Back in August, I wrote a post that was mostly unrelated to EVE called "Found money". In it, I examined the case of the makers versus the publishers of the Extra Credits videos. The people involved had suddenly and unexpectedly come into a windfall of some $100,000 U.S. The money was donated by incredibly generous viewers of the video series that wanted to do some good for the people who made those videos. What happened instead was the makers (on one side) and the publishers (on the other) started squabbling -- in public -- over the money. At the time, I wrote:
Yeah, everyone involved in this looks really really bad.We're seeing this situation play out again with the drama regarding the EVE is Easy website(s).
In real life, I've seen this situation play out at least a dozen times. Large amounts of found money never ever brings out the good in people. Money can't buy happiness, they say, but I'll tell you what it can buy: acrimony, distrust, and until-that-moment repressed hurt feelings.
Now, don't get me wrong. I'm a firm supporter of capitalism. In particular, I don't pirate software or other media. I believe artists should be paid for their work. And in general, I think the products and services potentially being sold by EVE is Easy are worth selling. I've watched every one of the publicly available videos at this point. Some of the videos are mediocre or just flat-out bad (I'm looking at you, Scouting video). But the majority of them are good, and some are quite good, notably the various solo PvP videos. Even more valuable is the one-on-one instruction that was offered to subscribers through the EIE forums and through roams and the like with the contributors. Those present the opportunity to make those that subscribe to this service markedly better EVE players, and I'm all for that.
But speaking from a capitalist perspective, there were many mistakes made in how this service was launched and sold. EVE News 24 published a fine article about the drama, calling the article "Greed is easy" and "Hostile take-over". Both concepts are worth discussing. I suggest you read the full article, including the chat logs, to get a solid perspective on this issue. It's worth your time.
When you're going to sell a service, it's imperative that you price the service appropriately. This is particularly true if you're going to sell a media subscription service. EIE clearly failed here, rather spectacularly. And they failed on two fronts. First, they were not up front and honest from the very beginning that they intended the service to be a subscription service. Ironically, this is no different from CCP's own late-stage experimentation with micro-transactions within EVE. Second, they ridiculously laughably overpriced their service at $19 U.S. per month or $200 U.S. "lifetime". This exceeds the price of the game itself!
It's pretty clear from the leaked conversations that the fault for the first lies with all of the EIE developers and the fault for the second lies with Abaddon21. The EIE developers were looking to build a comparable website to Skill-Capped for World of Warcraft, and that's fine. But I'll point out that that website costs members between $4.15 and $4.95 U.S. per month, not $19 U.S. That's substantially less cost for substantially more content than EIE.
The EIE developers got greedy, and they're paying for it. That's no different from pricing a monocle at 12000 AUR.
Let's talk about Abaddon21's "hard-earned business experience." I've been in business for more than 20 years, and I can tell you flat-out his business skills are crap and his negotiating skills are worse. Abaddon21's greed is ample proof of the first. Avarice is a sin in business just as much or more than it is in real life. The business-people among my readers know what I'm talking about so I won't belabor that point. Even worse, the business plan for EIE was clearly built around numbers that were essentially pulled out of Abaddon21's nether regions with no basis in research or fact. It would have been the simplest thing in the world to take the large farm of e-mail addresses that were gathered in the first phase of the launch, and use this (obviously interested) group as a research base to ask them questions like "How much would you pay for these kinds of services?" From what I can see, this wasn't done.
Abaddon21 initially signed his closing statement at eveiseasy.com with his character name. He's since removed it, obviously trying to distance himself from this disaster and I don't blame him. He didn't do his initial homework, and he didn't put the continuing work into research and marketing, and it shows.
But as bad as his greed was, his negotiating is worse. This is where the "hostile take over" part comes in. Two examples will serve here. While arguing that he should be paid now now now, Abaddon21 said this:
[17/04/2012 17:12:44] Abbadon21: you wil never know what ccp can doThis is so ridiculous that I'm having a hard time expressing how ridiculous it is. Let's handle it the easy way: EIE was and still is under existential threat. CCP can end EIE at any time and all it would take to do it is a twitch of their collective wrist: they can just ban everyone involved from EVE for violations of the EULA! How many EIE videos will be made after that? How many EIE roams will happen after that? How successful is EIE going to be if every time a new video is made, the account creating a kill-mail in the video is banned? The EULA is pretty clear that cases involving it -- if applicable -- get tried in Icelandic courts under Icelandic law. "You hereby expressly waive and agree not to raise any and all objections based on personal jurisdiction, venue and/or inconvenience of such forum and agree to the jurisdiction of the District Court of Reykjavík, Iceland." So sayeth the EULA.
[17/04/2012 17:13:07] Abbadon21: most likely if they do anything it will be in about 2 to 3 months after they have had lawyers mess with it
[17/04/2012 17:13:29] Abbadon21: then should they want to spend the money to do it, it will only be a cease and desist order
[17/04/2012 17:13:42] Abbadon21: a scary piece of paper that means nothing
[17/04/2012 17:14:31] Abbadon21: then should try to take it to court they will have to do take a year or more to get through that and the end result would be a take down order
EIE seems to have made just about enough money to fly one person to Iceland once.
And that assumes that every single customer of EIE(1) doesn't instantly demand a refund the moment everyone involved in the production of the website finds themselves banned from the game. EIE is providing a service, access to EVE is a critical component of that service, and they cannot negotiate with CCP on any basis that allows a threat to that access. They simply cannot take a hard line with CCP. If they do so and lose access to the game, their business ends. That's what "existential threat" means. Abaddon21 says later in the log that they should only have enough liquid capital on hand to provide two to three refunds. I think you can see now that that's laughable. Businesses live or die on their liquid capital. If you don't have it, your business dies.
But as a demonstration of really bad negotiating, that position of Abaddon21 pales next to this one:
[00:19:41] Abbadon21: Last chance is to buy me out, beyone that I don’t want any part of thisUltimatums have exactly one place in negotiations: when you have all the power in a relationship. When the U.S. and its allies demanded the immediate withdrawal of Iraqi troops from Kuwait in 1990, that was an appropriate ultimatum. If your spouse finds proof you're having an affair and demands you end it under threat of divorce, that's an appropriate ultimatum. If a business finds its trademarks are being violated and demand that it stop, that's an appropriate ultimatum.
[00:20:59] Abbadon21: I'm done thinking... creating new mail and shut down page now
If you do not have all the power in a relationship, an ultimatum has one of two alternate definitions: "extortion" or "failure". I'll leave for you to judge under which category Abaddon21's ultimatum falls.
If you say "take it or leave it", you can be pretty sure that 80% of the time, the other party is going to "leave it". The other 20% of the time, you can rest assured they're going to take it only because forced, they're going to be extremely resentful, and they're going to spend a lot of time looking for a way to get back at you.
Enough about Abaddon21. Let's talk Garmon and the other EIE principals.
Garmon, Duncan Tanner, and the others involved in EIE come out of this looking better than Abaddon21. But that doesn't mean they come out looking good. The logs paint a picture of a group that was manipulated by and let themselves be swayed by Abaddon21's avarice and unrealistic predictions. That's no way to start a business. The subscribe page at the "re-launch" EIE site is down and it seems pretty clear they're going to rethink their whole strategy, particularly since they're still under existential threat from CCP.
What they're not doing, though, is they're not being openly communicative about their goals and plans. They're also not being open and honest about what's happened to this point. Let's be clear: this is a mistake. Instead of fighting the story, Garmon and company should be guiding it. In particular, I'm sure that Lost in EVE, EVE Radio, or some other podcast would love to talk to them about this. That's something that they should do, right away. At the very least, there should be some kind of statement on the front page of their website giving their position on all of this. There isn't. That's also a mistake. They need to get in front of this and try to take control of the narrative. Because right now, the narrative has control of them. End of speech.
Finally, why is this worth writing about at this length? My typical blog post runs 900 words. Why does this topic get double that?
This is an extremely important topic for EVE's future. Sure, EVE has a lot of fan and hobbyist sites. You're reading this on one of them. But to this point, none of them have been commercial. A few succeed in earning ISK for their efforts, but to date, nobody's tried to make RL money. The first true attempt at a commercial EVE application or website was -- as far as I know, anyway -- the Capsuleer application for the iPhone. It failed primarily on the fact that CCP didn't want to negotiate commercial licenses for EVE supporting products and websites.
This isn't a position that CCP has the luxury of taking forever.
If DUST 514 succeeds, they're going to be introduced to the larger gaming industry. Skill-Capped works because Blizzard really doesn't have any way of stopping it. They can't introduce an existential threat because there are so many WoW accounts and so many ways to hide from the ban hammer. They have little choice but to accept that commercial support products are going to appear and try to channel the direction that they go. One way was to jump in front of such commercial applications by trying to subvert the market themselves with their Mobile Armory application.
CCP is clearly going in this direction with their Dust 514: Neocom application. So this problem is definitely on their collective minds.
So, whether EIE succeeds or fails, this sort of thing is in EVE's future. EIE might succeed. It might fail. But it's only the first attempt. CCP doesn't have the option to take it or leave it. ;-)
(1) From the leaked conversation, this seems to be 30 or so "lifetime" subscribers and 80 or so monthly subscribers.