25 Arguments for the Elimination of Copy-Protection

A pretty good summary of why digital copy-protection and DRM are bad ideas.

DRM = Epic Fail

Common Figures About the Impact of Piracy Likely False

Ars Technica debunks them.

McCain-Palin Supporters Are A Classy Bunch

The Used Games Market

There's an interesting thread on Quarter to Three unfolding as I write this. The opening topic began discussing EA's new business model of packaging NBA Live '09 with real-time player stats. What this means is that as things happen to players in real time during the season, the game will update the stats in the game. For example, if a player breaks an arm during the season, NBA Live '09 will update that player in the game to be out until recovered. EA is only offering this feature to first time buyers; any player who buys the game second-hand will have to fork over $19.99 to have access to the feature.

But in the last few hours, the conversation has shifted towards Epic Games and their upcoming Gears of War 2. Epic has decided to include a special download code, a one time use, which would give the buyer access to 5 additional multiplayer maps. Unlike NBA Live '09, though, Epic is not offering an option for second-hand buyers to have access to the extra maps. Epic claims that this is to reward those who buy Gears of War 2 new, while simultaneously punishing those who buy the game used.

The protest has focused on this attack on the used market. What I think is being ignored in this discussion is the simple concept of ownership. Poster EpicBoy, presumably of Epic, stated in one way or another that game developers deserve to make money on the sale of used copies of their games. The problem is that the developer has already made money on that sale -- the first sale. Once that first sale occurs, the developer no longer owns that copy. Ownership has transferred to the buyer. And according to the long ago established First-Sale Doctrine, the new owner has the right to resell that copy without providing compensation to the developer. As far as I am concerned, Epic does not deserve to make money on the sale of used games simply because they no longer have ownership rights to those copies. Ownership has already been transferred.

Not only is including a special code for downloadable maps that can only be used once an attack on the used games market, but more importantly, it is an attack on the rights of consumers to do as they are legally able to do with their purchased content.

On a related note, I don't think this is good business, either. Poster Al gets right to the meat of problem with Epic's approach:

A customer of GameStop is still a customer in the video games market. When GameStop takes their money for a used copy of Gears that money doesn't just disappear never to be seen again (do your own Great Economic meltdown of '08 joke here), GameStop takes that money and uses it to buy more inventory, open new stores and so on. All of that gives publishers have more chances to sell their games.

Besides that the secondary market also helps lower the barrier of entry into the market which helps expand it. My teenage nephews wouldn't be playing video games at all if there wasn't a used market; they couldn't afford to. Eliminating the used market wouldn't force them to buy their games new, it would force them to find something else to do. If that happens what'll they do once they grow up and have more income? Suddenly start buying games again or stick to whatever they moved onto? [edit mine, for clarity]

Not to mention that GameStop doesn't get 100% profit on used games, as some people have suggested. I have no doubts that those margins are larger than with new games, but they still have to buy those used games from people in order to resell them.

Ouellette Responds

A few days ago, I wrote my thoughts about Muxtape's closing and relaunch. A commenter suggested that I write to Ouellette about approaching independent labels, so I did. My email to Ouellette is published in the comments section. Yesterday, I got a response:

I did consider approaching independents, but it would've been extremely complicated logistically. Doing a deal with the four majors is possible with a small team of experienced lawyers, but there are literally thousands of independent labels each with their own ideas about how licensing should work and I can't even touch on the complexity of that problem. Also I couldn't have paid for it, especially in light of the fact that what I'd be selling to investors was a crippled version of the original site with a big question mark on the final price and the necessity of even licensing at all.

Even if the label negotiations had gone swimmingly well they still took up a massive amount of my time. Negotiating with independents would've been many times worse in that regard, and the site would've suffered badly. Then who wins? Muxtape was originally possible because I was free and agile to build whatever I wanted to, and that's what I'm trying to get back to. It's not just editorial control, it's the ability to say, write and release an iPhone app without having to ask someone's permission.

I think the only way to do that right now is to make the whole service opt-in. Labels and bands that see the value in it will be able make the judgement call for themselves whether or not it's right for them (and I suspect a lot of them will).

Justin

I want to thank Ouellette for taking the time to respond to my email -- I'm sure that he got a lot of questions/opinions about Muxtape in recent days. He's absolutely right about the logistics of approaching independent labels, and I suspected that would be a major barrier. The opt-in solution is a very good approach, and I also share Ouellette's optimism that many independent bands and labels will opt-in themselves. And if enough independents opt-in, I think Muxtape could have an opportunity to show the major labels and the RIAA why fighting digital file-sharing may not be in their business' best interest.

Good luck, Justin.

EA Admits File-Sharing Does Not Equal Lost Sales

Gamasutra has the story. Mariam Sughayer of EA's corporate communications department states:

Stepping aside from the whole issue of DRM, people need to recognize that every BitTorrent download doesn’t represent a successful copy of a game, let alone a lost sale. [emphasis mine]

Dan Hewitt, the Entertainment Software Association's senior director of communications agreed:

It’s important to remember that it’s not a one-for-one equation. Our calculation isn’t such that we say that every game that’s been stolen [he means downloaded] is a sale loss." [emphasis mine]

This comes on the heels of TorrentFreak's analysis claiming that Spore has been downloaded from bittorrent file-sharing networks more than half a million times. Last week, EA reported that Spore had sold 1 million copies. Now, EA is trying to downplay the record number of Spore downloads.

I have to ask: EA, if a downloaded copy of Spore doesn't necessarily equate to a lost sale, what is the point of your DRM? Are your DRM schemes simply to stop people who wouldn't have bought your games from playing them? That's the only conclusion I can draw, since we can see that your inclusion of SecuROM did not stop people from pirating the game.