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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."
Finally some intelligent thought on this matter from game publishers. They should focus on benefits that will get pirates to switch over, rather than annoying DRM technologies which do nothing but hinder the use of the game by legitimate customers, while real pirates bypass them with ease.
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Common sense is a lot better than DRM. Glad to see that at least some companies are willing to spend a few hours to identify reasons why people pirate games and think of simple solutions.
From my experience in various Eastern European countries over the last decade, the reason people pirate is not because they don't get attention from publishers. It's because people don't think films and games should cost much more than the cost of their storage media. Who doesn't want to get stuff for almost free?
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.
I downloaded Team Fortress 2 via torrent and played on some cracked servers. But that was pain because the servers were changing daily, then had to manually download patches, update and then realize that the next day servers reverted to the patch before etc. But the game was excellent and I thought, those guys really deserve the money, and I would have a hassle-free experience. Then I went out and bought Orange Box (which includes TF2).
Now year later I'm still playing this excellent game and it was worth every penny.
But I see a problem though. I generally use Steam as the game updater, nothing more really. But take for example GTAIV. It requires three services to be active when playing: Steam, Games for Windows and rockstar social club. 3 separate registrations and 3 resource eating programs. That is way over the top.
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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.
I think part of the problem companies have is they try and group everyone who copies games or music or whatever in to one group. They talk about "pirates" as though it is one homogeneous group with one mindset. That's not the case. There are important sub groups, and the question needs to be what do you do about each? For example I'd say you can divide people who copy along these rough lines:
1) People who want stuff for free and wouldn't pay no matter what. You write these people off and just don't worry about them. They are the kind that even if you made it impossible to copy your stuff, they'd just do without. You aren't going to get their money so just don't bother. Let them do what they do.
2) People who are doing a "try before you buy." In music in particular I've known people like this. They want to download albums to see if they like them and want to buy them. For these people you needn't worry too much, they are likely to buy if they like your stuff. Only things to do is make sure you are offering quality stuff, and try to offer a superior experience if they pay. For example in the case of a game maybe a nice online community and auto updater, that requires a legit copy.
3) People who pay for some stuff, but don't have enough money for everything they want. They are somewhat similar to the first group, but they do buy things, just not everything they get. Something like university students with little disposable income. This is the only group that tighter DRM measures might help you get more money. However if everyone is tightening DRM, well you are back to where you started.
4) People who would like to pay you, if only you'd let them. These are the people who either live in a country where you refuse to release your product, or people who have been screwed over by your DRM. They'd like to buy your stuff, but you won't let them, or your protection technology means it won't work. Thus they turn to copying it. These people the answer is less, not more DRM to get more money. Give them the ability to pay legitimately, and they will.
Ok well when you start breaking it down, you see that really there are a number of groups that you just need to write off. You aren't getting any more money from them, so stop worrying. Don't screw over people who want to be customers just to try and screw over those who don't. It really needs to be looked at as a profit maximization thing. Implement DRM only to the point that it actually helps you make more money. Don't just try and "punish" people for copying your stuff. I mean really, who cares? You are in it to make money, not to be a justice crusader.
I also think firms fail to take in to account the cost of DRM. It's never free. Most of it is purchased from a third party and there's costs for that, Macrovision isn't a charity, and if you develop it in house you are paying the development cost. Either way you pay the support cost. So if you spend $100,000 buying a DRM package, but it only gets you $50,000 in additional sales, it was a lousy buy because you actually lost money. If it then also loses you $25,000 more sales from people who can't play, well then it was a REALLY lousy buy.
I think the best thing companies can do it make it easy for people to buy things legitimately, make the legitimate buying experience better than the illegal copying, and provide things that are a good value for the money. That will get the most sales. The copying figures don't matter, what matters is getting the most sales you can. If you do something that increases copying by ten times, but also sales by ten times, well then that's a win. Doesn't matter that copying went up, what matters is sales went up.
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.
That is exactly what's wrong with content. A legally bought product has to be worth more than an illegaly acquired one. And it's usually the reverse when it comes to content.
Usually, when you buy a piece of hardware, furniture or whatever, you have additional benefits when you buy it legally in a store instead of, say, off a truck. You get warranty, you get coupons for addons, you get support, you get all those nifty little things that you're either entitled to by law or because the manufacturer wants to keep you as a customer. All that is not at your disposal when you get something from Honest Henry's Fencing Outlet.
It's the opposite with content. When you download a rip, no hassle. No DRM, no "keep that CD in the drive" problem, no messing with your driver setup, no limit on installations, in short, no DRM hassles. When you buy it, your HD is filled with crap drivers that clog your system or worse, you have to dig for that CD key codes every time you want to reinstall it (btw, why do they print that on the manuals, the manual is the FIRST thing I lose. Some are smart enough to at least put the sticker into the CD case... if you get a CD case at all these days, of course...), no phone hassle when you should dare to install it more than thrice (and then prepare to be accused of being such a pesky pirate, and cheeky to boot because you DARE to call them after you stole their crap) and so on.
The same applies to music and movie content. In a nutshell, copy cripled content that you can buy is limited in its use, either to a certain format, forcing you to watch stupid commercials before you may watch the movie you paid for or wanting to limit you to the countries that you may watch it in... all those limitations and more do not apply to content you did not pay for.
So, allow me the question, when content is worth more (in terms of flexibility and usability) to me as a customer when I rip it instead of buying it, explain to me why I should buy it? Just because of the legality issues? A business model that is based on pissing off your customer because you can, since he can't get your product legally any other way but to allow you to piss him off is not really what I consider a sound and sane business model.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Its not that Slashdot loves piracy, its that many people on /. hate the idea of copyright infringement being treated as equivalent to theft of physical property, and they hate stupid DRM schemes that make life difficult for people who have acquired software legally but which the most serious, organised, pirates seem to have little difficulty circumventing.
I'm a software engineer and I'd be out on the streets if our customers illegally downloaded our software.
No, you'd be out on the streets if not enough of your customers paid for your software to keep the company profitable.
but most pirates are people who want to listen to music, watch movies, or play games for free.
In which case, they were never going to pay for your software anyway, so unless they physically stole a boxed copy which you had paid to manufacture, you have not lost a dime. Most software/recording industry scare stories make the ludicrous assumption that every pirate copy represents a lost sale.
Conversely, some people who pirate your software will go legal when the next version arrives (or someone checks up), recommend it to others or (if its serious software) acquire skills in using it which result in future sales.
Equally, if you try and stamp out piracy by treating your paying customers as potential criminals and using intrusive DRM, you will lose customers to the competition (be it pirates, other companies or open source).
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The reason people download tv shows in New Zealand is because kiwis are reading blogs and watching fansites - they say, "Man, I want to watch that show so bad," but the networks and distributors respond, "you can watch that show in six months...maybe."
Repton.
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The DRM in Spyro the Dragon kept the game from being pirated for literally months. There is an article at gamasutra about how they managed this. http://www.gamasutra.com/features/20011017/dodd_01.htm