A Trial, A Spectacle, A Marketing Disaster

I’ve been following the trial in Swedish court against three of the guys behind The Pirate Bay (and one of their providers). Initially, I decided not to post about it here, as the trial is mainly political in nature, intensified by the theatrical spectacle that the pirate bay and their supporters are trying their best to fuel. I don’t really intend this blog to be about politics… but the more I’ve heard and read from the trial, the more that decision changed.

It changed not because the trial is less political than expected (or less spectacular, indeed), but because of the involvement of the industry I work in, and because of the way it’s being conducted in our names. It’s become increasingly clear to me that not only the outcome of this trial but also its very existence affects me, regardless of my choices. To explain my view on it, let me begin with some background.

The games industry has had its own battle against piracy, very separate from the other parts of the entertainment industry (Music and Movies) — our very nature is that we’re an interactive media, which differentiates us from them. The grander the interaction, the harder it becomes to do any meaningful piracy, to the extreme of online-only games and MMOs, where piracy of the game client is almost to be considered helpful.

With the emergence of the Internet, the games industry quickly picked up on the budding culture of participation that was thriving with the new possibilities — “user-generated content” as it’s so nicely called nowadays started appearing as level editors and levels for Doom, mods for Battlefield 1942 and Half Life. At first, the unexpected creativity shocked everyone, but then it was all embraced by the game studios and eventually turned into the massive support systems for user-generated content that today exist in games like LittleBigPlanet and the Trackmania games series (awesome games by the way).

Today, there’s basically two problems for the industry (well, winning the “simplification of the year” award here, but anyway): piracy for PC titles, and used game sales for Console titles. Yet if you listen to the internal dialogue in the industry (at least my part of it), the talk about what to do about this is not about punishment, it’s about new business models, and about providing more value for owners of original game copies, like giving away free stuff. I can guarantee that you’ll see more of that in the future.

Contrast this with the Music and Movie industries, who have been happily strolling along with the “shove it down their throat” business model until now. With a tight grasp of the market, distributors have been able to pocket most of the money, sending only spare change to the people doing the actual creative work.

With that background, I find it extremely strange how there are computer games in the list for the trial. It gets even weirder, in that World of Warcraft is one of them. So, one of the games that’s the very poster child for the new business models I mentioned above, that give away their game client on free trial discs, is a part of a lawsuit against a piracy site? Wait, what?

Why does this happen? Simply put: because the studio is one step removed from the publisher, and the publisher is one step from these umbrella lobby organizations. The end result is that the people doing these lawsuits are pretty much lost when it comes to the material they’re representing — they have absolutely nothing to do with its creation. The middle man is behind lawsuits, because the middle man is being cut out in the new world with a new economy, and more of the money is starting to flow directly to games studios, directly to musicians.

The behavior of the industry lawyers in the court has been nothing short of disgusting. With no actual case, they’ve spent the entire sessions trying to discredit the professors who have taken the witness stand, acting like an IFPI lawyer was qualified to pass judgment on who’s fit to be a professor and who’s not. They’re so eager to hide facts that don’t fit into their outdated view of the world that they don’t even realize that not only is it an insult to the Professor in question, it’s also an insult to the entire academic world and everyone who’s had a hand in reviewing and publishing his papers.

I’m proud that I’m part of the sector of the industry that is trying to move with the times rather than ride the lawsuits all the way to the end. I’d like to be able to say that I’m proud that my studio’s products aren’t on the list for that lawsuit — but sadly I think it’s just a question of random selection.

In the end, even if we aren’t associated directly with the lawsuit, we’re funding these organizations and we’re indirectly connected to it by our very profession, and treating people that way is nothing short of a marketing disaster. With the amount of money we spend getting games out there, not having the process sabotaged by a public backlash should be priority.

My conclusion is that it’s time to sever the connections and publicly distance ourselves from anything even remotely to do with suing our customers, and go back to working together with the gamers out there on the net. We have nothing to win in court, and nothing to lose in the market.

The mountain of flowers sent to professor Roger Wallis and his wife by (and paid for by) people following the trial on the net shows how deeply people care (and are obviously willing to pay for things they care about). I’d rather recruit this unprecedented movement of creative energy than die slowly of starvation like the likes of IFPI are going to. After all, there’s only so many years you can spend 75 Million Pounds on jailing your customers — if you somehow don’t run out of money I’ll guarantee you’ll run out of customers.

If you’re interested in the trial, check out the Wired article series or follow #spectrial on twitter.

How to Destroy a Universe in Order to Make Money in 6 Easy Steps

The games industry is often accused of having a bad case of sequelitis. Most big games are sequels, or in some other way part of some franchise. I think it’s a bit simplistic to blame the industry for this — looking at sales and income, the games industry has understood (just as Hollywood has) that the way to make lots of money is to make a sequel. Not necessarily because it’s cheaper, but because that’s what people buy.

So having established that we’re in the business of making sequels (and yes, I am), we need to look at lore. With each sequel, there’s a new story, but also an extension of the universe that story takes place in. Fans of series don’t generally love the stories themselves — more often fans are in love with the universe. The magic that surrounds something like the Star Wars universe (or did, until the prequel movies were made) or Lord of the Rings stems from the depth of the universes they take place in.

It’s easy to forget this and only focus on the new story you’re trying to tell. Even if this succeeds, and even if you make a fair bit of money from it, you may be lessening the total value of the universe by breaking the lore.

So without further delay, I present 6 ways to easily spoil the magic and destroy a universe:

1. Un-ending an end, or forced resurrection. This happens when the decision is made to make a sequel to a story that has been ended, thus altering the lore or coming up with convoluted ways to explain the miraculous continuation of a storyline that had been conclusively and definitely ended.The effect is that fans feel cheated and the value of the previous ending is reduced. Two good examples of this effect are the Terminator franchise un-ending of the end in Terminator 2, and the Alien: Resurrection movie.
2. Accommodating a new target audience by changing the universe. This happens when a spinoff, sequel or prequel changes the universe in order to accommodate for a new target audience — often a childrens’ version of the series.A perfect example of this is how many Star Wars fans felt that the Star Wars universe was tainted by the introduction of children’s movie character Jar Jar Binks and elements like the Hutt Pod-race. The prequel movies undoubtedly made a healthy profit, but destroyed some of the Star Wars magic in the process, lessening the total value of the franchise.
3. Not doing your research. This tends to happen when a universe changes hands, like a new author finishing a book series after the death of the original author, or a franchise being handed to a new games studio by a publisher. The new authors then make mistakes that lessen the credibility of the universe by simply not knowing or understanding some aspects of it.For instance, in the prequels to Frank Herbert’s “Dune”, written by Brian Herbert and Kevin J. Anderson, an invention is used several thousand years before its invention in one of the original books of the series.
4. Killing your core. Most universes are built up around some core occurrence. Star Trek is built up around the exploration of a vast mystical universe by crews on space ships, for instance. Removing the defining characteristic of your universe is a bad idea.This happened as the Wing Commander saga unexpectedly ended the war that was the core of the universe, removing the core component that had powered the lore. A few games were released after this, introducing a new enemy but the momentum of the universe had failed. Another good example of this is when an action movie was released based on the adventure series Mission: Impossible, even including a betrayal committed by the beloved protagonist of the series for good measure.
5. Forgetting your core. Sometimes, what makes a series special is taken for granted during the production of a sequel, to the very point that it’s forgotten entirely. Games are especially open to this phenomenon — in the rush for technological innovation the heritage is somehow forgotten.Doom 3 is a good example of this. With all the cool dynamic lighting and shadows in focus, the game completely failed at following up on the style of the previous games. Instead, the gameplay degenerated into a form of technologically advanced “Boo!” with monsters appearing out of nowhere in rooms with blinking lights.
6. Diluting your story. Charlie Jane Anders calls this “Being a story slut” — feeling the need to tell a lot of stories that may not fit in to the universe you’re telling them in. The end result is that the fans lose track of what the universe is all about.I’ll repeat Charlie’s example for this: The Matrix. By losing focus on the issues and story in the first movie, the entire Matrix universe is tainted by this dilution, losing some of its magic.

Often, these errors are immediately obvious to any fan. Why are not spotted and fixed?

Sometimes, the simple answer is that they’re accepted damage. For instance, if you want to make money out of a new Alien movie, you’ve accepted the fate of the lore the moment you started. This can happen because the franchise is in the hands of people who don’t care about the universe they’re extending, or because the people doing the sequels have simply lost track of the context for what they’re creating.

More often, though, I suspect the mistakes are the responsibility of a single person in charge, who either refuses to listen to others or who rules with such an iron fist that others don’t dare to sound the alarm. This appears to be the case of Jar Jar Binks, where the production team waved the red flag but were ignored.

So if you’re going to make a sequel, make it a good one — and don’t repeat these common mistakes. That way, you don’t have to be responsible for the next expression like “Jumping the Shark” or “Nuking the Fridge”

New Entertaining Times

I’m sorry there’s been a bit of a pause in the posting here. We’ve successfully gone through the process of finishing up our first internal demo of my  new project (nope, not telling you what it is… yet), and I’ve been introducing a new AI coder to the Frostbite codebase. It’s kept me more than busy… but now I’m back in business with a few days off, and I figured it’s time to reflect on some of the news of the last few weeks.

So, earlier this week the news hit of a dutch study performed by the researchers at TNO on behalf of the Dutch government, showing among other things that people that do illegal file sharing in general buy more entertainment media than those who don’t. A good summary of it is available over at MarketingVOX. A similar study was been done before by the Canadian government and concluded that there was a positive effect from the illegal downloading of music.

Looking at sales, the album that sold the most on downloads last year was Nine Inch Nails’ Ghosts, even though it was given away for free. And recently, Monthy Python sales on Amazon spiked by 23,000% as all of their material became available for free on youtube.

So there are two interesting questions that come out of this research… first of all, the big music businesses aren’t stupid when it comes to making money, usually, so how come they’re ignoring this research? And second, why is the PC games sector being killed by piracy if this is true — shouldn’t it apply to games as well? Or was all of that just a big lie?

The answer to the first question is rather obvious: The big music companies aren’t the ones making money. Their business model is based off a tightly controlled music sector where big hits like Britney Spears are produced over and over by a very small set of producers. They’ve been able to select who gets to release an album for a long time now, and they’ve taken most of the profits from the sales themselves.

Now, in contrast, smaller bands and artists are profiting. The money from Ghosts took a much more direct route from consumers to Trent Reznor, and none of it ever landed in the pockets of EMI or Sony. New talents are emerging through other routes than the record labels. Not strange these companies are trying to stop the flood, but rest asured that the result will only be drenched music industry lawyers. Musicians are freeing themselves from the clutches of big business, and profiting from it.

The second question is more tricky. Are we wrong? Do the people who pirate actually buy more games? No, obviously not as a general case, because we’re losing money on selling PC games, and the industry as a whole is moving away from it. So what’s the difference?

I think one key thing to consider here is the cost of games. The currently high cost of games is a large enough barrier that I’ll think twice about buying something. If I hear a song and fall in love with it, the cost of a download or a CD is low enough that I might buy it impulsively just from that entertainment value. In contrast, I’ve looked at buying Call of Duty this month, thought about it and decided not to on the basis of cost — and yet most of the people we expect to buy our games probably have less money to spend.

Why do games cost so much? With Steam and other digital distribution channels there’s no need to make a DVD, print a manual, make a box and ship it across the world… so the download should be cheaper, right? Of course it should, but enough people still buy games at retailers like GameStop and Game to let them bully the industry. Whenever a company wants to sell a game’s download version cheaper, the retailers step in and say “No, if you do that we wont sell your game” (“so people have a choice” — wait, what?). The sooner you stop buying games at retailers, the sooner we can break this evil lock-in and lower the price of games.

But I don’t think that’s all to it. I think at least part of the issue has to do with replay value. If I download an album from a torrent site, I’ll listen to it for a while, start loving it, and buy it because I’ll still play the album hundreds of times after I bought it. With some games, there’s next to no replay value. The point of “love for game starts” is very close to the point of “game ends”, and thus there’s a very short period in which there’s a high incentive for the player to go and buy the game.

The online portion of games counter this. Comparing the play time of a singleplayer game to a combined SP/MP or a pure multiplayer game, there’s a huge increase in replay value. Sadly, that does nothing to save the singleplayer experience, so the only reasonable way forward is to bring down the cost of games.

Especially as downloads fix another major problem in the process: that games aren’t available to some people at release.

So what’s the conclusion to all of this? Simple: buy your games online, help break the retailers’ stranglehold on the games industry.

The Future of PC Gaming

I just finished reading a long article on piracy by Koroush Ghazi from tweakguides.com. It’s an interesting article, and certainly one of the best researched articles out there on the subject, so I do recommend that you read it if you’ve got the time… but, I do also need to address some fundamental problems with it. If you’re sort of short on time, I advice you read the first half of it.

There are a few problems with the article, and while it’s quite possibly the best research done by anyone, it’s certainly not the best written article or best analysis. I’d love to have read the same article written with a fair bit of scientific method. I have the benefit of a background in Computer Science, and while I do understand that without it you’re likely to make that mistake, it still saddens me to see all that research presented in such a way.

Some background may be in order. In scientific papers, there’s a strict separation of source material and the authors’ own progressive works. Everything which is claimed is backed up either by a reference to source material or as conclusions of the authors’ own research. Generally, the papers themselves are split into sections where some are clearly dedicated to going through source material and others are entirely dedicated to the conclusions drawn from the research.

Ghazi makes no such distinction, but rather mixes and matches as he sees fit. This is an approach that is more similar to a short article you’d find in a newspaper than to a scientific paper or even, to grab a subject closer to the tweakguides home, to a hardware test on one of the hardware guide sites out there.

Added to that is the problem that he mixes logical conclusions to different levels in a way that shows a somewhat clear bias in the message he’s trying to tell. All honor to that message (hey, I make my living relying on these things too you know) of how destructive piracy is, but such information tends to have a better punch if it’s actually founded on the correct conclusions. In fact, any article that spends so much time telling you how objective and unbiased it is should probably flag a warning somewhere in the reader’s mind.

Let me take an example. In the section on The Economics of Piracy, Ghazi extrapolates the source information “there is a chance someone who pirated a game would buy it if piracy was unavailable” into the conclusion “there is some potential loss of income to the producer”. Fair enough, that’s a reasonable conclusion to make (the assumption that the chance being larger than zero implied).

However, he then goes on to present the source information “there’s some chance a person who pirated the game may cause a sell of the game by word of mouth”, only to argue that the chance is in fact near-zero through a complicated series of arguments without any actual proof. This is not only a flawed argument, it’s also inconsistent. The logical conclusion is that “there is some potential gain of income to the producer”. It can be argued that this potential gain of income is smaller than the previously mentioned potential loss of income, and in fact I’m fairly convinced it is. However, to make such a claim in an unbiased and well-founded way you really do need to back it up with some data, which simply put, the article doesn’t even attempt.

As the article gets closer to its conclusion, it also seems to lose more of its brilliance and good foundations. Ghazi spends two long pages examining not DRM techniques but DRM products, and then draws conclusions about the techniques based on the observations about the products. This bares some resemblance to looking at Super Mario Bros, Doom and Command & Conquer, and then drawing far-reaching conclusions about the merits of platform games vs shooters vs strategy games from it. He also falls into the logical trap of not understanding the single tier of effort of today’s networks.

About DRM techniques, the article fails to separate the concerns of small scale and large scale, and comparing the invasiveness of the techniques. For instance, the lock-down to only allow 3 installs of a product (small scale) is motivated by the fact that a restriction on number of installs is needed (large scale). This misses the very obvious point that any number would harm large-scale piracy as much. Allowing 5, 7 or 15 installs would likely have unmeasurable impact on piracy levels or sales, but would likely have caused much less of a PR disaster for a game like Spore. At the very least, with no conclusive evidence either way you can’t make a claim of 3 being a necessary number.

Ghazi then goes on to make some very perplexing claims about Steam. Let’s examine things: Steam was released and forced down the throats of very unhappy gamers, and was near-universally hated. That far, he has his facts straight. He then goes on to try to explain how Steam became accepted, without acknowledging the fact that Steam has changed. The reason people hated Steam was because Steam sucked. For the machines and bandwidth of the time, Steam was a horrible bloat.

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.

His recommendation that Steam may be a danger because it may turn into a monopoly is also somewhat strange. Several games companies including EA and Ubisoft have already started moving towards Steam, not because they like the product but because they like the technique… but Valve is several years in the lead. Even if I’m sure Ubisoft would rather use their own Steam-like tech, they’re stuck with Steam for the time being. The royalties they inevitably end up paying Valve should be more than sufficient a reason to fuel the development of their own tech.

Finally, the article turns into something more suited as a flame war forum post on some fanboy forum. Ghazi claims that various groups of people do various things intentionally with absolutely nothing to back such a claim up, and the tone turns rather ugly. The illusions of grandeur on display also somewhat leave a sour taste, when he claims to have made Microsoft take action on a previous issue. Anyway, consider the following from the beginning of the article:

Other articles take the easy path by slapping together some unsubstantiated opinions and dubious arguments which merely follow whatever the popular sentiment is on this topic, and come to the usual conclusions. Let me be clear: I won’t be doing that here. I’ve invested a great deal of time into actually delving into all the various aspects of this issue, thinking through all the issues and getting a good handle on the situation based on a large amount of publicly available data. Consequently throughout the article you will find numerous references to reputable data sources and first-hand information rather than just hearsay and conjecture.

Now compare that to the following, found on the last page:

Fast forward to the 21st century, and piracy has apparently somehow become a political struggle, a fight against greedy corporations and evil copy protection, and in some cases, I’ve even seen some people refer to the rise of piracy as a “revolution”. What an absolute farce. Truth be told I have the greatest respect for the people who simply come out and just say that they pirate because they can, no more, no less. At least then I know I’m dealing with someone who’s being honest and has got their head screwed on straight.

Balanced and unbiased articles do not call people of different opinions dishonest or say they don’t have their head screwed on straight. This is the same kind of name-throwing that continually hinders the piracy debate with anyone trying to argue logically about DRM gets called a thief. It’s counter-productive. Don’t do it.

So what do I really think about the future of PC gaming? I think that two things will happen — There will be a clear shift towards online-only titles or titles heavily focused on multiplayer… adding to this, you’re unlikely to see titles ship with the option of running private servers. The cost of maintaining servers is so much lower than the cost of having your game pirated that the solution is obvious. I also think that Steam or Steam-like networks will become the dominant distribution channel, and with this software around it’s likely that pirate software will be detected more often.

The development may go two ways from there… one way would enforce a shareware-style culture where pirated titles would cause an annoying reminder to please buy the game. The other would actually hinder the user in some way, like closing off access to other games or areas of the network. And reasonably, the games industry never learnt from these things before, so the second approach is likely to be tried first, have a huge backlash followed by more debates before we finally arrive at the first approach. But I’ll be happily surprised if we can be smarter than that.

In the mean time, singleplayer games are likely to become near-extinct on the PC market.

You cannot take that away from me

I was going to do some introductory post for this new blog… but of course, something much more interesting is available as a subject, so of course I won’t argue with that. In this case, the ever-hot subject of piracy and DRM is at hand. Jeff Atwood noted the rule that software creators live by, but that’s almost taboo to speak of loudly:

But let me be absolutely crystal clear about one thing: as a programmer, if you write software and charge money for it, your software will be pirated. Guaranteed.

The core of this issue is that people are people, so there will always be some that can’t afford it, some that have some agenda that justifies their piracy (“EA is evil!”), or maybe they do it simply for convenience. There’s a hundred different reasons, and it’s all about how human beings react to things and about our feelings. As such, it’s somewhat silly to think that we can solve the problem using technology alone.

Technology and all the advancements we’ve made is there simply to improve things for us as people living our normal lives. The better technology gets at cooperating with humans, the more likely it is we’ll use it and be pleased with the results. However, as soon as we start trying to employ technology to combat human nature, human nature is likely to win.

Take the DRM discussion for PC games as an example of this. It’s an obvious failure for that very reason — instead of providing assistance to the people that use it, it’s trying to combat human nature. Not only does it not work (games are still getting copied), it annoys people. It’s another one of those bad ideas that is repeated over and over. It’s pretty simple to see why all kinds of technology meant to combat human desires is destined to fail really… in a world where duplication of contents is essentially free, there’s only one tier of effort.

Let me explain what I mean by that through a few examples.

Consider a scenario where a record label is trying to protect their music by applying copy protection to their CDs (I know, madness!). It would seem like a clever thing to do at first glance, but here’s where there’s only one tier of effort. Once one person out there cracked the copy protection or even ran the music through his sophisticated all-digital stereo equipment back into recording software, it’s shared and completely effortless for everyone else. Well, the record labels eventually (yes, it took a good while) learned that it was pointless and started actually providing services to people instead.

Forward a bit in time, and you get DVD region locking. Hardware locks this time, can’t break that can you? Well, all it took was one brilliant man with alot of time and equipment to open the format up to the world. Again, once open the effort is gone… and as a result, region locking is a joke nowadays.

And still we end up here, with Spore. The game was on pirate sites before its release, and turned out ot be one of the most pirated games of 2008… yet legitimate owners who pay for the game can only install it on 3 computers and there’s no tool for moving it onced installed. Okay, so I get (in all ways related to DRM) a better product from a bittorrent site than I get from EA Store, and history repeats.

These things are all about how people work, and not at all about how technology works. Human ingenuity and stubbornness means that there will always be some brilliant computer wiz nutcase out there who will take on the challenge of breaking your scheme… and since there’s only one tier of effort, all it takes is one person (or group of people).

And more on how people work, you cannot take things away from people that they perceived to be theirs without them feeling let down. People used to be able to buy a game, and play it on any computer. The fact that only a tiny percentage of people actually want or need to use the game on more than 3 computers is irrelevant, because lots of customers will still feel that you’ve taken something away. And you cannot take things away from your customers.

McDonalds in Sweden tried a trick several years ago when they introduced those tiny boxes of sauce you can add to your menu. When they introduced the sauce, they removed the ketchup dispensers. If you wanted ketchup, you had to ask for it on while placing your order. Clever trick to get people to buy more sauce, you could think… but in reality, the only thing that happened was customers getting annoyed, even though you could still get free ketchup. Reflect for a bit on why? Indeed, there was a time before the ketchup dispensers were put in place, and people still flocked to McDonalds like moths to a spotlight on a summer night. But once there, people got used to them, and you cannot take things away from your customers. Regardless of how you try to motivate it or how few people actually used the particular feature you removed, people will feel cheated.

From a business point of view, it makes absolutely no sense to pay money (and lots of it) for something that provably doesn’t work, and annoys your customers to boot. Yet business leaders keep holding on to DRM and all these others restrictive ideas. Why? Human nature again — just as people will feel cheated when you try to take something away from them, a perception that someone is stealing something from you provokes a very emotional response within most people, who react to protect their property. This reaction is so strong that anyone trying to challenge it immediately get categorized as a thief or someone who thinks stealing is a fine thing to do.

Letting this sort of primal reactions of protective fear control the actions of a company worth billions can’t be a good state of affairs. There’s a lot of talk about the lost potential income of pirated games… so how come no one is talking about the lost potential income of games that customers shy away from due to invasive DRM measures or due to the bad PR in connection to it?