Here's a tongue twister for you.
What would you call a popular professional software developer's effort to squeeze money out of its embattled design format? If you paid attention to the headline of this article, you know it's Adobe's
The creator of Flash (and the Creative Suite, with all its Photoshop-y goodness) rolled out a new iteration of its signature Flash Player this week, offering improved graphical capabilities for browser-based gaming. Along with the rollout, Adobe announced a revenue-sharing agreement that could really tighten the screws on gaming companies already squeezed by Facebook's 30% cut.
Who did what, now?
The latest Flash upgrade adds 3-D rendering capabilities in hardware and the ability to access domain memory. They're two distinct functions, and using only one won't subject developers to revenue-sharing. However, using both functions in a game will activate a 9% revenue-sharing agreement for all revenues over $50,000. This is a pretty minuscule amount for a serious game company to make (not even covering one good programmer's salary), and could impact any company that wants to make its games graphically richer and more responsive.
I don't expect this to ding Zynga's
If it's this difficult for Zynga to maintain profitability, smaller companies with less of a budget will be in deep trouble. If Electronic Arts
Though this change won't happen until August, it doesn't seem too likely to generate significant revenue for Adobe, as the gaming industry is already suffering from extreme competition across multiple platforms. If anything, I'd expect such a move to alienate the few loyal developers still focused on high-quality Flash games. Since Flash needs developer buy-in to hold the line against HTML5 and other emerging development platforms, it's difficult to see this as anything other than a desperate move that's liable to backfire.
If Adobe's at risk of losing out on the next generation of gaming, there's one company that's right in the middle of the action. It's poised to capitalize on demands for better graphics, regardless of what software helps render them. Curious? Find out more about this great investment opportunity in The Motley Fool's free report on "The Next Trillion Dollar Revolution."
Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter @TMFBiggles for more news and insights. Motley Fool newsletter services have recommended buying shares of Adobe Systems. Motley Fool newsletter services have recommended creating a diagonal call position in Adobe Systems. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.