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DRM: Necessary evil or consumer insult?

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Nicholas Lovell, founder of Gamesbrief, is an expert in the business of gaming. We got in touch to find out how increasingly stringent DRM demands are affecting the moneymen of gaming, and just how piracy is changing the gaming we’re used to.

 

What do you make of the current anti-piracy precautions that we’re seeing?

Defeating piracy is a fine balance. Publishers need to protect their investment in intellectual property without alienating their paying consumers. Disc-based DRM has had its problems and is always cracked, but its existence is, at best, a deterrent and, at worst, a clear reminder to pirates that they are stealing. Always-on requirements have tipped that balance against legitimate customers. There is now no doubt in my mind that pirates now have a better experience than legitimate consumers.

Are current publisher measures too draconian, or are gamers being too sensitive?

Not only are they too draconian, they are bizarre. Steam has shown how you can have a balance between regular authentication checks and the ability to play the game without a permanent internet connection. It seems crazy to me that Ubisoft didn’t emulate Steam, which by some estimates has more than half the market, and instead went for their own draconian system.

My belief is that Ubisoft are targeting the wrong metric. They are trying to reduce piracy. I think that they’ll succeed, but I also think that they’ll reduce their sales. That’s surely not the objective.

In Ubisoft’s position, and indeed EA’s, what else could they have done other than enforce an always-on internet connection on consumers to fight piracy?

Tim O’Reilly once said that the greatest issue facing any author is obscurity, not piracy. The same is true for games. Publishers spend a ton of money on promoting their games. For Modern Warfare 2, the marketing and distribution budget was four times the size of its development budget. So there are ways to see piracy as the start of a relationship with a future customer, not theft.

Project Ten Dollar, EA’s way of rewarding people who buy the original game at retail [this is EA’s marketing drive to include free DRM with store-bought games], is a good example of how to generate revenue from secondhand (and pirated) material. I think it’s a great use of a new business model to reward legitimate, paying, supportive customers, and not punish them.


Above: Assassin's Creed II - you starting to get the idea? 

How else could they do it? Give the whole game away entirely for free, make it small, and charge for DLC. Investigate a virtual goods model (by most estimates, Zynga [creator of Mafia Wars and Farmville] is now more valuable than Ubisoft.) Slash the marketing budget and rely on pirated copies to spread the word about how good your game is, then charge for additional elements. In short, experiment to see how you can add value to your users, not to see what you can take away.

In what other directions is PC gaming evolving as a reaction to the rampant piracy that plagues it?

PC gaming is in rude health, yet selling boxed products at retail is in terminal decline. We are seeing games that charge subscriptions, and games that are monetised entirely through virtual goods. Always-on DRM is not wrong per se. It’s just a huge mistake to charge gamers a huge premium for their content and to limit their ability to play it in a way that pirates are not limited.

Is the change in PC gaming a good thing?

Unequivocally, yes. Publishers are obsolete. Their business model evolved when it was incredibly expensive to distribute a game. Publishers became the gatekeepers determining what got made and their focus was on reducing risk. But now we don’t need gatekeepers because distribution is so close to free as to make no odds. Sure, we need the skills of a publisher: marketing, finance, etc, but we don’t need their risk management any more. We’re in the very early days, but in the long term, the changing business model will be fabulous for PC gaming.

It’s my belief that Ubisoft is hastening this process, by making legitimate, boxed PC games sufficiently unattractive to consumers to drive them away to other forms of PC gaming entertainment. Sometimes, even as an analyst and a former investment banker, the foolishness of big companies makes my jaw drop.


The way ahead


PC gaming has always been about autonomy, the creation of your own network of favoured programs and hardware. And the imposition of a company to demand strict adherence from customers who have committed no crime is several steps too far.


Above: An online connection is required to play Settlers 7 

What’s more, permanently online connections may be the norm in the USA, Canada and South Korea, but not globally. Just as we baulked at Steam, we coughed up bile at Ubisoft’s Uplay. The motives behind its online-only policy are understandable. But its execution is heavy-handed in the extreme.

Things aren’t all bad though. Piracy is taking PC gaming in new directions. Broadband brought torrents – an ease of piracy beyond having a friend with a CD burner – but it’s also brought ways in which gaming can adapt and evolve. Microtransactions, free games with paid-for content, subscriptions, in-game reward systems – for gamers, piracy might just be the thing that revitalises PC gaming, for both players and publishers, and makes it stand out from the console crowd.

In the immediate future, the reason that Assassin’s Creed II and Splinter Cell: Conviction’s demands have garnered a little more outcry than EA’s similar policies is because games like C&C4 have been built with an online element that infiltrates the single-player. To this end, in the short term increasingly large PC games will find themselves filled with online hooks: centralised on publisher servers (APB), peppered with online achievements and potential downloads (Dragon Age: Origins), and attempts to separate gamers from dedicated server gaming (Modern Warfare 2).

The prevalence of digital distribution platforms such as Steam (whose front-end is relatively easy for pirates to circumvent, even if Steamworks might change this) will also come into play. The fear of a Steam account being tarnished through playing a pirated game online is real, and will ultimately put off casual illegal downloaders.


Above: Even bloody submarine games are online-only 

Although the mainstream media has been achingly slow to realise it, we now live in a download society: people are used to getting entertainment online just for the cost of a broadband link. Whether we’re talking downloaded episodes of Lost or free online content from newspapers and magazines, the public now expect information to be free, and it’s going to be very difficult for the entertainment and information industries to reverse this expectation.

Some are clever about it, like Comedy Central showing South Park knowing that a random Chinese website will do the honours. If publishers want to fight piracy, they’ve got to do it in partnership with the customers who want to enjoy their services and products. We are not the enemy. Above all publishers have to show that they understand how PC gaming works and why we love it so much.

May 18, 2010

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28 comments

  • Yetiman969 - May 25, 2011 9:39 a.m.

    I had to pirate AC2 because of the DRM, but followed SkidRows advice and bought the game, that is why the DRM is useless, an outdated concept. I just chose to buy cause I'm nice, but most people won't. Also, another problem with DRM's is the bigger, the tougher the challenge then the more people that'll go after it. Crackers wan't a challenge, give them a puny DRM, instead of a Draconian Ubisoft one, and Crackers'll probably focus on something else.
  • Pruman - May 26, 2010 3:42 p.m.

    Harsh DRM is a major problem because all it succeeds in doing is punishing the exact people game companies should be rewarding - the customers who actually pay for games! Pirates are always going to pirate the game because it is their nature, like the scorpion in the fable of the scorpion and the frog. The right way to combat piracy is to make a paid product better than free. Valve successfully did that with Steam by offering a wide availability of game choices, great prices, and the ability to play your Steam games on any computer with an Internet connection. Good DRM is unobtrusive and nearly invisible to the user. I believe Valve's DRM accomplishes that. Also, I read the best metaphor for piracy on Cracked the other day: "[the fact that there are no games on PC] has nothing to do with the morality of file trading. It's simple cause and effect. We're smashing out all the windows because it's fun, and then complaining when the rain comes in."
  • D0CCON - May 24, 2010 12:31 a.m.

    If the technology evolves enough to make it impossible to pirate a game, then it will be a necessary evil. Until then, I think that this only increases the number of pirates. Once the game gets cracked, people who hate DRM will try downloading it, even if they were planning on buying the game legitimately. Being one of the few people who prefers playing most games with a controller over a mouse and keyboard (only exceptions come in RTSs and games like Dragon Age Origins, and I rarely play RTSs anyways), I don't really care about the issue. Assassin's Creed 2 needs DRM? Fine, I'm enjoying it on my 360 anyways. But I still think that DRM hurts in its current form.
  • mentalityljs - May 22, 2010 5:23 p.m.

    Hey, I got an idea. How about Valve developes every game from this point on and have it activated through Steam!
  • Dibol1987 - May 20, 2010 5:36 p.m.

    Glad I gave up on PC gaming after 2008 (Tiberium Wars was my last game)
  • slapdatass - May 20, 2010 10:59 a.m.

    "Above: A one-stop shop for ill-gotten games" Why would you post a screencap of Torrentfreak there? TF is a blog about P2P, not a torrent site. Otherwise, good article.
  • ShadedPhoenix - May 19, 2010 8:45 p.m.

    heres another thing, if back in the days my uncle didnt gve me a cracked copy of system shock and boulder dash (and some other) i probably would had never started gaming in the first place (why should? books just cost 5-15 bucks depending on its age and where you look) As well to the issue with mw2, it has more online then retail sales, just get on steam and see the amount of people playing all day worldwide, its at a constant 50-100k most times still, and you cant play almost no game online over steam with a hacked copy, and now look what company did made steam and for what game, valve for half life 2, a drm invention that is good, a neccesary evil that is actual friendly (i cant repeat this often enough)
  • ShadedPhoenix - May 19, 2010 8:35 p.m.

    For me a perfect game has no drm, ill pirate anything before buying it (unless i was satisfied with the demo) but most times i dont have the money to immedietely buy me a game, so i dl it anyways, but i pad for many games nonetheless, and for way more if i didnt, here some examples of the earliest, Mass Effect 2, Bioshock2, Darkest of days, Metro2033 and ontop, i wont any game that has a too strict drm, or is not using steam, which is strict by nature but very very user friendly and it even has inbuild services like news, autoupdate, friends list, the ideal plattform
  • JohnnyMaverik - May 19, 2010 6:29 p.m.

    I cant play Ubisoft games now since I live in Univercity halls of residance and the connection here aint so great. Not only that but the nessesary ports to play games online get blocked, not sure if that'd have an effect in this case but I'm also not willing to take the risk, and even if it didn't, I still have the extremely flakey connection to contend with. I'm not guna pirate them either cuz quite frankly I can't be arsed, but hey, if something comes along that I really wanna play (see I Am Alive, which looks interesting)while I would buy the game with out the requirement for a constant connection, with it there's no point, as I'd just end up with an expensive tea coaster. The theory behind the DRM is solid and from what I know so far it's been harder than usual for the pirates to crack, but the problem is not everybody has a solid connection, in fact many don't, so while the theory may be solid, in practice the inferstructure just isn't there to support it yet, ergo you get people who can't play and therefore won't buy your games, and you know what, might just torrent a DRM free version instead, not because they don't/won't pay to play the game, but because they can't.
  • IHateMakingUserIDs - May 19, 2010 6:25 p.m.

    Always on Internet connection is a small price to pay. Did you forget on the first page where they same MW2 was downloaded 4.1 million times, and only purchased 270 000 times for the PC. that is only 6% of the total people playing the game buying it. Or on page 2 where the Football Manager guy says that he used hooks to see ho many people playing were playing retail copies, 30%! Piracy is a serious issue in PC gaming. And as such there needs to be drastic measures taken in order to protect companies rights to profit off their products. What does a PC game go for 40-60 bucks? If you use 50 as an average MW2 lost $205 000 000 in game purchases. Football Manager even offered a lengthy demo of the game for people to see if they liked it enough to purchase. That clearly didn't stop people from downloading illegal copies. I'm all for DRM's. If people want to play games for free, go playing at popcap.com, or addictinggames.com. There needs to be more enforcement of copyright laws. If you aren't doing anything illegal there wont be anything to worry about.
  • mutantsquid - May 19, 2010 5:56 p.m.

    This is somewhat ironic. I pirate PC games to test out the finished product and see if it will run and if support will be up to snuff. This is because the purchase of a PC game is a one time deal, there are no PC rentals and I cannot sell my copy back to the store. The ironic part is that both these reasons have come up BECAUSE of piracy. Bizzare.
  • MetalDooley - May 19, 2010 4:36 p.m.

    @philipshaw Killing the industry huh?Used game sales have existed as long as I've been gaming(20 years)and in that time the games industry has grown into a multi-billion dollar industry that rivals the Hollywood movie industry. Far from killing it the ease with which people can get rid of unwanted games has probably helped grow the industry Why is the games industry the only one complaining about used sales?Why do they feel they deserve special treatment?You don't hear the heads of Ford and Toyota complaining that used car sales are destroying the motor industry
  • Imgema - May 19, 2010 1:37 p.m.

    DRM is stupid because, in the end, it only effects the paying customer. If someone is a pirate, he won't buy a game because it has DRM anyway. He will probably wait for it to get cracked. If the companies want to fight piracy, they will need to increase the value of their products. All the money they spend on DRM, they should use it to make better packages, nice big boxes, fat good quality manuals and maybe some presents inside the box, like an action figure or a soundtrack, or a huge illustrated map. This way, more people will be tempted to buy the game rather that DL it. It wont destroy piracy, but it will reduce it. With DRM not only they don't increase the value of their games, but they even decrease it further. I was going to buy Dead Space for PC, but because of DRM i choosed to downloaded it. Later, i bought it for my 360. That's another reason why the PC software sales are so low compared to consoles.
  • AfricanWoolf - May 19, 2010 12:31 p.m.

    "So there are ways to see piracy as the start of a relationship with a future customer, not theft." Dangerous words :-P Though I must say not without merit. DRM is certainly a necessary evil, that said, straight forward, kick to the crotch DRM like Ubisoft's latest exploits, are not the way forward. Creative DRM that gives incentives for illegitimate players to become legitimate seems like the best way. Make the experience so much better for legitimate players that it becomes better to just buy the original game. Lowering game prices and going for a "high turnover" business model might also be the way forward.
  • vinicusg.t.guedes - May 19, 2010 11:40 a.m.

    PS3 won the piracy war, it has shown it's perfectly possible to be free of pirate copies without compromising the gaming experience. Unfortunately a closed platform in the likes of the PS3 is not possible in the PC.
  • philipshaw - May 19, 2010 9:43 a.m.

    DRM is a necessary evil because if you aren't buying games new, you are killing the industry
  • JohanLiebert - May 19, 2010 7:33 a.m.

    DRM reminds me of the drug war. It is punishing everyone by trying to prevent a crime that, obviously, is going to happen regardless of how good the DRM is. Piss on it.
  • RebornKusabi - May 19, 2010 3:53 a.m.

    As a fairly "casual" PC gamer, in that I have a relatively middle-range PC [laptop] and only play games that were released before 2004... I don't care how much publishers or developers attempt to justify it, the fact of the matter is that DRM essentially PUNISHES legitimate customers of a product while pirates get off scot-free due to the fact that all they have to do is download the game, get a crack and play the game without even paying a single cent. Sorry but I have no sympathy for measures that treat the paying customer like a thief...
  • Cwf2008 - May 19, 2010 3:35 a.m.

    Didnt they just write an article about how their sick of people complaining about DRM? Huh
  • EnragedTortoise1 - May 19, 2010 2:22 a.m.

    @Psylockerules: Yes, but eventually THAT will be cracked, too.

Showing 1-20 of 28 comments

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