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.

It’s interesting that Steam Guard is being made a requirement for all trades made using the Steam platform. Not because Steam Guard is any kind of scheme, but because the long-term viability of a Steam-based trading system was derision-worthy a few years ago. It’s now hitting the point where Russian money launderers have found TF2 to be a trading system that works for them. 

This doesn’t really prove anything over such a short time span. But if you believe that crime follows the paths of least resistance, the virtual economy in the form of TF2 has been somewhat more lucrative than some of my too-big-to-fail investments in the real world.

A few days ago, RPS published some excerpts from their interview with Trevor Longino of Good Old Games (GOG.com).  One of the parts that stood out to me most was this:

[A steep game discount is] not good for the industry. But users want the option because they never would’ve bought it otherwise. So our stance was, ‘If you’re buying a game you wouldn’t have bought otherwise unless it was 80 percent off, what are the odds you’re going to play it?’ And our users said, ‘We don’t care. Sometimes we like to collect games, or maybe we’ll play them later. That’s not your concern. Just let us buy the games we want.’

This is an apparent flip flop, after GOG had made some disparaging remarks about discounts in the recent past. EA’s Origin spokespeople had echoed similar sentiments, but it was more understandable because 1) They are EA and 2) EA is a game publisher who values its intellectual property more highly than its customers do. But it made sense from GOG’s perspective, because the entire premise of the site revolves around cherishing good games, not stacking them up as if all games are just another number.

But, I’m somewhat forced to point back to my previous article “Hoarding’s Rightful Place is in the Cloud,” wherein I totally called all this. At least to an extent I did. In a vacuum, there’s nothing wrong with trying to make digital games scarce. However, since marginal cost is zero, there’s also nothing really wrong with introducing steep sales often. Once you make your costs of development or deployment back, everything else is gravy.

This is why “Steam Sales and Indie Bundles Prevent More Piracy than DRM (or artificial scarcity for that matter) Ever Has (or will).” Because this is not a battle for a larger slice of the pie, but it’s more about growing the pie of both money spent on games overall and of types of stuff consumed. This is something that Steam fundamentally understands better than anyone else, because they are watching the pricing experiments and keep having the sales anyway. In fact, Valve discounts its own games far lower than you would expect a pseudo-monopoly to attempt.

Contrast the Steam and Valve model against Apple’s own App Store or EA’s Origin or Microsoft’s XBLA. The difference is striking. Valve seems to be very happily doing what most outsiders believe would be cannibalizing itself over and over again. And is snowballing into a very profitable behemoth. And, while we’re comparing Orange (Boxes) to Apples, EA’s complaint about Steam’s one camel-back-breaking rule is incredibly superfluous compared to the restrictions that Apple requires of its App Store participants. And yet, EA happily takes part in that money grab.

The long term reciprocation of this on game licenses might seem sketchy to the developers, but to gamers this is just one way to get their attention. You could always make a really great game and keep the price high and see how it goes. :)

Netflix just put up Indie Game: The Movie, which I had been meaning to watch since it was released on Steam. Here are some thoughts, but if you like anything about this blog, you should just go ahead and see it (on Netflix here).

First of all, the documentary is not exactly full of mirth and cheer. In fact, it’s a kind of depressing tale. It follows the stories of both Team Meat (of Super Meat Boy fame) and Phil Fish (of Fez fame) in parallel as they strain themselves to reach their respective release deadlines. It also has sound bites from Jonathan Blow (of Braid), Ron Carmel (of World of Goo), and others, but the bulk of it features SMB and Fez.

While the romance of game developing is used as a hook early on with some callbacks throughout, the creators are shown over the months of development spiralling outwards in their own ways. Edmund McMillen is definitely the most mentally stable of the three, but he and his wife both seem very emotional around the release of Super Meat Boy.

Part of developing anything successfully is being too dumb to know better, so peeking behind the indie-game development curtain like this feels like it’s a warning sign to kids with aspirations of glory and the easy life. But in the end, despite the horrendous setbacks and the terrible way that Microsoft interacts with its indie community (more on that in a later post), all the trouble and hard work seems to be worth it (spoiler alert!).

I’d recommend this as good watching for indie game fans, but also I feel that it’s education for the uninitiated as to what the indie game community means. For people who remain on the fence about whether or not the numerous indie game bundles provide real value or for those who confuse indie games with the $2 game bin at Walmart, this should be an eye-opening experience.

All of this reminiscing about City of Heroes and how there will actually be world-ending events to coincide with the server shut down has made me wonder, “maybe certain gamers would find some value in a real time-based game-world event happening within the game world.”

Certainly with MMOs on the subscription model, you are basically leveraging real time (and usually real money) against your game time. That introduces a paradox of resources, as the more you invest into that environment, the less you want to see it all for naught. But, every MMO in existence has faced extinction, and World of Warcraft will be no exception. 

It’s always a shame when these shut downs happen, and people are inevitably mad. So, setting the expectation of fun as a slow arc from the beginning might be a way to make the customer more of a partner in the cataclysm at the end. 

I’m trying to think of examples where a massive persistent game was marketed in this way. All I’m coming up with are alternate reality games (ARGs) and those tend to not be played as a video game, but rather using more intuitive skills. I have a feeling that somebody has probably done this in Second Life.

I don’t see MMOs as they traditionally have been done for the last decade continuing into the far future. An experience that tempers your investment hesitance with a gradual ramp towards a climax and then something big might be a nice transition towards a more palatable multiplayer genre later.

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.

Despite what you may hear about the Greenlight nonsense, Steam loves independent developers. Besides the fact that Valve are one, the Steam platform actually accelerated gamers’ acceptance of the indie developer as a noble profession with something to offer you.

I’d say that Valve legitimized Peggle to core gamers by including a free special edition of it with Orange Box. Valve also was one of the first prominent stores where indie games were given equal billing to AAA games. In the lull when consoles looked like the only obvious choice for the discerning publisher, Valve partnered with scores of independent game devs to bundle together their games and to provide value for the ignored PC customer base.

So, it’s not terribly surprising to hear yet another tale of woe about the XBLIG from ticked-off indie developers. As part of the Indie Games Uprising III, a discounted bundle of independent XBLIG games will be presented for the Xbox Live subscribers to obtain. The primary reason for this is that Microsoft is horrible at marketing XBLIG content to the public. This is another example of how Valve (and even Apple, to a lesser extent) get it right by focusing more on the service part and less on their platform.

When you combine that news with the recent release of Steam’s Big Picture mode (which transforms your Steam library into a gamepad-friendly console interface), it becomes very apparent that there is an ever-widening gap between what the current core game consumer looks like and the fronts that Microsoft is fighting on. Maybe it’s smart for them to just ignore Steam and mobile, and Games for Windows Live for the 10th time; just focus on making Windows 8 into a walled garden and wait for the money to grow within it.

But, if natural consumer choice is preserved, I think more folks would go over to the Origin swamp than the Windows Live/8/Metro Game Garden or however it will be monickered. It seems Big Picture Mode couldn’t have come at a more opportune time, then. And with OnLive’s trouble and this Agawi cloud-based competitor binding itself to Windows 8 + Azure, the PC gaming world will almost certainly look a lot different in another 3 years when the next consoles are rumored to be sold.

And the bridge from now til then is paved with respect for independent devs. I really believe that, not because people don’t want to pay for AAA titles (although, they are willing to pay less now than they were 15 years ago). But, because indie devs bring life to stagnant formulas and they do it for a relatively low cost.

Consumer lock-in is another reason. Once you have your first 50 games tied to a service, and the service isn’t awful, you tend to want to continue investing into that same service.  It doesn’t really matter if those first 50 games were 20% AAA and 80% short indie games, it still looks to me like there are a lot of material goods in my list.

I’m going to start using indie love as a yardstick for digital game service respect from now on. Consider doing the same.

Source:

Amnesia developer on piracy: “screw it”

Isn’t this really the only practical stance to take towards piracy?

We sold some games to customers, we built a tribe, and the pirates don’t get counted as something that deserves our attention.

Since the reports a few weeks ago about Ubisoft’s 93-95% claimed piracy numbers, Ubi has continued sending ambassadors out discussing how they are reducing their DRM away from the always-on requirements type to the just-activate-it-on-your-machine type. Tying a game to a machine (or even 5 machines) is still dumb, but not nearly as reviled as requiring one to always be online when server downtime or sunsetting is always a possibility. I guess that if we go from the fire back to the frying pan, we are supposed to be grateful.

It saddens me when I see video game publishers still wrestling over simple customer-satisfaction items like this that are pretty-well solved in the minds of average customers. I look at the video game world as a precursor to the inevitable digital mainlining of most media (mainly the PC gaming world, because the consoles are still acting anti-competitively).

Downloadable music still has a ways to go there, but it’s farther along than TV shows and somewhat movies. But most MP3 customers don’t understand DRM and really shouldn’t have to. Because of the early rifts in digital music rights, there remains a lot of misinformation about where you can play a song you buy on iTunes (the answer is anywhere, now, but at first it was not so) or what to do with music bought from Amazon (drop it into your music device, or import it into iTunes if you roll that way).

It’s odd to me, looking back, that Apple was content to throw away the Fairplay DRM that it developed and move into DRM-free music as soon as it could get the labels to agree to it. Contrast that behavior to Ubisoft’s cattiness when asked by RPS if their DRM had been a mistake. RPS thinks they’re protecting their shareholder’s perspective, but Apple saw a resurgence in its stock following the removal of DRM from iTunes songs.

In fairness, Apple wasn’t producing the music they sold, but their profits were still tied to sales. And, surprise, the world didn’t come down. And people still buy music on iTunes even at their relatively high prices. I suspect that Ubisoft still kind of believes that DRM works, despite all of the evidence to the contrary. And, even if it doesn’t work, as least they’re doing something. If that something alienates the people waving money at you instead of serving them, that something you did was wrong.

The notion of optical discs as a predominant storage medium of the future was dead before I wrote my first post on this blog. So it may seem a little obvious to everyone that companies would be throwing in the towel for their optical disc computer drives. But when Sony is the first major company to withdraw from the PC optical drive market (as of November), all of our eyebrows should raise. Why?

Sony was one of the first compact disc technology developers (the other being Philips) back in the 1970s, when everyone was still rocking 8-tracks or cassette tapes if you were modern. It also worked tirelessly in the subsequent 3 decades to replace its own technologies with more optical formats, such as DVD, minidisc, Super Audio CD, UMD, and finally Blu-Ray. The point is, you’d be hard pressed to find another player more invested in optical discs as a major business strategy for the last 35 years.

To be fair, Sony isn’t abandoning Blu-Ray or consumer devices. This is all about the PC drive division. But, it’s significant still because Sony is admitting that the optical platform isn’t going to expand outside of the consumer relationships it has now. That means, nobody is at home writing out DVDs and certainly not Blu-Rays for family video shows; it’s simply easier to publish it to Facebook or YouTube.

Naturally, Apple told everybody years ago that we didn’t really want optical drives and sold lots of folks on the Macbook Air and the iPad. The laptops that we’re seeing come out since then are going for lighter, slimmer profiles and that means cutting out clunky mechanisms like optical drives.

This all may seem troubling to physical disc collectors and especially the folks who replaced their VHSes with DVDs and hence their DVDs with Blu-Rays (hopefully you skipped HD DVDs). However, it’s actually going to be a good thing when the market shifts away from physical discs.

If you look at the PC video game industry in 2008, retailers were not willing to give shelf space to the small-market PC games when there were console games to be sold. Luckily, Steam was already in a position to sell lots of different PC games at that point with no shelf space concerns to worry about. The PC game market reinvented itself without much trouble at all, and now there is a huge variety of choice and price points.

After the physical disc sector burns off, there will hopefully be a much more interesting digital distribution phoenix that will arise (if it looks like Ultraviolet, something went wrong). And in the mean time, get the content you want on physical disc for cheap and store it on a cheap digital platform like Plex for your own use.