Evolving Beyond DRM– Part Two
How can companies prevent the general unhappiness caused by DRM and still sell games? Find out in part two of our series.
Do Nothing
When we last left off, I suggested that the solution was to do nothing. What does that mean, exactly?
What I’m saying is, forget about copy protection entirely.
DRM costs far more than it protects. It doesn’t prevent piracy—pirates are going to break it anyway. What it does is hurt paying customers, who should be cherished at all costs. After all, these are the people who are actually giving publishers money when they can get something for free. Why make things hard on the good guys? All it does is make them into the bad guys.
Yeah, sure, you say. No copy protection is just asking for people to pirate my game. How will I make any money?
Talk Like a Pirate
To understand this, we need to understand pirate behavior. Most people assume pirates do what they do simply because they can. While that’s true to some extent, it’s not the whole picture.
Over the summer, independent game developer Cliff Harris asked the Internet: “Why do people pirate my games?” What he learned was instructive.
Surprisingly, respondents cited the high cost of games as their primary motivation for piracy. $60 for a game was just too much in their opinion, especially when the quality of these games was often judged to be low. Next up was digital distribution—people would rather download games than go to a storefront. If they couldn’t get them legitimately online, they pirated because it was more convenient. Last, but certainly not least, was frustration with DRM restrictions.
Software with no copy protection is a very simple way to address these concerns. Consider the potential benefits:
- With no protection, anyone can upload or download your game. As a result, it is distributed far and wide —at no cost to you— via Bittorrent. This gets it out there and into the hands of people who might not have played it due to cost or lack of digital distribution. Even if it doesn’t always convert to sales, it’s likely to result in greater exposure, which is beneficial in the long run. As Tim O’Reilly famously said: “Obscurity is a far greater threat to authors and creative artists than piracy”.
- Think of it as a full-featured demo. Let users try out the whole thing, as much as they want, then pull a Radiohead and let them pay what they think it is worth. This gets over the potential quality issue. The customer doesn’t feel short-changed by an over-hyped, over-priced game that falls short. Don’t assume that no one will pay. Some won’t, but many will if you give them the option. O’Reilly again: “Customers want to do the right thing, if they can”.
- Most importantly, no DRM means no restrictions that might potentially anger paying customers. Again, these are the guys and gals you want to treat right. Customer service lore has it that every patron lost to a bad experience will cost your business ten more because they’ll share it with others. While you’re at it, you probably don’t want to do anything to anger non-paying customers, either. Bad press is bad press, and on the internet it’s hard to tell who it comes from.
DRM comes out of an ideology that piracy is a zero-sum game, which we argue it is not. Yes, people will download games for free, but that does not necessarily equate to lost or even poor sales.
Case in point
You may not have heard of Sins of a Solar Empire. It doesn’t come from a big name publisher. It didn’t receive a lot of advertising. It’s just a really good game that made a lot of money—with no DRM whatsoever.
While Spore has sold a million copies at a development cost of $20 million, the relatively unknown SoSE brought in 500,000 copies with a development cost of less than a million. Assuming the same price point for both titles, that’s an ROE of 20 compared to 1.5 for Spore. Not to mention, the developers of SoSE, Stardock, have a lot of goodwill in the community from their decision to drop copy protection. As they put it: “Our customers make the rules, not the pirates.”
Granted, Spore is a major title in a different genre, but I think the point is made: you don’t have to have DRM to turn a profit with games.
We know our customers could pirate our games if they want but choose to support our efforts. So we return the favor - we make the games they want and deliver them how they want it. This is also known as operating like every other industry outside the PC game industry.
–Brad Wardell, CEO Stardock
It’s impossible to know how many people would keep paying if they could download a game for free. Eliminating copy protection would cost some sales, but it would also convert some pirates. It wouldn’t take much of a shift to make a difference. For every game sold with some form of DRM, estimates say that 15-20 copies are pirated. If publishers could convert just one of those pirated copies into a sale, about 5% of them, they would double their income.
Instead of more copy protection, perhaps publishers should think about less. Now that would be an evolution.
Comments on this post
1.
Thank you Nick for a great blog article on DRM. Would you have a different view if game protection didn’t negatively impact honest users and actually gave them more benefits?
The main issue is that current DRM solutions lock the game/software to one computer and make it difficult to move it. End users should be able to install the game/software on an unlimited number of computers and keep on adding installations, as hardware changes or system crashes etc. occur. The real item to control is not the number of installations; it is how many of these installations can be used, at the same time.
For more information see the whitepaper ”Is Anti-Piracy/DRM the Cure or the Disease for PC Games?”.
2.
Hey Christian. Thank you for your comment.
Full disclosure (which should have been made clearer in your comment)– you work for ByteShield, a copy-protection developer.
In principle, I agree with your stance on supporting gamer’s rights. However, I fail to see how your product “gives honest users more benefits”. As I see it, the benefit of your system (provided that it works) is that it is not quite as bad as current DRM. So, no, I guess what you’re selling doesn’t change my opinion.
DRM –in any form– puts an inordinate amount of control in publishers hands and proves that they’re not listening to what users are saying. I’m not talking about problems with the implementation of DRM, which you claim to fix, but problems with the concept itself.
We are a blog about restraint, so the point I am making is that we don’t need more technology (however benevolent it may be intended) but less.
Indeed, having no copy protection does grant added benefits, as I laid out in my post: 1. wider distribution; more people get to try more of the product 2. addressing quality issues through graduated payment 3. no DRM-related PR fallout. Moreover, it’s just way easier to not have to keep developing new locks all the time.
No amount of technology is going to solve the incongruity between the culture and the old business model– as the music industry is finding out. So why isn’t the games industry learning from their mistakes?
I think its great that you’re trying to fix some of the flaws in DRM, but that doesn’t address the big picture. In the race to lock everything down and make it like old media (and yet find new ways to squeeze people for more money), I think we’re missing some opportunities to evolve business– to generate some real win-win scenarios.
Frankly, Design Less Better is more interested in that sort of thing.
3.
Nick Senske: Full disclosure (which should have been made clearer in your comment)– you work for ByteShield, a copy-protection developer.
Christian Olsson: >> I wasn’t trying to promote ByteShield as much as investigate your opinion. However your point is taken.
Nick Senske: In principle, I agree with your stance on supporting gamer’s rights. However, I fail to see how your product “gives honest users more benefits”. As I see it, the benefit of your system (provided that it works) is that it is not quite as bad as current DRM. So, no, I guess what you’re selling doesn’t change my opinion.
Christian Olsson: >> ByteShield provide new benefits to users:
• Completely portable and flexible reinstalls and activations - purchasing a software application or a game should include the ability to use it anywhere and be easy to reinstall after a hard drive crash or upgrade to a new computer. It should also permit lending it to a family member or a friend – as long as usage is in line with the license e.g. one activation at a time. This is crucial to our product and why we view ByteShield as considerably more end user friendly than other solutions. End users can install the game/software on an unlimited number of computers and keep on adding installations, as hardware changes or system crashes etc. occur. The real item to control is not the number of installations; it is how many of these installations can be used, at the same time. Thus, with ByteShield, the permission to run moves from one PC to another, seamlessly. The publisher can decide, per activation code how many a) users will be allowed, b) active installations each user will be allowed and how quickly the permission to run moves from one user to another and from one computer to another.
• Ability to back-up game on a DVD – back-ups of game can easily be burned.
• Flexible and dynamic licensing - achieve by using software usage management to generate custom licenses on-the-fly in little to no time, even allow users to choose and pay for only the specific software features they want.
• Ability to buy games online or offline – ongoing updates are now typically distributed online whether the original purchase was online or offline – vendors generally offer both and their anti-piracy solution needs to support both online and offline distribution.
• Automatic compliance with the software license – Audits not necessary.
ByteShield agreements with game developers and publishers insist that the packaging clearly call out ByteShield protection to allow customers to make an informed choice. It also requires that ByteShield completely disappears when the game is uninstalled.
• With ByteShield developers/ publishers have complete flexibility to ‘throttle’ back or entirely remove the usage management at any point.
Nick Senske: DRM –in any form– puts an inordinate amount of control in publishers hands and proves that they’re not listening to what users are saying. I’m not talking about problems with the implementation of DRM, which you claim to fix, but problems with the concept itself.
We are a blog about restraint, so the point I am making is that we don’t need more technology (however benevolent it may be intended) but less.
Christian Olsson: >> I do understand your recommendation to drop all protection but think this is an extreme position unlikely to be adopted across the industry. There are many justifiable criticisms of current DRM systems and as you say ByteShield successfully addresses most of them and at the same time provides extremely strong protection. Practically speaking we think we have a better solution for the industry rather than a solution at either extreme. We detest DRM systems that penalize/inconvenience honest users or impact development teams and that are not transparently declared on the outside of the product – this is a requirement with ByteShield – see details in the whitepaper.
Nick Senske: Indeed, having no copy protection does grant added benefits, as I laid out in my post: 1. wider distribution; more people get to try more of the product 2. addressing quality issues through graduated payment 3. no DRM-related PR fallout. Moreover, it’s just way easier to not have to keep developing new locks all the time.
Christian Olsson: >> With ByteShield can you 1) get wider distribution by allowing more people try the complete product with full-feature trials (which is feasible with a strong protection) 2) address quality issues through automatic distribution of patches through the ByteShield protection service and 3) re-establish trust and a balanced relationship between game developers/ publishers and their customers.
Nick Senske: No amount of technology is going to solve the incongruity between the culture and the old business model– as the music industry is finding out. So why isn’t the games industry learning from their mistakes.
Christian Olsson: >> The key thing is that end-users want to be able to play their music or their games on any device. With ByteShield you now have a solution where you can play your games on any PC by just moving the activation.
Nick Senske: I think its great that you’re trying to fix some of the flaws in DRM, but that doesn’t address the big picture. In the race to lock everything down and make it like old media (and yet find new ways to squeeze people for more money), I think we’re missing some opportunities to evolve business– to generate some real win-win scenarios. Frankly, Design Less Better is more interested in that sort of thing.
Christian Olsson: >> A system like ByteShield’s enables the ‘first sale’ principle to be applied to software instead of the current software industry approach to ‘license’ rather than ‘sell’ its products.
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