Published as part of our sister-site GamesIndustry.biz' widely-read weekly newsletter, the GamesIndustry.biz Editorial offers analysis of one of the issues weighing on the minds of the people at the top of the games business. It appears on Eurogamer after it goes out to GI.biz newsletter subscribers.
In over a decade of writing about the videogames industry, I've noticed two questions that never seem to go away. The first, most recently resurrected only a couple of weeks ago, is: "Is PC gaming dying?" That one's an easy question - the answer is always "No", although the reasons for that answer do change from time to time.
The second question, which is somewhat related, is harder. It's a question that's never been far from the lips of the industry's top executives: "What are we going to do about piracy?"
One of the PC's top developers, Chris Taylor, has a fine idea in this regard. He talks about "secure" PC gaming, a new model where games need to be in contact with a server in order to work, as being the ultimate solution to the piracy problem. He sees the old model, where games are simply bought on a disc and run on a home PC, rapidly becoming obsolete, replaced with a system where games are either played on a server or authenticated via a server, thus cutting pirated copies out of the loop.
It's not actually a new idea, by any means. PC games have been authenticating their serial codes with central servers for years, after all, and the entire massively multiplayer market is a testament to the potential of having games which rely entirely on a client-server connection for their functionality. What Taylor seems to be suggesting, though, is a wholesale move to a secure model where every game is, in essence, a "thin" client on the user's PC, incapable of playing the game by itself, and a server to which it must connect in order to function properly.
Piracy is, of course, a huge challenge for the industry. It's most prevalent on the PC, but the PS2 (still a thriving platform) experiences widespread piracy, as do the PSP, the Nintendo DS and the Wii. Only the Xbox 360 and the PS3 have for the most part avoided the unwelcome attentions of software pirates.
Moreover, on most of those platforms, the commonly trumpeted concept of organised criminal gangs being behind piracy is simply false. While counterfeit PS2 and Wii games certainly make their way out into the market from relatively organised groups, especially in Asia, the vast bulk of piracy comes from people downloading CD, DVD, UMD and ROM images from the Internet. This kind of individual piracy creates no profits for anyone, and certainly funds no human trafficking, terrorism, drug dealing or any of the other horrors which anti-piracy efforts have tried to connect to it - to general derision from the public.
The response from the videogames industry to piracy has, thus far, been utterly asinine. Not, of course, that videogames should be singled out here - the music and movie businesses, too, have done their fair share of asinine things in the last five to ten years as they desperately struggle to understand the changes which internet piracy is causing to their market. Only the music business, which has been struck hardest by online, user-driven piracy, has begun to learn its lesson and adapt its business intelligently. It remains to be seen whether movies and games are condemned to repeat the same costly mistakes, or whether they can learn from their sibling industry and avoid the traps.
The core of the response of both games and movies (although our focus here is on games, obviously) to internet piracy - the response which leads me, with absolute confidence, to describe these efforts as being asinine - is to treat their legitimate users as though they were criminals. Almost every single effort which has been made by these industries to protect their products has had the result of inconveniencing, frustrating and disenfranchising honest, paying customers.
From installing nasty spyware software on the computers of users, to preventing them from copying legitimately purchased media onto portable players, through to forcing customers who have made the switch to digital, hard-drive-based media systems to buy legacy physical products for no good reason, the media businesses have treated their customers despicably in recent years. The damning result of this idiocy is that customers who pirate their products, downloading them for free, actually get a better user experience than those who pay for them. Even eliminating cost entirely from the equation, pirated media goods are better quality, more user-friendly and less restrictive than their legal, commercial equivalents.
The games business fares no better than any other. Pirate games on the PC could be played without the original CD in the drive; come to think of it, they worked on every CD and DVD drive, not just the ones that were compatible with the hideous proprietary "anti-copying" systems that were en vogue for PC games for many years. They didn't automatically assume that anyone with CD-burning software installed was a criminal for wanting to send a CD-ROM of photos to their granny.
Nowadays, pirates are even more sophisticated - which, like it or not, boils down to fixing the broken functionality of many other devices. Despite having a Memory Stick slot perfectly capable of playing games with smaller load times and better battery life than UMD titles, Sony won't let you download any PSP game you like and play it from Memory Stick. The pirates will. The DS won't let you download titles and stick multiple games on a memory card to avoid carrying around a sack of carts with you, but DS pirate devices like the infamous R4 will. Xbox and PlayStation 2 consoles didn't let you install your games to the hard drive for fast load times and fast access - the pirates did. The Wii won't let you play games from other global regions, but pirates have no such qualms.
To describe this as a mounting crisis would be an understatement. In the hope of protecting its business from pirates, the industry has angered, frustrated and annoyed its legitimate consumers - just like Sony Music did when it installed a spyware "rootkit" on its audio CDs, or like countless movie companies have done by subjecting customers to awful, unskippable preaching about piracy at the beginning of every DVD or cinema screening they watch (despite the fact that they've paid to see the movie, and if they had pirated it, that offensive prattle wouldn't be there).
There will always be a core of people who can't or won't pay for things, and who will go to incredible lengths and inconvenience themselves awfully just in order to get stuff for free. However, it's a stupid and useless dogma to claim that all piracy happens because of that impulse. The reality is that when pirates are offering a better user experience than you are, your business model is broken - and rather than punishing your loyal customers, or whinging to national governments in the hope that they'll cover your backside with unpopular, civil liberties-infringing legislation, you need to fix your business model. Or find a new job.
The music business has learned this. We've come in a short space of years from the Sony rootkit debacle to a situation where restrictive, consumer-punishing DRM is being lifted from music downloads. Finally, the music business is offering a better user experience than the pirates - iTunes and its ilk are a more user-friendly, pleasant way to browse and search for music online than any pirate site, with faster downloads, and (in some cases - iTunes still lags behind here) good cross-compatibility between any devices you happen to own. Lo and behold, consumers aren't actually against paying reasonable prices for music - they're just against having to go out and buy CDs with spyware on them, or having to download tracks that are crippled, locked up and liable to be unplayable as soon as the company you bought them from goes bust.
How long will it take videogames to learn the same lesson? Chris Taylor's suggestion, at least, suggests that there's an understanding in some quarters about how the business models of the industry need to change. One part of his proposal is correct - games which depend on server-side interactions are a great solution to piracy. World of Warcraft and its ilk are the models for this; you're essentially turning your game from a product into a service, charging users for access to your servers on an ongoing basis rather than worrying about an up-front fee for the product. More and more games which follow this model will actually encourage "piracy" of their client - they'll give it away for free, and if it ends up on BitTorrent, then that's less bandwidth costs for the publisher.
However, companies need to be incredibly careful about implementing this. If your game has a major server-side component (like World of Warcraft), then turning it into a server-reliant game makes sense and will be accepted by consumers. If, on the other hand, you take what is essentially a single-player game and try to turn it into a service, or to tie it into an online server model, then that's nothing more than an extension of the old, broken and stupid copy-protection ideas the industry already uses.
Are you going to tell someone who brings a laptop on a flight that he can't play his new RTS game's single-player campaign because he can't connect to your server from the plane? I should certainly hope not, because it's fairly easy to tell what will happen as soon as his plane lands - he'll go online and find a pirate version of the game that won't treat him like a criminal, or a wayward child who needs to be kept on a short leash. Let's not pretend, either, that requiring server authentication or even keeping chunks of code on the server will prevent piracy - there will always be ways around such protection, and the pirates will always find them. Technological solutions to piracy have never worked in the long or even the medium term.
It's a bitter pill for some executives to swallow, but the only way forward in the fight against piracy is going to be to treat customers like adults, and to assume that they are honourable and honest. The music business, to its surprise, is discovering that when you stop treating users like criminals, they stop acting like criminals. Let's hope videogames can learn that lesson without having to go through the revenue-crippling ordeal music has experienced in the past decade.
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