Why Bother With DRM?

Brad Wardell of Stardock and Ron Carmel of 2D Boy recently spoke with Gamasutra about their efforts to move the games industry away from restrictive DRM. Despite the fact that both have had their own troubles with piracy, they contend that overall piracy rates aren't significantly affected by DRM — and that most companies know it. Instead, the two suggest that most DRM solutions are still around to hamper a few more specific situations. Quoting: "'Publishers aren't stupid. They know that DRM doesn't work against piracy,' Carmel explains. 'What they're trying to do is stop people from going to GameStop to buy $50 games for $35, none of which goes into the publishers' pockets. If DRM permits only a few installs, that minimizes the number of times a game can be resold.' ... 'I believe their argument is that while DRM doesn't work perfectly,' says Wardell, 'it does make it more difficult for someone to get the game for free in the first five or six days of its release. That's when a lot of the sales take place and that's when the royalties from the retailers are determined. Publishers would be very happy for a first week without "warez" copies circulating on the Web.'"

Comments

Encourage piracy?

[Leviance]

So, the purpose is not to prevent piracy, but to prevent multiple legal resales of games ... which would only result in further illegal piracy. Sounds like a winning argument to me...

Property or not?

[causality]

Publishers aren't stupid. They know that DRM doesn't work against piracy,' Carmel explains. 'What they're trying to do is stop people from going to GameStop to buy $50 games for $35, none of which goes into the publishers' pockets. If DRM permits only a few installs, that minimizes the number of times a game can be resold.

This struck me as a hypocritical position on the part of those game publishers. Either IP is property or it is not. If it is property, then there should be no restrictions allowed on whether or how frequently it can be resold (i.e. no one tries to stop you from reselling your car or your house). If it is not property, then there should be no artificial scarcity surrounding it which would also make this or any other DRM an inappropriate practice.

It should be obvious that what they seem to want is a level of control that is unavailable to the manufacturers of any other sort of good or service. It's surprising that anyone takes them seriously. Much lively debate occurs on the fine nuances of copyright law while missing the point that what they want is to be singularly special, to wield powers unavailable to other industries. That's known as the inability to see the forest for all the trees. That's why I think it's a phony debate, just like most media discourse surrounding what should be regarded as power grabs. They are aiming at an unreasonable amount of control over the marketplace in the name of copyright.

Lost Sale Fallacy

[bughunter]

These specific situations still suffer from the false assumption that a pirated copy is a lost sale. I would wager that very few pirated copies represent a copy that would have been sold at retail, either:

• The person has no interest in the game, but will download a "free" copy because it's "free,"
• The person cannot afford the full retail price of the game, or
• The person wants to evaluate the full version, not some crippled demo,

When I was a starving student (and associate engineer struggling to pay rent), I had a very slim budget, and would play "warez" until I could save/beg/borrow enough to buy the full versions, and I would *unless* the game sucked anyway. Now that I can afford software and music, I make it a point not to pirate copyrighted info, but I will still "evaluate" music before I buy it from MPAA publishers. And most people I know feel the same way.

So, the real product that DRM protects is the "Turd in a Can," a product that the consumer would not pay for if they knew beforehand that they were buying crap.

Sophistry To Kill First Sale Doctrine

[maz2331]

Really, if we distill the arguments for DRM down far enough, it becomes clear that the idea is to try to work around the First Sale Doctrine and kill the second-hand market.

Re:Sophistry To Kill First Sale Doctrine

[socrplayr813]

Really, if we distill the arguments for DRM down far enough, it becomes clear that the idea is to try to work around the First Sale Doctrine and kill the second-hand market.

Really, if we distill the arguments against DRM down far enough, it becomes clear that the ideas is to try to get shit for free.

Both of you are right. There's a group of people fighting for each of those extremes. The rest of us are getting drowned out in the chaos of the battle.

Re:Sophistry To Kill First Sale Doctrine

[SpecBear]

My argument against DRM is that I want to use the shit that I fucking paid for.

If it was just about getting shit for free, I wouldn't be bitching about it on Slashdot. I'd be downloading the pirated version, which doesn't have a limit on the number of installs and doesn't require me to ask permission from some company's server before I can play.

I can get shit for free now, regardless of DRM.

Re:first weeks is exclusively "warez"

[gnasher719]

Pirating the game later has the same effect as buying the game second hand as far as the publisher is concerned, but by pirating it you don't support the second hand market, which benefits the publisher. I might see such practices justified for games that break the second hand market, but if they have no/reasonable DRM, I can't say I entirely agree with you.

I think you've got that backwards. By buying used games (instead of pirating), you give money to people who bought the new game, reducing the effective cost for them, and making it possible for them to buy more new games. Say I have $50 to spend, and used games sell for $25. So I can buy one game for $50, you pirate the same game, that's it. Or I buy a game for $50, three months later you buy it used for $25, I buy another game for $50, three months later you buy it used for $25, so it cost me the same $50, but the manufacturer got $100. So buying used games _does_ support the manufacturer by making new games less costly.

Re:first weeks is exclusively "warez"

[lordofthechia]

"same effect as buying the game second hand as far as the publisher is concerned"

The publishers need to focus on games that have replay value (so more people will want to keep them) and being competitive (adaptive pricing). The reason used video game stores exist is that many people aren't willing to pay $50 to $60 for a new game.

Now if PC game companies were more aggressive with their pricing then they could compete with the used market. Just look at console games "Greatest Hits", "Players Choice", and "Platinum" titles. If a game has a 2nd hand market, many publishers will re-release the game at $20 to $30, taking the wind out of the 2nd hand market (why pay $17.49 for a used copy of game X when you can get it new for $20!).

Ya well

[Sycraft-fu]

I think 2D Boy gives publishers more credit then they are due. I think publishers ARE stupid over all. I think they really do think they can win this war. They think "Well if we just keep getting better DRM, we'll find something they can't crack." I think they also believe that DRM does give good ROI, which is to say that the increase in profits is greater than the cost of the DRM. I really believe that most publishers are stupid about this, just like the music publishers.

The problem is they see these big numbers of copies out there and get dollar signs in their eyes. They think "Man, if we had been paid for each of those copies we'd be RICH!" They are right too. Games are heavily copied. If every person who ever downloaded a copy instead paid for the game, they'd probably make 5-10x the money. What they don't consider, of course, is that not everyone would. There's a lot that people will take for free that they won't take at any price, much less a $50 price. You offer it for free, they say "Yes I'd like that." You want any money for it, they'll pass.

However, greed is able to short-circuit logic for many people I don't think the people at publishers are any different. They see the money they could be theoretically making and stop thinking logically about it.

Also the DRM companies push their products heavily, of course. They reassure the publishers "Oh ya, our DRM is really effective it'll get you a bunch more sales but if you DON'T use it, we'll you'll go to the poor house because nobody will buy your game!"

Personally, I think the numbers on the Bittorrent sites tell the real story. Demigod sure as hell got downloaded a lot, because people were very interested in it. However, Spore got downloaded even more, because even more people were interested in it. The difference DRM had on downloading in that case? Zero. People downloaded if they wanted to.

Re:Hmmm

[BronsCon]

Only after it's too late to do anything about it.

Idiots

[Anenome]

Here's the problem: That $50 price includes the game's value at resale. If the resale value is $35, then you're diminishing the value of the original purchase price by making it impossible for a 2nd buyer to use. Simple, basic economics. So, if you remove that functionality, some of which justifies the $50 price, the game is no longer worth $50, because the value of its resale is now gone.

So, the result of adding DRM to your game and not lowering your price to reflect the diminished value is that your game now appears overpriced. Good job, you've now guaranteed yourself flagging sales because of greed.

Imagine if car companies programmed their cars to self-destruct if sold to a second buyer. It's ridiculous. The argument that second hand sales take money out of the pocket's of the producers? Ridiculous also. Just stop it, you idiotic, economically ignorant publishers. Focus on making a damn good game, one that's good enough to purchase in the first place.