Adobe's 9% Flash tax
blog.alexmaccaw.com
blog.alexmaccaw.com
On top of that, it only comes into effect after $50k revenue. If Flash reduces your development costs (not making that argument one way or another), then this is a great deal for small developers and will only be pushing away the large developers who can afford to invest in other technologies.
Is this a good idea? I don't know. I'm guessing this is the same type of licensing that a game engine would offer, but it does sound very expensive.
Unless I'm reading the license totally wrong.
Of course, Flash is not UDK so it's not a fair comparison. Plus, if you use UDK within Flash your royalty rate will be 34% split between Epic and Adobe.
No. It would be flat. A regressive tax would charge the small companies more than the big companies.
I'm seriously regretting that decision. Legally, it was "the right" thing to do.
But personally, I feel I paid the people that are screwing me -- as one person recently commented about the content industry, he was ceasing to pay those people so that they could use the money to force their evermore draconian policies (of self-interest) on him and society.
Furthermore, due to Adobe's clear mistakes, I needed support from Adobe Support. And despite all the money they had received from me, the experience was absolutely horrible. Eventually, I was the one explaining (repeatedly) to their support technicians what they needed to do. It finally came down to luck of the draw and reaching an associate who was actually willing to demonstrate a little initiative.
All this boils down to personal anecdote, but for me that is: Adobe goes to extremes to seem/be undeserving of the license fees they demand.
I made a $15,000 software purchase a few years ago (A bunch of copies of CS5 Master) and the same day I called for support because it was not running well on our brand new machines. I was told "Sorry sir you have to pay $79 to talk to a technician because you use a server (Level two Escalation)" Me: I just purchased $15,000 of software and I have to pay to talk to someone who may or may not be able to solve my issue? Them: "That's correct" Me: "Please let me speak to a manager" Them: "I can't do that sir"
Sorry Adobe, but at a minimum buy me dinner before you... I'm sure you can finish the rest.
Just because you recently spent $15,000 doesn't mean the next $80 are worth less.
The relevant portion comes after Gilbert sets up a situation not unlike the one being discussed here. People won't shlep across town to save $100 on a $31k car, but they will to save $100 on a $200 stereo. He explains the cognitive mistake as follows:
> This kind of thinking drives economists crazy, and it should. Because this 100 dollars that you save -- hello! -- doesn't know where it came from. It doesn't know what you saved it on. When you go to buy groceries with it, it doesn't go, I'm the money saved on the car stereo, or, I'm the dumb money saved on the car. It's money. And if a drive across town is worth 100 bucks, it's worth 100 bucks no matter what you're saving it on.
[1] https://www.ted.com/talks/dan_gilbert_researches_happiness.h...
If i can save $100 every two-three months, with no downstream liability as a result (like the cost of taking my car the extra distance to the dealership) then I've profited $4000 over 10 years.
It's not the way you treat customers, Period.
so because i just spent 1500 on something valuable, i should be ok with spending 79 on something not worth its value?
also a lot of companies offer great customer service for high-ticket items for free in order to encourage more purchases so people feel 'they got what they paid for'.
adobe's value in support is nothing, zilch, nada, zero. paying 75 for it, even if i just paid 1500, is not worth it AND they could learn a thing or two about customer service and should offer it for free.
a) We are self-aware enough to acknowledge that the end of flash being relevant is nigh, so let's monetize this thing while we can
b) We think flash is a growing platform, and we're in a position of strength (like Apple's App Store), so the percent of revenue is something people will hate but tolerate
(Due to MBAs' infrequent use of the word 'nigh', b) is more likely)
Is this an accurate assessment?
By adding this license fee, Adobe puts a serious damper on that.
(edit: people were planning on using Unity for plain old 2D games; the nature of the toolkit is that even exporting those to Flash would run afoul of the licensing requirement)
Adobe is targeting operations that are 1) making allot of money of their platform and 2) could benefit from the new features.
And for exchange to access the new features that will make their games port easier, run faster, and allow for more play, they want a small fee back.
> Is this an accurate assessment?
No.
If you want to create a 3D game using Unity and deploy to Flash, for example, you will need to pay the 9%. That's a lot of people, Flash support for Unity was a much-requested feature. So that's a lot of people right there.
And this isn't just Unity users. Any fast 3D game will require the premium features.
You might want to export to Flash if you're going the licensing/sponsorship route ala Armor Games, Kongregate etc but there's not a ton of demand for the 3d stuff anyway.
This 9% cost will affect all those developers. They are not a small group - Unity would not have put the effort it did into supporting a new (and very different) platform, Flash, if it wasn't for a large group.
Caveat: Adobe has actually not issued specific rules or statements on when licensing is required, so until they do, any analysis is really just conjecture.
Edit: The facts on which I based my analysis have changed. Adobe has issued a FAQ, and Unity has confirmed that the Unity-Flash conversion uses both features. Consequently, the practical effect is that any game that succeeds in reaching the $50,000 revenue threshold will incur licensing fees of 9% on the revenue in excess of $50,000 (i.e., $0.09 for $50,001 total revenue, $4500 licensing fee for $100,000 total revenue).
Unity's export to Flash does currently require both 3D and memory-optimization technologies. Any Unity-Flash game that has a chance of netting $50k falls under the requirement, from what I currently understand. This basically covers any non-hobbyists. Unity could solve this problem by making their Flash exporter not use "domain memory", but that might be technically infeasible.
One interesting question is, if my company makes 5 games, each of which makes $49k, is that legit? Could I get away with taking down any game right before it nets the magic number and putting up a "new" game which is only slightly different? I'm guessing the answer is "no", but edge cases sound like a nightmare.
Yes, but all Unity games on Flash do use both. So all Unity games on Flash will need to pay 9%.
Here's a question in general though, ExternalInterface.call allows you to execute javascript in the browser from flash. So if you'd use ExternalInterface.call to control WebGl you wouldn't need Stage3D.request3DContext for hardware acceleration and thus allows you to use ApplicationDomain.domainMemory at the same time without needing a licence?
Can that actually be legally enforced? I assume this tax would be part of the TOS for using an authoring tool. A consumer has to agree to the TOS for using/downloading the Flash client. But if I want to put up an SWF file I built without Adobe tools... who can legally stop me?
Unless there's some kind of encryption key for generating signed Flash files necessary for the functionality, and circumventing them would run afoul of the DMCA...
In the original announcement, they say, "When the premium features licensing terms go into effect, unlicensed content will continue to run but will no longer have access to the premium features tier". Which implies that somewhere in the player they're planning to have a if(date() < August 12, 2012 || signed()) bit of logic.
When you buy your computer/phone/tablet you are not purchasing hardware and software to use as you please, you are purchasing access to a "platform" that can reach into your computer and make decisions based on not-your self interest.
Proprietary software has been around for a long time, young Padawan. And for all that time, using it has meant knowing that the platform owner could step in at any time and ream^H^H^H^H"monetize" you.
Since when has the SWF format had "fundamental openness"? It's the exact opposite.
It's Adobe's tools that aren't free or open.
Since approximately the 1st of May, 2008[1]. Adobe publishes a specification of the file format[2], currently at version 10[3]. N.B. The Wikipedia entry suggests[4] that the specification does not exhaustively cover the capabilities of the format.
[1] http://www.adobe.com/aboutadobe/pressroom/pressreleases/2008...
[2] http://www.adobe.com/devnet/swf.html
[3] http://wwwimages.adobe.com/www.adobe.com/content/dam/Adobe/e...
CA (Computer Associates) made this their primary product revenue stream by buying up old software (eg. Clipper, Ingres, etc.) that still had an installed base. They invested minimal amounts into product maintenance (make sure it works on the newest version of Windows) and rake in the licensing revenue from the remaining user base.
The only thing different is that Adobe is essentially doing it to themselves--monetizing their own long tail instead of selling to a long-tail specialist and moving on.
I disagree it is 'pretty peculiar', I think it is 'pretty obvious' why Adobe has done this. After years of growth and dividends and success, they have gone through a decade of sideways motions where they are resorting various and sundry cost cutting moves to keep their stock afloat. They have 'good enough' disease.
That is the disease where computers and their products which run on those computers have become 'good enough' and their customer base isn't rolling over every 12months to pony up an upgrade fee. One of the interesting ways to see this effect is to look for sales of technical books about older versions of a particular software. When they are still selling well it is because those folks are using the 'old' version rather than upgrade.
Given the pricing model Adobe doesn't have a good way to capture that market. They have aggressively been trying to shut down re-sale of older versions on Ebay and elsewhere but the courts have handed them a couple of set backs too because their licenses do actually allow it.
So they have a product, Flash, which they have already said is 'dead' [2] in that its future is maintenance only, and so they perhaps figure, what the heck, lets get some money out of it before it goes.
[1] http://www.google.com/finance?chdnp=1&chdd=1&chds=1&...
[2] http://money.cnn.com/2011/11/10/technology/adobe_flash/index...
Adobe makes money from Flash by selling licenses to the tools. During the long period of platform growth, developer community growth and turnover helped maintain profits through new license sales. Now that the Flash community is shrinking, that revenue is not sufficient to maintain the profits that will motivate Adobe to fund continuing development of the platform. This is a business, after all, not a nonprofit like the Apache Foundation.
Meanwhile, you have companies like Zynga making profits from software built on the Flash platform disproportionate to the number of Flash licenses they purchase. Zynga owes much of its success to the high market penetration of the Flash player, which makes its social games extremely accessible to its non-technical core users.
It's reasonable to place much of the blame for Flash's decline on Adobe for failing to maintain the quality of the Flash Player and for underestimating the shift to mobile/tablets. In light of those failures and what must be rapidly falling Flash tool sales, Adobe has made a decision to change the revenue model for Flash so that they can continue to profit from the platform.
100% agreement. Going from a infrastructure support model to a rent seeking model. This will hasten the abandonment of their platform as historically rent seeking has been antithetical to supportable business models in users of the technology at hand, especially if there is no FRAND agreement in place for the technology.
Also, Adobe didn't declare Flash dead, they just discontinued the development of the mobile browser plugin (which no one was actually targeting). Flash on mobile devices is alive and well and running on Air better than ever, on both the iOS[2] and Android[3].
[1] http://en.wikipedia.org/wiki/Adobe_Systems#Revenue [2] http://blogs.adobe.com/flashplatform/2011/09/flash-based-mac... [3] http://blogs.aerys.in/jeanmarc-leroux/2012/02/02/air-3-2-sta...
Please, Adobe, keep this shit up.
This. Seems near impossible to keep track of all those different devs, monetizing in so many different ways.
However, this isn't an apt comparison to what Adobe's doing. Apple, Google, Amazon, etc provide the infrastructure, hosting, payment processing, and the integration into the device. Adobe is providing none of this, yet is still claiming a piece of the action.
The guys that do it, do it because they can.
When GOOG and AAPL first launched their stores, it they were clear in saying they were going to take 30% (hosting/banking/whatever they justified). If you had a successful product with Adobe that was running for over a year using their "premium" libraries, you just lost 9%.
If my game makes 60k one year, then 300k the next year because I poured money into marketing, development, new content, better experience, etc.... why should adobe get more money? Especially if none of the new growth had anything to do with the licensing. This is so insane... Why would anyone agree to this?
Apple has a giant marketplace thats allows people to find your app by search or discovery, they distribute it, they host it, they manage the servers for the store, they keep it secure, they host the feedback, they have a massive customer base that they offer your app to in an easy to use marketplace, etc. etc.
adobe is just unlocking a portion of an language/api essentially. Ive never heard of a premium upgrade taking a portion of your revenue. ive only ever seen a fixed rate to have access to better features. That's just insane. I would never pay this & I pay 25% of my revenue for a marketplace for my scripts & themes
9% for unlocking an api? that's insane/offensive/hilarious & i would never participate in such a thing. it feels like a bully taking part of my lunch money no matter how much my mom gave me.
There is a huge potential for security exploits in 3d code. Drivers are optimized for performance and glitches will likely allow malicious code.
Forcing developers who use these features to sign their code gives Adobe a way to police exploits.
In fact, look at how soon the cut off date is. A researcher has probably sent them a proof of concept exploit. Adobe's solution is to disable the feature for most developers.
1) I've been in a company with a large established user base on a development environment. This is a very tempting option for such companies. (Look at the comment elsewhere referencing CA.)
2) Such a tax is not regressive. The $50k minimum is actually very friendly to the little guys.
Is the title of this post fud filled interpretation, or are there some facts?