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Taking Aim At The Mod Squads
Cutriss writes "CNN's usually dry and uninspired reporting was interrupted today by this interesting and rather well-informed piece by Eric Hellweg from the Technical Investor section. It compares and contrasts efforts from various companies in squashing/supporting the hobbyist community. It's rather well-timed, considering recent events."
Just in case.
Taking aim at the mod squads
Is it good business when customers modify a product or does it justify a cease-and-desist order?
October 14, 2002: 1:41 PM EDT
NEW YORK (CNN/Money) - When video game enthusiasts talk about going "mod," they don't mean getting a shag haircut and zipping across town on a Vespa.
For them, the term is short for "modification," and it's what some love to do to game consoles and the games themselves. Like, for example, tweaking the operating system of the Xbox to run Linux, as some gamers have already done.
In this age of extreme sports, it's what you might consider an extreme hobby. But the act of modifying a game's code or a hardware console is polarizing for gaming enthusiasts, software makers, and hardware manufacturers.
Some believe it fosters sales and customer devotion, while others view it as an infringement strictly forbidden by 1998's Digital Millennium Copyright Act (DMCA). Most important, these modifications raise a question: In the digital age, is the customer always right?
Microsoft (MSFT: down $0.21 to $48.66, Research, Estimates), it seems, isn't so sure. The manufacturer of the Xbox game console recently took legal steps to shut down a Hong Kong-based company offering "mod chips" that allowed Xbox users to alter the game's operating system and play pirated games.
While it's understandable that Redmond would shut down a company making money off unlicensed Microsoft knockoffs, the company doesn't believe that consumers have the right to tinker, even as hobbyists.
And Microsoft isn't alone. Last year Sony (SNE: down $0.30 to $41.95, Research, Estimates) forced a customer who had purchased its popular robotic dog, Aibo, to remove code from his Web site that would have allowed other users to program their pups to dance -- something not originally intended by Sony.
Bad call, in my opinion, since only a fanatically devoted customer would have spent hours writing code to make Aibo do the mambo. This kind of cultish devotion is every marketer's dream -- a product perceived as so cool that owners will subjugate their normal lives to embrace it. So what's the problem?
Valve Software, maker of the boffo hit videogame Half Life, had no problem with the millions of dollars in unforeseen bonus revenue it reaped selling Counter-Strike, a "modded" version of its popular game.
According to an article in the October issue of Business 2.0, Counter-Strike -- created by Half Life fans after Valve made the game's source code available for free -- has sold 1.3 million copies and is the most popular multiplayer action game in the world. In a telling glimpse at what may be Microsoft's true stance on modded products, a Counter-Strike version for Xbox will be available in 2003.
Valve isn't the only success story. In 1998, Lego allowed users of its popular Mindstorms robotic toy to program new uses for the product. The result? Something you literally can't buy: a fervent community of rabidly loyal fans.
"It's hard to say, but I think it's led to increased sales," says Soren Lund, a director at Lego in Denmark. "It has kept the product vibrant and alive, even today," four years after it was first released. "I still get amazed when I see what's going on out there."
Unfortunately, however, with the DMCA providing legal ammunition, companies are all too willing to clamp down on this unique-to-the-era form of customer loyalty.
Nowhere is this more apparent than in the entertainment industry, where, increasingly, any consumer use of a product that varies from the manufacturer's exact intent is met with a cease-and-desist order.
It's a troubling and shortsighted trend. Currently there is no convincing evidence showing that this kind of consumer behavior results in lost sales or trademark dilution.
Unfortunately it seems that many companies have abandoned the maxim that the customer is always right. Ultimately, on this issue, these firms will find out that they've been dead wrong.
Unfortunately the author failed to mention that one of the reasons Sony went after the author of the Aibo software was that he had copied some of Sony's code.
The author also fails to mention that Sony subsequently opened up the Aibo's API.
here's the link to counter strike article
Seems to me hardware vendors don't have a leg to stand on concerning aftermarket modifications to their hardware. People have been moding cars for years with aftermarket parts.
Dangit, if I buy the hardware and want to modify it, I payed for it--it's mine--why shouldn't I be able to? Void the warranty, yes. But don't tell me I'm doing something legally wrong.
Particularly in that, unlike a software package on CD, the unit isn't sealed in an envelope with a shrinkwrap license agreement on it. You pay your money, the dealer gives you an Xbox, and you take it home; the transaction is a sale, not a license, and you own the hardware -- you can do anything to it you want to, whether it's installing modified BIOS chips to run other software or using the unit as a boat anchor.
Now, the creator of a mod chip is in a much grayer area; they have to take steps to ensure that they don't use Microsoft's code when creating their chip, or they are in violation of copyright on the code.
No, it's gone UP.
Thanks to that price drop ($300 -> $200) it costs Microsoft at LEAST $150 per xbox.
They still do not have the volume being made to counter that, primarily because they don't sell fast enough to justify increased production.
Sony and Nintendo both have highly optimized designs (sony because they own all the silicon designs, nintendo because of requirements at outset for a tiny footprint) so they can better consolidate components, and they have 3 continents (at least) where their systems are selling very well. This is where using almost stock Intel and Nvidia components, IMO, hurts Microsoft.
First, let me point out this statement:
Is this actually true? Microsoft has not gone after the modder's themselves, only companies that are distributed modified BIOS's (which I've read elsewhere are copyrighted). I don't think I've ever seen Microsoft saying that those who purchases XBox's don't have a right to modify them.
The fallacy of his argument is that he believes the modifications to the XBox will lead to more sold. Even if that were true (which I don't think is true), will this directly lead to more legitimately sold software for the XBox? (which is where they make their money... a fact that I realize has been repeated a billion times on this board) So for him to argue that the modifications are, in fact, good for Microsoft is very weak. He compares them to the Lego Mindstorm products, which is a terrible comparison due to the fact that Lego's are made for the very purpose of creating your own work. The XBox business strategy is very different from that.
Important Note: Before I get 400 responses talking about bad business models, I want to make something clear: I am not saying it is a good business model, or that the laws should protect flawed business models. I am simply showing that the author's logic is failed in arguing that the modifications are good for Microsoft.
Forget the whales - save the babies.
Well, here Lego Mindstorms story is not being clearly covered...
When Mindstorms came, Lego was only willing to deliver a little more complex toy for older kids (~12 years old). In their minds, this was just an extension of Technics, nothing else. But then it came the surprise. Some crazy hackers broke into the robot and realized that it had a relatively powerful chip inside. And some realized that this chip was in accordance to some MIT basic theories on Robotronics. And that made a boom of all kinds, even US Air Force had one guy porting Ada to Mindstorms.
Meanwhile sales were not looking so good. As far as stories go, Lego planned to make a small launch of 10000 units and forget the matter. At that time they saw what hackers were doing and started the get mad. Back then there were a few articles with disgruntled managers claiming that hackers were hurting Lego by violating its property rights. There were even some voices that hinted about Lego preparing a run to courts. However, this mood suddenly stopped. Why? Because Mindstorms sales hicked. And Lego came to create three robot versions and sell some 100000 units.
Frankly, as I could see over one shop nearby, it was not 12 year-old kids that helped Lego in this. It were hackers. The clerks told me that they tried hard to sell two units, but, not even the big daddy with golden rings and buckstuffed pockets was willing to buy such a toy for his kid. Absolutely no one was interested on it, except two weird guys. One was some middle-aged guy from some institute, the other was me who is also not a teenager. Interesting to note that my box was gaining dust on the shop for some 6 monthes before I bought it.
The robot is some marvel. You may think it is crazy to play such a thing, that an adult should have much more important things to do. Wrong. Try to run over the deep bottom of programming a $200 robot and you may realize that there are a few things that make you look as a teenager in front of his first Z80, typing its first BASIC program. There are a few things on robots, which are outside the scope of your usual programming skills. Before you try, programming Mindstorms may look simple and stupid. But, when you see the robot going nuts or breaking his leg, you realize that you still have something to learn.
Presently, Lego is still fighting with that brief lack of vision, however, its support over the hacker community has been slowly rising. It were all those big kiddies, some with little kids who barely understand why daddy/uncle also plays Lego, that made the Robot a success.
Automatic firearms are legal to buy, FYI. Yes, there is some paperwork, but that is easy compaired to finding a seller: Due to law, they are no longer legal to maufacture for civilian use.
--Demonspawn
I think this is a more interesting question than everyone else who has yet responded to the thread.
First of all, even a literal quotation with certain small twists in a serious work has been accepted as "satire" by U.S. courts. The question is, when the work infringes commercially with potential profit in the same target audience market then the work is no longer considered satire. But satire is some of the most protected speech in the U.S. (unless it is directed against judges or law enforcement, which gives the authors a much rougher time.)
Second of all, the fair use doctrine of the Berne convention and U.S. law allows the extensive literal reproduction of and derivation from news articles. Many nonprofit and commercial sites take advantage of this fact. You could claim that a changed conclusion results in a derivative work, even if you copied all the quotes and facts verbatim.
Third of all, every single reporter in the world LOVES it when his or her work shows up in thousands of email inboxes, even in edited or truncated form. The only real problems in this realm occured when freelance work with limited publication rights started ending up verbatim in LEXIS/NEXIS, which was a big messy lawsuit around 1995 or so. If anyone is losing anything in article redistribution, it's the publishers, not the reporters, and even the publishers in practice acknoledge that the free advertising from widely-disseminated quality work is worth a lot more than the possible market value loss.
Fourth of all, I think this is a remarkably good idea. Why don't you do it and ask the author what he thinks of it?
I have a feeling that there is more to the question than was meant to be in it. An interesting experiment awaits!