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.

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.

The Gaming Police

Howard County Sheriff’s Department have been on the hunt for a drug dealer for a while, but lost track. The dealer skipped the country to hide in Canada. He made a mistake though — he chose to play World of Warcraft. Someone told the police about his online gaming habit, and they sent a Subpoena to Blizzard, requesting any information they had about the dealer in question.

Something interesting happens here. Maryland police has no legal juridistiction to subpoena things from Blizzard (situated elsewhere). The subpoena is more to be seen as a kind request for information. Months passed, and eventually Blizzard provides a chunk of information. Among others, the police gets an IP address that can be located and used to coordinate an apprehension together with Canadian police.

There have been plenty of reactions to the story, with comments like “if you don’t fancy prison life, you shouldn’t be selling drugs”. This is some form of the “if you’ve got nothing to hide” argument and thus misses the central problem of it all. You get caught on a quite common, but still quite false, line of reasoning that equates the possibility with the action. The problem here isn’t the action itself, it’s the possibility; not the result in itself, but the span of potential results that are made possible by the action as it is.

Let me explain that further. When the police nicely asks for information this way, Blizzard ends up in a problematic position of power. The company now has to take a moral position and in principle act as an authority of law. Maybe this had been a clear-cut case if we had been dealing with something that was illegal everywhere, and which everyone agreed constitutes an illegal and immoral action, like violent crimes.

Now it’s about the war on drugs. Regardless of how you feel about narcotics, you have to realize that laws about them are different in different parts of the world. So, now it’s suddenly up to Blizzard to decide if these sorts of laws also apply in the virtual Azeroth, regardless of where the people playing are in the world, or relative to where the police who’s asking the question is. Has Azeroth signed an extradition treaty with the United States of America?

In and of itself, it’s not a major problem, but the fact that Blizzard doesn’t answer “no” to any such requests as a policy is somewhat dubious. It opens the door for enforcement of any law in any country around the world — in the online world.

This is what I mean with that the possibility is the problem, not the specific action in the case at hand — what happens when Chinese authorities want some information? There are a whole lot of Chinese World of Warcraft players out there. Is that request equally much ok? The matter could concern different crimes there, and most of us agree that it would be less than pleasant if all the laws from all countries could potentially be applicable online, internationally. Is the next person who hides in Canada a Chinese dissident? What will Blizzard’s decision be in that case?

Of course I realize that Canadian police may not be very helpful when it comes to the Chinese government wanting to hunt dissidents, and that it’s very likely that Blizzard would take a different decision in that case, but there are issues in the decision to hand out information that are decidedly unpleasant, regardless of if you find the effect in this specific case upsetting. It’s a path that doesn’t look brushy, but leads deep into the djungle undergrowth.

Image credits: jluster.

Beta Comics

I want to share Azarimy’s Battlefield: Bad Company 2 beta comics with you. They’ve been posted on the EA UK beta forums, but not really had the recognition or attention they deserve. It’s an amazing feeling that we’re not just making a game, but also inspiring other creative art like this.

My respect to Azarimy for some awesome comics, and my gratitude for his permission to share them with you here.

Awesome stuff. Azarimy’s got more coming, so if you like them, head on over to his thread on the forums. And on that note, I wish you all a happy new year.

(I’m a ninja, I’m a ninja, I’m a ninja, I’m a ninja!)

A Beta Release is Born

I’ve had a few minutes here and there to keep tabs on the EA UK forum for the BFBC2 PS3 beta, and toss in a few answers here and there. One thread turned into a discussion on the pros and cons of patching vs not patching the beta build.

There’s a limited amount of internal stability testing we can do. That testing can run down most things, but can’t test large-scale things (like server backends and what happens when 5000 people all log in at once). So, we get three things out of the beta: backend/large-scale stability tech testing, large-scale balance data and feedback from people.

I understand that people would rather see us implement our fixes resulting from all three directly into the beta. But putting out an update of the beta would require us to use up some of our internal testing to make sure the beta update is good enough. If sending a broken build to 100 people is bad, sending a broken build to 10000 people is a lot worse.

So in that situation we’re in a place where we have to choose between a spending our quality assurance resources on a beta update OR on the final product. To me, at least, that choice is quite easy. The led to this comment from poster 1Bryce1:

Isn’t a beta essentially a broken build to begin with? Any patches just eliminating problems and addressing balance issues along the way. So unless you break it more, any update would be less broken. Not only that but the “Backend/large-scale stability tech testing, large-scale balance data and feedback from people.” you get from each patched version would be more accurate to the finished game and give you better results. Wouldn’t it? I mean some of the most basic tweaks can drastically change the game and how people play. Spending some QA resources on a beta update IS contributing to the final product.

I started answering on the forum, but I figured this could be interesting for a wider audience and moved it here. A beta build is expected to be more broken than a final release — though I wouldn’t call it broken as such. A public (closed or open alike) beta is a reasonably unbroken build, from where I sit. The catch in the above line of reasoning is in this: “unless you break it more, any update would be less broken”. Essentially this is how it goes:

Lots of people in the dev team are making changes to the game. Each such change is to fix a bug or improve something. However, each time you change something, there’s a small risk of breaking something without noticing it. So together, the small risks of any one change breaking the game becomes a fairly major risk of *some* change breaking the game in one way or another.

Which means that the more work you do on a game, the bigger the risk that more stuff is broken at any given time (while, on average, the quality increases). As a developer, you can put up with that… either go back to an earlier, working, build or ignore the error for a while until fixed. Sending a build out over PSN is major though… you guys can’t just go back to an earlier build, or not jump into the tank because that crashes the game, or ignore the fact that all names in the score board come out as “PLAYERNAMEHERE_PLACEHOLDER” or whatever… a hundred small fixes can cause one large error, which you then fix as you find it.

So the way to deal with this is to stop development, test the build thoroguhly to find all the bugs. The closer you get to shipping something, the more stuff you will leave in there because of the risk of breaking something if you touch it, which means that as you get ready to ship the game off, the only bugs you fix are the really major ones. That way, when we ship, the game has been really well tested and we’re sure that it wont break.

This procedure has to be done regardless of whether it’s a beta update release or the final game… and that sucks because of the thing with “stopping development” I mentioned. So for a beta, what you do is branch the development. This essentially means you copy the entire source for the game to a separate repository, where it sits while everyone else keeps on improving (and breaking ) the game. The beta branch is tested, and thoroughly bug fixed. Needed bug fixes are done to both the main game line and to the beta line, while other improvements are done only on the main game line.

A slightly simplified version of this procedure as an image:

Some things are easy to see from this image: First of all, when the beta gets released, the main (somewhat broken) game line has already progressed a fair bit beyond the state in which the beta was branched. Second, there is no obvious way to update the beta from where it is… you need to start the entire procedure over again, branch another branch out of the main line game, and stabilize that the same way, and it is this process that takes resources away from the main development line.

I know there have been some comments that other betas do update. I’m sure they have rational reasons for that, which make the cost worth paying. MAG has come up as a name, and though this is pure speculation on my part, I’m guessing that their player count makes the game hard to test internally, which would mean that doing public beta updates is a very good choice for them.