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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.
I was about to buy a copy of GTA IV on Steam during the sale they've got going. With credit card in hand, I found out in some reviews that the PC version requires Games for Windows Live for saving and installs SecuROM. Dealbreaker right there and I never purchased.
When the pricing of a software package gets to be too outrageous (not in terms of value but simply compared to how much cash one has on hand), then pricing becomes a significant issue as well. For example, a graphical WYSIWYG HTML editor, a graphics editor, a text layout tool, a math package, etc. each for $400 makes it quite difficult to afford the software. Most people are willing to lay down some sizeable dough for one program but, when you need to lay out $400 for your office package and 10 others each of which will need upgrades for $200 in several years it gets to be an investment that is not very workable.
OTOH, if the same software were available 24/7 for immediate download (with no support unless paid for) for a much reduced price -- say $50, the quantities sold will be much higher and the software company can reduce its costs by eliminating Best Buy and a host of other stores that take 50% off the top anyway. Additionally, there is no packaging, manuals, DVDs, etc. that need to be printed / burned nor shipping. The costs for the software company will go down and their sales will go up. I might be even tempted to try software that I wouldn't ordinarily buy simply because the software is not cost prohibitive.
The Apple Appstore is really a good example of this. Yes, the software is underpriced compared to an office package on your office PC but it does drive home that you don't need to charge $40 for a game and you can do it for a $1.00 instead -- a 40 fold price reduction. Oh, yea, Angry Birds has about 500 Million downloads now .... If Photoshop were $10 - $20 and available for instant download, I suspect that Adobe could make a lot more than they do. Especially when they double charge you by printing the "manual" in book form and then your having to buy it from the Last Bookstore in America.....
You're right it's not their responsibility to do that. But not for the reason that you think, they've unleashed this pox upon the gaming community, but it isn't their responsibility because their responsibility is purely to the shareholders.
Just like how there's no guarantee that they won't at some future time take everybody's games away or require a subscription to access them.
Corporate suicide is not in the best interest of the shareholders. And if you read the article, (Asking a lot I know) you will find Gabe saying that actually serving your customers IS in the best interest of the shareholders.
I agree completely.
Check this out.... I played bf2 so seriously and competitively that my clan has won a world championship (TGL 8v8). My clan, including me, has been awaiting bf3 for years. It recently came out, and I still don't own it.... they require you dl and install EA's clone of steam and run it alongsde the game, and then the server browser uses an external web browser...... uhhhh.. no.
I won't accept that trash. Game looks awesome, and I very highly anticipated it (having spent thousands of hours on the predecessors)..... but they're asking too much of me. I will pay an extra $5 on the price if that mde them happy, but in truth they want more from me than I'm willing to give.
I know I'm not the only one to hold out.
I smell the EA fiasco in your comment.
Valve got pissed off because of EA's DLC store for bioware games.
EA retaliated by pulling crysis 2 and any future releases not set in contract.
now we have origin. which sucks, but we can't play BF3 without it.
Steam is losing customers at a slow trickle.
I would rather use steam.
They're using their grammar skills there.
The reason is that multinational retailers, etc set their prices based on an exchange rate at a specific date, and then don't tend to change it based on the fluctuation of currency exchange rates. This is even more obvious for books in North America - most publishers use the same print for US & Canada, and on paperbacks they list MSRP as something like "$9.95 US, $13.95 CA". That was true in about 1990, but it's $1 US : $0.95 CA today!
In 2009, $1 AUS = $0.60 US Today it's almost 1:1. $80-90 AUS for a game that's $60 US wasn't too bad in 2009, but now it *seems* horrible in comparison.
On the up side, the Australian dollar is kicking ass against most foreign currencies right now, so Australian travelers are getting great deals these days.
It's not like there was 40% deflation in the Australian currency, though, so you no one is going to be too sympathetic. Software may be weirdly priced, but other physical imports should be cheaper. Probably not the best for the domestic tourism industry, though...
This is a good reason to stick with Steam, and a good chunk of the reason why I refuse to go elsewhere anymore. The remainder had to so with the availability of indie games. Let's face it, there are a lot of indie developers who sell games through Steam and sometimes Steam alone.
Origin? No thanks, not with its horribly invasive nature, and the fact that it's an EA product. Screw that.
I'd like to see the poster you were replying to show statistics backing up his claim that Steam is losing customers in a "slow trickle," but I think he's simply repeating what he's been told. If anything, Steam is probably gaining sales. Every holiday, I buy up a bunch of game packs for family and friends as virtual stocking stuffers. I know I'm not alone.
He who has no
Yes it can. Like recently when the DiRT 3 promotional game codes got leaked from that ATI affiliate site; Valve revoked all of the DIRT 3 promotional keys, uninstalled the games, and required legit ATI hardware owners to scan proof of purchases.
Steam is losing customers at a slow trickle.
[Citation Needed]
Not to mention Steam gives the publisher a HELL of a lot of eyeballs to plug their game to. i know that thanks to Steam sales, which Steam nicely pops up in a little box to tell me about, i have bought more games in 6 months than I had in the 4 years before I started using Steam. didn't they say L4D had something like a 1740% increase in profits thanks to one of their crazy Steam sales? That is a LOT of money to leave on the table because Mr Publisher wants to be a douchenozzle.
Personally I can't really see myself shopping with anyone other than Steam and GOG anymore. once in a blue moon i'll pick one up at Amazon, just to round out the purchase for supersaver usually, but being able to just push a button and have the game is just too damned easy. Now that my boys are using steam too I won't even have to deal with any crazy Xmas running around as we'll just wait until the big Xmas sale and I'll just gift them the games they like.
So I agree the network effect means I just won't deal with crap like Origin. with Steam my friends are there, my family is there, its easy to chat and join a game, why would I want a bunch of different services? The only reason i still shop at GOG is that there is no stupid service and i get a DRM free .exe instead of dealing with the crap. They can keep origin, impulse, D2D, I'm just not interested. if it isn't on Steam? its not like there aren't a bazillion other game publishers with cool games I can spend my money on.
ACs don't waste your time replying, your posts are never seen by me.