Easy on the DRM pretty please?

There are some premises in there that simply don't hold up. For example:

The argument is straightforward and both intuitively and logically sound: for every pirated copy of a product, there is some potential loss of income to the producer of that product. This is not the same as saying that every pirated copy is a lost sale. What it actually means is that firstly some proportion of the people who are pirating a game would have bought it in the absence of piracy. Equally as important however is the fact that even those who would never have paid the full purchase price for one reason or another may still have paid some lower amount to purchase and play the game which they pirated. This is because by the very act of obtaining and playing a game, they've clearly demonstrated that they place some value on that game. After all, if something is truly 'worthless', consumers won't bother to obtain or use it in the first place, regardless of whether it's free or not. Even if a game only gives the pirate a few hours of enjoyment, that's still worth something. In the absence of piracy they may have purchased the game at a discount several months after its release, or bought it second-hand for example. So the existence of piracy results in some loss of income to PC game developers, publishers, retailers and even other consumers.

What's missed here is that people who pirate these games may not have even heard of them were it not for piracy. It fails to recognize that piracy generates "buzz" which, in and of itself, generates increased sales. As the author admits (but fails to recognize the implications), piracy also attaches value to the products - value that might not exist absent piracy. This impacts demand for the game. Companies themselves actually DO know this; that's why they release demos.

And no, not every copy pirated represents a loss of income because not every person who pirates a copy is necessarily going to buy it (even second-hand) absent piracy. Only the proportion who would have bought, absent piracy, is a loss of income.

 

@Benacer: you are 100% correct in what you said. Publishers know this as well.

Just a sample of a quick google search explaining. Publishers lose ALOT of money through resale of games, because they don't get any of that money.

 

Publishers tried to stop reselling through legal means but the courts saw right through it and established the "right of first sale" doctrine, so now they use piracy as an excuse to do an end around via the DMCA.

 

frekk:

I agree with this. Anything the guy backs up with references or quotes was from the publishers and developers. I think he mentioned something about verification not being available from the pirate's perspective. It just seem like common sense. I could get bent about AC 2's DRM but I have no interest in the game. They could drop the price to a $1.00 and I wouldn't care so I am definately not a "lost sale". Doesn't really apply to me because I won't pirate.

I think the writer's viewpoint, here, was mainly comming from what the publishers told him. The main thing I got from it was that pirating on the PC is easier. Easier platform to crack and easier for would-be pirates to find and download content. That seems to be why he thinks console game sales are so good and pirating is such a problem on PCs. Even though computers are superior gaming machines.

 

It is a good read. It's interesting that, with a higher volume of sales (lower production costs) and less piracy, console game prices are on average sold at 10-20% higher price. So it's certain that it does generate some signifigant loss of revenue, because it seems obvious that the markup has to be lowered in the PC market owing to competition from piracy. It just bothers me to no end when it's calculated on the basis of full retail value for every pirated copy. That's inaccurate and distorts the cost-benefit picture of copy protection.

Another thing that might be noted from that survey is that piracy attacks games in proportion to their sales success (eg the Sims and piracy). There are lots of small game companies almost completely unaffected by piracy, by virtue of the fact they are obscure. In that sense, it's safe to say that piracy may represent a loss of revenue for game developers, but it cannot threaten the existance of the industry because it is proportional to success.

 

That might be true in the US, but this is definitely not the way the game is played in the EU (with the possible exception of the UK). If you buy a game in the EU, it is yours, and you can do whatever you like with it. You can play it, sell it, or build a model helicopter out of it.
And no, it does not matter what the EULA says.

 

I can see from many of the post something that matches my decennial experience working in the software industry: people do not like DRM.
DRM means Digital Rights Management, and it's a very interesting name for a type of commercial behavior that in earlier and more honest times was called "copy protection".
The name it's interesting because it implies that it's there to manage somebody's rights.
For sure it's not managing the user's rights.
In most of Europe it's legal to have personal copies of media content and software as long as it's done for private non-commercial use (I'm talking about European Union, in UK it's illegal to even copy your own music CDs), and many DRM are preventing it.
Big corporations are changing the way we buy digital products: we do not buy anymore the product itself, but only the right to use it under very strict limitations.

DRM force people to "live" in very closed boxes, making it very difficult for them to do anything outside it (try to synch an iPod over multiple PCs).
Actually Apple is a classic example of the direction of the market.
You cannot use Apple's elegant devices without using iTune.
You cannot really use iTune in full if you don't have an iTune account.
Whatever you purchased via iTune cannot be used without it... the user is locked, and has no rights except the small concessions granted by a private corporation.
Naturally there are ways around the problem, to use your own devices with the content you own, but they are called "piracy" by the industry.

In reality digital content companies perfectly know that a number of people will always resort to piracy: these users are often not even considered as potential customers.
DRM is often used to "keep honest users honest", not really to prevent piracy.

The digital media industry (more the music corporations than software houses) then lobby governments to have more restrictive laws, claiming huge "losses" due to piracy.
The losses are calculated assuming that all pirated digital items would have been purchased at full price by end users.
This is not true at all.
A large number of people download pirated goods to try out something, and in most of the cases abandon pretty soon: they would have never purchased the digital item in the first place.

To summarize, I don't like anti-copy system that prevent me to exercise my own legal rights over content and software I do legally own.
I also don't like DRM systems that bind me to a specific service or hardware.

 

That's true for tangible goods (e.g. a DVD) but it's extension to all type of digital content, especially if bought from Internet without a physical support, is still under discussion.
Or better companies are lobbying to create laws to reduce the legal rights of EU consumers to the same level of our fellows across the channel and across the pond.

 

You are right - I was thinking about tangible goods, like a boxed retail game.

Actually, it would be very interesting to force a trial regarding an internet based game. For example, if I had bought the D2D version of BTS and wished to sell it, D2D might not let me, and I would have to take them to court. I am certain that the first to do so in the EU would be granted free trial all the way yo the supreme court - it would be a principal trial if ever I saw one.

Keep an eye out for such an opportunity, guys.

 

I don't know how true that is. World of Goo, a relatively successful indie game, that I might add was available off the creator's website in a DRM-free form, had reported piracy rates of up to 90%. That's a staggeringly high number and that's most definitely a small game company.

I'd argue they'd be likely see higher rates of piracy than the big name games. A small game won't be advertised in a way that allows the general public to hear about it. The people who do hear about it are those who spend their lives on their computers reading articles and websites that allow one to hear about these sorts of indie games. I'd wager as tech-savyness increases, so does the proportion of pirates. That is to say, the more mainstream a game is, the smaller the proportion of pirates to legitimate customers is.

Source: http://arstechnica.com/gaming/news/2008/11/acrying-shame-world-of-goo-piracy-rate-near-90.ars

 

I have the money to buy any game I want, and the willingness to do so if it's good.
I have also the willingness to NOT buy anything that include limits to my ability to own the use of the game. If I pay to have a game, I want to be able to use it whenever I want, wherever I want, in ten years from now and CERTAINLY NOT having to ask permission to an authentificator that I do not possess myself, or requiring an online connection to work.

I don't give a damn about how good or bad Steam is, I want to own what I paid for, and not depend on anything else.
So if Steam is in, I'm out.

Well, that's exactly what I meant
If pirating is more convenient than the copy-protection, it will lead to piracy. So a small anti-piracy protection makes pirating more inconvenient. A large anti-piracy protection makes pirating more convenient - and it also justify pirating in the mind of the people who endure the abusive protection.

Intrusive, abusive copy protection increase the chances that people will pirate a game, because they increase their willingness to pirate and decrease their loyalty.

 

I've never heard the car companies complaining abouth that used cars are sold.

agree.

A very sad example, true .

The problem is, that people will only spend some money on something, which appears to be worthy for them (okay, that's not really a "problem"). I've also read about World Of Goo, and it seems to be very funny, but i would not buy it, because it's not really something, where i think i could spend hours on it. So i would also not spend even some €s on it, doesn't matter, how cheap it is.
But the same thing doesn't happen for piracy: A game will even get downloaded, when the gamer just hopes to get 1-2 hours of fun.

 

This is a very central issue, a lot of the digital goods are not completely worthy of their price (at least in the eyes of the potential buyer).
World of Goo is a funny game and impressively well implemented.
Unfortunately, it's not the game I'll play for long time.
Nice to try it, but I would leave it pretty quickly.

Civilization is a completely different matter: I know I'll play it to exhaustion!
It will give me uncountable hours of fun.
If i take the price of the original Civilization IV and divide it for the number of hours I did play it, the result cost per hour is almost zero.

World of Goo cost about 20 us$ and I know i wouldn't play it more than 1 hour... 20$ per hour ... no thanks... and (for my personal taste) little entertainment.
Anyway the main point is that I wouldn't really spend anything to play it to the end.
I guess that many people who got the pirate version found not completely worth the full price... while buying it original or download a pirate copy takes pretty much the same effort (if you already have paypal, else the pirate version is much easier and faster to obtain).

If I go to watch one of the new 3D movies like "Alice in Wonderland" in a good cinema it costs about 10€.
I do pay willing because the experience is great, and it's a nice movie (not really the best of Tim Burton, but not too bad).
I wouldn't even think to download a pirate copy for home watching.

 

It's a very different type of good: they are very tangible goods.
So much that it even costs money to dispose of a car, you can't (legally) simply trow it away.
They are something that the consumer owns completely: you have all the rights to use and modify them (in the limit of law and good sense), and the right to resell them.

At the same time car makers see somebody who sell his car as a potential customer for a new car (with added revenue and profit for the car maker).
The money a person makes from selling his old car is almost always used to buy a new one.
If selling used cars was forbidden, people wouldn't change their cars so often

The commercial dynamic for digital goods, especially media, is very different!

 

The World of Goo example does not prove anything. How many of those 90% pirates would have bought the game if it was impossible to pirate. None of them? All of them? We do not know!

 

Yes, we don't know, but with that rate of piracy you can't blame pubs/devs for wanting to use DRM. On the 2D boy example, if DRM caused even 1 in 10 pirates to buy the game, they would have doubled their sales. Thats the kind of odds worth playing.

 

If, if, if. All of these scenarios are based on total guesswork.

If 50% of the people who actually bought the game wanted to try before buying, DRM would have cut the sales in halve.

I can and do blame pubs/devs for using DRM. It is at best an uninformed decision on a crucial aspect of their business.

 

They allegedly reported "piracy rates of up to 90%" that means pirated copies amount to 90% of the number of sold copies.
Practically 1 pirate copy for each legal one ... very different from your interpretation.

We also have to consider that a game like World of Goo becomes popular thanks to "viral marketing" with people got suggested by friends.
In this type of business model (direct to consumer, viral marketing, no distributor) a certain amount of piracy is to be considered as "part of the game", and a way to make the game better known.
Lets remember that it's almost easier to get a pirated copy than a legal one.

It's also very difficult to evaluate the number of pirated copies.
If the game was using a server than it's relatively easy to quantify piracy levels, else they are only estimations and sometime numbers are a bit exaggerated for marketing reasons.

Many software companies try a different route, using official distributors (like steam) to make easier to reach users (thus they may experience lower level of piracy in relation to copies legally sold).
But resellers and distributors get a share... a large one.
Apple Appstore (for iPhone, iPod Touch, etc.) takes 30% of the retail price of every application sold!
In the mobile market they are the "cheapest"... mobile network operators (carriers for the Americans) charge much more for distribution of software and content in their network. 50% is considered normal.


Anyway the main issue we discussed is that DRM create more problems to honest users than to pirates.
At the same time DRM limits our legal rights and do not really prevent piracy

 

The fact that they use anti piracy as an excuse to kill the 2nd hand marked is downright dirty although I can understand the motivation from the point of view of a corporate manager who get much richer for every point he can raise the profit margin with.

All I can say is that I sincerely hope Sid won't allow Civ5 to go down that road

 

My understanding was that their (2Dboy) estimations of piracy WERE based on a central server reporting that there were 10x the number of connections made as copies of the game that had been sold until that time. When they said 90% piracy rate they meant 9/10 copies were pirated.

Oynaz, don't you think its a bit hypocritical to criticize use of DRM as being based on total guesswork and then use total guesswork to allege that non-use of DRM would be better?