Path: utzoo!attcan!uunet!lll-winken!lll-lcc!ames!nrl-cmf!ukma!rutgers!att!mtuxo!mtgzz!drutx!druhi!dlm From: dlm@druhi.ATT.COM (Dan Moore) Newsgroups: comp.sys.atari.8bit Subject: Re: Financial aspects of new 8 bit software Message-ID: <3766@druhi.ATT.COM> Date: 14 Dec 88 17:11:25 GMT References: <3916@ihlpe.ATT.COM> Organization: AT&T, Denver, CO Lines: 68 in article <3916@ihlpe.ATT.COM>, daryl@ihlpe.ATT.COM (Daryl Monge) says: > It seems to me that once a piece of software is developed for the other > 6502 machines (especially the C64) that the conversion to the XL/XE > machines would be fairly easy. Surely there are a lot of us professional > types that would be interested in doing something like that. > > The question I do not know the answer to is what is the pay back for > converted software? How much would the original author get? How much > would the converting author get? How many copies would need to be sold > to at least break even for the effort? I'll try and answer this since I used to write programs (SynFile+, PaperClip, BackTalk, and Sherlock) for the 8 bits. I also worked with a several people who were converting programs to/from the Atari 8 bit systems. As a general rule an author gets about a 10% to 20% royalty on software he writes. It varies based on market size, how well know the author is, past hits, is it a game or an application, etc. That royalty is on the publisher's selling price which is usually about 45% to 55% of the the retail price. So a program that sells for $39.95 will wholesale for about $19.98. The author will get 10% of that or $2.00. On a conversion the original author and the conversion author will split the 10% royalty, usually 50-50. So each will get about $1.00 per copy sold. Depending on the program being converted it will take between 3 and 9 months to convert a program from one 6502 machine to another. Applications usually can be converted fairly quickly since they don't have any fancy graphics, games take longer due to the graphics. So to make a conversion worth doing the converting author must be able to make 1/4th to 3/4ths of a years income off the conversion, depending on the amount of work required. If he expects to make $30,000 a year he needs to make $7,500 to $22,500 off that conversion. So he, the publisher and the original author all have to guess whether the program will sell 7500 to 22500 copies on the Atari 8 bits. Right now there are *NO* 3rd party programs for the 8 bits that are selling that well so it doesn't make much sense to port a program from a C64 or Apple // to the Atari. NOTE: I'm completely ignoring the publisher's expenses in the above. Ads cost about $5000 for a full page in 4 colors. Boxes, disks, labels, etc. are about $2.50 to $5.00 per copy (depending on how fancy). So the publishers break even point may be higher or lower than the converting author's break even point. Software publishers base a lot of their decisions on what machines to support on the SPA's reporting of software sales figures. They break software sales down by machine and type of software (business, games, etc.). According to the SPA the top 4 software markets are the IBM and clones, Macintosh, Apple // family, and the C64. All the other computers (Atari 8 bits, STs, CBM Amiga, Unix(tm) boxes, etc.) are lumped together as "other". The totals for "other" are less than the totals for any of the top 4 markets. There just isn't a lot of money to be made writing or converting program for the 8 bit systems. As long as the market is small you are going to see very few of the larger software publishers supporting the 8 bits. Small publishers or publisher/authors will support the Atari 8 bits since they can get by on smaller margins (no support staff, etc.). Dan Moore AT&T Bell Labs Denver dlm@druhi.ATT.COM or dlm@druwy.ATT.COM