Video Games: Goods Or Services?

silentbrad points out an article about the gradual shift of video games from being 'goods' to being 'services.' They spoke with games lawyer Jas Purewal, who says the legal interpretation is murky: "If we're talking about boxed-product games, there's a good argument the physical boxed product is a 'good,' but we don't know definitively if the software on it, or more generally software which is digitally distributed, is a good or a service. In the absence of a definitive legal answer, software and games companies have generally treated software itself as a service – which means treating games like World of Warcraft as well as platforms like Steam or Xbox LIVE as a service." The article continues, "The free-to-play business model is particularly interesting, because the providers of the game willingly relinquish direct profits in exchange for greater control over how players receive the game, play it, and eventually pay for it. This control isn't necessarily a bad thing either. It can help companies to better understand what gamers want from their games, and done properly such services can benefit both gamers and publishers. Of course, the emphasis here is on the phrase 'done properly.' Such control can easily be abused."

Comments

Onw way to kill

[future assassin]

Well that's one way to kill the first sale doctrine or second hand market. Its a service and in the TOS "No reselling allowed" Luckily for me between my NES/SNES/N64/GameCube/Sega Master/TG16/Jaguar/Dreamcast/Saturn there's enough games out there that I never have to bother with buying/supporting anything as a service for the rest of my life.

Re:Onw way to kill

[Defenestrar]

Well that's one way to kill the first sale doctrine or second hand market. Its a service and in the TOS "No reselling allowed" Luckily for me between my NES/SNES/N64/GameCube/Sega Master/TG16/Jaguar/Dreamcast/Saturn there's enough games out there that I never have to bother with buying/supporting anything as a service for the rest of my life.

I love retro games. I just don't see how any games on those systems can be substituted for modern online multiplayer games.

Or legally obtained and used as the second law takes its toll on the physical products. There's only so long that you'll be able to find Pitfall or Zelda in the pawnshops you know...

Just because you've got the dog chewed or cosmic ray struck cartridge/disk sitting on top of the PC doesn't make emulators legal.

Withdrawing from the market through hoarding or black market (self-disenfranchisement from the dollar vote) isn't a sustainable solution

Re:Onw way to kill

[Truekaiser]

And that my good sir or madam, is the whole point of the change over!
most if not all of the console makers as well as the studio's and publishers have looked at the multi billion dollar industry that the second hand game market has become. with the likes of game stop, Babbages, vintage stock, etc earning large profits off of re-selling games after the original owner has payed them when buying them and thought. hey how can we get a piece of this action.

so they have tried a few different things. some have draconian drm that tie the game to the machine as long as the registration servers exist. this works but it also pisses off the original owners because hardware failure and upgrades can render the game unplayable.

in the case of a resident evil game on the nintendo ds, the cartridge is coded not to delete or reset game data making the game only playable once. this also did not fly to well as many people like to play games over and over multiple times to find everything.

some others have tried online pass codes that are only good once, this allows the game to be sold at a second hand store but the new owner would then have to pay another 12 to 20 dollars to get a new code from the publisher. and on top of this they limit or shorten the 'single player' part of the game to make the product worthless without that code.

I am guessing then some bright but not necessarily nefarious executive took a look at major it software where the 'software as a service' idea was born and thought. 'hey why don't we do that too'. combine that with the idea of digital distribution and similar minded t.o.s. that steam has claiming physical ownership of the parts of the hard drive that steam and the games reside on, and you have the modern digital black hole of gaming.

you are correct in that today about 20 years after a nes cartridge was made you can go out, get a copy legally(as well as download roms of it.) and be able to play it at any time. the same can not be said in 20 years or so, or even as little as 3 to 5 years from now with the modern games.

Because there is a irony in this killing of the second hand market. while it increases the short term profits of these people by forcing more people to buy new or don't buy at all. it also kills what makes large franchises with staying power or gaming culture as a whole. not to mention with tie in to digital distribution services which in turn are solely reliant on the existence of a certain company to continue to run. the long term prospects of modern games to last very long is not very good. all it takes is valve for example to have a bad year or two and boom. steam goes down for good, same with games for windows aka xbox live though it may take more then a bad year or two. Sega isn't even a hardware company anymore, but i can still go out and buy any of their systems and the games run just fine.

Re:Onw way to kill

[future assassin]

Why does it have to look spectacular? I want game play and I want it too look like a game, if I wanted to see spectacular real life Id take up paint ball or car racing or pull out a gun and start shooting people.

Re:Onw way to kill

[Dynedain]

The problem is that classic console resolutions aren't scaled up linearly to HD resolutions.

What I'd like to see is linear scaling, so crisp pixel edges and lo-def lines remain sharp at high resolutions. But because of the bicubic and other scaling algorithms, the edges of pixels* are blurred on higher-resolution displays, so everything just looks fuzzy. It's not all that noticeable for live-action video footage, but put something like an NES on there and its almost painful to look at. Even the Wii looks horrendous on a large-screen 1080p display because it only does 480p.

Basically, everything looks like if you put your LCD monitor into 640x480 mode... blurry as hell.

*(yes I know NTSC scanline doesn't map equivalently to modern pixel-based displays, but I'm illustrating a point)

Re:Onw way to kill

[Half-pint HAL]

This entire comment sums up why I am done purchasing any new video games until the industry goes back to the "Goods" way of thinking, and with the way the MPAA and RIAA have been I've been boycotting them as well. The final straw for me was when I took my old PS3 Madden video games into gamestop for trade in value on the next year's version and they gave me $0.75 for 2010 and 2009.

Hmmm... methinks you've got that back-to-front. The very fact that you were given a trade-in proves that Gamestop is still engaged in the "goods" way of thinking. The fact that you got 75 cents for the games is simply a matter of supply-and-demand. Remember that you were trading them because you wanted the new version. A great many people do the same thing. Madden has a very limited market as a second-hand game.

Goods, always.

[JustAnotherIdiot]

The game itself should always be classified as a "good", and should be able to be used in some form or another on it's own.
Connection to a server in order to play with others, however, is a service.

Re:Goods, always.

[American AC in Paris]

Absolutely. What you're going to see more and more of, though, is a move towards thin game clients that are effectively valueless without the service--even in situations where you don't actually need to interact with other players.

You'll still have your "good", and you'll still be able to sell your "good" to another person. The issue here is that said "good" is going to be effectively worthless without the service, much like a (non-smart) cell phone is.

As I've posted elsewhere in this thread, this is the game maker's natural response to piracy. DRM stinks for the end user and publisher alike--and is impossible to manage once a crack is out in the wild. Server-based game content, however, is a very different beast. It's hard to cross-engineer, run, and maintain an unofficial game server. What's more, it's easy to track down such servers and shut them down for, say, illegal redistribution of copyrighted materials. All a cracker needs to do is drop a patch on the 'net once, and the cat's out of the bag.

Re:Goods, always.

[Kenja]

Remember that the next time you ask for a game to be patched or updated.

Re:Goods, always.

[mrchaotica]

Not only should the game itself always be classified as a "good," but nothing should be allowed to infringe on the buyer's right to modify the good he purchased. This includes, but is not limited to, the right to create his own service that interfaces with that good (e.g. bnetd).

Re:Goods, always.

[Defenestrar]

Probably, but only because gamers are dumb enough to buy that shit. I stopped buying games that require "phoning home" to play single player games, or have intrusive DRM, but everyone else seems to cheerfully throw their money at such things, so it isn't going to stop as long as people don't seem to mind it.

You get the world you deserve.

You also get the world you live in. Most consumers either don't know or don't care about these issues (they've got bigger issues than worrying about the legal details surrounding their short escape from stretching paychecks and herding children). The thing is that these are the people who will drive the dollar vote and it's up to those who care about the legal issues to protect the general public (or defraud them depending on POV).

This is why we have the FDA to prevent snake oil salesmen and the EPA to prevent chemical dumping; what's needed is an equivalent for consumer level IP. Perhaps the new Consumer Protection Bureau could be petitioned to take up the task, but until then it's up to aware citizens to vote with their dollars on products, support groups like the EFF, write letters to congresspersons, and caution their friends and associates to do the same. Otherwise, if you have these feelings about the process, it's similar to knowingly letting an apothacary sell saccharo et aqua to a parent trying to treat his/her child's pneumonia (pick your own degree of severity).

Software as a service

[Hatta]

Is never a good idea for the purchaser. This doesn't change when it's video games instead of spreadsheets or databases.

Re:IT IS A BAD!

[Barefoot Monkey]

But which are they: bads or disservices?

It's a general problem of the software industry

[Eli Gottlieb]

Our product is bits. Bits are arbitrarily reproducible by anyone with network bandwidth and storage space. Copyright laws are only a partial success in locking up our product as property we can sell in a shrink-wrapped box or rent-seek upon via licensing.

What we want is an income for our work. What companies want is ever-growing profits. What customers want is either free stuff (as always, ultimately) or a concrete product they can buy and own like a car.

Post-scarcity production and distribution technology is clashing with industrial-capitalist economics.

Re:It's a general problem of the software industry

[Alwin Henseler]

Post-scarcity production and distribution technology is clashing with industrial-capitalist economics.

While I somewhat agree with that, I see no conflict between modern digital distribution of software products, and shrink-wrapped boxes.

You provide me a copy of software product, I pay you 1x fixed amount for the privilege of having & using that copy. Whether that's shrink-wrapped box or download only is irrelevant for this purpose. X people buy their copy, developer gets X times fixed amount. If developer sells X copies / month, then developer has X times fixed amount / month coming in to support that software and work on new products. If developer sells too few copies, or takes too long to produce something new that also sells, too little money will come in to make a living from it.

Nothing new there, no conflict with modern distribution in the digital age. Whether customers should be forced to pay for their copy, and/or keep paying after getting it, is another matter (or different matters, in fact).

Re:It's a general problem of the software industry

[mcgrew]

You're thinking like the RIAA. They used to be in the RECORD business, but now consider the "music business". It doesn't work like that.

If you're trying to sell bits, someone else will sell competing bits in a shiny box that they don't need a network connection for that the customer can resell and run you right out of business.

Fear of piracy is stupid unless your product is shit. Most people have no qualms about paying for what they get, and to make your product less desireable to them in order to keep it from those who aren't going to buy no matter what is incredibly stupid.

The RIAA isn't after "pirates", they want to kill their independant competetitors by making everyone think "piracy". They have radio, the indies don't. They know full damned well that "piracy" sells goods.

I'll never "buy" your software, no matter how good it is, if I can't box it up and resell it. If your business model demands that I lose my right to resell what I bought legitimately, fuck your business model and the horse it rode in on. I want nothing to do with it or you.

Harming your paying customers to get at those you percieve as harming you is brain-dead stupid. Another reason for not wanting your software -- I don't like doing business with idiots, or by people who sell to idiots.

If your business model involves fooling idiots, you're a thief.

Re:It's a general problem of the software industry

[Vario]

Unfortunately the situation is not as simple. Just one example: With physical items it takes time and effort to share them. You own a book, the neighbor down the street might own the same book. The likelihood that you are reading it at the same time is pretty low, so why not share it? In a digital world this is no problem, just send some bits, use dropbox or something similar.

Or think of network licences in a company. For a lot of special programs we only have around 10 licences for 250 employees. It's never a problem usually, as very few people are working with the same software at the same time. So we only pay for 10 instead of 250 because sharing the licences is seamless. If the software company would charge the same amount for the 10 network licences than for 250 regular licences they would damage their business model quite a bit. In comparison we use a lot of reference books. I would guess we have around 100 copies of the most used ones, so that you don't waste your time looking for one. It would be painful to only have 10 and then search the whole place to get hold of one.

This is just one aspect but illustrates that there is a conflict. I personally also prefer a game that I can buy and sell as I want to like a physical item but I have tons of games that I only play for a few days per year. In principle I could give away all those games for most of the time on some kind of lending model but that would definitely influence sales of all those companies that produce games, software or other digital items.

Re:It's a general problem of the software industry

[Eli Gottlieb]

You are agreeing with me quite vehemently.

If you're trying to sell bits, someone else will sell competing bits in a shiny box that they don't need a network connection for that the customer can resell and run you right out of business.

The problem is that, often enough, that someone else is living in their mother's basement without paying rent, or permanently squatting at MIT with administrative permission (Stallman).

Even without "piracy", competitive markets cause prices to converge to the marginal cost of production. For bits, that cost is zero, so prices converge to free. The only way to counter this is to circumvent a competitive market: copyrights, patents, and ultimately Software as a Service (in which you keep the actual bits under lock and key but hire out your trained priests to operate on the bits for a monthly service fee), Cloud Computing (in which you compete to offer a pseudo-hardware paltform for other people's bits), and User as a Product (in which the user pays nothing, because someone else pays for access to the user).

Basic capitalist economics is, lacking government intervention on behalf of software firms, incompatible with making a living writing software-as-a-product. This is exactly the reason that some of the largest players in the software industry (IBM, Amazon, Google, large parts of Microsoft) have gone for these models, and many others (Apple, EA, Ubisoft, Sony, MS) have gone in for the Digital Restrictions Management tech necessary to lock down their products and pretend they have a nonzero marginal cost of production.

Both...

[AngryDeuce]

This is based on the RIAA's argument that mp3s sold online were merely licensed when arguing in the ReDigi lawsuit, but asserted they were sales through iTunes when arguing that they didn't need to pay an artist the contractually higher percentage of royalties due her for licensing her music as opposed to selling it.

My guess is video games are goods and/or services depending solely on which is more beneficial to the MAFIAA goon in court, and nothing at all logical.

Resisting services

[Oswald McWeany]

I for one am resisting the "services" model all I can. I will not pay to play a game more than once.

There again, I'm a cheap barsteward who won't spend more then $9.99 on a game anyway. I gain no extra pleasure from playing a $60 game than a $2.99 game that is a few years old.

Rather than paying a $15 subscription- wouldn't it make more sense to buy a "new" cheap older game once a month- surely they're worth more for a month of novelty than it is to play the same old thing month in month out on a subscription game?

As for steam- nothing but added problems... you get whatever bugs the game may naturally have- compounded by the extra bugs that running something through steam adds. I avoid steam when I can.

Re:Resisting services

[phantomfive]

I for one am resisting the "services" model all I can. I will not pay to play a game more than once.

Paying twice isn't even the biggest problem, the biggest problem is when you want to go play your game and you can't anymore because the servers are down, or worse, down permanently. In those cases, sometimes you'd be WILLING to pay twice, if they would let you. But you can't, so you go outside instead. Climb a tree. And never buy from that company again. Which isn't hard since the company is out of business. So you cry.

Not conceptually hard

[Spazmania]

My television is a good. The DVD in my DVD player is a good. The programming sent to my television over the air is a service.

If it runs on my computer, it's a "good." If it runs on somebody else's computer, it's a "service." If part runs on my computer and part elsewhere in order to get the whole experience, the portion that runs on my computer is a "good."

Re:Not conceptually hard

[Spazmania]

Rewind to 1960. Why did you pay a couple hundred dollars for a television (goods) that's utterly worthless without programming from the local TV stations (services)?

This legal issue has been around for years...

[bfwebster]

...not specifically for video games, but for software in general and particularly for custom-developed software. I've seen this a lot because of work on "failed IT project" lawsuits -- the goods vs. services distinction brings different legal standards, requirements and remedies to bear. Generally speaking, commercial off the shelf (COTS) software is usually seen as "goods", but the more customization and original development involved, the stronger the "services" argument. And, of course, the whole movement towards "software as a service" and cloud deployment muddies the waters more. ..bruce..

Re:Makes perfect sense

[0123456]

Make a game a service, and you pretty much completely eliminate resale and piracy issues.

I see you finally mention the real reason right at the end. Game developers are far more concerned about evil consumers who resell their games than they are about pirates, because pirates would never have bought it in the first place.

'Game as a service' is excellent for them because they not only eliminate the evil resellers, they can also turn off the servers and force you to buy the new version of the game at any time.

Re:Black's Law Dictionary

[VGPowerlord]

2. permission to use the software in spite of copyright and patent protections is a license;

Assuming US law, let me fix that for you:

2. permission to use the software in spite of copyright and patent protections is unnecessary.

Copyrights due to Title 17 S 117 (part a1 for the most part), patents because you don't need a patent license to use goods created by someone else.

As much hate as Congress gets, Title 17 S 117a1's wording is very flexible. For instance, if the instructions for using a program say you have to install it to a hard drive, that copy is "created as an essential step in the utilization of the computer program in conjunction with a machine and that it is used in no other manner." Same goes for the copy in RAM when you load it.

It does say "and that it is used in no other manner," which, strictly speaking, makes reverse engineering it illegal, but I seem to recall other laws protect that.

Re:Makes perfect sense

[American AC in Paris]

You're absolutely right--and as many other people in this thread have pointed out, the appropriate response to this if you do not like it is, very simply: do not give that company your business.

You do not need to give these companies your money, and a company is not obligated to tailor how they provide their product to suit the demands of the consumer.

Re:Black's Law Dictionary

[magisterx]

#2 is murky. Clearly the box and physical items are goods, and interactive online access is a service. But it is not clear that a license should be needed for software. While there is now some case law on EULA's it is far from clear yet. After all, I do not need a license to read a book. Why should I need a license to use software I purchased? And even the cases that say a EULA is enforceable generally view it as a contract of adhesion, which means it is subject to scrutiny for what the company can put in it and so those contours are very unclear. And you mention copyrights and patents, but I only need to worry about copyrights and patents if I am doing something which is protected by those. It is fairly clear that most uses of most software (even software that in some way invokes a patent) are *not* covered by patents. Most uses of software do involve some sort of copying, but that kind of transient copying which is necessary to make any use of the purchased software at all would almost certainly fall under fair use. So, #2 is extremely murky. And there are plenty of software cases that don't implicate 1 or 3 and some of those are murky. Do I buy anything when I use GoodOldGames.com (great site incidentally), or am I licensing it? Is it a sale of a good or a service or neither?

Re:Services Rendered or Ongoing?

[The_Crisis]

So what do you consider games that require connections to a server to play? (think Ubisoft)

Coasters, frisbees, signal mirrors. (think AOL discs)