In my opinion, one of the most significant things to happen in the world of videogames in the last few years is the Humble Indie Bundle. Beginning as somewhat of an experiment by the guys at Wolfire, the Humble Bundle challenged established industry assumptions about money, DRMs and corporate control. Using a “Pay What You Want” model and offering the games with no DRMs, the first Humble Bundle earned more than a million dollars in the space of about a week. Though many people payed next to nothing and others simply pirated the games, the sale was a huge success, earning a substantial sum for both the developers and charities. A second Humble Bundle would follow in a few months, surpassing the first one in earnings. Both times, I was surprised by the success of the events and the enthusiasm that it generated across the web (or at least the part of the web that I frequent).
Currently, a third Humble Bundle is in progress, the Humble Frozenbyte Bundle. Although this bundle only features software from a single developer and has not been quite as well received as the other two, as of right now, it has already earned $863,896.09 and counting. Once again, the Humble Bundle has surprised me, but this time, it’s not the numbers that caught me off guard.
On Friday, Gamasutra reported that Sequoia Capital, a venture capital firm that played a significant role in videogame history through its investments in Atari, Apple and Electronic Arts, is currently leading a $4.7 million investment in the Humble Bundle. The man in charge of this operation seems to be Alfred Lin, a relatively new member of the Sequoia team who was formerly the COO of Zappos.
This new development poses some interesting questions. Though the previous Humble Bundles have earned millions of dollars, this revenue was split primarily between the developers of the games and the two charities, the EFF and Child’s Play. With the second bundle, there was the added option of the “Humble Tip,” a small fee that would go to paying for the bandwidth and the development of the event. Like the other beneficiaries, the buyer could choose to donate as much or as little to the “Humble Tip” as she liked. As far as I know, this was the only money that actually went to Humble Bundle, Inc.
The question now is whether or not this system will change with the involvement of Sequoia and other venture capitalists. Sequoia is known for taking an active involvement in its investments. When it invested in Atari, it put its founder on Atari’s board of directors1. Venture capitalists aren’t generally in the business of simply supporting causes that they think are neat. They’re in the business of making money. As successful as the Humble Bundles have been, working for tips doesn’t really seem like the kind of thing you invest millions of dollars into.
The most significant thing about the Humble Bundle is not the games themselves (though there have been some fairly amazing games included in the bundles), but the model that they used to distribute them. In a time when game developers and console manufacturers are trying to tighten their control over users and restrict their rights regarding their games, the Humble Bundle offered some of the best-selling independent games of recent history with full rights provided for the users. Many of these games even made their source code open source, allowing users to participate in the development process. If the Humble Bundle becomes a profit-driven distribution machine, will they be able to keep this model?
Despite my misgivings about the deal, I remain optimistic. Sequoia has a history of backing visionary projects like Apple Computer, even when other companies turn away. They have a long history of seeing the potential that small companies have and helping them realize it. Hopefully they understand the factors that made the Humble Bundle a success and will try to preserve the spirit of the original bundle. Either way, it looks like there will be more surprises to come.
1. The Ultimate History of Video Games. Stephen L Kent.