Humble Monthly Gamble Discussion Thread

polq37 wrote:

For a while now, I've suspected that Humble was basically providing a kind of tax dodge for developers and publishers. That is, a publisher lists a game for $30, sells it on humble for a few cents and pockets the difference as a profit offsetting charitable contribution. There may also be implications for repatriating profits from sales in various countries. Are there any Gamers Who Are Tax Lawyers who can comment?

Not a lawyer, but I'd seriously doubt it. Humble is really just an online store/discount reseller (not an IRS Exempt Organization) that happens to donate some of the proceeds to charity. They partner through the Paypal Giving Fund to donate (which is a valid IRS Exempt Organization), but I think Humble would get the tax break, not the developers.

When you buy a bundle, you are giving that money to Humble directly. Humble (by default, but can be changed) takes 65% and kicks that back to the developer, takes 20% as a direct tip, and then donates 15% through Paypal Giving Fund. So the developer isn't really in the loop in terms of the charitable donation, and they also aren't donating anything to Humble.

IMO, Humble grew too fast and got too greedy. They could have run a 5- or 6-person operation pretty much indefinitely, but they wanted to get rich quick, instead of getting rich slowly. So they took VC money, grew much too large for the market to actually support, and then steadily abandoned most of their original principles to try to drive money in the front door to feed the hungry beast they created.

Instead of staying a small and sustainable player, they strip-mined the market and most of their goodwill, failed as a business, and sold out to a larger entity.

It didn't have to be that way. They had a highly profitable business, but decided that wasn't enough.

I'll probably be reviewing my library there and making sure I have local copies of everything. When they trumpet "no changes!" as loudly as they're doing, that means things are going to change in a major way as soon as they think people are paying attention to other stuff.

I think I'll pause next month as I'm not terribly interested in ESO or quake. My luck the Gamble will include shovel knight and D:OS 1 lol

Also frightening about IGN buying humble.... hope it does not mean the ruin of an awesome service

PurEvil wrote:

When you buy a bundle, you are giving that money to Humble directly. Humble (by default, but can be changed) takes 65% and kicks that back to the developer, takes 20% as a direct tip, and then donates 15% through Paypal Giving Fund. So the developer isn't really in the loop in terms of the charitable donation, and they also aren't donating anything to Humble.

That doesn't quite pass the smell test. Assuming we're talking about the bundles and monthly drops, as opposed to the standard store offerings, devs are offering their games at discounts that are approaching 100%. Nobody's making money off of that and they aren't making money on volume either. The devs and publishers are essentially donating their product to Humble for a charitable purpose - now whether Humble's status as an IRS exempt organization matters for charitable legitimacy is a tax law question. Maybe they act as a pass-through for-profit bundler of charitable donations? Is that even a thing?

devs are offering their games at discounts that are approaching 100%.

But not 100%. I haven't looked in awhile, but it appeared likely to me that most of the bundles ended up netting several hundred thousand dollars at least, and I seem to recall one or two multi-million bundles. (not certain on that.) The devs are definitely getting a chunk of change out of the deal. They're not getting much per copy, but they're moving a lot more copies than they normally would, and it's basically free to make a copy of a game. Their marginal cost of production is borne by Humble, so selling a million copies costs them the same as ten, $0. (although they may lose some sales, which would be a deferred cost.) Any revenue they gain this way is money good.

There was at least one bundle where, by definition, the entire amount went to charity (with Humble's usual 10% default split), but I only remember one of those. Nearly always, the devs are getting the bulk of the total revenue. It might be split ten ways, and not a huge amount of money for each, but it didn't cost them anything to make the copies.

A sudden influx of $100k for a small outfit can keep them in business....

Here's the current bundle with default settings:

IMAGE(https://i.imgur.com/5iIJrOR.png)

I set it to $10 because it makes the percentages obvious. The thing is, no one really clicks the "Choose where my money goes" button, which hides the option to change these percentages. You can set it so that the charity gets 100%, or Humble, or the developer, but 65% developer, 15% charity, and 20% Humble is the default. And this transaction doesn't involve the developer, so they really shouldn't be involved in the tax break.

It seems obvious tossing a few $10-$20 games on a bundle for $1 is not going to make you much at all, but the developers are operating like regular retail manufacturers in regards to discount resellers like Big Lots and Ollies. Making a little bit of money, even pennies per sale, is better than nothing at all. It may seem like they're donating the games, but they are still making a profit on the sales so it's not a donation. These are games that are likely not selling on their own. Take Van Helsing, on the $1 bundle. Looking at SteamSpy, there has been a steady decline in players up until 10/8, then an influx of close to 80k players (with the bundle dropping on 10/10). So let's split that $1 by a third (three games in the bundle), then split 65% of that... is about $0.22 per copy, multiplied by 80k, is $17,333. For a game that wasn't selling, has mixed reviews (many stating that there are serious bugs in the game and not recommending it), and was bundled for $1. Yes, I know that Van Helsing is $45 on Steam, and that the same players buying that game for full price would be over $3M, but it wasn't being bought, so they weren't making money on it. With not having to manufacture physical copies of the game, it costs very little to have it on Humble, and you're making a little money off people who weren't interested in your game enough to buy it.

Edit... Bah, just noticed that Humble shows you how many bundles have been sold. Given 180263 bundles sold at the time I'm writing this, each game in the $1 tier has made their developers a little over $39,000. I'm only doing the $1 tier because all bundles sold will include those, but not ever bundle sold will include the other two tiers, so it's a complete guessing game for them.

Consider the opportunity costs though. They're sacrificing their long-tail sales potential by flooding the market with super cheap keys.

I can see lots of good reasons why devs might want to sell their games at ultra low cost in a high profile venue, especially if they are focused on developing playerbase or building revenue streams from DLC and loot boxes (note that the edition of Borderlands 2 in the current bundle has all the characters but is not quite the GOTY edition) and amazing things can happen with volume when your marginal costs are zero. But, I still think there's another piece of the puzzle here.

I can't really say I care about any of the stuff you guys are discussing. Bottom line is I'm looking for great deal on games that are legally sold. If they continue to do that I'll continue to use them. If not I won't. Not complicated for me.

TLDR; It’s too difficult to accurately assess the tax position without seeing the entirety of the legal arrangements between the publisher/developer and Humble.

It might be structured so that Humble is a sales agent, such that Humble merely sells the bundle and disperses the sale proceeds as Humble determines (by default or in such proportions directed by purchasers from Humble). In such a model, it would be correct to say the publisher/developer did in fact make donations out of the sale proceeds because all sale money net of Humble’s commissions is available to apply as the publisher/developer sees fit.

Or it might be structured that there is a licence to Humble and the publisher developer receives a royalty expressed as the default ratio times sale price or in such proportions as directed by purchasers from
Humble. In this model, the publisher/developer is not the entity making the donation because all it is entitled to receive is a proportional royalty not the entire net proceeds.

Malor wrote:

IMO, Humble grew too fast and got too greedy. They could have run a 5- or 6-person operation pretty much indefinitely, but they wanted to get rich quick, instead of getting rich slowly. So they took VC money, grew much too large for the market to actually support, and then steadily abandoned most of their original principles to try to drive money in the front door to feed the hungry beast they created.

Instead of staying a small and sustainable player, they strip-mined the market and most of their goodwill, failed as a business, and sold out to a larger entity.

It didn't have to be that way. They had a highly profitable business, but decided that wasn't enough.

I'll probably be reviewing my library there and making sure I have local copies of everything. When they trumpet "no changes!" as loudly as they're doing, that means things are going to change in a major way as soon as they think people are paying attention to other stuff.

This is so utterly pessimistic, even for you, that I'm gonna ask you to cite some of this stuff you're claiming.

So, ign creates direct2drive, sells it off, and now buys humble bundle?

My heart just sank a bit there.

This is so utterly pessimistic, even for you, that I'm gonna ask you to cite some of this stuff you're claiming.

You don't go for VC money unless you're trying to get rich quick.

polq37 wrote:

I can see lots of good reasons why devs might want to sell their games at ultra low cost in a high profile venue, especially if they are focused on developing playerbase or building revenue streams from DLC and loot boxes (note that the edition of Borderlands 2 in the current bundle has all the characters but is not quite the GOTY edition) and amazing things can happen with volume when your marginal costs are zero. But, I still think there's another piece of the puzzle here.

It's pretty much that. The vast majority of game sales happen within the first few days of release. It's also increasingly hard for indie developers to get people's attention. Bundles help in both of those cases, although developers have gotten burned by putting their titles into bundles prematurely. General rule of thumb or conventional wisdom seems to be wait at least 12-24 months before doing so.

Malor wrote:
This is so utterly pessimistic, even for you, that I'm gonna ask you to cite some of this stuff you're claiming.

You don't go for VC money unless you're trying to get rich quick.

Citation needed.

Malor wrote:

You don't go for VC money unless you're trying to get rich quick.

This is definitely not always the case, at least depending on how long you consider quick and what your threshold for rich is. Having been part of two companies that went thisroute, I can personally attest that venture capital is also used when you want to grow a small company into a larger one by reinvesting the capital. Yes, both times, going public was the long term strategy, but it was the end goal of a five-ten year plan. It's a lot fairer to say you only go for VC money when you want to increase your net worth. Selling out and walking away from a company is more in the "getting rich quick" category then bringing in VC. There are also times when capital is brought in when you want to keep a company running and there's a dip on the horizon where you wouldn't have enough capital to survive (but a light at the end of the tunnel). Obviously in such cases, your valuation is going to be much lower.

Ug. Forgot to pause my subscription for this month, because I only had a passing interest with ESO, and really no interest for the others. But, I got my receipt earlier, so I figured what's done is done, and I'll check out ESO at least and wait for the rest of the unlocks.

I redeemed it on Steam, but I can't install it because I either get an error saying the content server is busy, or that there's no download source. I went over to ESO's website, which has a login using Steam option, but it tells me I need to purchase ESO. This seems like a very poor setup so far.

ESO installed just fine a few months ago when I picked it upon Steam.

Yeah, seconded. Downloaded everything with Steam, booted up the launcher, and it all patched effortlessly.

I really like the game mechanics too, I just find the lore and presentation boring as hell. Could be fixed by buying Morrowind (I adore that gameworld), but it's a hard sell when I lost interest in the default world 2 hours in.

I want to give it some more time, because it has some really fun ideas for an MMO.

It was sitting as queued when I left to pick up my kids from daycare, and was downloading when I got back. Must have just been a flood of people downloading from the bundle.

PurEvil wrote:

Ug. Forgot to pause my subscription for this month, because I only had a passing interest with ESO, and really no interest for the others.

This LOL

Hope the surprises are nice

Well, as far as the absolute junk the preshow games were.... I'm really shocked at the selection of what was bundled with it...

The Elder Scrolls Online: Tamriel Unlimited
base game only, bah
Quake Champions Early Access plus 50 Shards, 100 Platinum, 2000 Favor
doesn't include all the characters, no way to unlock new characters without paying money, humbug
The Elder Scrolls: Legends: 2 Card Packs (Skyrim) 1 Event Ticket 100 Gold 100 Souls
CCG, more bah, haven't even activated it yet
Dead Rising 2
I had the one with Frank West and extra areas in it, so.... ehhhhh
Silence
seems like a good point and click adventure maybe
Resident Evil 5 and DLC
Already had 5 from a previous bundle... guess I'll use it for the DLC but... fine
Shadow Tactics: Blades of the Shogun
SHOCKED this was in it, had my eye on it and this is quite recent
World to the West
another one I had my eye on, score
Emily is Away Too
ok, why not
Wilmot's Warehouse
Organize a warehouse and fill out orders of customers.... um alright, I'll try it

Next Month, H1Z1.... why?

I am so, so, SO giddy about Shadow Tactics. The rest is just gravy because SHADOW TACTICS.

Great, I bought RE5 a few days ago. Maybe I need to look at how Steam refunds work.
Not initially interested in anything else. Shadow Tactics does seem interesting however.

Shadout wrote:

Great, I bought RE5 a few days ago. Maybe I need to look at how Steam refunds work.
Not really interested in anything else.

TOTALLY REFUND THAT sh*t. If you've played it less than 2 hours you're golden.

I couldn't find anything I wanted this month so I tried their "suspend a month" thing. Perhaps next month will wow me.

Damn, I put subscription on hold this month and they put Shadow Tactics in it!! I had that game on my wishlist since launch

Yeah, Shadow Tactics is a pretty good inclusion this month. I probably wouldn't have played anything else in the bundle. So, I'm glad I put it on hold last month.

H1Z1 this month? Another month of hold for me I guess.

I was going to skip, forgot to suspend, had Shadow Tactics on wishlist, am interested in RE5 and Dead Rising 2 so I'm happy about my faulty memory!

Is Elder Scrolls any good? Not sure I can afford a subscription game, it would cut too much into my collection budget...

f*ck yeah! I was *just* looking at Shadow Tactics just now and wondering if it was worth grabbing at the sale price. Also I've been hovering on Silence for a while now as well. World to the West looks cool too. I think everything else I either already have (Resi 5, Dead Rising 2) or am not really interested in (Quake) but neato! I'll call this month a win I think!

Hardek wrote:

Is Elder Scrolls any good? Not sure I can afford a subscription game, it would cut too much into my collection budget...

From what I played way back it was an ok action mmo but a pretty mediocre Elder Scrolls game.

Hardek wrote:

Is Elder Scrolls any good? Not sure I can afford a subscription game, it would cut too much into my collection budget...

Elder Scrolls is like Guild Wars, you pay for the base game, and pay for expansions, there is a monthly booster service thing but there is no monthly fee unless you choose to have one.