Torque 3D Sidebar - Pricing and Licensing

This is probably the most candid blog post I'll write all year. It's also likely to be quite long. I'm aiming here to communicate a lot of things and I'm hoping they come out in nice fluid arc, but we'll see. It's supposed to be about GG and you, but we might take some twists and turns getting there. I should also warn anyone who's willing to read through this that there are no clear answers in this blog, just thoughts and questions.

While I'm sitting here starting to write this, I'm thinking about how much I like reading Warren Buffett's shareholder letters. I'm certainly not alone in admiring his frank, honest, pull-no-punches style. Buffett's customers are his shareholders, but I notice that very few companies write to their customers this way. What would it be like if they did?

I'm certainly not arrogant enough to draw any kind of comparison between me and the Sage of Omaha, but I really going to try to follow his example in candor and clear communication about business goals.

Most of you probably don't know that I did finance and investment work before joining GG. Though I've always been into games and technology my whole life, it's still a a very weird kind of transition to make from that button up world to the laid back, but hyper-competitve world of a startup software company. Obviously, GG is much more fun, but it's almost demanding in a lot of the same ways finance was for me. You might be surprised how much business is just business, and finding ways to succeed and get more done is universal across those kind of boundaries.

There are a bunch of subjects I'll likely wander around in this post, but the one that bears this post's title is the focus...

RUH-ROH! I can hear the alarm bells going off..."GG is raising prices! I knew it!!!!!!!!!!"

I'll just tear the Band-aid away quickly then. Torque 3D will have a higher price tag than GG'ers are used to from Torque. How much higher? I'm not sure yet to be honest...I've given it a lot of thought, but in the past few months, when I've looked to you guys for feedback, it's always been helpful and understanding, so I figured I'd push my luck and do it again =)

Here are the core principles for GG and Torque that I'm trying to stay true to in working this out:


(1) Make sure that Torque licensing is a sustainable business that allows for signicant reinvestment in the technology--enough to keep Torque at the forefront of modern game engines.


(2) Eat our own dog food. This means we use what we sell, reinforcing the need to reinvest in the technology.


(3) Leverage modern distribution options. This means web publishing, downloadable channels, and any other efforts that upset that status quo in publishing and put more money and control in the developer's hands.


(4) Remain an affordable option for the little guy.


Obviously there's a balance to be struck attempting to serve both (1) and (4). However, there may be less conflict than you'd think. For example, let me talk about (1) a little bit.

Why I'm not worried about Epic or AAA

We made a decision with Torque a long time ago not to compete head to head the top competition in the AAA space. That competitions has emerged in the past decade to be Epic's Unreal engine, first and foremost. While Torque can do a LOT of what Unreal can do, we're executing on a much different business model and strategy...part of it is idealistic, part's pragmatic.

The Unreal engine is driven by the needs of Epic's studio to deliver every year, without fail, on a game with the highest visual impact possible. They succeed, more or less, in doing this with Unreal Tournament and Gears of War. These huge budget AAA games subsidize the enormous cost of developing technology that keeps the games looking better than anything else. By extension, the Unreal engine is percieved as being the best technology at any given time. (Seem like circular logic? Keep reading.)

Sure...there are disturbances in the force. Upstarts like Crytek or Gamebryo steal the limelight now and then, but let's be realistic, Unreal dominates AAA engine licensing. When I say AAA, I mean licensing for use in big budget AAA titles. If you're building a $10-$30M game, you're looking at Unreal first. It inspires confidence in your publisher (guaranteeing more money) and it says to the media and press that "this game is going to achieve a certain visual quality bar that you expect from games made with Unreal." This last part in particular is crucial to the hype-train that gets gamers to pay $60 for a game on release day.

Sound like any other industry you can think of? Come...let's all share in the let down and pretend we didn't just get screwed.

I'd be lying if I said I didn't admire Epic's success in both engine licensing and game development. They've figured out how the game is played and beat everyone under the current ruleset. My hat's off to them. But a lot of this blockbuster-game-driven perception about engines is crap IMO. The dirty little secret in AAA games is that great art, far more than tech, creates visual quality. Even so, "UE = visual superiority => best engine" is the common thinking in the games industry and no one--NO ONE--has been able to break Epic's stranglehold on this section of the middleware market for the better part of decade.

How would you change things if it were your desire to do so?

There are two paths that I see...

You can try to beat Epic at their own game. To do this you'd need a premiere game studio with huge budgets to consistently impress on developers and the press that Unreal is no longer the best performing engine tech around. This means truly high end tech and *really* high end artists that can push the technology's boundaries.

Crytek appears to be trying to execute on this strategy, and they've had some success. id, while a major innovator in game dev technology, appears only casually interested in upsetting the state of Epic's AAA middleware domination. Gamebryo has some good tech and a good marketing / sales team, but no dedicated studio to consistently test the tech and then demonstrate where they stack up next to Unreal or other AAA competitors, so I think they're doomed to fail in AAA. Valve plays a role similar to id. They appear to only casually pursuing licensing of their Source engine.

So that's it... Crytek is the only reasonable candidate to unseat Epic as the AAA engine licensing champion. Why don't I think that will happen? In order to do it, Crytek needs to do it year after year for a sustained period of time, and that demands a lot of money. Epic's makes financially successful games that subsidize the costs of developing their tech. Crytek, to date, has not.

Even for hardcore gamers and the press, it's not just about the good looks, it's also about being on the right platforms, being able to tell a good story in-game. Developers have to find the right gameplay hooks to make a game rewarding. As visually impressive as Crysis is (far more than any UE3 game IMO), the game lacked what was needed to achieve maintream (and financial) success. Minimum hardware requirements that were totally off the charts on the game's release didn't help much either.



Does it make sense for GarageGames to try to go to head-to-head with Epic in the same fashion? Well, maybe we'd consider it if the AAA engine licensing space were a growth market or currently underserved, but it's neither. AAA engine licensing has been a fairly stagnant market for years now and Epic'c never conceded more than about 50% of the available revenue, so I don't know about you, but doing bloody battle for a slice of a pie that isn't growing seems kind silly to me.

So, if not head-to-head with Epic, where does Torque fit? What's the angle? Well, our goal is not really to "beat" Epic, it's to change the game (in the "meta" sense of the word). We think it's dumb that games cost $60 and that the best selling games published by the biggest publishers all essentially answer to Walmart.


Games should be cheaper.

Gamers should have more variety.

Developers should feel comfortable taking more risks.


None of these are possible without upsetting the status quo. This is why we created Torque and put a $100 no royalties price tag on it in 2001. This is why we created InstantAction.com so that we could build our own audience and connect gamers to developers with no interference from publishers or retailers. Both efforts serve the same goal of making it easier (and more affordable) for developers to take risks.

Torque exists to provide developers (starting with our own game studio) with the means to take these kinds of risks, to create games that can achieve AAA-level visual quality, but with a focus on what makes games fun. We want our studio and you to innovate in ways that matter most to gamers. Portal didn't need next-gen visuals or a multi-million dollare engine to win over gamers. It could have easily been built with Torque. Just the same, Marble Blast Ultra didn't need super-high end rendering. To make the point even clearer, look at Phil Hassey's Galcon. Phil built this game in Python all by himself and it's currently one of the most played games on InstantAction.



We think this evolution, bridging the divide between developers and gamers, enabling greater risk taking at lower cost, is where the industry must go. The faster it gets there, the more Torque makes sense to a wider audience of game developers. As a company, we've always aimed to support platforms and technologies that make this happen faster. I put Steam, WiiWare, XBLA, PSN, id's Quakelive and InstantAction.com all on that list. In fact, without Steam, I doubt Valve could comfortably afford to take the kind or risks they do. We'd all, as gamers and game developers, be much worse off without if they hadn't bucked the system and created the most effective digital distribution platform on the planet. (Go Valve!)

Let's think again about the balance between enabling the little guy, and being in a position to reinvest in Torque and sustain this effort to encourage risk taking in games. Who do we mean by the little guy? Does a hobbyist who never publishes anything serve these goals? Probably not...let's talk about that...

We're building Torque to enable a particular set of developers: those who can persevere though the challenge of game development. This means outfits like Fro Games, Stickman Studios, Sickhead Games, and Tilted Mill to cite some recent examples. In the recent Game Developer profile on TGEA for the Front Line awards, I think they hit the nail on the head.




Are you one of these developers? A lot of you might not know yet. Some of you may not know whether you even want to push that hard or take that much time. You might be happy with game development as a curiousity and have no interest in ever publishing your work. This does not mean Torque is not for you.

Just as Photoshop, Flash, Max and Maya are built for professional use with professional licensees in mind, so is Torque. And just as plenty of amateurs and hobbyists use Adobe and Autodesk tools with no intention of making their work public, so will amateur and hobbyist Torque users. Still, often times, these tools make professionals of people who didn't know if they had what it in them, and we hope Torque does the same.

If we want Torque to effectively serve professionals and that set of developers who have the fortitude and talent to give it a real shot, we need to re-evaluate Torque's license fee. We can't do this effectively for $150 / seat, at least not with Torque 3D. Torque has thousands and thousands of licensees, but developing engine technology is very complicated and very expensive--certainly more complicated and expensive than developing games.

Attaching a $150 / seat price Torque has created a quality perception that does not do justice to Torque's capabilities. GarageGames could *easily* spin out a new business under a different banner and sell TGEA / Torque 3D right next to all the other major AAA engines for hundreds of thousands of dollars per title. Why don't we? Because it doesn't help us with (3) or (4). We'd be quickly assimilated into the tiny space left over by Epic and fighting tooth and nail with everyone else for 3-4 licensing tile deals per year. It wouldn't help us with games. It would disrupt the broken industry model. It wouldn't do much of anything good for games or gamers.

So what price makes sense? What's commensurate with the value Torque provides? Again, I don't know the answer to this yet. It's not $150 / seat and it's not $295 / seat. Perhaps it's $1000. Perhaps it's more. I look at products like Flash ($699) or 3ds Max ($3495) / Maya ($4995) and compare them with Torque. Torque is more complex from an engineering perspective and Torque is in a smaller, more niche market. Both of these factors would argue for a higher price. What about (4)? What's affordable for the little guy? What's going to be the right price that makes it acceptable for developers who ship product to feel comfortable taking risks with a good chance of success? Hard questions to answer.



I've also noticed that Unity, which appears to be competing more with Flash than game engines, is priced many multiples higher than Torque and yet, it's attracted a license base of primarily hobbyists and amateur developers. Even though Unity now offers a lower priced "Indie" version of its tool that deprecates major features and significant license freedom, for a long time you couldn't buy Unity for less than $1000 / seat. How does that compare with Torque (a much more capable and mature engine technology that actually provides source code)?

There's another consideration that's really important to me, and that's all you reading this. Many of you have been loyal GG customers and Torque users for a long time...in some cases much longer than I've been here myself. You've become accustomed to Torque's low price. Even if it costs GG money in the short term, I don't want to see this community lose is vibrance or engagement because Torque's no longer an affordable technology to stay current with.

While I haven't figured out how it will work yet, I have decided that when Torque 3D is ready for relase, we'll offer it with an option that makes it much more affordable for TGEA owners to make the move. New licensees who don't already own TGEA at that point will pay full price, whatever that ends up being. I should also note that TGEA 1.8 will probably remain an affordable option at the low end throughout 2009, but if we can, we'll provide a better, affordable substitute with Torque 3D...perhaps with some sort of meaningful feature or license delta. This might mean that Indie vs. Commercial changes, or goes away as well.

My ideal outcome is that in mid-2009, everyone who wants to continue working with Torque in the future will be using Torque 3D and sharing resources and knowledge with the rest of the community. This product is the largest investment we've ever made in engine tech and our expectations are high, but better I think to disclose our thoughts and intentions on things like this sooner rather than later. I'm very confident that for those of you who are really engaged in making games, upgrading to Torque 3D will be an easy choice well justified by the value it adds to your talent and dedication.

More sidebars and development blogs to come. This is post #5.

Torque 3D development blogs:

• Post #1 - Kickoff
• Post #2 - Apparatus and Warrior Camp
• Post #3 - Luma's racing kit
• Post #4 - Josh Engebretson and Web Publishing
• Post #5 - Pricing and Licensing
• Post #6 - Pricing and Licensing CONTINUED
• Post #7 - Wetness & Precipitation
• Post #8 - Screeen Space Ambient Occlusion (SSAO)
• Post #9 - Matt Langley and the Torque Launcher
• Post #10 - Chris Robertson and Collada
• Post #11 - Depth of Field
• Post #12 - Advanced Lighting
• Post #13 - Soft Particles
• Post #14 - World Editor
• Post #15 - Pricing and Licensing ANNOUNCED!
• Post #16 - GDC Live Edition
• Post #17 - River & Road Editors
• Post #18 - Beta is UP!
• Post #19 - Light Rays, Undercity, Material Editor
• Post #20 - Mass Market Hardware
• Post #21 - Beta: Part Deux
• Post #22 - Marching Towards Beta 3
• Post #23 - pureLIGHT
• Post #24 - Lighting, Terrain, and Cloth
• Post #25 - Beta 3!
• Post #26 - Coming Soon!