list of articles, the earliest news story from May '08 mentions that it was a four-man startup that was completely virtual. Don't know how that lasted, but not having an office certainly frees up the budget to pay people.
I certainly hope it's not controversial to suggest that VC-backed startups, especially thrifty ones like bandcamp allegedly is, very commonly offer lower salaries to extend runway and make up for it in the form of equity options. My last startup offer actually gave me a window of salary ranges and let me choose my salary based on how much equity I wanted. The more salary, the less equity.
I get it: venture capitalists are interested in the most efficient possible way to loot the economy, and funding non-viable startups until they're so overhyped that some other idiot buys the over-inflated toxic asset from them before it blows is a great way to do that.
Of course speaking out against VC and startup culture on Hacker News is going to get me downvoted to oblivion, so go ahead and mash that down arrow. Don't forget to dislike and unsubscribe!
That's because in most of the industries you are thinking of, you can get traditional financing.
The need for an exit of some sort follows from the financial structure.
I'm just confused by two interlinked things. The terminology of "exit" and the implicit need for an "exit".
To me, the focus on "exit" does imply moving away from involvement with the business (in how the phrase sounds, and most importantly, in how it seems to be most often used). Which to me signifies a culture built around starting businesses and ultimately around becoming a VC yourself. Doing this is not notable, but presuming it is.
So either "exit" is any kind of large financing, and it doesn't involve "exit" in terms of involvement, in which case the term "exit" is strange to me.
Or "exit" is selling control and does imply "exit" in terms of involvement, in which case it's interesting that this is presumed to be the goal of starting a profitable business.
It seems in practice to be just jargon that covers both, but more the latter.
I don't think that's how it is used in this context either.
A lot of early stage money in tech startups is there for the short(ish) term, and they definitely want to get their money out (i.e. "exit") at some point, not build a business over decades.
It's their usage of "exit", and the need to have a strategy for it, which drives the usage more broadly, I think. Agree it can be a bit confusing by confounding the above needs.
As for the "exit=financing" association, I made that based on your comment:
> > It's a jargon term not used in the entrepreneurial side of most other industries.
> That's because in most of the industries you are thinking of, you can get traditional financing.
> The need for an exit of some sort follows from the financial structure.
But I think I misunderstood and you were saying something more like that the lack of traditional financing leads to a form of financing that necessitates selling the business wholesale.
Yes I should have been clearer.
Re founders there is a tension: They often want to both maintain control (i.e. equity) and realize some $$ from building the company. A liquidity event of some sort is often seen as the best way to do this, especially if they've been lean on salary for a decade at that point, which is often the case.
Epic lies. It is what they do. They are the epitome of a dangerous megacorp.
https://www.theverge.com/2020/9/15/21438194/rocket-league-fr...
I don't like not being able to play the game on my OS anymore, but that's just a tree in the forest of behavior. Epic anti-competitive monopolist behavior is completely transparent if you've been watching from the start. They also attacked companies that created popular games using their engine by copying the games and releasing them for free to undercut their own engine customers (see: Fortnite vs PUBG).
Epic uses their "free" software as a weapon, just like Microsoft did in the 90s.
More people playing the game you like is very good for that game receiving more investment/developer time. Shorter queue times, more revenue for the game in the form of mtx, and gameplay in a competitive multiplayer game should never (this is a big should, but in the ideal) get worse for an existing player because of skill-based matchmaking (something TF2 lacks).
Another problem it enables is trolls: People make new accounts then join games to ruin the fun for everyone else. Account got banned? No problem: Make a new one. Repeat.
The ranked play aspect of the game was completely ruined after Epic bought Rocket League.
In return for those problems, the game gets an instant, massive increase in players. Monetization usually increases, since modern mtx are usually much more effective than either subscription or one-time-purchase models.
I'm not saying there are zero problems with going F2P. Obviously there are. But just as obviously, since so many studios have chosen to go that route, the benefits are worth it for the company. If the revenue benefits are worth it, they keep developing the game, keep running the servers, keep fixing bugs, rather than just letting the game die. That seems pretty good.
Are you posing this as not a problem? This makes a game the digital equivalent of cancer: There's a lot of it, it grows fast, but nothing about it is worthwhile or good. It just exists to prey on everything around it.
c.f.: sunk cost fallacy
There's a reason I haven't played TF2 in years, and it's not because I'm indignant that others didn't have to pay for it.
Not saying that it was user error here, but I haven't noticed any significant input lag when I play it.
Would be interesting to think of acquisitions where this wasn't the case. The only one that jumps to mind is Zappos.