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What licenses are games sold under?

If you've ever installed something on your computer, then the odds are that you've seen an example of what's known as a EULA. Whether or not you just scrolled down and blindly hit "accept", you probably saw a specific line at the top of the wall of text. This line famously reads: "This software is licensed, not sold".

The reasoning for this is pretty simple. A digital product can be copied an infinite number of times and thus the files that make it up are practically worthless. But, just having a copy of the files does not grant one permission to use them. When you purchase software, you're buying a license to use that software. This is particularly evident when you purchase software online through a service like Steam or Origin, as you do not receive a physical product.

But, not everyone charges for their programs, and many programs let you have much more authority over them than others. Thus, there are many different licenses out there. Most of these fall neatly into a small list, so I've collected the usual types of licenses into the list below.

Commercial / Retail

This is your standard, everyday license. Your rights under this license are pretty limited, but for most of us they are sufficient. In practice it works like purchasing any product from a store. You paid for the product and receive a copy you may use in return. You do not have permission to alter the program or distribute it.

If a program is under this license and you did not rightfully purchase your copy, then you are pirating software, which is illegal. This also applies to making copies of the program and passing them out in person or over the internet. Either way, you are violating the law and the agreement you made by accepting the EULA.

Donationware

In the past, there were games distributed under a shareware-like license that claimed a portion (or all) of the proceeds would go to charity. Since there was no way to verify that the money was passed on as promised, people were often advised to be wary of them.

Today, donationware has returned in a less questionable manner. On the internet, you may run across games that are sold under a "pay what you want" system, making any payment effectively a donation or tip to the developers.

Free to Play

Many online games, specifically MMOs and MMORPGs, allow you to play them for free. These are sort of like freeware with an extra catch, as you must play them online using the services offered by the program's owner. In essence, you only rent these games.

Games like this usually make their income from microtransactions rather than the sale of the game itself. When handed badly, this is derided as pay to win, and games that earn that monkier should be avoided completely.

Freemium

Another license that mixes other licenses, freemium games combine aspects of Free to Play and Pay to Play. This is typically done by offering higher privileges to a paid account, but providing a free account as an option.

Be careful with these; some are infamous for giving paid accounts grossly unfair advantages over the free ones, making it a pay to win game.

Freeware

Similar to the Commercial license, software with this license may not be modified. However, it may be used and shared freely. Since it costs nothing, software "sold" as freeware is often very popular.

Unfortunately, a lot of freeware programs come with adware, spyware or even viruses. In many cases, the program appears to be something useful so that the user is basically tricked into allowing the malware into their system.

Open Source

The ultimate example of liberty in computers, open source software is software that permits its users to not only use the program free of charge and share copies with anyone that wants one, it also provides the program's source code so that someone with programming skills can modify the program however they want. Unfortunately, there is often an issue with quality, as people that code open source programs usually do so during their free time. That said, open source utilities like Firefox, GIMP and Inkscape are usually very high quality. It's typically the games that suffer the most.

Open source software is sometimes called FOSS, for "Free Open Source Software". It's unfortunate that the free part needs emphasized like that, but your average person won't realize that open source and free are practically one in the same. Thus, this needs to be explicitly pointed out.

Pay to Play

Some online games charge a subscription fee. Like Free to Play games, you don't actually own your copy of the game. You have a client that uses their services to play the game.

There may still be microtransactions within these games, which may also devolve them into pay to win games. Pick your pay to play games carefully, as this is the most expensive way to play video games and may not be worth the price.

Shareware

This is an interesting blend of the above two licenses. Part of the program is freeware, but the rest is sold as a commercial product. The main benefit from this is that you can try a program without having to commit to the purchase, and if it's particularly nice, you can share copies of the free part with your friends.

Shareware programs saw their heyday during the DOS era, which came to an end in the mid-1990s.