Shareware author Steve Pavlina responds to my conversation with Scott Adams


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May 25, 2001

Steve Pavlina, President of Dexterity Software and author of bestselling shareware game Dweep, responds to my conversation with Scott Adams.

Robert McNally


From: "Steve Pavlina" <stevep@dexterity.com>
To: "Robert McNally" <ironwolf@dangerousgames.com>
Date: Fri, 25 May 2001 10:32:10 -0700

Hi Robert,

We discuss issues like these in the ASP [the Association of Shareware Professionals] every once in a while. The general consensus for now seems to be that people who pirate software won't pay anyway. One ASP member has been using cookies to track usage of pirated versions of his software and to attempt to convert pirates into registered users via his web site. After one year if I recall correctly, he didn't manage to convert a single one to a paying customer, even though he tracked hundreds of illegal copies.

Quite a while back a shareware author and user case study showed that the #1 reason people register shareware is that they felt the program was high quality and that the author deserved the money.

One thing that's been found by many ASP members is that registration incentives are very important to sales. Giving away too much will generally hurt sales. I think Dweep does well for me because the shareware version can be used up -- i.e. the demo levels aren't really replayable because the key is figuring out how to solve them. So the demo provides maybe 30 minutes of gameplay, enough to show you what the game is like but also get you hooked. I previously had a 10-level demo, but sales have been slightly better with the 5-level demo.

I take a very pragmatic view. I'll combat piracy when it becomes profitable to do so. Right now it isn't a good use of my time. The most successful ASP members seem to do little about piracy. They have cracks and keygens for every release, yet their sales continue to thrive. Those who choose to fight piracy are often caught in a never-ending battle, trying to convert the least-convertible subset of the population into paying customers; meanwhile their sales stagnate or decline because they aren't focusing on income-generating actions.

Some developers get emotionally upset if they know even one person is using their software illegally. I occasionally get the juvenile email that says, "Hehehe. I'm playing a pirated copy of your game." My response is simply, "Thanks for playing." Instead of getting upset, I choose to feel grateful that at least someone is enjoying one of my games. This also prevents me from developing negative associations to running my business. I don't want to associate unnecessary negativity to my work if I don't have to, since that would just make the work less fulfilling.

I wonder what id Software would think about Scott's idea that shareware is a commercial flop. That's of course the general perception, but like many things, perceptions are often wrong. I think the try-before-you-buy model has never been stronger. Microsoft uses it. Intuit uses it. So do many other major publishers. Scott Miller (founder of Apogee) just posted in the ASP forums yesterday about a writer looking for shareware success stories. And I was recently interviewed and photographed by the NY Times for an article about shareware success -- it will be in the June 13 edition. Nowadays, that Dilbert office worker could be making money on the side with his own shareware programs, eventually quitting his day job to run his own software business. :)

What Scott doesn't understand is that the reasons for shareware success vs. failure are becoming more well understood each year. Scott could also say that most businesses are a "spectacular commercial flop," and that would be true as well. Even from established companies like Proctor and Gamble, about 80% of new products fail. But there are patterns in shareware that I believe make it easier to predict and repeat success and prevent failure. Like writing books, you really just need one good hit to get established, at least for a while. With each new game I release now, I have more and more ways to promote and sell it. For one, every day my customer database grows larger, I have more newsletter subscribers, I have better press contacts, and so on. You can fail dozens of times, but you just need one success to effectively erase them all. I can see who the next bright stars will be because they're the people who are asking all the questions, hungrily gobbling up knowledge; they experiment, and they go from one setback to the next without any loss of enthusiasm. They'll succeed simply because they'll keep making better and better attempts until they get it right.

You know as well as I do how little developers earn per unit from retail sales. How much would a budget retail game make for the developer? $1-2 per copy maybe. Instead my company makes almost all of the retail price, except for the credit card processing fees. So we can do far better than retail with just 5-10% of the sales we might get in retail. And it's far less risky and has other long-term benefits, such as the potential for back-end sales, building a customer list, etc. Some say that you make it up in volume in retail; that hasn't been my experience. When I see industry veterans like Looking Glass Studios fold after 12 years with several hit titles, I know I'm on the right path to use the direct sales model.

Scott is right though that good incentives are key. The old Shareware = Registered version debate was soundly defeated a few years back when a developer ran a pretty compelling experiment showing how just one good incentive could dramatically increase sales. Other developers then followed suit. I've found that the more incentives I put in my products, the better my registration rate. My partner RealNetworks has found similar results and has been sharing what they've learned with their developers. Weak incentives = weak sales. I often say to developers at conferences that what you're selling is the difference between the registered version and the shareware version.

The "article" you mentioned from me wasn't actually an article originally. It was just a long-winded post I made in the ASP forums, but a friend liked it and wanted to add it to his site, so I gave him permission. The two people I mentioned in the article (Tom and Terry) are both doing even better today than they were when I first wrote this. Both recently celebrated their $1,000,000th dollar made from shareware, and both currently make tens of thousands of dollars a month. Each has just one product that accounts for the vast majority of their sales. I think Tom's company is just him and his wife (and cat), and Terry has 2 or 3 people working for him. I'll be seeing both of them again at the Shareware Industry Conference in July. All three of us have products nominated for the Shareware Industry Awards this year (www.sic.org/2001nominees.asp). What's interesting is that all three of us employ different strategies. Tom basically dominates the search engines for keywords like "soliataire," and his uses freeware to promote his shareware products. Terry does a lot with referral sales from current clients. And I get good mileage from a variety of quirky strategies that all work together synergistically.

Scott makes a good point about Napster. Piracy may become a bigger problem if it becomes easier to pirate than to buy. For instance, how many people will bother to look for a crack for a $20 program? Is it worth their time? Many cracks don't work, and they require some intelligence and skill to even use, but if they became simpler and more ubiquitous, how many more people would pirate? There are honest people who don't pirate, but there are also borderline people who just do what's easiest for them. Right now it's generally easier to shell out $20 than to try to hunt down a crack, which may or may not work. But if that changes, who knows?

Steve Pavlina
Dexterity Software
http://www.dexterity.com
"Boredom's Greatest Enemy"


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Most of the action on my site is now in my blog and my tumblelog. I invite you to visit!