I'm kind of amused by the whole Scrabulous flare-up. First, I'm amused by the founders. From Dealbook:

Jayant Agarwalla, 21, told The New York Times in an article published over the weekend that they did not create Scrabulous to make money, even though they now collect about $25,000 a month from online advertising. They just wanted to play Scrabble on their computers, and their favorite (unauthorized) site had started charging, he said.

Still, they are now taking in $300,000 a year and, according to Silcion Alley’s back-of-the-envelope calculations, with a 10- to 20-times-revenue multiple that would make Scrabulous worth $3 million to $6 million. Allowing for a what the blog calls “a hockey-stick growth curve,” it could be worth more than $10 million, Silicon Alley said.

But according to the publication, again citing an anonymous source, “the brothers want a ‘multiple of several times that’ $10 million, and the four corporations they’re negotiating with think that’s ridiculous.”

I think it's kind of awesome that these guys can take someone else's idea, post it on-line, and then demand tens of millions of dollars from the company that actually owns the game. I mean, if you wrote a book, and then I stole, published and distributed a copy of it, would it make any sense for you to pay me a huge multiple of what I might potentially make off of the book that you wrote? If only I could be so lucky!

I can see that the game companies are trying to avoid consumer backlash and are probably conscious of the negative publicity that the RIAA and the MPAA have received for suing MP3 downloaders. But Hasbro and Mattel are dealing with guys that blatantly ripped them off and are now making $300k a year off of their game, not with the actual consumers of the product.

I think it's also funny that even though the game companies have been treating the Agarwalla brothers with the utmost of care, that there's still a consumer backlash, with facebook groups planning to boycott sales of Scrabble. People are addicted to getting things for free, and they get pissed when someone indicates that they shouldn't have ever had it in the first place. In light of this, I'd be curious to see what the response would be like if Hasbro/Mattel put out an official Scrabble application that was similarly free and of good quality, and then had the courts shut down Scrabulous for violation of their IP. Would people be mad because of the use of the legal system, or would they be fine because they could still play Scrabble online for free?



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