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Valve Takes Optimistic View of Piracy

GameDaily recently spoke with Jason Holtman, director of business development and legal affairs for Valve, about online sales and piracy. Holtman took a surprising stance on the latter, effectively taking responsibility for at least a portion of pirated games. Quoting: "'There's a big business feeling that there's piracy,' he says. But the truth is: 'Pirates are underserved customers. When you think about it that way, you think, "Oh my gosh, I can do some interesting things and make some interesting money off of it." We take all of our games day-and-date to Russia,' Holtman says of Valve. 'The reason people pirated things in Russia,' he explains, 'is because Russians are reading magazines and watching television — they say "Man, I want to play that game so bad," but the publishers respond "you can play that game in six months...maybe." We found that our piracy rates dropped off significantly,' Holtman says." Attitudes like this seem to be prevalent at Valve; last month we talked about founder Gabe Newell's comments that "most DRM strategies are just dumb."

24 of 509 comments (clear)

  1. Same day release and appropriate pricing by Enderandrew · · Score: 3, Interesting

    Many countries speak English, so release English versions same day everywhere, and localized releases shortly there after. And if people in China, Russia, whatever can buy a pirated copy of that game for $5, then you can't sell a legal copy for $60. In certain countries, they may just have to sell legal copies for $10-$20.

    --
    http://blindscribblings.com - Tasty pop-culture in conceptual fashion.
    1. Re:Same day release and appropriate pricing by KingAlanI · · Score: 2, Interesting

      How do you keep people from buying at the el-cheapo foreign price and selling at the ~$60 price? Postage costs & customs charges (even if you do get it with them) wouldn't fill up the difference.

      Thing is, I don't want to see region-encoding crap either.

      --
      I listen to both RIAA and non-RIAA stuff if I like the music, tangential business/politics nonwithstanding.
    2. Re:Same day release and appropriate pricing by Enderandrew · · Score: 2, Interesting

      I bought pirated X-Files DVDs from China. It cost $30 to ship it here from China, so yes, shipping would all but make up the price difference.

      However, it was cost effective for me to buy the pirated DVDs because I bought all 9 seasons for $80 total, plus $30 shipping. (It was $30 for one DVD, or $30 for as many DVDs as I wanted). At the time, individual seasons were going for $110-$120 in the US, and I got all 9 seasons for that price.

      --
      http://blindscribblings.com - Tasty pop-culture in conceptual fashion.
    3. Re:Same day release and appropriate pricing by Walpurgiss · · Score: 4, Interesting

      My sister tried that with DVDs of the West Wing she got on ebay. They were pretty low quality, bad Aspect Ratio, and half of the last episode on each disc was cut off. The bitrate was awfully low, trying to crap 6 episodes per single layer DVD. Spelling errors all over the otherwise decent looking counterfeit packaging.

      So often with the counterfeit DVDs, quality issues can arise. It seems like a much better idea, rather than to import illegal/stolen goods, to do the piracy yourself. Then you could control the quality of the DVDs made from the source files, and it would cost nearly nothing.

  2. And Steam reflects that... by GPLDAN · · Score: 4, Interesting

    Steam allows you to get content online. They are leading the charge to remove boxes from shelves. Today there was mass chaos at some Circuit City stores, because their CEO ran that company into the ground and won the worst CEO of 2008 award - Philip Schoonover, possibly the worst businessman in retail history. And that's saying something.

    Next up is Best Buy - do you really need to travel there to pick up a disk to have a game anymore? No.

    Sony kinda gets it, you can download some games with a PS3 that are fun, esp. for little kids, without needing to go get something. Pretty soon all the consoles will realize the revenue stream in controlling the distribution channel for all software via broadband.

    Do that, tie it to reasonable encryption keys, and alot of piracy will go away. PS3 games aren't up on piratebay for a reason, while Xbox games are. Just make it available, and make it easy - to the world, and the internet will take care of it. The loss of sales via the retail front won't be as bad as the suits fear, and mail-order is always available for the PC gamer living in an Igloo.

    1. Re:And Steam reflects that... by Ihmhi · · Score: 3, Interesting

      The Best Buys that I've been to don't have an insanely huge game section compared to the rest of the store.

      Yes, it's large - but what will they end up losing? PC games? There's still all of the console games to put on the shelves. Broadband penetration isn't good enough for the next console generation to be 100% game downloads like Steam, nor are hard drives cheap enough for game console pricing.

      Valve's ultimate victory, IMO, would be getting Steam in on one of the next generation consoles. Build the STEAM API into your console and everything is already handled - friends, community stuff, cross-game chat, voice chat, downloading games, secure payment - even a web browser. Publishers obviously get money when their games are bought on Steam, so the pricing arrangements can be made as well. I'm fairly certain Valve might even make some concessions if Steam was the sole system that a next-gen console used for pulling down games and playing them.

      Yes, the API needs work, but if Valve had a good reason to make major improvements (like debuting on the Playstation 4 or the Xbox Quad (whatever the Hell they'll be called)), they probably could without too much effort.

  3. GTA4 by shutdown+-p+now · · Score: 4, Interesting

    That's all great, but it's just words. On the other hand, when I wanted to buy GTA4 on Steam from Russia, I found out that the release was North America only (and despite this, I've got bombarded by ads urging me to preload and save, etc - all also NA-specific). After seeing the ads and the trailers, I really wanted to have that game, and getting such a slap in the face on release date was... very unpleasant. I immediately went and downloaded it from the torrent, and I am not going to pay for it anymore. I wanted to in the first place, but they said "no, we won't let you". So be it, then.

    I guess it's publisher policy really, not Valve, but still, Steam is and will be associated with Valve first and foremost, so maybe they should clean that mess up before speaking on this. Once I've got burned, I looked around, and I've found that there are many other games that are similarly released first only in North America, and then gradually elsewhere. There's even a Steam group, "Rest of World", that's dedicated to this problem, with over 10,000 members.

  4. Slashdot loves piracy by GodfatherofSoul · · Score: 1, Interesting

    I never understood this editorial opinion in most posts here. I'm a software engineer and I'd be out on the streets if our customers illegally downloaded our software. Sure, there are underserved markets, but most pirates are people who want to listen to music, watch movies, or play games for free. I don't see what economic model is going to squeeze profit out of that.

    --
    I swear to God...I swear to God! That is NOT how you treat your human!
    1. Re:Slashdot loves piracy by DeadPixels · · Score: 2, Interesting

      While I agree that there's a sizable group of those who want media for free, I don't believe you'd be getting their business no matter what you did. By ramping up DRM and other such "anti-piracy" methods, you're really only hurting the legitimate consumer. If someone wants your software badly enough, they're either going to pirate it or do without, and then you wind up in an arms race to see who can secure or crack the product faster.

      I'm not suggesting that you put your products out there with no protection, because that is just setting yourself up for massive amounts of piracy. The trick is to find a balance that is not too restrictive for your customers yet still keeps your product (reasonably) secure.

    2. Re:Slashdot loves piracy by Sj0 · · Score: 3, Interesting

      It's really simple. Most people DO want to pay for their games.

      When I'm paying a game I paid for that I really like and I helped support the people who made it, it gives me a big rubbery one.

      The problem is, companies want to make it too much trouble to buy their damn software. Stores where I live don't carry most software, and I'm not about to pay 30 dollars shipping for a 30 dollar game CD. Even if I get the game, some distributors, like EA, think I'm going to tolerate not being able to install my game more than 3 times (I've already installed every game I've bought this year more than 3 times. Get over it.) With Steam, I can say "Hey, I want to play Half Life Blue shift. I've never tried it.", and 4.99 on my mastercard and a 1GB download later, I'm playing it. If I re-install and want to play some more, I just download steam, download the game, and enjoy.

      I design industrial control systems for a living. We have to follow human engineering principles all the time. For example, if an instrument is lower than a person's knees or higher than their face, odds are it won't get maintained. Therefore, you can get all moralistic about how tradesmen are lazy and they should do their jobs, or you can do the right thing and design your plant so people naturally are inclined to maintain the most important equipment. If you get all moralistic, though, be prepared to do it while your plant is down and you're losing tens of thousands of dollars of production per hour.

      This is no different. Companies like the RIAA member companies, who want to bitch and whine, who want to sue their customers, who don't want to make the experience of buying music any easier, they're going to see their profits fall, and piracy skyrocket. Companies like Valve who design their systems so it's easier to buy than to pirate, they'll see their profits rise, and piracy fall (as this article says they've seen).

      --
      It's been a long time.
  5. Re:Naivete by Nimey · · Score: 2, Interesting

    You think that's a holdover from the days of Communism?

    --
    Hail Eris, full of mischief...

    E pluribus sanguinem
  6. Hmm... by XPeter · · Score: 1, Interesting

    If I ran a major gaming company, here's what I would do. (Internet Connection Required)

    Make software CD's completely FREE. Yes, FREE. Lets take GTA4 for instance. You could go to Best Buy or whatever and walkout with the game but when you got home and wanted to play you'd have to make an account which you must log into before the game starts. In order to activate the account, you could either pay a monthly fee until the games fully paid for (you could stop payment at anytime if your not liking the game) or you could pay the total up front. And of course, only one person could log onto the account at a time.

    Now lets say your friend decides he likes this game. You could lend him the CD and he could go make his own account ect.

    It virtually eliminates piracy/DRM and makes everyone happy.

    Please post thoughts/ideas to add on!

    --
    "The difference between genius and stupidity is that genius has it's limits" - Albert Einstein
  7. Pirates are underserved customers. by Anonymous Coward · · Score: 1, Interesting

    Pirates are people willing to take a look at your game. But not pay you anything. This is a good thing. These are potential customers. Potential good word of mouth.

    Really you're lucky they have any intrest at all in your game. And if they like it. Some might buy it. Some might tell their friends to buy it. Some might play it for free and never buy it... Can't win em all.

    On the other side... Some might also tell everyone they know that your game has such shit invasive drm it's not worth fucking with for free.

    Let alone paying money to deal with the hassle of activation, cd checks, blacklisted programs, online activation, expiration dates, hidden rootkit like programs. And other garbage.

    It's sad when your game isnt worth paying for. And real sad when its not worth the price of FREE.

    You game companys are lucky anyone bothers to take the time to pirate. You never lose anything you were going to get without piracy. You can only gain from it.

    Game companys drive priacy. You treat everyone like a thief. Even the people who PAID YOU!

    So why not pirate? It might be good. We might consider paying you.

    Maybe.

    If you're real good.

  8. Re:Finally by ccguy · · Score: 4, Interesting

    DRM is not designed to stop pirates forever. It is designed to stop it for the first few weeks when a game makes a large portion of its money.

    Then why don't they get rid of DRM after those few weeks? That would be a reasonable compromise for me: "You will need to activate this game and it will connect to our servers until 1/6/09. After that period the game will not need an internet connection, or the CD to be in the drive".

    Now, I would wait for the set date before purchasing anyway, but that's better (for them) than never buying the game no matter what.

    PS.1. Yes, I know that DRM removal tools exist.
    PS.2. The real date can be checked from trusted time servers.

  9. Re:Finally by Kindaian · · Score: 2, Interesting

    What is the point then if they launch the game at diferent dates all over the world?

    Any DRM will be break in 2 or 3 days if enough interest is generated.

    The only thing that escapes this is when the suppliers band together to make an hardware/software lock-in like the one made with blue-ray disks.

    And even then, it only survives a few months.

    If they make global launches, and don't sectored the world they will gain:

    1. Cheaper production: one size fits all;
    2. Easier to manage launch: only one date to manage;
    3. Less appeal for pirating due to the fact that the product is truly available.

    But i don't understand nothing of this... i just... don't buy if i can't access.

    And i've also avoided to buy games due to DRM (mostly the dreadfull - you need a cd to play this game - nope i don't care to pack 50 cd's so that i can play my games).

  10. Re:Finally by andy_t_roo · · Score: 4, Interesting

    I've purchased all my valve games irrispective of steam simply because they are good games, worth the money you pay for them, and i want to support the company that made them.

    Perhaps valve's secret to not having a large amount of piracy was to charge $20 for portal, and $80 for the orange box, both of which were easly worth that money. Another company would of said "portal is popular, $80 if you want it", at which point a significant group of people would say "i'm not paying $80 for a 4 hour game" and go pirate it.

    I do download games from time to time, but anything which manages to keep my attention beyond the first few times i play it, i pay for.

  11. Re:Finally by mobby_6kl · · Score: 1, Interesting

    I've warezed games instead of buying them through Steam because it was easier to do.

    In any case, he's wrong on one major thing: Russians aren't pirating games because they're released a bit later than elsewhere, they do it because a $50 game is about 10% of an average monthly income. Some publishers account for that and price their games competitively, and it works, mostly.

  12. Re:Naivete by urbanriot · · Score: 3, Interesting

    I don't know why you were moderated Troll, and if I had points I'd moderate you back up. It seems as though people in their (arguably) economically sound first world countries don't realize the attitude people have for items of enjoyment. If they can have them for free and they don't see anyone being physically hurt by their stealing, they feel perfectly justified in doing it. You're absolutely right.

  13. Re:Gabe Newell is a liar by Coolhand2120 · · Score: 2, Interesting
    It's true that prior to the release of HL2 it was acknowledged that this was a work of ID. But that only came out after the source code was leaked and Valve's hand was forced. Gabe Newell represented Valve's "source" engine as a separate program from the Q2 engine. Of course my assertion that Gabe would not pay licensing fees to ID for his "source" engine is conjecture, because this never had a chance to occur, nobody will ever know, the theft prevented any underhandedness. If he lied for the fame or for the money is irrelevant to the fact he lied.

    Valve rewrote the engine by replacing the goldsrc engine piece by piece

    I do not call optimizing code rewriting code from scratch. The theft of the "source" engine showed everyone how "modified" it really was, which is to say hardly at all when compared to the GPL Q2 source. Gabe tries to take credit for making some revolutionary engine, but it's not, it was mostly written in 1992 by ID, it's not the next big thing. The proof is in the relicensing of "source" to Vivendi and before it was even written! If Vivendi knew that "source" was GPL Q2 with a few tweaks I assure you they would not have signed up with valve, more likely they would have used ID or EPIC. Valve does not make game engines. They make some decent games, but calling "source" a game engine is a misnomer, it would be like calling Counter Strike a game engine. It's just a modified version of the quake 2 engine.

  14. Re:Glad to see someone figuring it out by Sycraft-fu · · Score: 5, Interesting

    I can really see how that shit contributes to the much larger copying numbers that seem to come out of countries other than the US and Canada. Living here, you kinda forget about it. Almost all media is available immediately. You forget that there are people where that isn't the case. I certainly can empathize with them when they say "To hell with you," and copy it.

    I actually ran in to a situation like that. I stumbled across a little French cartoon on the web called Minuscule. It is a bunch of 5 minute shorts of silly anthropomorphic 3D rendered insects, blended with real backgrounds. Superb job very entertaining. Despite being done in France, there's no speech so no translation is necessary. I figured this is the sort of thing that would just delight my mother. Thus I set about buying it.

    Well no US stores carried it. I figured this was probably because they don't have an NTSC version, but that is kinda silly. There are plenty of DVD players, including mine, that can do PAL to NTSC in real time. Also a computer has no problems playing either, since they operate on different refresh rates anyhow. So I decided ok, I'll just order it from France. Shipping is going to be hell but whatever. I go to their site and fill out everything. All the fields are in French so I have to use a translator program to understand what they want. Get to the end and it says It'll be like 10 Euro for the disc and 20 Euro shipping. Ouch, but worth it. I say "Ok make it happen." Then the first time anything in English comes up, it's a notice that says "Sorry, we aren't allowed to sell to that country."

    I was more than a little miffed. Here I was trying to give them money for their product, and they wouldn't take it because of some bullshit over where they were willing to distribute.

    Well, I can see anyone having to deal with that crap on a regular basis turning to copying quite often. You want their product, you want to pay for it. However they don't want to take your money. Ok, fine, you take the product and don't give them money. Their loss for being stupid.

  15. Re:Gabe Newell is a liar by ion.simon.c · · Score: 2, Interesting

    So, lemmy see if I understand you:

    I have an OSS codebase. It has a couple of functions:


    MakeCoffee()
    SexGirlfriend()
    WashCar()
    PrintMoney()

    The original coder fucked up when he wrote these functions. Among the many bugs:
    * MakeCoffee() actually makes very strong tea.
    * SexGirlfriend() is dirty and tangled, and uses deprecated methods.
    I decide to replace the guts of each function while leaving their signatures the same. This makes my code a drop-in replacement for the existing executable.

    Your claim is that while I may have entirely rewritten the body of each of these functions, my work is still just a modified version of the original code?

  16. Re:Finally by Urza9814 · · Score: 1, Interesting

    I'm not saying I want it to be easy, I'm just saying I can't compete with people who generally have nothing better to do that play the game for 10+ hours a day. I can't beat halo in hours, it takes me days. On easy. And I can't hit level 70 on WoW in a week, it takes me more than a year. I can't compete with people who, sometimes quite literally, play these games professionally. And I can't compete with the 12 year old kid who comes home from school every day and sits on the game for the next eight hours. When I enjoy a game enough to get pretty good at it, I can generally take the computer on fairly difficult settings. But the people who play online are a whole different class. And I don't feel like forcing myself to become enough of an addict to be able to compete with these guys.

  17. Re:Finally by WCLPeter · · Score: 2, Interesting

    DRM is not designed to stop pirates forever.

    DRM has nothing to do with pirates and everything to do with denying your right to first sale (http://en.wikipedia.org/wiki/First-sale_doctrine).

  18. Re:Finally by im_thatoneguy · · Score: 3, Interesting

    Here's how you get to the top 10% of any server. (This is from back in my high school days when I would play so much that I would be top of just about every server I joined and was banned from many many more for "hacking".)

    You cheat.

    Now. I'm not saying that you install software which cheats. I'm not saying you change the game in anyway. I mean you understand how the game ACTUALLY works and play that.

    If you watch an old CS tournament in slow motion you'll see something fascinating. People don't just aim at the head. They don't just even aim at the body. There are so many bugs in all modern games the way to win is to understand all the bugs of the game and take advantage of them. Understand that the hit boxes don't always line up and aim where the hitbox actually is not where you think you "see" them.

    You also have to understand all the little idiosyncracies of a map such as the exact sound that someone running across a certain surface will make. "oh 1 second of brick then one second of metal they'll be coming around the left corner in 3... 2... 1..."

    You are shooting before they're even visible.

    You have to be able to bunny hop in TFC, you have to be able to do all the little micro-glitches that are legal and just 'part of the game.' You have to know how to snipe in Halo by using the autoaim to lock onto a head when swept.