GioCities

blogs by Gio

Tagged: rent-seeking

politics Your engine hasn’t earned your rent

YoYo Games announced today that they’re switching GameMaker to a subscription model. You know, I was planning on doing a high-effort article about this some day, but what the heck, let’s do it now.

First, here are the actual details of the GameMaker change. Instead of buying development tools you can use to develop things, YoYo is making its latest version of GameMaker — GameMaker Studio 2 — free to use. You can download it for free, learn how it works, and invest as much time making your game in it as you want. You only have to pay if you want to ship a game. And if you decide you really want to ship your game, it’s a whopping $80/yr for as long as you want your game on the shelves.

Subscriptions🔗

This idea of a company turning a product into a subscription service is probably familiar to you. Famously, Photoshop and Adobe’s other creative products switched from one-time purchases of software to indefinite recurring subscription fees, after having locked in most of the creative industry.

Earlier this year, a very similar thing happened with Buildbox, another “no code” game maker program. Buildbox changed their terms and conditions to demand revenue from all Buildbox games, including games and in-app purchases. In the normal tier, 70% of your total revenue goes straight to Buildbox. Even if you’re in the highest tier, you can’t stop them siphoning your revenue.

politics 5G’s standard patents wound it

I remember seeing a whole kerfuffle about 5G around this time last year. Not the mind-control vaccine, the actual wireless technology. People (senators, mostly) were worried about national security, because Huawei (the state-controlled Chinese tech company, who is a threat, actually) was getting its 5G patents through and making its claim on the next-gen tech IP landscape. Maybe Trump even needed to seize the technology and nationalize 5G? Everybody sure had a lot to say about it, but I didn’t see a single person address the core conflict.

Format Wars🔗

Before we get to 5G, let’s go way back to VHS for a minute.

The basic idea of the “format war” is this: one company invents a format (VHS, SD cards, etc) and make a push to make their format the standard way of doing things. Everybody gets a VHS player instead of BetaMax, so there’s a market for the former but not for the latter. Now everyone uses VHS. If you’re selling video, you sell VHS tapes, and if you’re buying video, you’re buying VHS. If you invented VHS, this is great for you, because you own the concept of VHS and get to charge everyone whatever you want at every step in the process. And, since everyone uses VHS now, you’ve achieved lock-in.

Now, this creates an obvious perverse incentive. Companies like Sony are famous for writing and patenting enormous quantities of formats that never needed to exist in the first place because owning the de factor standard means you can collect rent from the entire market. That’s a powerful lure.

And that’s just talking about de facto standards. This gets even worse when you mix in formal standards setting bodies, which get together and formally declare which formats should be considered “standard” for professional and international use. If you could get your IP written into those standards, it turns your temporary development time into a reliable cash stream.

Enter SEPs🔗

5G” is one of these standards set by standard setting bodies, and it’s a standard packed with proprietary technology. The most important slice of those is called SEPs, or “Standard Essential Patents.” These are the Patents that are Essential to (implementing) the Standard. In other words, these technologies are core and inextricable to 5G itself. This figure represents only the SEPs:

politics How Apple destroyed mobile freeware

I have a memory from when I was very young of my dad doing the finances. He would sit in his office with a computer on one side and an old-fashioned adding machine on the desk. While he worked on the spreadsheet on the computer, he would use the adding machine for quick calculations.

Adding machine

A year or two ago I had a very similar experience. I walked upstairs to the office and there he was, at the same desk, spreadsheet on one side and calculator on the other. Except it was 2020, and he had long ago replaced the adding machine with an iPad. There was really one noticeable difference between the iPad and the old adding machine: the iPad was awful at the job. My dad was using some random calculator app that was an awkwardly scaled iPhone app with an ugly flashing banner add at the bottom.