Early Access needs Signed Off investment review financials

[Ror(Moot)]

To preface, I'm not starting this discussion because I'm 'butthurt' about getting "scammed" by an early access developer, more so to illustrate a process that I think would be both beneficial for steam customers and Valve.

So to begin, I am an investments manager for a large subsidiary that develops software products for businesses and some software products that reach the final consumer. Our parent company gives a very limited amount of investment dollars each year, and because we are a subsidiary, we do not have access to the kind of capital that a typical corporation would have (such as free cash flow, bond issuing, stock issuing, outside investment, etc.); therefore, we take investments in our products very seriously and apply serious financial analysis to make sure any new project passes the "sniff test."

(To those who don't know, a "sniff test" is basically a simple test to see if the financial assumptions even make sense. For example, if a project manager makes a financial assumption that would imply doubling our current account openings, we would probably be extremely skeptical.)

Anyways, I believe each and every development team that wishes to sell early access should provide Valve (and the steam community) with approved financials in order to start charging steam users for early access content. Just as a typical investor would want audited financial statements before making an investment, I believe that steam users should have the same thing, especially since making an early access purchase is essentially an investment, given that they are paying now for the expectation of a better product later.

The early access financials should include expected costs to release and revenue assumptions on how the game will break even at the very least.

So for example (and I'm completely making these numbers up), a development team wants to release an MMORPG and expects internal and 3rd party development to cost $5,000,000 to achieve full release in one year. Additionally, the team will need to rent servers to host the game while in early access which will cost $10,000 per month. The development team knows they are appealing to a limited niche market of about 15,000 to 22,000 players. Using basic math with some sensitivity, the development team knows that they will need to capture anywhere from $341 upfront per player (assuming only 15,000 players in the market) to $234 upfront per player (assuming 22,000 players in the market). Also assuming that Valve doesn't have a revenue share*.

Already, it becomes clear that this game will not likely ever leave alpha or beta unless the developers choose a different pricing option (such as subscription fee + upfront fee). And I think this is the kind of information that is critical before someone actually purchases an early access game, especially if they're buying it with the belief that it will actually be finished. (Some people buy them just to try a new concept, like me, so I'm not particularly bummed if the game development halts.)

Using this kind of transparency should limit the number of early access failures and increase the number of early access successes because customers will know what is required to make a game happen. If there are indeed 22,000 people in the market from the example above, and they are so jazzed about the game that they are will to pay the $234, then the game most likely will succeed (assuming the costs are accurate).

Now, if the financial analysis was never done and the developers only charge $20-$50 to play early access, most likely the 22,000 players (and maybe some more who are just interested) will only pay the $20-$50, creating an immediate insolvency in the development of the product simply because neither Valve nor the Developer nor the Customer knew what was truly required to bring the product to fruition. And yes, I include the developer because quite often developers are NOT financial people - they do not think in dollars and cents - so it would be a very good value-add exercise for them to understand what is needed for their game to succeed.

Furthermore, in regards to development costs, I would expect the same kind of analysis to be done as well. For example, if a company with 50 full-time employees all working on the game says they only need $500,000 to complete the one year of work needed, it becomes very easy call that out as a financial issue before the game is approved for early access. Knowing the costs is probably the most important issue for early access as it often will be the best indicator for success or failure.

All in all, I know this is a very high-level summary of what could be done, and I truly believe this process would help remedy the gaps in knowledge that currently exist. So please, let me know what you think!

[Tux]

at this time there is not a need for consumer protection around Early Access. There maybe in the future but as it stands right now the game most people play are frigging fantastic and get great things said about them.

there is however, ioronically, an arguement to be made that there should be consumer protection around more traditional game publishing approaches

[Ror(Moot)]

引用自 Tux：

there is however, ioronically, an arguement to be made that there should be consumer protection around more traditional game publishing approaches

Too true.

But I don't think this process is that time consuming or costly for either Valve or the Development team. I believe it's just keeping everyone honest and informed. There might be some fantastic games that are simply underfunded and consumers are willing to pay more to fund it.

For example, I purchased a game last week that is truly awesome, but it simply will require a higher upfront fee and subscription revenue to keep it going, and that was probably needed from the start.

[Dendrobates Tinctorius]

引用自 Ror(Moot)：

So to begin, I am an investments manager

So you own a hammer; why do you think there are so many nails here?

Steam users who preorder games and then whine that the games suck are scarcely the people you want to audit financials.

[Tux]

引用自 Ror(Moot)：

引用自 Tux：

there is however, ioronically, an arguement to be made that there should be consumer protection around more traditional game publishing approaches

Too true.

But I don't think this process is that time consuming or costly for either Valve or the Development team. I believe it's just keeping everyone honest and informed. There might be some fantastic games that are simply underfunded and consumers are willing to pay more to fund it.

For example, I purchased a game last week that is truly awesome, but it simply will require a higher upfront fee and subscription revenue to keep it going, and that was probably needed from the start.

honestly I think highly regulating what is basically a donation for low budget creative projects will have a negitive affect of slowing down creativity. The more controls we put on creative projects the less likely they are willing to take risks.

I think for now we should focus on the issue of falst advertising..,
(aka graphics of ubisoft games)

[Ror(Moot)]

引用自 Tux：

引用自 Ror(Moot)：

Too true.

But I don't think this process is that time consuming or costly for either Valve or the Development team. I believe it's just keeping everyone honest and informed. There might be some fantastic games that are simply underfunded and consumers are willing to pay more to fund it.

For example, I purchased a game last week that is truly awesome, but it simply will require a higher upfront fee and subscription revenue to keep it going, and that was probably needed from the start.

honestly I think highly regulating what is basically a donation for low budget creative projects will have a negitive affect of slowing down creativity. The more controls we put on creative projects the less likely they are willing to take risks.

I think for now we should focus on the issue of falst advertising..,
(aka graphics of ubisoft games)

True - I think it should be more of a donation like Kickstarter. There shouldn't be a fixed price necessarily. But also like kickstarter, the developer should make it clear how much money is needed to achieve a minimally viable product. Maybe put that next to the price/donation button on the store page.

[Ror(Moot)]

引用自 Dendrobates Tinctorius：

引用自 Ror(Moot)：

So to begin, I am an investments manager

So you own a hammer; why do you think there are so many nails here?

Steam users who preorder games and then whine that the games suck are scarcely the people you want to audit financials.

Haha - that is true.

Maybe I shouldn't say "audit" but rather have some kind of transparency (that may lead to helpful discussions).

[Tux]

引用自 Ror(Moot)：

引用自 Tux：

honestly I think highly regulating what is basically a donation for low budget creative projects will have a negitive affect of slowing down creativity. The more controls we put on creative projects the less likely they are willing to take risks.

I think for now we should focus on the issue of falst advertising..,
(aka graphics of ubisoft games)

True - I think it should be more of a donation like Kickstarter. There shouldn't be a fixed price necessarily. But also like kickstarter, the developer should make it clear how much money is needed to achieve a minimally viable product. Maybe put that next to the price/donation button on the store page.

in fact I find Early Access more secure that Kickstarter when it comes to buyer protection.

My issue regarding this topic is this.

Many people are trying to solve a probelm that doesnt exist while at the same time ignoring the problems that DO exist.

This concerns me deeply.

[Dendrobates Tinctorius]

引用自 Ror(Moot)：

Haha - that is true.

Maybe I shouldn't say "audit" but rather have some kind of transparency (that may lead to helpful discussions).

But the problem remains that transparency isn't particularly beneficial when people don't know how to use what they're looking at.

[Ror(Moot)]

引用自 Dendrobates Tinctorius：

引用自 Ror(Moot)：

Haha - that is true.

Maybe I shouldn't say "audit" but rather have some kind of transparency (that may lead to helpful discussions).

But the problem remains that transparency isn't particularly beneficial when people don't know how to use what they're looking at.

Right - what about a simple structure like:

Goal (Money Needed)
% to Goal (Percentage of Goal that has been raised)
Goal Left (Remaining dollars needed to achieve goal)

So then if someone sees an early access with only 10% of goal that has been out for 2 years, they will know to avoid it.

[Tux]

引用自 Ror(Moot)：

引用自 Dendrobates Tinctorius：

But the problem remains that transparency isn't particularly beneficial when people don't know how to use what they're looking at.

Right - what about a simple structure like:

Goal (Money Needed)
% to Goal (Percentage of Goal that has been raised)
Goal Left (Remaining dollars needed to achieve goal)

So then if someone sees an early access with only 10% of goal that has been out for 2 years, they will know to avoid it.

what is wrong with existing system as it is?

For me I am pretty sure that if it was for Early Access I would no longer be playing games at all. So from my vision I think we should leave best alone.

[cinedine]

引用自 Ror(Moot)：

Right - what about a simple structure like:

Goal (Money Needed)
% to Goal (Percentage of Goal that has been raised)
Goal Left (Remaining dollars needed to achieve goal)

So then if someone sees an early access with only 10% of goal that has been out for 2 years, they will know to avoid it.

How should this help? First off the data has to come from the developer as Valve is in no position to demand anything from them nor should any company be forced to lay out their development schedule and progress for the public.
And a game which is at 95% after 3 months might end up just as a much as a turd as the 10% after 2 years. Also development goes in different paces, studios have different sized teams and God only knows what could go wrong. Making such data visible would hinder the program as a whole as people would only buy into games which are close to finishing and games which participate in the program at an early stage would see virtually no benefit from it.

引用自 Ror(Moot)：

Anyways, I believe each and every development team that wishes to sell early access should provide Valve (and the steam community) with approved financials in order to start charging steam users for early access content. Just as a typical investor would want audited financial statements before making an investment, I believe that steam users should have the same thing, especially since making an early access purchase is essentially an investment, given that they are paying now for the expectation of a better product later.

NO. People who buy into Early Access are not investors. They purchase the product as is and what is essentially a lifetime subscription to any updates. There is no investment going on, it's a normal store purchase. Also the intentions as well as the scale are completely different: Investors pay large amounts to make a profit in return and go at risk of losing their money. Gamers pay a small sum to receive a playable copy and they do pretty much right after their pledge. The only risk they run is to end up with an unfinished product - which isn't too different from some major releases nowadays.

[Ror(Moot)]

引用自 cinedine：

NO. People who buy into Early Access are not investors. They purchase the product as is and what is essentially a lifetime subscription to any updates. There is no investment going on, it's a normal store purchase. Also the intentions as well as the scale are completely different: Investors pay large amounts to make a profit in return and go at risk of losing their money. Gamers pay a small sum to receive a playable copy and they do pretty much right after their pledge. The only risk they run is to end up with an unfinished product - which isn't too different from some major releases nowadays.

I'll address this first. Any ASSET you buy is an investment in the general sense. Every. Single. One. Why do you buy a chair? Because you're investing in the perceived opportunity to be able to sit down. The chair may be ♥♥♥♥, and it may break, but you have purchased the asset with an intended, continuous benefit.

The amount of money does not matter. There are large investments and there are smaller investors. Everyone is an investor. An investment is not necessarily something you purchase with the expectation of a cash return. I invested in an expensive mattress to have better sleep and be more productive during the day. I'm not directly getting cash out of the investment, but I am achieving the benefit from the asset.

Why do you buy a video game? Because you're investing in the perceived opportunity to reap fun and fulfillment out of the product (hopefully for a long time). Software is an asset. Video games are software. If you were a business, you would depreciate your software assets because they are not a consumable good like an apple or piece of paper.

Yes, gamers pay with the disclosure that there may or may not be changes to the product they're currently buying, but without any kind of official statements, they can't know if/when/how the game is going to go anywhere.

And as with bad major releases, they are advertising that as the finished product. The consumer knows that it is finished and will not see major changes, if any (depends on the genre). But with a game that is explicity known as not-finished, the final consumer should know how the development is coming along.

引用自 cinedine：

How should this help? First off the data has to come from the developer as Valve is in no position to demand anything from them nor should any company be forced to lay out their development schedule and progress for the public.

Valve is in a perfect position to demand that information. Valve has a right to protect the integrity of their product (Steam), and hosting half-made games can be bad for business. As well, Valve can easily stipulate in their contract that this information be provided. And yes, development teams should be required, to some extent, to publically layout their developmetn schedule and progress because otherwise there is too much room for potential fraud, given that a small team could produce great screenshots, a video, and a compelling description to lure people in with no ability/intent to work further on the game.

引用自 cinedine：

And a game which is at 95% after 3 months might end up just as a much as a turd as the 10% after 2 years. Also development goes in different paces, studios have different sized teams and God only knows what could go wrong. Making such data visible would hinder the program as a whole as people would only buy into games which are close to finishing and games which participate in the program at an early stage would see virtually no benefit from it.

Yes, there are ♥♥♥♥ games from powerhouse studios and ♥♥♥♥ games from tiny, unheard of studios. But unlike large studios/publishers, smaller studios may or may not even have a reputation to uphold, so asking them to provide some kind of credibility is completely fair. Also, on a similar note, games that are at 90% completion would, in fact, probably get more attention because they were good enough to reach 90%. If a game at 10% was actually something people were really interested in, people would continue to fund it. Supply & Demand.

[supertrooper225]

引用自 Ror(Moot)：

引用自 cinedine：

NO. People who buy into Early Access are not investors. They purchase the product as is and what is essentially a lifetime subscription to any updates. There is no investment going on, it's a normal store purchase. Also the intentions as well as the scale are completely different: Investors pay large amounts to make a profit in return and go at risk of losing their money. Gamers pay a small sum to receive a playable copy and they do pretty much right after their pledge. The only risk they run is to end up with an unfinished product - which isn't too different from some major releases nowadays.

I'll address this first. Any ASSET you buy is an investment in the general sense. Every. Single. One. Why do you buy a chair? Because you're investing in the perceived opportunity to be able to sit down. The chair may be ♥♥♥♥, and it may break, but you have purchased the asset with an intended, continuous benefit.

The amount of money does not matter. There are large investments and there are smaller investors. Everyone is an investor. An investment is not necessarily something you purchase with the expectation of a cash return. I invested in an expensive mattress to have better sleep and be more productive during the day. I'm not directly getting cash out of the investment, but I am achieving the benefit from the asset.

Why do you buy a video game? Because you're investing in the perceived opportunity to reap fun and fulfillment out of the product (hopefully for a long time). Software is an asset. Video games are software. If you were a business, you would depreciate your software assets because they are not a consumable good like an apple or piece of paper.

Yes, gamers pay with the disclosure that there may or may not be changes to the product they're currently buying, but without any kind of official statements, they can't know if/when/how the game is going to go anywhere.

And as with bad major releases, they are advertising that as the finished product. The consumer knows that it is finished and will not see major changes, if any (depends on the genre). But with a game that is explicity known as not-finished, the final consumer should know how the development is coming along.

引用自 cinedine：

How should this help? First off the data has to come from the developer as Valve is in no position to demand anything from them nor should any company be forced to lay out their development schedule and progress for the public.

Valve is in a perfect position to demand that information. Valve has a right to protect the integrity of their product (Steam), and hosting half-made games can be bad for business. As well, Valve can easily stipulate in their contract that this information be provided. And yes, development teams should be required, to some extent, to publically layout their developmetn schedule and progress because otherwise there is too much room for potential fraud, given that a small team could produce great screenshots, a video, and a compelling description to lure people in with no ability/intent to work further on the game.

引用自 cinedine：

And a game which is at 95% after 3 months might end up just as a much as a turd as the 10% after 2 years. Also development goes in different paces, studios have different sized teams and God only knows what could go wrong. Making such data visible would hinder the program as a whole as people would only buy into games which are close to finishing and games which participate in the program at an early stage would see virtually no benefit from it.

Yes, there are ♥♥♥♥ games from powerhouse studios and ♥♥♥♥ games from tiny, unheard of studios. But unlike large studios/publishers, smaller studios may or may not even have a reputation to uphold, so asking them to provide some kind of credibility is completely fair. Also, on a similar note, games that are at 90% completion would, in fact, probably get more attention because they were good enough to reach 90%. If a game at 10% was actually something people were really interested in, people would continue to fund it. Supply & Demand.

I don't see how this is supposed to help anything. Games are not finished until they are finished. Most people claiming "scam" are those that do not realize what they signed up for to begin with. Contrary to many people's opinion...most of the games are not scams. Many of them are simply unfinished and users can choose to opt in to early access to participate in development if they are truly fans of the concept. But users are told that game features may not be in the final product and that you are buying the game at your own risk.

Bottom Line. DO NOT PARTICIPATE IN EARLY ACCESS UNLESS YOU ARE WILLING TO TAKE THE RISK. It is not there to give you a nice shiny new polished game. It is there to give another route to market for developers. Sometimes things don't go according to plan during development and certain features or selling points are not able to be completed. So, some features get cut.

If you want no risk.....play a finished game. Unfinished games are naturally up in the air as far as risk goes. The devs may be able to make the game they want....they may not. It takes developing the game to find out. No spreadsheets or collections of numerical data will ever change that.

Investors invest in stock....people who buy games are not investors....they are consumers. The term 'investment' only implies that you are transferring money for a product in this situation. And it is the product that is avaiable as of NOW in Early Access. There are no promises or anything beyond that.

[belaerdei]

By the way just becouse you write out in terms that you sell full of garbage,that not mean you should be allowed to sell full of garbage at the first place.

[Gus the Crocodile]

引用自 Ror(Moot)：

I'll address this first. Any ASSET you buy is an investment in the general sense. Every. Single. One. Why do you buy a chair? Because you're investing in the perceived opportunity to be able to sit down. The chair may be ♥♥♥♥, and it may break, but you have purchased the asset with an intended, continuous benefit.

Seems to me you're moving the goalposts. Up in your original post where you said "making an early access purchase is essentially an investment, given that they are paying now for the expectation of a better product later", you didn't give the impression of talking about this kind of general, almost colloquial usage. Indeed, you had set up "a typical investor wanting audited financial statements before investing" as the context in the same sentence.

Then it gets pointed out that actually, Early Access is a purchase of the current state like any other time you buy software, and you switch to this "everything is an investment" angle to justify your use of the term.

And sure, in a general sense, that's absolutely right; I have no problem with that as its own statement. But it does make it meaningless to invoke Early Access's status as an investment as part of your argument because it's no longer a special thing to be. If all the things I buy are investments then this thing being an investment is no reason for it to be treated differently.