Yes, Virginia, XBox One’s DRM Move Is The Right One

It’s now been about a week since XBox announced The One, including obliquely hinting that games will be locked to one console, and the entire Internet responded with rage not seen the Matrix: Reloaded turned out to be an exercise in Wachowski wankery. This caused Microsoft to backpedal, albeit in a vague, nondescript sort of way that suggests they are either changing their plans or pummelling their PR department into figuring out how to spin the move as being a good one for consumers. Which is a shame, because it probably is.

Now then, I have never shipped a console game – I’ve been in MMOs my entire career, which are in their own state of transition – so I’m watching this all from a distance, and I don’t really have a dog directly in the fight. That being said, I find it comical that the fanboys of the world are absolutely indignant that the way that they buy video games might change forever. Here’s a free clue: this has already happened. The consumer economics of buying video games has already changed forever. The console makers are now merely trying to keep themselves relevant in this changing world.

Change #1 is Steam. Right now, you can buy Borderlands and Skyrim on Steam for less than the cost of what you can buy the same titles for at EBWorld -used.  Sure, it’s off by a buck or two, but as a consumer I gain other benefits, such as the fact that I don’t have to put on pants to buy Skyrim – I can continue my antisocial ways.  I also no longer have to worry about losing or scratching my CD or a host of other problems – I merely have to hope that Steam doesn’t go out of business anytime soon, and my games will be accessible from any computer forever.

Steam is doing a couple of key things lost to the casual game player.  First off, its extending the ‘shelf life’ of games a great deal.  You can now buy all of the Tropicos on steam right now – good luck finding any of them at Best Buy.  The lack of physical inventory means that the store can get infinitely big.  All of this creates an insane level of competition on steam, though, which creates strong price pressure downwards.  Which results in Steam’s various weekend madness sales.

Steam also has more financial upside for game developers.  Consider how a standard $60 box sale is split.  For most console games, the console maker gets a 20% chunk and Gamestop gets a 20% chunk. Rumors have it that Steam’s is only 30%. On top of that, Steam dramatically reduces the value of the publisher in a relationship. Getting published by EA or Ubisoft is not just about getting access to funding, which is crucial, but it also gives you access to their retail distribution network – it takes a lot of money and logistics to ship games to Gamestops and Walmarts across the globe on launch day, and part of why EA is a juggernaut is that they’ve got a well-oiled machine. Steam removes all of this value from the Publisher’s end of the equation, which gives developers more leverage in negotiations. It is not an accident that PC ports of console games have actually started to match the quality of the console games themselves if you plug your controller into your PC. The developer really would prefer you bought that version.

The second change is League of Legends bringing free to play to the hardcore gaming market. Previously, F2P was the province of only kooky Koreans making goofy MMOs unpalatable to the American audience, due to an uncomfortable number of panty shots. Now, though, it’s cutting into almost every genre you can imagine.

It’s not hard to imagine a world where the Box Sale (and by extension, Gamestop’s brick and mortar stores) are a curious anachronism as soon as 5 years from now. Right now, any MOBA that comes out would be considered suicidal if it tried to charge $60 bucks for a game that competes with LOL. Tribes forces that same question on any first person shooter that’s coming out. Both The Elder Scrolls and Wildstar are making noises like they plan on having a traditional subscription/box sale model, but there’s a strong argument that the wealth of free options available (including the recently converted SWTOR and the designed-for-microtransactions Neverwinter Nights) will make this a pretty hostile arena to step into. The iPhone games market has converted almost entirely from premium to free in the last couple of years. One by one, we will see other genres and platforms go free, until eventually, any game that doesn’t do so will stick out like a creepy forty year old man in a trenchcoat at a playground. Box products will likely evolve to become ‘DLC packs’ that exist largely so your mom can physically purchase something to put under the tree come Christmastime.

The thing about Free to Play, though, is that its not really free. It turns out that game programmers need to pay rent too, so F2P games require microtransactions. It requires an easy to use online store, it requires no piracy, etc, etc. Right now, this is an easy and natural thing to do on a PC. Game developers do not want to make games with two different billing models on two different platforms.

I guess this is all a very longwinded way of saying that the changes that players are afraid that XBox One have already happened on other platforms. Steam licenses are non-transferrable. iPhone games as well, and most iPhone games have already made the move towards being F2P/Microtransaction games. Microsoft has to care a lot more about how they fit into THAT particular competitive landscape much more than they need to worry about the premature hystrionics of some myopic fanboys.

Also, Gamestop is evil and almost all game developers would be happy to watch them die.

2 comments

  1. I’m sitting on the other side of the fence, your comment “I merely have to hope that Steam doesn’t go out of business anytime soon, and my games will be accessible from any computer forever.” is one reason for those who dislike DRM to react.

    But this can be mitigated by proper sunsetting, now, I have no idea if Steam actually has sunsetting coded into it’s platform.

    One way to do this would be to auto-disable the DRM/online if it’s been x years since last steam update for example.
    Then again steam does have a offline mode, not sure how that is technically implemented though.

    There is one DRM issue that you did not mention though, and that is the “Always on” DRM.
    This is the main issue folks have with DRM.
    Needing to verify when installing or updating/patching is ok.

    But if a single player game need to have contact with a server to be otherwise playable is a major issue.

    Imagine playing Knights of The Old Republic, and suddenly the game halts and quits as it’s been unable to contact the server for X amount of minutes.
    And now you need to wait a few minutes, or worse until the next day or longer depending on the issue.

    One thing many people do when the net is down or they are unable to do stuff online due to flakey networks, is to play single player games.

    And the network issues does not always have to be at the customers ISP nor at the game server park, but someplace inbetween.

    I’ve worked at GridStream Production as a radio host for two years and a tech guy for 11 years now. (GSP is a station by players for playes and broadcasts from within a MMO. GSP is the oldest still running MMO radio station.)

    And trust me, we have had some DJ’s unable to reach the broadcast server while others have had no issues at the same time, for some reason the DJ may be unable to reach the server.
    And it is not uncommon for the radio broadcast to break up, only for it to be re-established a few minutes later.

    And when both the server and the DJs are sitting on mbit lines with solid providers, you know it’s not the fault of the endpoints.

    Running a “tracert” tend to reveal odd routing and points where routing just stops or ends up having a latency close to infinity. Most likely a choking point of sorts.
    DDoS attacks on the net may also cause other routers to go down.

    Kicking the player out of a single player game is the worst thing a always on DRM can do, just mitigating this would reduce some of the anger out there.

    And refusing to start just because the game can’t reach the server is another thing that needs improving, providing a offline mode and offering to sync up stats with the server at a later point would help mitigate most of that anger too.

    And if sunsetting code is added, then the last of the anger towards the DRM should pretty much vanish.
    (a few developers have released sunset patches x years later for their games though, which is very nice and something more should do)

    That being said though. Games like The Witcher, and all games from GoG which are DRM free seem to do very fine.

    What it boils down to is that people want to be in full control of what they buy. After all if you buy a smartphone you are in control of when and how you want to use it, if you loose connectivity you can still use it to play music, take pictures, play games (usually).

    If the net is down, a console owner want to be able to play a single player game while they wait for the net to get back up so they can watch the latest episode of some TV sow on netflix or something, or post stuff on facebook.

    If they can’t play games offline, what should they do? Go outside? What if they actually end up liking the outside?
    That could mean declining sales of console games…

    • Tim says:

      My understanding of the Steam DRM model says that if Valve goes out of business, you won’t be able to install your library of games anywhere, but everything you already have installed should work fine forever.