Tuesday, April 09, 2013

That's a stupid question, not a real one.

Tobold recently addressed the hot topic of DRM where he asks the question: "should a company be allowed to put restrictions on the use of their game software?" and once again, I think he completely misses the point. I don't think any reasonable person has ever suggested that a company doesn't have the right to put restrictions on their product to prevent piracy. It's their product, they have the right to wave it in front of our faces and say "nah nah nah nah nah nah" if that's what they want. The question should be: Does DRM accomplish what it is meant to accomplish? If you think DRM is meant to decrease or stop piracy, you're wrong.

The only reason a company wants to stop piracy is because they see it as a lost sale and a lost sale to them is money they could have had if not for piracy. Ultimately that means DRM is meant to increase the amount of money they receive. It's all about the bottom line. It's a numbers game. That's not an indictment. A company is in business to make money so it's easy to see if the company views each act of piracy a lost sale then for each act of piracy they stop, they effectively increase their bottom line.

Now a lot of people who discuss piracy want to throw ethics into the mix. It's stealing. It's not stealing. And while I do have an opinion on this it's not worth muddying the water because in the end, it doesn't matter. I can tell you right now, any given company could not care less about the ethical ramifications of pirating. They only care about the money going (or not going) into their pockets. And for this reason, it absolutely baffles me why companies don't spend a lot more time and effort into studying the reality of piracy rather than trying to boil it all down to numbers they can move around in columns.

One of the most comprehensive studies I've seen only had a one page blurb on gaming piracy that basically boils down to this: There is a lot of talking about the subject but almost no useful data. Funny thing though, even if there was ample data to draw a conclusion, if it isn't the conclusion they expect it's more likely they'd just close their eyes, put their hands over their ears and stomp their feet while screaming "I can't hear you!" This article written back in 2009 shows the ridiculous blinders they are willing to put up to keep their version of reality in place.

Here's the irony of the situation. If you give your customers (and potential customers) what they want, they will flock to you to give you their money. People want to spend their money, they just don't want to spend it on things they don't want. Apple has recognized this for years. It's not a difficult concept to understand. People started pirating music because they were tired of spending $15 for an album that had 3-4 songs they were interested in listening to. Apple recognized this and turned it into a multi-billion dollar industry that they dominate in ridiculous proportions to this very day. Steve Jobs then called out various music companies on their use of DRM and shortly after stopped selling DRM protected music and raised prices on popular songs. And their music sales continue to sharply increase. Now, after the music industry has really started to embrace giving you what you want, how and when you want it, via streaming sites, mobile devices and DRM-free use of their product, they are finally, after 13 years, seeing an increase in global music sales.

It took the music industry 13 years to start to recover from their stubborn stance against giving their customer what they want. Rather than learn from this example, the gaming industry is still trying to force DRM down their customers' throats. Gamers don't pirate games because they don't want to pay for them, they pirate games because they don't want to waste money on them.

The gaming industry is where the music industry was 10 years ago. Unfortunately, for both us and them, they don't seem interested in changing with the times.


Tobold Stoutfoot said...

How is the absence of useful data equal to a proof that DRM doesn't work?

It is certainly right that the calculations in which EVERY pirated copy is counted as a lost sale are wrong, because some people would never have bought that game. But certainly if piracy wasn't an option, some people would buy the game even at full price, and others would buy it later at some half price sale.

What useful data do you have that would prove that without DRM the game companies would make more money than with DRM? So I would say that DRM very much accomplishes what it is meant to accomplish.

Locke said...

I wasn't trying to use the absence of data as proof DRM doesn't work. I was using it as proof that gaming companies blindly assume it to be a fix. Whether it is or isn't working is pure speculation.

And while I cannot provide much useful data specific to the gaming industry (because there just isn't any at this point), I can (and did) provide plenty of reasonably applicable data from the music industry's handling of the matter. Despite all their efforts to clamp down on piracy, it wasn't until they essentially ignored that aspect and started focusing on the real issue that they slowed and then eventually reversed the steady decline in music sales.