Selling Copies in a World of Hyperdistribution

Comments to my post recently about Project $10 made something clear to me — a revelation of sorts. I’ve previously commented on the issue of hyperdistribution in connection to DRM, in You cannot take that away from me: from the business side, companies are so used to selling copies of games that they will keep doing that regardless of whether or not it still makes sense. In a world with hyperdistribution, all it takes is one guy or girl who breaks the protection scheme for all the world to benefit.

So while I’ve spent the last few years trying to find a way to get some sense into circles of business leaders and politicians, I’ve never thought much about the consumer side of the same coin. It makes perfect sense in hindsight, but I didn’t see it at the time: many consumers are just as clueless about the changes we are going through. I don’t mean that as a slight to anyone — we’re living in a social and political revolution brought on by a technological leap forwards. It’s hard to understand this new world.

So let’s take a look at that statement from the consumer side then: It no longer makes sense to sell copies of digital culture. The music and movie industry is extremely reluctant to realize this, but pioneers in those segments still have, which is why we see things like streaming music services and donation-funded movie productions, generally from newer artists not already settled in old business models.

It has excited me then to see a some of the big game publishers move towards newer business models. EA is notable with things like Battlefield Heroes and other new models. Others are hellbent on locking in their old “sell-copies” mentality by introducing DRM that requires you to be online all the time, for instance.

I mentioned in the post on Project $10 that game resales are causing much of the same problems as piracy for publishers. This is tightly related to the fact that the industry is used to selling copies of things and that consumers are used to buying copies of things.

Fundamentally, though, a game is not a tool or a utility which you are bound to keep, or a consumable that you use  up — a game is an experience. It makes sense then for the consumer to trade in the disc, since he or she has already “used up” the experience on it, but it still has value for someone else.

When a publisher fights for the right to sell copies or when a consumer is fighting for the right to resell a game, they are both doing the same fundamental mistake: they’re mistaking the game as being a plastic disc rather than as an experience. Back when copying was hard and game resales not much of a deal, the game basically became the disc (or cartridge), just like the music tightly associated with the CD it came on.

As soon as this connection is broken, old business models fail, and people inevitably complain. Publishers complain that people copy or resell their discs, consumers complain that publishers are greedy and think they have some sort of “right” to be paid more than once for each game.

What is happening now is a rough period of trying to invent new ways of making game development business work. It does not involve companies thinking they “have the right” to be paid, but the simple fact that the companies need to be paid or they will go out of business, which would be bad for everyone involved.

The problem now is that we’re in the middle of the transition. We’re in a world where we cannot expect everyone to be able to download a game from the net, which means we need to sell copies. At the same time, hyperdistribution is a fact and game resale is abundant.

From my point of view, seeing EA try to find a way forwards with a middle ground of things like project $10 to earn money off resales and more “free downloadable content” included with the boxed products to start an ever so slight move towards providing services.

To see retailers complain about the move is expected — after all, they must know just like we know that we’re moving fast towards a world where music and games are not distributed on pieces of plastic anymore, which means that there wont be a need for a store to buy the pieces of plastic in.

Still, I said this in one of the posts I started off referring to, The future of PC Gaming:

Then he fails to grasp the core points of what makes Steam popular: It gives something back to the customer. It’s that simple — the other DRM schemes are all for the benefit of the producer, while Steam has loads of nifty features for me as a consumer that have “Future” stamped all over them.

This also goes back to the other post and human nature. People have come to expect being able to trade games back in for a part of the value towards a new game.

There is a disconnect here really, since the problem for publishers is that the same disc is used twice (which means disc != experience), but the problem for the consumer is that not letting the disc be used twice would stop his or her ability to hand in the game disc, essentially making games more expensive.

I’ve suggested that a solution to this would be to include a game disable function in a Steam-like digital distribution system to fill this need. Once you’re done with a game, you could disable it for a piece virtual currency. You could then use the virtual currency to buy new games if you have enough, or fill in with regular money.

Even more likely though, I think we’ll see more transitions towards games being cheaper content platforms and that part of what you get is tied to an account. Transitioning from a producer of boxed game products to service providers needs to happen for game publishers to survive, but I’m sure we can find ways to do this with both sides benefiting.

Of course the middle men are unhappy, but as soon as they’re out of the way we can live in a happy world where the price of games isn’t so outrageous.

The broken web

So I spent the day looking at web design again. I don’t do much of it anymore, but Lethania does and so I tend to get pulled into it. I later ran into this ad, which I thought was kind of funny:

I would be much happier if everyone could start creating flash-free websites. Anyway, today’s ordeal made me think back to the fine old days when everything was a table. HTML wasn’t made to display layout. The nice things about HTML, hyperlinks, worked just fine in regular text documents with some simple formatting, like bold and italic, its creator figured.

The nice things turned out to be really nice though, sparking an incredible development where pages got increasingly sophisticated layouts. The original HTML text format included tables, a fact which was quickly used to hack together all kinds of pages. A table could be used as a grid to stuff things into certain places, and a table inside a table could be used to create more interesting layouts, not to mention a table inside a table inside a table.

Because tables were meant to be (you know…) tables, different browsers rendered them slightly differently. Fine, if all you want is a table of text. Not so fine, if what you wanted was a pixel-perfect design. The solution to this was to add a whole slew of properties to each table, row and cell.

So after hacking together a sophisticated web site layout using table, the result was predictably a complete mess. The tables holding the text in place was mixed in with the text itself, making sites a nightmare to update or maintain, to not even mention changing the design.

A solution was clearly needed, to separate the design from the contents of web pages. So, why not adopt a language that wasn’t meant as a design language either? Sure thing, Cascading Style Sheets (CSS), a language meant for styling rather than layout was adopted during a long and slow process full of bugs, browser incompatibilities and new hacks.

Today’s standard of “good” for the web means using HTML strict (which few do) and control the appearance using CSS. The result is slightly less convoluted than the tables approach, but takes about 20 times as much effort to understand or write correctly, involves just as much hacking and is so fraught with peril that most people simply avoid it, going back to tables or mixing in horribly ugly JavaScript. Or, as seems to be extremely popular with games companies, insist on making the entire website in Flash, even though there’s absolutely no need for it.

So the page we were looking at today needed 3 columns of the same height. Let’s do it the old way with tables, for nostalgia’s sake:

<table>
  <tr>
    <td>Column 1</td>
    <td>Column 2</td>
    <td>Column 3</td>
  </tr>
</table>

Okay. Not too bad. So how to do this with CSS? Generally, you’ll need 3 DIVs next to each other, all with float: left. This makes them each have an individual length though. There are several ways to get around this, but none of them are good. The first involves stretching images across the DIVs as background images, which means you’re now bound to the color of those images instead of a color value. Also, you can’t have borders.

The second way we tried involved a very complicated set of maneuvers using three extra panes and shuffling content out the left side of the screen and then back in. The description for how to do this was about 10 pages long. And oh, it turned out to not work with borders either. Sigh.

So finally we found one way that seemed to work with borders. Only it didn’t, since you didn’t get any bottom border that way. The good part is that you could hack around that by using an image.

So for the old horrible table version, you substitute a mess of nestled DIVs and several pages of CSS, and it doesn’t even work fully without adding a picture where you essentially paint the entire bottom of the border along the page (yes, you actually paint a snapshot of your entire webpage, 1 pixel high). Way to go.

<style type="text/css">
      #container { float: left; background: url(images/example-6.gif)
          bottom center no-repeat; padding-bottom: 1px; }
      #inner { float: left; overflow: hidden; }
      #inner div { float: left; background: #ccc; border: 1px solid #000;
          width: 200px; margin-right: 5px; margin-bottom: -1000px;
          padding-bottom: 1000px; }
      #inner .col2 { background: #eee; }
      #inner .col3 { margin-right: 0; }
      .clear { clear: both; padding-top: 10px; }
</style>
...
<div id="container">
  <div id="inner">
    <div>Column 1</div>
    <div class="col2">Column 2</div>
    <div class="col3">Column 3</div>
  </div>
</div>
<p class="clear">

That seems like a great way to code! Not to mention that part of your design is now locked up in the image.

The best part about all of this is that it’s presented as “without CSS hacks”. Well, if having to use 6 nestled divs, large-number positive and negative margins and all kinds of bullshit like that isn’t an ugly hack, then I don’t know what is. The fact that the art of web design has advanced to the point where the normal thing you have to do is one big hack isn’t encuraging. And then they add the hacks on top of that…

I never liked tables, but at least they worked. In one of those memorable IRC quotes (in Swedish), someone said:

<sycon> imagine 1000 ants, tables are like the cage that keeps them in place, in the right place
<sycon> css is like a child with spasms trying to poke them all into place with chopsticks.

After spending countless hours trying to do seemingly simple things, I think I agree. Something’s still broken with the web, and no one seems to care to fix it. Well, other than inventing more workarounds.

But hey, at least you can draw Homer Simpson with it. So, ok, let the flak begin. Look, a Parrot.

Game Resales and Project $10

I’m slowly bouncing back from a period of incredibly hard work, followed by a complete disconnect and resting period. I should hopefully be back to posting regularly again now that the game has gone gold and we’re moving on to the next project. I still have some emails in my backlog of things to reply to — if you’ve been waiting for an answer, I’m sorry about the delay.

Anyway, retailers have spoken out against the so called “Project $10″, saying it will cause consumer rage:

“The person you’re pissing off the most is the consumer,” McCabe told GamesIndustry.biz. “This affects [them] directly – they pay the same amount of money and yet the resale value is much reduced. From a retailer’s point of view, they’ll just readjust [the price] bearing in mind you have to buy the voucher.”

This is an interesting development. For those who aren’t familiar with the concept, the $10 project essentially puts a code in the box to unlock additional content online for the game. The code can only be used once, which means that buying the game new has additional value over buying the game used.

Consumers who buy a used copy can still choose to buy the online content, but for a fee (one would imagine $10, considering the name of the “project”, but I think it’s actually $15 for the current titles). It’s been done with a few recent games including Mass Effect 2 this far (awesome game by the way, I’ve been having a blast with it), and will be done for future titles, including Battlefield: Bad Company 2.

“EA’s project $10 move is aiming to stifle pre owned games sales, but what they don’t factor in is the damage this could have for them in relation to new sales,” said Day.

Wow, what a complete misunderstanding. This has nothing to do with publishers wanting to stop resales — it’s simply a business model where publishers can earn some money off of resales.

There are interesting parallels to be drawn for me, between the console and PC markets. Pre-owned games pose much of the same problem on the console market as piracy does on the PC market. The end result of both is the same: people play our games without a single bit of money ending up with the people who made the game. In the worst case, we end up paying a lot of money to keep servers online, while getting no money at all from the sale.

There has been a lot of whining from publishers and developers about both issues. Those of you who know my stance on piracy should not be very surprised that my stance on pre-owned games is very similar. Whining about it or blaming people for it is not going to help — yet you cannot deny that the fenomenon in itself is causing major problems for publishers and developers (just as piracy is) — there is no getting around that.

However, trying to “clamp down” on used games sales or piracy is pointless. Piracy is illegal, but unenforcably so which means that it doesn’t really matter. Resale is simply a business choice. While you might think that it is a bad business choice and that retailers would be better off long-term by staying clear of business practices that will kill their providers, they are making a ton of money short-term. There is no way they wouldn’t fall for that temptation, and in the end, any business choice that works for them is a valid one. Whining or arguing about it isn’t going to help.

This causes an interesting problem for publishers. One way would be to move to direct online sales only, but this excludes large chunks of consumers who can’t download large games or who aren’t connected at all. Another version would be to require online activation and to bind the game to a certain console or live/psn account, which simply wouldn’t be fair to the consumer and would cause a never-ending stream of problems and well-earned gamer hatred.

The middle ground, then, is to sell a full game to people through retail, but to provide extra value with unlockable content to people who buy the product new. It should come as no surprise that retailers dislike this — it will certainly cut a chunk of profitability out of the resale market. It will lower the value of a game for resale, which means it’ll be worth less to trade in. Will this annoy some customers? I’m sure it will.

Many people seem to be taking this as the publisher wanting to be paid twice, which I think comes back as the default gamer response to anything developers or publishers do to earn money being horrible and bad. It sometimes gets to me to see this kind of attitude with gamers. We can’t make games as a charity, and making these games on bleeding edge tech is extremely hard work, and the people in the industry are incredibly dedicated to their art.

The other side of things is that buying the game used will be cheaper, creating a much better “try before you buy” environment, where you can potentially buy the game used and try it. If you like it, you can buy the DLC that you would’ve got from the new version. This is sort of a win-win situation for the publisher and the consumer, but of course not that great for retailers.

To publishers, this is the option that provides the best value to consumers while moving to a new business model that allows us to actually start making proper money from games again, which could halt the current trend of studios closing and developers being fired.

I’m sorry if that takes money out of retailers pockets, but I really do think that the talented people who sweat blood making these games deserve the money more than people who only know how to push people to buy used instead of new. It may have been a good dream for you, but it was still a dream and now it’s time to wake up.

And yeah, retailers claiming to stand up for the consumer is nothing new. But just as with music labels claiming to speak for artists, they are simply middle men that are slowly losing their value.

Internet Freedom Starts Back Home, Minister Bildt

The Washington Post recently published a column by the Swedish Minister for Foreign Affairs, Carl Bildt, titled “Tear down these walls against Internet freedom“.

The column seems to present a very optimistic view of the Internet, a liberal view seldom seen among politicians today. Between the urge to stop file sharing and combat terrorism and child pornography, censorship and mass surveilance among the western nations has taken our Internet connections several steps closer to what the average Chinese user sees when logging on.

Sweden has traditionally been a strong country for new technology, so why wouldn’t the fight for a free Internet take root here? Indeed, Sweden is the birthplace of a political movement focused on saving the free Internet, the Pirate Party, so why not? I feel the need to offer up a report from within the country governed my Minister Bildt’s party.

The column in the Washington Post was preceded by a similar column (google translated) in one of Sweden’s largest newspapers and a blog post on Minister Bildt’s own blog. Sadly, the Swedish columns are less clear on this issue of what freedom means.

Here is a translated quote:

“It is obvious that the international rule set is far too weak and that the means that are available to ensure adherence to the rules in place are insufficient. The users have ended up trailing far behind the abusers.”

I wouldn’t call that obvious. The summary of Minister Bildt’s columns appears to be “more freedom will be had by introducing more government control”. This matches the actions of the government he is part of as well.

It is easy to criticize the Chinese government for their surveilance and censorship, yet the last year alone the Swedish government has put in place a law breaking a long tradition of free communications, ordering a mass surveillance of all Internet traffic that crosses the nation’s borders. Knowing how the Internet works and considering the small size of the country, that works out to just about all Internet traffic — all emails, IMs, chats, you name it.

This caused a wave of protests through the country and an online protest now known as the “blog quake”. Google declared that after the law was passed, it would no longer place any servers on Swedish soil, due to concerns for user privacy and integrity.

The same government has given media companies rights that go further than the national police force when it comes to hunting file sharers, and is preparing a new law mandating that every cell phone call, text message or other communication be logged, together with the position of the device at the time, essentially turning every cell phone into a tracking device in the state’s service.

The columns caused an outcry among Swedish Internet activists and supporters of freedom. The minister responded on his blog, showing just how ignorant the government is:

I do not understand that Christian Engström and others are upset about what I have said. Do they not think it is good that Sweden has a government that wants to defend freedom on the ‘net? To whine about FRA (the governmental body tasked with the mass surveilance of the Internet, my note) and our intelligence agency has nothing to do with it. Sweden does not restrict freedom of speech on the ‘net or anywhere else.

I would applaud Minister Bildt’s call for Internet freedom in the Washington Post, had I seen it in isolation. However, all is not well in the state of Sweden. While I would love to see the Iranian attempts to silence protesters fail and the great Chinese firewall break down, an easier political target would be to respect the rights of the people in your own country.

And sadly, the Swedish government has failed to take even the slightest account of it’s citizens’ right to privacy on the Internet. I would not trust a pest control company with roaches inhabiting its offices, and I will not trust a government that censors the Internet to tear down any walls against Internet freedom — in China or elsewhere.

Bad Company 2 Singleplayer Revealed

Today’s a good day. GameTrailers TV will be running an exclusive preview of the singleplayer campaign on Spike, and the new trailer is up. Watch it in HD, and see if you agree with the overwhelming flood of positive comments.