» Thu Apr 30, 2015 5:09 am This is a repost of my article on Nexus. Any comments or input is highly appreciated. Thanks 
It seems that what Bethesda is trying to do is setup industry standard roles where Valve is the distributor for whom 30% is standard, Bethesda is the supposed publisher, and Modders are developers for whom 25-30% is standard. The problem is Bethesda fulfills none of the roles of a publisher but two - they've sourced the distributor and they've licensed the IP.
In game development a publisher typically advances the cost of development to the developer and in exchange the developer receives a royalty on all sales of the game (25-30% is pretty standard in the industry) beginning after the publisher has recouped an agreed upon percentage of the advance - when the publisher has recouped 10-20% of the advance they will start paying the developer 30% royalty on all sales going forward from then on. The publisher is responsible for the marketing and promotion of the game; they're responsible for bringing in the customers; they're responsible for distributing the game - either themselves or through a company such as Valve.
So perhaps it helps to clarify matters to think of this as Bethesda's publishing offer and Valve is the distributor contracted by Bethesda. So lets look at what Bethesda offers us as a publisher:
- Advancing cost of development
This is simple. They do not.
- Marketing and promotion
Publishers are expected to market and promote the games they publish. If Bethesda expects to be paid as the publisher to the mod developers they must provide the same service for individual mods as game publishers provide to individual games they publish. Publishers are not paid to promote the market as a whole, they are paid to promote the game they are publishing.
If Bethesda expects to be paid as a publisher for an individual mod in the same way they would if they were publishing an individual game, they must provide the same individual promotion.
- Licensing the IP
The Elderscrolls is a huge IP. Simply being associated with it is a huge bonus to exposure, no question. The licensing was implicit. 15% is the high-end of licensing royalties in the gaming industry.
- Quality Assurance
Publishers have a vested interest in assuring what they publish is a quality product because they have to recoup their advance to the developer. As a publisher Bethesda is offering no advance and therefore has no vested interest in assuring quality control beyond the viability of the new market itself. This is less an issue of not providing an expected service and more an issue of them simply not fulfilling the standard role of a publisher.
Bethesda offers nothing by way of quality assurance as a publisher, instead relying on the marketplace to sort out the good from the bad while they profit.
- Content protection
Publishers also have a vested interest in assuring what they publish is not simply stolen. They can't recoup their advance if what they publish is stolen and not sold. This is not an issue for Bethesda as they have no vested interest in assuring the work of the developer is not stolen beyond the bottomline of the marketplace itself. If, for example, I publish my work with Bethesda and someone steals it in part or in whole to repackage and publish themselves, Bethesda loses nothing while I lose money by losing sales to the thief. Put simply, aside from outright piracy where mods are distributed between users outside the marketplace, Bethesda has no incentive to protect my work. They will still make money.
As a publisher Bethesda offers nothing by way of protection against asset theft or piracy.
- Distribution
Bethesda has worked with Valve to distribute mods through their service for which Valve receives 30% of revenue.
So what is Bethesda really offering? 75% for distribution and licensing. 30% for distribution has become the standard with huge companies like Google and Apple. Lincensing royalties in the game industry can be as high as 15%. In the music industry, the Beatles IP is licensed between 15-20%. Is Bethesda bigger than the Beatles? So that's 45-50% for distribution and licensing. Wherefor the additional 25-30% then?
Bethesda and Valve expressed an interest, in so many words, in exploring another way to help mod authors earn revenue for their work. They see the potential here, but failed to understand the community.
My suggestion is for a new donate-what-you-want implementation for Steam Workshop with a fair split of revenue between Valve, Bethesda, and the mod authors. 30% of revenue would go to Valve as the distributor, a generous 20% would go to Bethesda as licensing royalty, and the remaining 50% would go to the mod author. Mods would still be free, users don't have to donate, and if they do decide to make a donation it can be whatever they like. I think this addresses the many of the concerns of mod authors.
Prevent of asset piracy - their work will not be stolen and sold as the community that is inclined to support the mod author and make a donation is likely to know, or get to know, about the real author of the work by reputation and word of the fraud is like to spread faster than donations roll in preventing quick cash-grabs and naturally discouraging the piracy that may have been a thing with the pay-per-mod system.
Quality control - Downloading mods remains free so users have as much time to evaluate the quality of the mod before they decide to donate as they like. Donations can be seen as a true reflection of the quality of the mod, unlike sales which may be misleading. Higher quality mods will naturally rise to the top. Combined with ratings and comments this provides a reliable self-regulating community-based quality control mechanism.
Thoughts?
