Category: Followup

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.

No More Rants

Steve Yeggie has decided to end his blog, Stevey’s Blog Rants. I’ve been preparing a post about what blogs I read, and his rants was certainly on that list — it’s one of those few rare blogs that puts quality over quantity. One one side of the blog spectrum you have the churn-out-posts blogs like coding horror, who’s single advice to budding bloggers is to measure only quantity — he told himself he had to write six posts a week and then went about and did it, succeeded and thus everyone should do it.

In the age of information overload, I find myself less and less inclined to subscribe to blogs like that — too few of the posts are actually interesting. I’ve seen many people take Atwood’s advice and manage nothing else than to spam me with uninteresting posts with a few nuggets hidden in the constant stream.

I subscribe to a few blogs like that, but those would round up the bottom of the list. The best ones, however, are the ones like Stevey’s Blog Rants — they post anywhere between rarely and not-crazily-often, and they always post good content — whenever a new post shows up from some blogs, you know it’ll be worth reading.

It’s clear that Steve intends to go out with a bang, however. His latest post is part three in his series on “A Programmer’s View of the Universe”.  Long-time readers may recall one of my early posts was a reply to his second entry in that series.

The latest part, The Death of Richard Dawkins,  takes the shape of a Sci-Fi short story worthy of any master in the field of Sci-Fi, and I recommend it to anyone with as much as a slight interest in Sci-Fi.

I’ll be awaiting the last parts of the series eagerly, and mourning the death of a seriously good blog.

Taking a Step Back

I’ve been doing quite some thinking about things, and considering the interpretations my post from the other day has got, and some of the speculations going on I’ve decided to take it and the followup post offline. I’ve tried explaining my viewpoint on it, but it hasn’t seemed to make much of a difference.

I love being able to communicate with fans of the games I make, and I certainly won’t stop communicating on how to make the best games possible for all of you guys.

Illegal Opinions

In some interesting comments to my last post, a commenter named HomerJ makes some claims about the state of the music industry, about surveys done and about downloading content.

The “radiohead experiment” was a failure. Read this article: Basically most people freeloaded and paid either nothing or next to nothing for the music. Radiohead still made some money out of it, but way less than they could have via normal commercial channels.

This is a very interesting point, and the article is a good read, yet there are a few things to note here if you want to interprete it as a “failure”…

What we know from their data is that about 2 out of 5 people who downloaded the album paid for it. In the model they tried, people were invited to determine what price they thought was reasonable, so different prices were paid by different people. So the assertion that HomerJ makes is that they made less money from this than they would have from normal sales.

Before drawing any conclusions from this, let’s do the math: With an average of 40% of everyone paying $6, the number needed who would actually buy the album at normal download cost ($8) is 30% for a break even. Now there was a whole lot of attention in the media about this, so it’s pretty certain that a fair few people downloaded it just out of curiosity… that’s the whole point, isn’t it? And if a few of these people liked it, and paid for it, that would otherwise not have bought the album. Also, some of the people who paid less for the album may not have bought it at all, while the people who paid more would of course only have paid $8 for it.

So in order to declare this experiment a success or failure, you have to take into account all the above factors in order to determine whether the amount of people who would also have bought the album for $8 if it had not been available for free download is more than 30% of those that downloaded it. The answer is in no way obvious, so I’m not going to claim to know it… but claiming it as a failure only on the basis of that study is a leap of faith, rather than a logical deduction.

Essentially, this comes down to something I’ve written about before as well: it’s time to overcome the primal reaction of feeling let down by someone “taking my stuff” — what matters is not how many percent of all people freeload, but how much income there was as an end result.

HomerJ also commented:

I can ignore a study when it says that it is based on surveys. I don’t need to disprove it because the underlying methodology is known to be too faulty and biased for usage. Of course pirates don’t particularly care, they’re happy to use anything to support their freeloading.

Ah, of course… anyone who thinks this way only does so to support their freeloading, to justify their piracy. It may suffocate the discussion, but really does it ever win anyone over, or convince anyone? Intimidation is unlikely to get you customers.

It’s a discussion where one side inevitably calls the other side names — which really is quite a curious fenomenon. I’m happy to discuss the facts, research, ideas and to hear arguments… but I’m not happy to be called a criminal whos only motivation is to justify my own criminal behaviour (which it’s taken for granted that I have), when talking about broader ideological issues. I may not agree with someone, but calling them a thief or criminal because of their opinion isn’t likely to help either of us.

It’s a somewhat slippery slope of debating that shows in all parts of copyright and piracy debates… some opinions are simply considered illegal even to express, or at the very least the only reason to have said opinions is that you’re a criminal. I find that highly dangerous even in the broader sense that it threatens the very democratic foundations we build our nations on… In the words of Voltaire, “I do not agree with your opinion, but I would fight to the death for your right to express it“.

And as noted, I already make my living from copyrighted works, in a business hit extremely hard by piracy.

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