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Valve's Gabe Newell On Piracy: It's Not a Pricing Problem
New submitter silentbrad writes with a followup to our discussion this morning about Ubisoft's claims of overwhelming game piracy. An article at IGN quotes a different point of view from Gabe Newell, CEO of Valve:
"In general, we think there is a fundamental misconception about piracy. Piracy is almost always a service problem and not a pricing problem. For example, if a pirate offers a product anywhere in the world, 24 x 7, purchasable from the convenience of your personal computer, and the legal provider says the product is region-locked, will come to your country 3 months after the U.S. release, and can only be purchased at a brick and mortar store, then the pirate's service is more valuable. Most DRM solutions diminish the value of the product by either directly restricting a customers use or by creating uncertainty."
The quote was taken from an interview at The Cambridge Student Online, in which Newell speaks to a few other subjects, such as creating games for multiple platforms and e-sports.
And yet Steam has that USD=Euro conversion and region locked pricing.
DRM does not stop pirates, they are smart enough to circumvent it, it only annoys legitimate users.
I'd say DRM encourages piracy more than anything. I'd rather a game just work, than having to jump through hoops to make it work. If a game has something like Securom, frankly I'd rather pirate than have to deal with it. DRM never works, it will always be cracked. There's no getting around that fact.
In truth I never like pirating, if a company makes a good game I'm of the opinion that they deserve my money, but sometimes they don't make it easy to take. Dreamfall is a noticeable game I remember, I have the boxed copy which uses a disk check, but thankfully there are loads of DRM-free .exe's the pirates have provided.
Having a service problem doesn't mean there isn't a pircing problem as well. The three biggest issues IMO are pricing, service, and respect, although I'm sure other issues play a role as well. However, the respect problem isn't the 'pirates don't respect intellectual property' garbage, but rather, the lack of respect for customers from copyright holders. The FBI warnings on DVDs being a good example of disrespect that only affects those that actually BUY the product.
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Make a reasonable price, make easy to pay (paypal?), make easy to buy/download, do not annoy me with DRM or "you must be on to play" and I will buy the game. Is so difficult?
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Piracy is a natural response to people who want to "CONTROL". The issue is not about IP, its not about getting something for nothing. Time and time again research, the research generated by the very vendors of IP, says people are happy to pay for something of value. That they simply want what they want the way the want it. It is the unbridled need, addiction to, the control of something that has become the crux of the piracy debate.
The irony is, that by punishing consumers for the fear of being robbed, precipitates the actual robbery. People just ask to get their music, movie or game, simply, easily, and accessibly from any technology they possess. It is the draconian measures which now threaten to destroy (SOPA) the very conduit our collective futures rely on (the Internet), that is a clear extension of the avarice and need to control. These people have enjoyed decades of complete control, allowing an infrastructure of suppliers and middlemen to rape artists at one end and consumers at the other. With the advent of growing technology, old paradigms fail. For these people, the answer is not to learn how to leverage the amazing power of the new technology, but strangle it so they can bring back the bad old days. We need to make it clear to our representatives in no uncertain terms, that the future demands that the internet be free, broad and democratic.
Newell said that the "service problems" are the primary problem. He's right.
I will not buy region locked disks precisely because my family lives and works between 3 regions. Region locking is an absolute ripoff, at least for us.
Anywhere in the world, 24 x 7, purchasable from the convenience of your personal computer
Is anything less ever acceptable in this day and age?
Most DRM solutions diminish the value of the product by either directly restricting a customers use or by creating uncertainty."
He's being polite. DRM is mostly a form of defective products and sales fraud.
Price *is* an issue, it needs to be reasonable. But I won't even think about that until *all of the above is out of the way* or your "product" simply doesn't exist to me.
Sorry but the only instances of pirated games I have ever seen (and btw didn't download) were cracked versions of a game that could be downloaded for free. I haven't seen a site offering to sell me someone else's game for a fee. I agree its a matter of convenience in a lot of cases - when something cool is out people want access to it now - but I think it must be a much less common thing that people buy the game from a pirate. I have never associated piracy with a separate sale arrangement, just people who want something for free, or simply want it where its not available or (as noted by an Aussie above) its grossly overpriced and people feel ripped off.
The pirates charge less than the game companies. The fact that the price is $0.00 doesn't really matter; you're still paying less than if you bought it legally. If I were to make a bunch of copies of a game disc, and go around handing it out to people and paying them $5 (note, *I'm* paying them to "buy" my product), then I'm selling the game at an even lower price than the pirates. Yes, it would be incredibly stupid to do that, but that's not the point; the point is, just because the customer isn't paying doesn't mean they're not sales. I think Gabe's got it spot-on. In economics terms, the pirates are competition; competition who is selling a better product, more widely available, and cheaper. You can't beat competition like that by crippling your product even further.
DRM stops "casual" pirates (pre-crack) and it increases the R&D cost for serious pirates. Take the PS3 for example: it was not cracked until the removal of Other OS. Increasing the cost of legitimate hacking and made the USB solution more attractive to research. I do not say this in support of DRM, but any counter-argument must be honest in order to succeed. DRM works for certain definitions of "works", and that angle must be addressed head-on rather than brushed aside.
Other people should create art, music, games, films, and entertainment for me as a favor and fund it out of their own pocket.
Not aware of any pirates who want to force or coerce other people into creating things for them for free.
10) Because I have never had to create, develop and market a game and I don't have a clue as to what it takes to run a business.
Never heard anyone use that as an excuse.
12) Pirating something NEVER results in a lost sale. Not even when spread over thousands of people.
Not really aware of any that think that, either (Maybe I'm just not looking hard enough?).
Of course, all pirates are evil little thieves that desire nothing more than to see developers starve. It's almost like how all people who like copyright are corporate shills.
Filthy, filthy copyrapists!
Let me translate that:
Locks on homes prevent people you don't want from coming in
DRM prevents people from accessing the content
Only problem is... the content providers WANT people accessing the content. Locks on homes are like having a firewall, patched software and some sort of AV software on your computer... the house would work just well without the security add-ons, and so would your computer. The add-ons make it more secure.
With DRM, the entire idea is to prevent access.
Now, a real counter argument is that if people are grabbing pirated copies of the content, there is nothing to prove that the content is still secure and hasn't been monkeyed with by the pirates, to, say, add botnet software, a keylogger, or something else nefarious.
Then again, some of the DRM software includes keylogger and/or botnet-like hooks that the Bad Guys can leverage, so it's probably a wash.
If your home security system only worked when you didn't have a cold, and only worked for some members of your household, or otherwise prevented people with the right to access the home from doing so in an accustomed manner, you'd find that security feature hobbled in some manner pretty quickly. Then you get the appearance of security without the benefit... just like with DRM.
This is why I think Good Old Games is the true hero in all of this. They have a no compromise policy- if you want to sell games on their site, you have to sell it 100% DRM free (Steam is DRM btw), with a lot of additional free content (like PDF manuals, soundtracks, codes, etc.). You can re download your game as many times as you want, copy it to wherever you want, give it to whomever you want. And with the success of the Witcher and its sequel, they're attracting interest and acquiring more publisher agreements. GoG is the real future, not Steam.
But there are also a number of services that many people find valuable that the pirate can't provide, such as "Not breaking the law" and "Supporting the artists".
If the legal service is as convenient as the illegal service, and the only differences are the price and the legality, a lot of people will choose the legal service rather than the free service, even if the legal service is significantly more expensive. Again, we have evidence for this in the form of Steam, which manages somehow to sell games for $60 that you could pirate for free. If price was the problem, Steam would have failed long ago.
Disneys market strategy is to make you forget about their IP so they can sell it again to your kids. That is why they deliberately do not sell subsets of their content.
Absolutely agree.
There is one more aspect he forgets to mention:
Dear publishers, if you put out all this DRM and copy-protection and basically treat me like a criminal, then who am I to argue with you? I'll use The Pirate Bay, because apparently that's what you expect me to do.
If you treat me like a valued customer, then I will be one. There's a shelf full of boxes right next to me proving that I'm quite willing to spend money on games. But I don't enter into business relationships with people who disrespect me. I'd rather respond by disrespecting them as well.
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Yeah it's that point about lack of demo for me. That seems to be the norm now that we have all the "app store" distribution models (iTunes Store, Steam etc). You're supposed to just "know" if a game is any good, that it will work well on your PC properly etc and gamble £30-50 on it. No thanks - if they can't be arsed to make a demo, I'll make my own.
Of course, once you've got a pirated version working it's up to discipline and morals to buy it. I would, but tend to be in the minority (I'm the sort of person who drives the speed limit. Almost no one does that). Maybe writing demos would help reduce it a little, or maybe there's not enough "pirated it for a demo and now I have it I might as well keep it" activity to justify the cost of making one which is their choice.