why are most soft synths and effects so expensive?

[foosnark]

On a different thread I compared your average synth with your average multiplayer online game. The synth may cost $150 or $200, but the game will cost $50 or $60 and then about $15 a month . . . if you play it a year it'll cost you $230 to $240. But I don't hear any players complaining about that.

And I do know people in the computer game industry.

I'm one of them. 3D graphics engine programmer with a few years' experience, making about half the average STARTING salary for programmers in the game industry as a whole... kinda shows you where MMOs are.

Anyway. Players DO complain about it. A lot. Which I find kind of funny, because I used to play GemStone III back when being online cost $6/hour. I'd rack up $50-$200 per month and was considered a casual but regular player. There were people who spent over $1000/month. One of those sold their character and bought a brand new Harley with the proceeds.

So $15/month is practically nothing to some gamers, but others think we're horrible greedy bastards who swim around in hot tubs full of cash and never do any work or take any financial risks.

Your analogy is even better now that I think of it.

[imekon]

Heh. My microscopic studio apartment is US$899 a month. I don't own a car, so that's not a big deal - my transportation costs run around US$100 a month. Utilities are another US$200 a month. Other debts run about US$400 a month. So.. for me.. that's US$1599 a month in *basic necessities*, up around US$20K a year. Taxes take close to half my income, as well.

Don't move to Silicon Valley - or the U.S.!

I thought the UK was expensive... houses here aren't cheap, especially in the south near London. Petrol (gas) is expensive. I pay GBP 40 ($70?) to fill up the small french car I own. Then there's gas (ack! natural gas for the house), electric, water, council tax, tv licence, 17.5% VAT.

"I owe, I owe, so off to work I go!"

[SuitcaseOfLizards]

Let's say you need to make $50,000 a year (poverty level here in Silicon Valley) before taxes to live

f**k! Half the people I know would be paupers. That's roughly what I earn and I know plenty of folk who don't come close to that. Moreover I live a very comfortable life on that kind of money in one of the ten most expensive cities to live in in the world.
In fact, I think the average wage in Australia is around Au$55,000 which is about US$41k.

Heh. My microscopic studio apartment is US$899 a month. I don't own a car, so that's not a big deal - my transportation costs run around US$100 a month. Utilities are another US$200 a month. Other debts run about US$400 a month. So.. for me.. that's US$1599 a month in *basic necessities*, up around US$20K a year. Taxes take close to half my income, as well.

Don't move to Silicon Valley - or the U.S.!

WOW...move to another place man...$899.00 a month for a freakin STUDIO APT ??? unbelievable...
I live in Hampton Roads Virginia, not a small
place really..you got Norlfolk, Chesapeake,
Virginia Beach, Newport News..it's a pretty big
place...alot of industry and tech here..I pay
$800.00 a month morgage...$360.00 a month for my
vehicle, $100.00 a month for insurance..and I pay
roughly $200.00 a month in utilities...
and I do just fine on $40,000.00 a year...
and if you would look into the bill being
proposed HR25, and if that gets passed, we would
not pay income taxes anymore..ALL the money you earn,
goes directly into your pocket...and it
is up to the AMERICANS to contact you state
representitives and let them know...either they
support the FAIR TAX HR25, or we will support
another representitive via our vote.

Quite simply, I can usually afford to buy
the $200.00 VSTi, and believe me, I am so
tempted at time to where I have to shut down my
computer...my children are far more importrant to
me than a synth...synths is just a hobby...
but I tell you all this...I recently went into
a music shop and saw a KORG M1 synth...and this
keyboard was $500.00...and what is the
KORG DIGITAL ? like a couple hundred dollars ?
( I don't know the exact price ) and not
only do you get the KORG M1 emulation, but then
you get the Wavestation as well...so with my
M-Audio Kaystation and a host...I could own BOTH
for approx. 1/2 of that Korg M1...

Don't mind me folks...I am an optimist...and yes..
my liqour glass is Half Full

I use to live in California, actually I am native born..and I know the expense of living there, and
that is why I left back in '94...and I have not
looked back..my quality of life in Virginia far
exceeds the oppressive expense of living in California...but we all choose our poison, and
thus we must all live with our desicions.

Right now, I'm fscked, screwed, shafted, and terminally stuck living here so I can afford to make my support payments! I can't take a cut in pay or I'll have to move to Mexico and code for some drug lord underground where my ex's lawyer can't reach me! And no, it wasn't my decision to get divorced here.. it just worked out that way.

I used to live in Fairfax VA., Greenbelt MD, and Rockville MD. - all a LOT cheaper than here. But I hate the D.C. area now, I'd rather pay and live here than somewhere that FROZEN WATER FROM THE SKY shows up every year! It's current 68f outside, heh heh.

As long as I can afford it and still get a synth every year, I'm OK. For now. At least microbrew beer is pretty cheap..

[Blue Wind Project]

I feel for ya ! Went through a divorce in Cali as
well...but I walked away smealling like a rose..
and the ex...well..she's 5'3" tall...115 lbs...
and somebodys girlfriend in prison

I guess she was unaware of the consequences
of bigamy but she does now.

[bluediver]

]If software synths were such a lucrative market, believe me, the big synth manufacturers (Roland, Yamaha, Alesis, et. al.) would be dominating the market.

That's a pretty naive statement. The big hardware manufacturers have a lot more at stake; factories, distribution channels, etc which they could never support if they threw all their expertise away in software packages.

You really think that if someone like Roland could make as much profit off software as they do off hardware that they wouldn't close their factories, fire most of their manufacturing labor, cut their costs and go 100% software? Their distribution channels would benefit them for selling their software (and no doubt hardware controllers), so that investment would stay. What sounds naive to me is your assertion that because a hardware company has investment in factories and labor that they would want to hold onto them even if they could get as much return with less up front cost.

But I don't think they'll abandon their hardware lines because I don't think the software market is anywhere nearly lucrative enough for them to justify it. If it were, they'd dump their expensive hardware lines faster than a US clothing manufacturer could open a cheap labor plant in China.

You've hit the nail on the head. One of the economic concepts that so many people have a hard time appreciating is the concept of "sunk cost." Any basic economics textbook will explain it: money that's already been spent on factories, warehouses, equpiment, whatever, is irrelevant to future spending (and pricing) decisions, because it's already been spent and will not be affected by anything done in the futue. If you want to maximize profits, fixed costs are irrelevant to pricing decisions (this can even be proven mathematically, although it requires an understanding of differential calculus.). You can be sure the major harware companies would jump on board immediately if they became convinced that they'd make more money selling software. Of course, they don't always recognize market trends (Hewlett Packard turned down the opportunity to manufacture what became the first Apple computer because they didn't see th market for it.)

[LiteOn]

But fixed costs might become affected by pricing decisions...

[JackDark]

My philosophy is sell cheap to sell more. Sell 20 copies at $10, you've made $200. Sell 2 copies at $50, you've only made $100. Just the way I think, doesn't mean I'm right...

[Kraku]

Did anyone mention R&D? It usually takes tremendous amount of time before and during the programming of the final product.

Taxes?

Here's somekind of a list what takes man hours in software development (in this case, VSTi development):

Design
R&D
Programming
Testing
Debugging
GUI
Management
Preset designing
Manual
Marketing
Distribution
Customer support
Taxes & Insurances
Office rent

Now allocate some people to do all those. Estimate how many hour of work they'll have to spend on their tasks. Multiply all that with their salary and add all kinds of taxes & insurances on top of that, etc... Now try to come up with a nice price for your VSTi. How many people will buy it with the price you chose? Where's the balance between the expensive/cheap product and the sold units?

As you can see, it's not very simple at all, nor is it a very small task to create a good commercial VSTi.

[LiteOn]

My philosophy is sell cheap to sell more. Sell 20 copies at $10, you've made $200. Sell 2 copies at $50, you've only made $100. Just the way I think, doesn't mean I'm right...

This is a tempting view - but really only works if your calculation works that way. If you sell only 15 at 10$ but 4 at 50$ your model wouldn't be very good anymore.

[eduardo_b]

My philosophy is sell cheap to sell more. Sell 20 copies at $10, you've made $200. Sell 2 copies at $50, you've only made $100. Just the way I think, doesn't mean I'm right...

In the past I've suggested that volume would trump margin, but others have dismissed this as less important than pricing for recouping investments in time and effort. I think this only works if there are enough people willing to pay higher prices. So, do you keep prices low by not trying to make back your costs quickly or do you simply find that volume gives you a large enough, more consistent revenue stream? So many of your plugs are free that I assume you don't need to sell VSTs to put food on the table.

[LiteOn]

.. do you keep prices low by not trying to make back your costs quickly or do you simply find that volume gives you a large enough, more consistent revenue stream?

It might depend heavily on your solvency how many time you will have to find that proper volume.

[Sascha Franck]

Dudes, I can't believe what you're all paying for your freaking appartments.
My flat has 60 sqm, I have a garage next to it and I'm paying €400 for it. Add €100 for gas (warm water and radiators) and power. And that's about it.
And it's not even the cheapest price.
I can more or less easily get away with another €500 for insurances, telephone bills and food. And I'm not eating garbage.


Anyways, back on topic, to me the question really comes down to "Is plugin XYZ worth it for me?"
In case it is, I'll buy it, regardless whether the developer is getting perversly rich (which he/she most likely isn't).

I do actually think that quite some hardware is ridiculously overpriced.
I own a Tom Anderson guitar. Bought it because I just had to back then - it felt as if I never played another guitar ever before. But apart from that, it's one of the most overpriced things I ever bought. €3000 for some axe that doesn't even have some shielding? Ridiculous!

Personally I'm sometimes wondering about what you can get for your money these days. 500 for a pretty much reasoable PC, less than 100 for a very good soundcard, another 100 for a USB keyboard, another 200 for a mixer, then some, say, 500 in total for software and you've got your studio done. Add another 1000 and you're even at professional quality.
I paid all that for my Fostex B-16 alone back then, and that was a used one.

[eduardo_b]

.. do you keep prices low by not trying to make back your costs quickly or do you simply find that volume gives you a large enough, more consistent revenue stream?

It might depend heavily on your solvency how many time you will have to find that proper volume.

That's true. When we refer to developers, that lumps everyone from a large shop with multiple coders and designers to a guy working in his apartment and doing everything himself. Solvency would depend on having a day job versus living from the income from plug-in sales after subtracting costs.

[LiteOn]

Anyways, back on topic, to me the question really comes down to "Is plugin XYZ worth it for me?"
In case it is, I'll buy it, regardless whether the developer is getting perversly rich (which he/she most likely isn't).

Bingo! That's a good point (wanted to post something similar over in the Surge thread). Only finding that personal threshold price in advance appears to be a mystic art..

cheers,
LiteOn

PS: 400€ - aber nicht in der Oststadt, oder?

[Sascha Franck]

PS: 400€ - aber nicht in der Oststadt, oder?

Nöö - gibt's da aber auch.
Ich bin in Linden, woanders will man ja nicht wohnen.

(sorry for the german)