For Sale by Modder

This week, Valve introduced their latest feature in their virtual economy, the ability to sell mods of a game. The news of this has spread far and wide in the social spheres of gaming and was met with polarizing reaction.

This isn’t a surprise move if you have been paying attention to what the fine folks at Valve Software have been saying and doing. The TF2 Workshop was the testing grounds for the shared revenue model for years, where some of the most prolific hat makers earned $500,000 a year. If any of you watched some of Gabe Newell’s recent presentations, it’s obvious that mod selling is an essential part of their vision of a modern virtual economy. Lets take a look into the details.

What the Player Sees

When the players browses the Steam Workshop of a particular game, they will find mods that are free, pay-what-you-want, and priced. Valve added search options so the people can still only look for free if they want. While there is a risk of buying a mod you don’t like, they also added a 24 hour refund window for mod purchases.

What it takes to Sell a Mod

Valve has done the hard work of paving the legal pathway for allowing modders to earn money with their mods. Considering how few mods in gaming history have made such deals with publishers, this is an impressive feat. In order to take advantage of selling mods, the creator has to provide valid contact, bank and tax information. Afterwards they can post mods for sale in the game’s Steam Workshop page.

What does the Modder Get?

Lets take a look at the Revenue Sharing Terms.

First thing is that the modder gets a gross percentage set by the developer/publisher. The most vocal complaint at the moment is the share being only 25% (set ZeniMax Media, not Valve) but as more games allow mod selling, we’ll likely see competition driving the share upwards, especially by smaller indie developers.

The other terms (4-7) however paint a more interesting picture in the range of possibilities:

Granted a the last three terms are at the discretion of the publisher, in fact it’s up to the them whether to allow mods for sale on their game in the first place. For the games that do, the modder could get revenue in multiple ways in the Steam platform.

A Road to Professional Modding

Almost all mods today & in history are the work of passionate dedicated individuals that care about the games they add content to. However if one wanted to do it for a living, one had to get a job in the game industry or find other means such as a ‘day job.’ Many individuals in the game industry came from the modding community and many people build mods for their portfolio to join those ranks.

Being a modder has opportunity costs, and the mod community has a constant turnover of people. Some members find the activity intrinsically rewarding enough to continue regardless but many other skilled modders move on as their lives change.

With the ability to sell mods in other games, Valve has widened the pathway for people to become professional modders. As more games allow mods to be sold, the professional modding community will grow and provide more high quality content to players. Combined with the publisher’s ability to bundle mods with their own content, the space between developer and community will get ever smaller. It could get to the point where some Superstar Modders or Modding Teams become famous enough that developers offer them bundle opportunities to get them to ‘work’ on making mods to their game.

Valid Issues

It isn’t to say that the current system is without any flaws. One major concern among gamers is the impact this will have on the current modding communities, some suggesting that this would be very destructive. This concern does have some basis as it’s known in psychology that adding extrinsic rewards (such as revenue) can adversely affect intrinsic ones. Although my hypothesis is that the earnings from selling mods would reduce the opportunity costs enough for more people to stay in the modding community. We’ll have to see which force has the greater impact.

Another issue I’ve read is the problem of mod support, especially when the developer makes changes to the game. It is well known to gamers that major patches often break or introduce bugs to mods, and that some are abandoned instead of fixed. While the loss of a free thing is considered an annoyance, as soon as value is tied to that thing, the magnitude of loss is feels much greater. But one factor many don't consider is that developers have a stake with paid mods; as their game gets more paid mods, the developers will likely be more careful with major patches that impact them (since it'll impact their revenue as well). And for the modder making money from their creations, they obviously have a strong interest in making sure whatever breaks gets fixed. So it's possible that mod support for paid mods could be better than free ones.

In Conclusion

It’s exciting to see Valve continue to pave new pathways. I wouldn’t be surprised that in the following year that people will experiment with new types of business models with the mod selling, much like how some did with Early Access. In fact, I could see some indie developers leveraging this for getting high quality content bundled they otherwise couldn’t do before. What other ways could you see this