Valve CEO: 'Pissing off the Internet costs you a million bucks in just 2 days' | Hacker News Reader

Valve CEO: 'Pissing off the Internet costs you a million bucks in just 2 days'

uk.businessinsider.com

76 pointsalexcasalboni64 comments

Gabe said that just the additional email they received over a few days cost them a million: "That's like 1% of the cost of the incremental email the program has generated for Valve employees (yes, I mean pissing off the Internet costs you a million bucks in just a couple of days)."

That seemed preposterous to me. It can't be the additional hardware expenses to store/process the mail, those are negligable. I suppose it's simply the time the support staff have to spend to weed out all the irate mails. But can that really amount to a million dollars? Existing solutions for combating spam must be sufficient to classify those mails and throw them away or send out the boilerplate message the support staff would have sent otherwise.

> Existing solutions for combating spam must be sufficient to classify those mails and throw them away or send out the boilerplate message the support staff would have sent otherwise.

Except maybe (I haven't tried contacting them) Valve isn't the kind of company that annoys customers even more by bulk classifying their mails and sending generic spam back?

Well based on their support system I would be surprised if they were opposed to sending out automated messages on principle.

From what I've heard however the emails may have been answerable/seen by non-support within the company meaning expensive developer time may have been used on reading and replying to emails.

The thing is: Gabe Newell put his personal e-mail account on some games (I remember seeing it in HL2), and promised to read all those he can, even if he does not reply...

I think that mass deleting e-mails would be noticed by the people e-mailing Gabe...

> I think that mass deleting e-mails would be noticed by the people e-mailing Gabe...

If he doesn't promise to reply, how?

Last time I sent an email to that address, I got a boilerplate response back. Granted, this was during the potato sack ARG.

I don't think Gabe's response was the result of a thorough financial analysis or specifically limited to just the costs of email. He probably did some "napkin" math and thought "shit, this probably cost us $1 mil when you add it all up"

They make a lot of money from casual purchases of in-game items and the games themselves. Every day someone's too irate to purchase something is lost revenue.

It probably hit them harder than that, it'll take time to see what kind of a dent sales in add-ons have taken.

Honestly, I thought it was a good idea, funding mod makers to do even better work directly, but maybe they should've stuck to a new game to launch that idea rather than push it back into existing titles where people might get miffed their formerly free mods go paid.

It's probably just a PR move. By pretending to have been financially hurt by this campaign they both stroke the ego of the internet gaming crowd and make it seem that they have been sufficiently punished.

Quite. There's nothing quantifiable in what gaben said but a statement like this is more than enough to have that million dollar figure quoted and re-quoted in discussions about poor gaming company decisions, how to cut losses, the right way to respond, etc.

This is probably a back of the napkin calculation of future lost sales and other actions. I could see it adding up to a large number. Valve really is not in a great position now considering the success of Origin and how current and future version of Windows will make further use of the MS store to sell software.

A lot of that cost is probably in refunds. They're refunding purchasers of mods, but presumably they're not taking money away from mod makers. That would be 25% of the mod costs that they're eating. I doubt they sold $4m in mods in two days, but that plus other costs makes $1m seem plausible.

It isn't just the time spent sorting/filtering hate emails. It's the impact of time passing on issues in legitimate emails that is wasted. Running a platform on the web that has as large a scope as Steam does is incredibly tenuous (ask anyone that works on SaaS applications), and if you aren't efficiently getting the info you need from outside to identify and fix these issues, then you are going to lose money when those issues inevitably make an impact on functionality. Downtime = lost money

A million is a pretty ass-pull number in an offhand comment, but it wouldn't surprise me if it rang true.

Seems about right, you have to tally up the entire economic cost. Salary costs of everyone handling this issue, the cost of them not performing other tasks due to handling this issue, it is not just weeding through emails.

I've been in an 2 hour long meeting with 8 people who are effectively paid $400hr to talk about how to handle a $58 fee.

I don't really get why giving only 25%?

I mean, as a service I don't see any high cost to justify a 75% retain fee. The idea was definitely great, but execution was very poor. I would have been furious with them if I was a modder investing time and, sometimes, money to only get 25% on the price I was deciding for my mod.

This was a huge failure at so many levels... I hope they learned from this lesson.

> I don't really get why giving only 25%?

Valve took their ~30% platform charge, and left the remaining amount to be split per the discretion of the publisher of the game, in this case Bethesda. Bethesda chose to give mod makers roughly 1/3 of the money left, resulting in a final split of Valve 30 / Bethesda 45 / mod author 25.

It was more a financial question honestly, I know the split was btw Bethesda and Valve, but I can't justify why a 75% should go to Valve and Bethesda. That's the key point, I can understand the 30% of Valve, it's actually a samilar rate of other stores/platforms, but what's the financial necessity of the publisher? I mean, the game has been already released, it's making money and mods are usually a very high sales pusher (if well made, e.g. Counterstrike for Half Life). Why keeping 45%? I can't see any financial justification for such a higher rate, I would understand a 10%, max 15%, but no more.

Valve provides hosting, advertising, support, billing etc. Bathesda is essentially providing licensing for the ip and taking a risk they you mod won't harm their product or users, also a little bit of plain old capitalism. Frankly I'm okay with this, it creates a monetary incentive for publishers to create modding Apis etc which can only help in the long run.

Ah that explains the 25%, I saw references to it but had no idea how that had come to be. So Valve's base offer was a standard 30/70 cut, the issue is the game publisher got to decide of the split for the 70%, and Bethesda decided they deserved the vast majority of it.

Honest question- why should Bethesda get any money from mod sales? You need to have purchased the game to use the mod, and mods add something to the game experience that Bethesda didn't have to pay for themselves.

Because modders are using Bethesda's copyrighted intellectual property as the base for their mods. Bethesda deserves a cut because it's their IP.

Still, Bethesda is notoriously greedy... I think many people still remember their Horse Armour DLC.

This silly item kickstarted whole DLC market. I'm not saying its a good or bad thing but its a very big market now.

They already got their cut for the use of their IP.

How are all mods using Bethesda IP? Surely one could make a simple sphere, import it to the game (and any other game) and call it a mod.

It's the same as making a remix of a song. The base of your new version is still the original authors work, so the author deserves a cut. A mod is akin to a remix of the game, and that remix is still mostly Bethesda assets, not to mention running atop their engine.

The game still has to be paid for to play the mod. Bethesda _already_ got their cut when the user paid for the game before even considering the mod.

How are mods their IP? if you add an asset, or you REPLACE an asset. In most cases that's YOUR IP. When I added a M1A1 tank to Battlefield 1942 as a kid, I made the model, I made the textures, I wrote the code for it. The fact that a user places those new assets in a directory in such a way that someone else reads and uses them doesn't mean i'm using their IP.

So if a modder builds their mod on top of someone elses mod , charges for it and refuses the pay other modder you'd be ok with that?

We do the same thing with code and as long as the license is respected, things go smoothly. There's no reason it can't work with mods.

> as long as the license is respected

That seems to leave a pretty huge area for a license that requires payment.

I'd be very okay with it. Then I could charge for my mod, and if their mod is popular it would probably help me sell more.

You're still using their engine and their world. Just because I bring a dish to someone's house doesn't mean I own it. (Of course, in this case, you own the house and you're bringing the dish.. so.. doesn't really work as well)

Of course, this goes back to what was posted last week about true ownership of products (John Deere issue). I'd say you're still right because we've already paid them for their portion of it by buying the game. Not to mention, they'd likely make more money because people have to buy it to use your content.

If anything, modders create demand for the original product. You can't play the mod if you don't own the game. Something like DayZ was a major driver of ARMA2 demand.

I think there might be a positive market dynamic overall for the original game makers to keep a cut: it would encourage more games to be made moddable, especially indies, who would look to an actual extra revenue instead of the unverifiable "mods sell more of the original game", which is definitely true for big names like Bethesda (whom I think could do well with a 0% cut to encourage even more professional mods), but might not attract so many new people into buying an indie game.

Good point. I would think 5% would be a more reasonable number though.

A lot of people in this discussion are asking this question, but I don't think anyone's hit on the real, fundamental answer.

The real, fundamental answer here is that Bethesda can just shut off modding entirely, or at least, they can going forward. Legally, this is their playground up to and including the ability to kick everybody off unilaterally and suing anyone that doesn't comply. Therefore, they can basically charge whatever they like, and give you the choices of taking the deal, or getting nothing.

Now, there are many ways of looking at this situation and you are free to use other value systems for your own opinions. I'm not saying this is the only way of looking at the situation. I'm just saying this is in some sense the most fundamental way to look at the situation... we wouldn't even be having this discussion if it weren't for this base truth of copyright law, EULAs, and the DMCA. Also, I'm not advocating for this position, just explaining it. I have neither created nor necessarily endorse this situation.

("The power to tax is the power to destroy"... well, it runs the other way too.)

And the real, fundamental consequence to disabling mods is that two things happen. First, brighter-hat modders abandon the franchise to make mods to some other game that allows mods. Second, darker-hat modders crack the game, restore the modding capability, and distribute mod-enabling patches or pre-loaders for every official release. The black-hats will simply distribute pirated pre-patched copies, with pre-loaded mods.

Thanks to NexusMods, much of what I actually see when I play Skyrim has actually been created by other end users. This includes the "killer app" of mods, which involves the physics engine and more detailed model skeletons. You know which one I'm talking about. Jiggle, jiggle. The studio probably couldn't create half of those mods and still sell the game on console platforms. They would either bump up against resource constraints on the device or licensing restrictions on content (lookin' at you for this one, Nintendo).

The ability to mod is almost intrinsic to any game where the physics and rendering engine is separated from the content. The only question is whether that content-loader is exposed in any meaningful way to the end user. Even Doom had its WADs. Unless you're willing to completely break your world-design paradigm, motivated players can find a way to alter the content.

So Bethesda does not actually have that power to shut off all mods. They only have the power to shrink the brighter-hatted mod community. And they shoot themselves in the foot by doing so. They couldn't sell their own downloadable content expansions as easily!

Never mind the "bug fix" and "cutting room floor" mods. Arguably, these are things that Bethesda should have done themselves, prior to release.

I can think of no reasonable argument why Bethesda should get a cut of any mod. It would be like the construction contractor that built the wall getting a cut if Banksy painted something on it. Or maybe it's more like the original artist of a thrift-shop painting getting a cut when someone paints dinosaurs into it and resells it for more money. It makes no sense.

Copyright would only apply in that instance if someone made prints from the altered painting, but if you have to buy that existing copy of the original to get the additional dinosaur, there is no copyright violation, because there was no copy made. The dinosaur may now be inseparably attached to the original, but the original was already paid for when it was altered.

There is also this, from the Creation Kit EULA:

"If You distribute or otherwise make available New Materials, You automatically grant to Bethesda Softworks the irrevocable, perpetual, royalty free, sublicensable right and license under all applicable copyrights and intellectual property rights laws to use, reproduce, modify, adapt, perform, display, distribute and otherwise exploit and/or dispose of the New Materials (or any part of the New Materials) in any way Bethesda Softworks, or its respective designee(s), sees fit. You also waive and agree never to assert against Bethesda Softworks or its affiliates, distributors or licensors any moral rights or similar rights, however designated, that You may have in or to any of the New Materials."

http://store.steampowered.com/eula/eula_202480

I can see why Valve deserves a cut, as distributor there are costs associated (though probably not anywhere near 75%). However I don't see why I need to give Bethesda a cut simply because it runs on their platform.

If I develop a Windows application, I don't owe any money to Microsoft. If I make a cocoa app I don't owe money to Apple, There's countless examples of people writing software that runs on top of other peoples copyrighted software. I don't think you can make an argument that it makes your work a derivative work. It's pure crazy to think that I would have to give a substantial cut of my revenues for that "privilege".

In a free market you rarely have to justify rent seeking.

If Bethesda are 'rational' then they estimated how much they'd make at various royalties and decided that they make the most when they take ~45%, so 'deserves' never entered into their decision and it's reasonable to assume that it never entered into Valve's decision to take 30% either.

There's no rule that says what you charge people for a product or service has to be commensurate with your costs.

The game publisher, Bethesda, determined that amount. I think everyone would agree it's steep but that's what the games publisher wanted. If they rolled out these mods for different games, those publishers could choose a different percentage for splitting it.

Hmm ... the problem is that Bethesda were getting 45% ... which is absurd. I already paid for the game, the publisher should get at most 5-6% ... if the scheme was 10% valve, 10% bethesda, 80% mod creator - it would have been a different reaction.

Why should Bethesda get anything at all? Unless they're going to the trouble of making sure their official patches don't interfere with popular mods or something like that, they aren't providing additional value beyond providing the game that was already paid for. I think one of the issues in this wasn't just that mod creators would have gotten a small fraction of profit, but because Bethesda's behavior was somewhat rent-seeking -- attempting to normalize publishers getting a cut of sales that they hadn't gotten before, for doing no extra work.

They provide a platform with fine support for mods. That's some extra work and cost in the development of the platform which allows modders to spend less time and money to finish their mod.

I agree the percentage is ludicrous, but I don't find a small fee unreasonable at all. Developing a customizable system is hard. We may argue that they may sell extra copies based on that feature, but we'd never have objective data to back up or refute that claim.

But they already provided the platform and didn't require a cut before. That's the whole point, that this would be a net negative change from what was before. If we lived in a world where there wasn't a previous modding community and mods weren't a thing, and this was a new option to allow fans to make "non-official DLC" and sell it, then it may be more acceptable.

But given the state of the existing mod communities, doing these things for free or donations and usually out of a love of the game, normalizing an environment where Bethesda gets money for doing no additional work is going to be understandably resisted.

This is like the John Deere article posted about last week. Bethesda must see the game as "rented" from them rather than purchased.

Example:

  If you rent a house and you have a party and make a meal, you are allowed to use the house to your fullest extent and eat as many meals as possible etc but the house is still owned by the landlord.

  If you purchase a house and you have a party and make a meal, you have complete freedom and own the house outright.

Your meal is your mod and your house is Skyrim. They built the house and apparently think that they're just renting it to you even though you flat out purchased it from them.

Bethesda already get financial returns in the form of increased sales due to modability.

I can see why they should get a cut - they provide not only a very moddable game but also pretty good tools. I would be ok if Bethesda has an incentive to design their future games with modding capabilities in mind.

But they should not get more than the actual modder, imo.

One of the reasons their games sell so well is because of the mod support. People are willing to pay lots of money for Bethesda games because they know they can have fun with them for years, on account of all the mods.

Bethesda was already benefiting from the mods in the form of increased sales.

Lots of money for Bethesda games? Are their games more expensive then competition that does not provide modding? Are their games expensive at all? Giving how much gameplay game like Skyrim gives, price seems fair.

Anecdotal, but still relevant. They have typically ended up more expensive than most games for me due to the time it takes for the price to drop down to the same level as a lot of other games, even during steam sales. Even without a price discrepancy though, the reputation of moddability has certainly influenced my decision on bethesda games in the past, as well as other people I know. It's tough for a long time fan of their games to not see this as a way to squeeze extra cash out of their game, especially with the cut they offered modders.

Well I think that there should be incentive for publishers to release mod tools and quality mod tool require effort and support (and modding is somewhat gray legal area)

Would it? A better cut for the mod publisher does not solve the problem of people taking publicly available mods that they did not make, and submitting them into Valve's system to get paid for work they didn't do.

That is copyright infringement ... a whole different case ...

Relevant Forbes Article: http://www.forbes.com/sites/insertcoin/2015/04/24/valves-pai...

My big hangups were:

-Bethesda gets a cut, but offers no guarantees concerning compatibility and user support.

-Mods usually use other mods for back-end functionality or as an augmentation. i.e. using a new cloud generation mod for an overall weather mod. It generally devolves into a legal tangle of who owns what and who gets what.

-The steam green light and early access marketplaces are becoming clogged with low-effort garbage that unscrupulous devs are trying to make a quick cash in. Steam has no structure in place to stop that from happening in the paid mod store.

-They poorly and shoddily introduced monetization in a model that didn't have one already in place, skewing incentives and placing the community under tension.

I really don't understand being mad at having the option to buy things. Don't like it? Don't buy it. What makes me mad is the inability to buy the apps I want as in the Apple App Store.

Most people weren't against the idea of paid mods. They were against the poor execution of it, including but not limited to: * Stealing free mods and either directly uploading them or making a knockoff paid variant. * The revenue split (30/45/25 to valve, Bethesda and the modder respectively) * Resistance to change. Skyrim is old, it's modding scene established and entrenched around nexusmods.com and a certain culture. Valve/Bethesda disrupted it.

That's short-sighted -- one of the largest complaints was nefarious users profiting off of the works of others. From day 1 there were free mods being sold by random jackasses whom have no affiliation with the project.

The only remedy Valve offered was DMCA takedown notices or similar self-directed policing.

Considering that Bethesda's mod tools give Bethesda ownership of any content created with them, would a mod maker even have legal standing to file a DMCA takedown?

The whole Valve team are doing a great job with Steam, I hope gamers get on board with supporting companies that push the realm of gaming platforms, or at leave Valve.

~ When asked how much it would cost to piss off the Internet for 3 days, GabeN was unable to answer, until it was explained to him--yet again--that 3 is the number that lies between 2 and 4. At that time, he replied, "Now you're just making up fake numbers. The only thing I know of that goes between 4 and 2 is 'Dead'." Thus, the Internet remained pissed off, and Valve failed to earn a million bucks. ~

There is no such thing as bad publicity

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