Path: utzoo!mnetor!uunet!lll-winken!lll-tis!ames!pasteur!ucbvax!decwrl!pyramid!octopus!avsd!govett
From: govett@avsd.UUCP (David Govett)
Newsgroups: comp.sys.atari.st
Subject: Re: WHAT ATARI NEEDS TO DO...
Message-ID: <115@avsd.UUCP>
Date: 20 Apr 88 16:10:20 GMT
References: <209@bdt.UUCP>
Organization: Ampex Advanced Technology Division, Redwood City, CA
Lines: 47

> 
>>A software company has to amortize its development costs over projected
>>sales.
> 
> Right.  And so there's no argument for developing any ST software.  Somebody
> said before that there was less than a million ST buyers.  Well let me tell
> you; there's A LOT LESS.  More like less than 50,000 actual, qualified buyers
> (not computers collecting dust and pirated software).   Of the 50,000, you're
> doing well to penetrate 10,000 of them over the life of the product.  So
> saying it sells for $40 retail, which you're saying is the most any ST buyer
> will pay (and I agree); that means $16 wholsale, of which say $5-$10 is gross
> profit (higher profit margins can only apply if you have "economies of scale"
> which few ST publisher have).  Ok so over the life of the product there is
> $50,000 to $100,000 gross profit.  That has to pay for development and all
> the overhead it takes to sell those 10,000 copies: advertising, office
> operations, sales overhead, administration, telephones, computer operations,
> office/sales space, and a lot more.   If you can sell all 10,000 copies in
> the first year, and you keep you're expenses low, guess what:  you break even!
> 
> With ST software, it's not very likely you will ever sell 10,000 copies.  Ask
> around.  Very few ST packages have achieved these numbers, even some that
> have been out for three years.  Admitedly, a few ST packages have sold
> lot's more than 10,000 copies; but there are a lot more products with
> numbers well below this level, even well known packages.
> 
> Combine with that the fact that ST software sales are not even as strong
> as they were a year ago, and things only look worse.
> 
> I'm not saying that the user should bear the burden, but don't make the
> small independent software companies bear it either.  Just becuase you
> pay $39 for a piece of software, don't think that the guys that developed
> it are "ripping you off".   I think everybody on the net by now knows
> who I think should bear some of this burden.   Can you spell Atari Corp?
> -- 


Two comments:

If I may be allowed to generalize, people who buy STs are, on the
whole, quite different from those who buy PCs and clones.  Many PCs
go into businesses where money exists to buy expensive software, but
ST users seem to have trouble buying even moderately priced software.

Rumor has it that WordPerfect Corp. is so disgusted with ST users
pirating ST WordPerfect that it is considering withdrawing it from the
market.  As I said, it's only a rumor.  If true, however, it seems
to support my thesis that software should be priced for the intended
audience, and I know no ST users who would buy it for $300.