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Among the most prominent is Bill Budge, 28, who has written two of the industry's biggest entertainment hits: Raster Blaster, a computerized pinball game, and Pinball Construction Set, a program that allows players to custom-build their own video pinball machine. He earned $500,000 in 1982 and resides in a $240,000 eight-room house with a spectacular view of San Francisco Bay. Budge, though, does not spend his day admiring the scenery. Most of the time he is down in the yellow-walled basement, swigging cans of Coke while hunched over a computer.
The proliferating number of software titles means that it is harder to strike it rich quickly. Says Ron Fisher, vice president of VisiCorp in San Jose, Calif.: "There is now a surfeit of good people with good programs." Independent programmers once received royalties as high as 37% of the wholesale price, but their commissions have slid to an average of about 10%. Concurs Gibbons of Software Publishing: "The days of giant royalty payments are gone for good."
With rare exceptions, so has the eminence of the solitary programmer. Much of the latest personal-computer software is too complicated to be written by any individual. MSA, the big Atlanta software firm, uses at least eight people to complete a business program and sometimes as many as 24.
As software grows ever more complex, it becomes harder for companies to produce error-free programs on schedule. The appearance of Apple's new Macintosh computer was delayed for two years primarily because of software problems. In late 1982 VisiCorp announced that a new software product called Visi On, which allows the operator to run and display several different business programs simultaneously, would be on sale by the summer of 1983. After spending $12 million on development, VisiCorp was unable to get it to stores until December. By then, the software had lost some of its technological edge. To remain competitive, the price of the product had to be cut from $495 to $95 after just a month on the market.
One of the hardest things to comprehend about software, at least for consumers, is the price. While the cost of making a floppy disc and the packaging runs only about $4 to $7, the software sells for much more. A data management program like dBase II costs $700, while Micro/ Scan II, a stock-analysis program, can be as much as $12,500. Even a popular educational product like Bank Street Writer has an undis-counted price of $69.95, and a program to teach a preschooler the alphabet can be $40.
The enormous disparity between manufacturing costs and selling price has led some users to accuse software makers of arbitrarily raising prices. In their defense, program producers contend that they are merely covering their costs of development and distribution, as well as providing profit for themselves and a reasonable markup for retailers. As in any new and fast-growing field, the competition that will force manufacturers to price products more realistically has not yet developed. When it does, the cost of software is likely to fall, perhaps sharply.
Adam Osborne, founder of Osborne