iD Software bootstrapped themselves with a low budget, shareware, no effective DRM, and an audience that largely wasn't big on buying things (teenage boys, as far as I can tell).
The recent success of numerous "indy" games, smartphone app games, and in particular Zynga indicate to me that success in the market with a low budget (read: not making 'AAA games') is still not only feasible, but common.
I didn't mean to imply that indie titles weren't viable. They certainly are, for some games. And tons are really, really fun games. It is totally viable to, in the existing economy and with the existing copyright model, self-bootstrap such a company. I apologize for the lack of clarity.
But the issue is how to do so without the ability to extract money from an "easily copied" work--that is, how to make it economically viable without copyright protections on the published end result. I find it unlikely that in this idealized no-copyright world, it is economically viable to devote a lot of time to building something that requires significant multidisciplinary effort (also read as "cash outlay for things you can't do yourself") with a relatively small investment up-front.
I find it likely that the Kickstarter/creatives-as-contractors model would end up not being worth my time, nor that of probably most people on HN; spending my time stumping for donations that barely cover production costs (else people ask why you aren't doing it for barely enough to cover production costs, why you're keeping "so much" in order to do those "eating" and "paying for gas" and "sleeping under a roof" things). Somebody else is more likely to pay me well enough to live--subsisting off the angels of consumers' better natures does not strike me as a winning proposition.
With copyright protections, it becomes economically plausible (not a guaranteed success, but plausible) for me to spend my time making something, even sinking my own money into it, because of the conviction that enough people will like it that I'll make back my nut and turn a profit as well. Y'know--capitalism.
And I find it extremely unlikely that those 'AAA titles'--which, as it happens, are often really really spectacularly good--would exist at all. Which would be a grievous, grievous shame. Skyrim is a beautiful game. Loads of fun, but more than that--just beautifully crafted.
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Alternatives such as Zynga are, to me, unpalatable, and are the "Facebook monstrosities" to which I referred elsewhere in this thread. Freemium games offer a terrible user experience and subscription games almost as bad. They may make a lot of money, but while I've talked a lot about economic viability in this thread, I do still have a vested interest in making great stuff. Making money and building great stuff are more at odds in the freemium and subscription models than in the more standard, "buy a license, play it" model.
To be fair, I am not suggesting that schemes with no copyright would benefit or even have a neutral effect on individual companies or even industries. I think they could continue to exist, though quite possibly in a diminished state.
It is my thought however that the harm done to society by these industries becoming diminished would be vastly outweighed by the positive aspects. We'll likely have to agree to disagree there.
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"Alternatives such as Zynga are, to me, unpalatable"
The recent success of numerous "indy" games, smartphone app games, and in particular Zynga indicate to me that success in the market with a low budget (read: not making 'AAA games') is still not only feasible, but common.