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

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: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

[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.

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.