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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.
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.
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.
here prices are sky right and population's consumption power is not first world, mainly because of taxes that double the game's cost for the consumer. Prices here are not as bad as Australian's as far as I know, but it's the major player into piracy decision making, besides the growing culture of "only dumb people pay for what you can get for free".
This combination doesn`t exist: ETIs that know about humanity and want to see us dead. Otherwise we wouldn't exist.
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.
This is my signature. There are many like it, but this one is mine.
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.....
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?
Religion: The greatest weapon of mass destruction of all time
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.
I live in Latin America and have the following options for movies/music/games:
1. Get it on DVD from a pirate (approx cost $1) [ILLEGAL]
2. Rent a pirate copy (approx cost $2) [still technically ILLEGAL]
3. Buy it on iTunes (cost $1-$4).. but I can only do this because I've figure out how to get around regional limitations [psuedo-LEGAL]
4. Buying on Netflix/Amazon is not an option [N/A]
5. Going to threater (movies only).. sometimes, when/if it arrives at a timely basis (cost: $4-$5) [LEGAL]
6. Buy the legal DVD (cost: $30-$100) [LEGAL]
As you can see a great option is iTunes/Netflix/Amazon but the industry has systematically cut off those options from us. Also the legal DVDs are sold at much higher prices than in the US.
So do you wonder why there is so much piracy around the world??
There's no viable affordable legal option.
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.
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.
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.
But Jesus was the first pirate. He "copied" bread and fish for tons of people who wanted it. Doesn't that mean that good Christians should advocate sharing and copying, or as you refer to it, "piracy?"
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.