Bit Shift

When discussing the new Amazon AutoRip feature with friends, I was excited. I’ve been shopping at Amazon since 1998 or so and I have spent quite a bit of money there. I’ve also been ripping my own CDs since that time, but getting more content in the cloud without any work on my part is always welcome.

But when Amazon sent me the email that I had new content in the cloud via AutoRip, there were only 4 albums added. And 2 of them were gifts I had bought for other people.

So, I had only purchased 4 physical CDs (at least that qualified for AutoRip) via Amazon in the last 15 years. I must not be the audience that Amazon is going for. Why then even bother making this feature?

Amazon’s entrance into the digital market has been a cautious one, and the path is littered with value-adds such as this where they provided relatively little value in absolute terms. But the overall arc is much more important. Amazon provides reassurance: “This is your home.” “This is where your interests are protected.”

Look at iTunes versus Amazon several years ago. Apple negotiated the big deal with labels and Apple took all of the spoils for the first year or so. Amazon came along with less than all of the labels, but they had a value-add in the form of DRM-free. Even Apple couldn’t get that. In fact, Apple had to develop FairPlay just to get the deal.

What Amazon did was compete with Apple on an entirely different playing ground: “You can purchase here with the assurance that you can take your music anywhere.” And Apple eventually got that working for them as well, but most iTunes customers have no idea that their music is DRM-free. I know because they tell me.

Whether most of Amazon’s customers understand DRM is not as relevant as the fact that Amazon benefits from playing nice with the ecosystem.

Take Steam and PC gaming as another example. Long before digital distributions, disc-based games were saddled with horrific copy-protection on CDs that did some combination of prevent legitimate back ups of your game’s media and restrict installing the game on more than one PC at a time. While all the game publishers were busy finding new ways to prevent leakage, Steam started the process of deeply discounting digital video games. “Deeply discounting” is really understating it. But Valve was essentially building monetary leakage into the distribution process. 

That’s useful because if customers believe they are getting more value than they are paying, they will come back. “This is your home and all of your stuff is already here.” That’s the most important aspect of the cloud computing movement for any company. People have to feel that they have persistence in your environment. If you can buy that by writing off your 30% distribution cut and talking your publisher/developer into lopping off another 30% temporarily, then you are building momentum and furthering your relationship.

Amazon gets this. Which is why they price match digital sales. Which is why they sell gamers Steam-activated games… and Origin-activated games… and DRM-free games… The only common-denominator is that you can buy all of these through Amazon. So no matter who loses the next digital platform battle, Amazon can win the war… Or maybe be the arms dealer?

But for now, AutoRip and me don’t really need each other. I stopped buying physical CDs a while ago. But somewhere, there’s a little old lady who has no idea how much she should be loving AutoRip, right now.

If EA and Ubisoft really want to be a competitor with Steam, they should at minimum do what Steam did for Valve games.

Pretty much since the Steam client was released in 2003, Valve allowed you to tie your previously bought (physical disc-based, mind you) PC game keys to it.

As Origin and Ubisoft stand, unless I’ve bought some of their games very recently, I’m a brand new customer. I don’t have any history with either their published or house-developed games. 

While a platform may not be able to control what third-party publishers choose to do with their back catalogs, if a game exists on the publisher’s own platform and there is a list of legal CD keys in some database, it stands to reason that there’s an immediate gift of customer buy-in that you can give your marketing department. 

Much like format shifting in the movie industry, making the leap to your new platform requires a significant amount of faith that you will do what you say you’re going to do for me. Not just now, but 3, 5, and 8 years from now. Both EA and Ubisoft have exponentially more game years in their catalog than Valve does. It’s a real shame to presume that their customers don’t value that.

Whatever it costs to make it so that my original Sims CD registers on your platform will be worth it, because it may convince me that I’m not being sold on a new platform at all: I’ve been on it the whole time and just unlocked new value.

I don’t know about you, but EA has been popping up in my news feeds a lot over the last few weeks. Even ReadWriteWeb, who doesn’t cover games exclusively, decided to list the reasons why EA is on their deathwatch. They’re the only game company I can recall that has people continuing to write articles about how reviled they are. And I’m old enough to remember the EA Spouse incident.

EA v. Steam

As you likely already know, EA’s Origin service has been contending against Steam for over a year, with Origin getting somewhat exclusive access to some EA titles and Steam gamers not getting access to them. It can be hard to follow specifically why, because EA is pointing to some allegedly unfair Steam terms and saying that they are unique and unprecedented in the digital distribution arena. Steam has a few people quoted that they would love to have EA’s games on the platform and that they hope EA would see the value in being on Steam.

EA’s official policy on the Steam incident points all the blame at only one download service (but it’s a big one) and claims some mysterious policy is preventing the new games from appearing. EA only talks about wanting to communicate with and provide updates and support to their players. But I think shoulder shrugging and saying, “We offer our entire catalog, but some games don’t get approved for some reason,” is disingenuous.

What’s really going on?

Because the nature of EA’s rub has been unclear to me, I just asked Quora if anyone knew anything about it. Responses are pretty limited, but the best one so far points to a Shacknews article from last year. In it, it was revealed that Crysis 2 was pulled because it was selling some DLC exclusively through Direct2Drive (now Gamefly). Based upon his comments, it’s clear that EA’s digital boss DeMartini knew this the Crysis 2 distribution thing was going to be a conflict, and it’s likely that EA chose to push through Direct2Drive only to counter the argument that it was excluding 3rd parties like Steam from content.

I tend to look for exceptions to prove the rule. And, indeed, there are similar examples and non-examples where Steam interacts with various versions of the third-party “problem.” Here, I’ll list some:

1. Games for Windows Live games have been historically allowed on Steam. In the cases that I’ve seen, even some updates have actually happened through the GFWL client. BTW, even on a good day, that user experience may be best described as, “Imagine getting through the turnstiles of an amusement park, and then being searched at an international customs counter before you board each ride.” But Steam has permitted that trash for very recent games and it “competes” with Steam.
2. Valve sells its own games digitally outside of Steam. Stores such as Impulse and Gamefly have been carrying their downloads for a while, now. At the very least, that indicates there’s not an exclusivity double-standard and that Valve is willing to share the revenue cut with other storefronts.
3. Lots of games come with retail CD or digital keys that can be activated on Steam. Entire sub-forums are dedicated to finding these at discounted prices to activate on your Steam account.
4. A comment by a Puppy Games dev made it clear that there is no charge to comp Steam keys for your game’s existing customers. So, Steam is not saying, “You use our bandwidth, you pay our bills.” This seems pretty bloody generous.
5. Many games sell DLC outside of Steam (such as via Amazon) that will activate on the Steam copy of the game. Steam gets no additional revenue from those sales, so there is no requirement that all sales must go through Steam.

So, what is the license term at issue?

Even after all that, I still don’t have a definitive answer (because Steam’s agreement with a dev is never disclosed publicly). But, by eliminating all of the above scenarios, I think it’s safe to say that Steam’s unfair term looks like this:

The Game (or product) will offer for sale on Steam all game-related content that can be obtained for it.

This makes sense from a customer experience standpoint, and it reduces bait-and-switch effects a bit. It’s similar to Apple’s iOS App Store rule about digital content, but Apple goes farther and prevents even pointing users towards acquiring content outside of the in-app purchase system (FWIW, EA has games on iOS, too). Steam is playing on a much more level playing field here.

All that to say, this isn’t about communicating with customers as EA purports it to be. I reckon Steam probably still doesn’t care if you want to update pieces of your game using another CDN. Your customers will probably hate it, but you are most likely free to do that even under the new terms. This is about EA’s backhanded attempt at siphoning customers and money out of Steam and into a walled garden where they get to continue closing off the ecosystem.

So feel free to ignore DeMartini when he says things like, ”I am absolutely not at this point saying, ‘hey, it’s Origin versus Steam,’ It’s never been about that.”

Exactly.

Another EA executive is talking to the press, again. This time about unique approach that Origin is taking on digital game sales. That is, they won’t be doing the big 75% off sales that Steam has historically become famous for.

My pragmatic stance is that EA can do whatever they want with Origin. It’s obviously their platform (and, let’s be honest, pretty much just their games so far). I’ve even said that I’m in favor of finding great reasons to ask for more. But as a gamer, I found his remarks about the gamemakers working hard to make the property fairly ignorant.

Let’s work with the assumption that Steam will retain its practice of big, nasty sales semi-annually. The marketplace of digital stuff is less about devaluing any one specific piece of property but, instead, turns the value equation around. The gameplay value of the $50 game you are selling needs to be demonstrably better than the $7.50 games I just bought. Not just one of the games, all of the games. Otherwise, I will probably not buy it.

Nobody, game developer programmers included, really gives a crap about the sanctimonious protection of intellectual property on a sale-by-sale basis.

And if you believe Valve, game sales not only tend to exponentially increase absolute money during the deep discount sale, but also they significantly cause an uptick in the sales of that game after the sale is over. It’s an error to treat Valve as a rogue organization, forcefully thrusting ridiculous prices upon the publishers of the games that they host.

From all available information, Valve seems to discuss its past statistics, behavioral psychology research, and historical findings with the game publishers to let them decide how to proceed based upon that. So, while a gamemaker may be encouraged to set the price a certain way for the betterment of the game’s sales temporarily, I don’t believe they’re suggesting that the games must decrease while Steam must increase or anything along those lines.

It seems far more likely that EA, just like Activision, imagines that digital distribution platforms need their games far more than the games need the platforms. Thus they are setting out to mine their own fortune without paying another party.

The whole devaluing games logic comes from retail shelf space, not from the short digitally distributed historical reality. That is, in the digital world, there isn’t a limited amount of games to push around that are all fighting for a fixed pool of money. There’s no reason to assume that it has to work this way, and that attitude alone is the most significant difference between EA and Valve’s approach to marketing their stores.

We don’t know what the bird in the hand is that the EA exec referred to. But in the long term, the Origin store’s probably looks a lot more like MS’s Xbox strategy where games have a minimum price. And while the EA interviewee insists that, for the first time, nobody could say anything bad about Origin after they announced free 90 day distributing for crowd-funded games, I was reminded of the Super Meat Boy bait-and-switch that Microsoft pulled on XLBA.

This is all a bunch of horn-blowing so far, anyway. It’s prudent to remember that no digital platform maker’s tidal wave can even relatively compare to Steam’s wake. Heck, Microsoft is on their 4th reboot of the Games for Windows Live effort since Steam started selling games; and their logo is on every box.