I am so UNBELIEVABLY sick of every single industry news article focusing on the new Xbox ONE and its DRM. For those of you under a rock (and who probably won’t care because the XBox One won’t work under your rock) Microsoft announced in the past month details on its new video game/media console coming out this fall. What has every single idiot in the media focused on in these new tidbits of information? That gamers won’t be able to share games and buy used games like they are used to doing. (GASP!)
Seriously, is everyone in this industry an idiot? Does no one else see what has happened with digital media in other industries in the past 20 years to know that strict DRM is a GOOD THING??? Yeah, I said it. DRM on consoles is a good thing. Come to think of it, it is a GREAT thing.
Let me explain.
First of all we know that every human being in the world only cares about themselves. Hardly any of us are Mother Teresa types of individuals willing to put others first. So everyone just looks at DRM on consoles like the idiots who sit on welfare here in the US and they refuse to look for a job because they think they have somehow “earned” the right to these benefits. “I bought this game, so I should be able to do whatever I want with it.”
Why has no one dug through the archives and looked through the media hype behind the change between producing music on CDs (what are those? are they like an 8-track?) and the release of legal music for download that would be (OMG!) limited to use on just a couple devices in your household. Remember that? Napster? Lawsuits? Everyone swore they would boycott buying music through services like iTunes. How has everyone forgotten? Paying $1 for a song? Outrageous remember!!!???? Of course now I have a Rhapsody account that I pay $15/month and use on 3 computers and 3 mobile devices for downloading songs and streaming on as many devices as I want. I wonder what Spotify would have looked like in 1999 if it was side-by-side with Napster?
Games are no different than apps, music, video, etc. Artists and programmers develop something that is delivered to consumers as bits and bytes now. Video used to be slides, reel-to-reel, VHS and even weirder distribution like LaserDiscs. Now ever single cable provider offers shows and movies on demand. Services like Hulu, Netflix and now Redbox offer TV shows and movies streaming anytime you want. Guess what? It won’t be long before brand new movies will be released digitally to consumers instead of through movie theaters. Old fashioned distribution channels drive up prices needlessly.
Apps have had the easiest road of all, simply because they were able to start from scratch. Apps didn’t used to come delivered on a physical piece of media. No one waited by the mailbox for their latest app to arrive via the postman. No one camps outside a Best Buy waiting on the latest release of an app at midnight. So there never has been any arguments with consumers complaining that they can’t share apps. My wife has an iPhone 5, I have a Windows 8 Nokia Lumia 822. We both have bought Angry Birds, Plants vs. Zombies and many other games separately and NEVER ONCE did I think that it seemed wrong to buy the same exact games twice.
Why is that? A couple of reasons that all of the morons whining about Xbox One’s DRM keep failing to address.
This leads right into my points for Microsoft to follow and take control of this situation and own it. I am sure they follow my blog of course. 🙂
1. Distribution – Honestly, this one is super simple. But it is also the hardest to break kind of like oil companies and electric cars. There is so much dependence on these greedy and unnecessary retail companies to help sell their games that Microsoft is afraid to cut them off completely. Stop being pansies and push digital downloads over physical discs. Do the one thing that we all know is possible, make digital downloads cheaper.
Distribution methods now are archaic, expensive, not necessary and honestly not good for the environment. I run a retail store and I know wholesale prices of our physical games are $48 each for $60 games. Wholesale companies probably make $5-$8 per disc. Larger companies like Target, Walmart, Best Buy and Gamestop get them direct from the manufacturers and probably pay $40/game.
Before that level there are the actual manufacturing plants that produce the games. I interned at Sony Digital Audio Disc Corporation here in Terre Haute, IN when I was in college and the last I knew all PS3 games were made right in that plant. The cost for making a physical disc in that plant including all molding, artwork, boxing, wrapping, etc was under a buck. The plant itself sold them out to the next level of distribution for $7 each. Those prices might be different today, but the ratios are probably the same.
I believe that there is $25-$35 in costs associated with delivering a physical disc. And our poor planet earth now has to deal with 750,000 copies of Madden 07 that no one wants to collect/play/sell/trade anymore along with hundreds of other titles.
2. Sharing Digital Games – Don’t try to reinvent the wheel here Microsoft. You can follow the lead of iTunes, Rhapsody and others by allowing content to run on “X” devices. Or you can follow the lead of smartphones and other app stores and literally just allow them to play on the one device. Stop making things complicated and trying to let friends share them with friends on Xbox LIVE or 10 family members share them. All you are doing is trying to appease the media because they are calling you a big evil corporation and confusing the dickens out of the rest of us.
Once you are all digital, sharing is a non-issue. We don’t share phone games/apps, we don’t share Steam games (but they love to sell them in bundles and you can “gift” codes to your friends, genius moves that are available once you embrace all-digital distribution) so we don’t need to share Xbox games.
3. Lower the Price – I know I mentioned this above in the distribution example, but this could perhaps be the single most important factor in the entire debate. If your new DRM allows you to limit the play on a digital download, then you are saving $20+ per game by not using standard retail channels for physical games. That means you can AT LEAST price brand new titles at $40/game right out of the gate.
But don’t stop there, the app model I talked about before where my wife and I both have purchased the same game to play on each of our phones works because the apps are cheap. If you truly go all out and control distribution of games physically and focus on digital distribution you should be able to sell more games that previously would not have been a sale at your level (used games now generate $0 for Microsoft and publishers). Standard economics also tell us that if the price is lowered you will do more volume.
Valve is a great example for how games can be sold digitally at a greater volume with price discounts. Currently console manufacturers have no way to put any of their games on sale for a weekend special. Everything has to be done through retails stores. It is so difficult to have buyers make instant purchases based on impulse that a weekend digital sale would produce. Xbox should know this, they have been doing Deal of the Week specials forever on Arcade titles and older retail games that can be digitally downloaded.
So Microsoft can make more money and consumers can buy games cheaper. Who would be mad about that? Retailers.
4. Call out Publishers – It is like meeting behind the school yard for a fight. You get out there and your friends all day have told you to finally put an end to the school bully’s reign of terror. When you get out there and face down the bully you glance over your shoulder and your friends are nowhere to be found. Gulp. Maybe this wasn’t such a good idea.
The same thing has happened to Microsoft with publishers. We all know that meetings have taken place between publishers and console manufacturers to try and figure out how to stop used game sales. It is so much baloney when the publishers are now coming out and saying “we support used games and retail outlets”.
We all know that publishers stand to gain a sizable amount of money with DRM policies that are strict and no used game market. They tried the online pass scenario but of course that didn’t work because consumers considered that as an “add-on” product instead of a portion of their actual game purchase.
5. Tell Big Box Retail to Take a Hike – Its time. Don’t be scared, pulling off the band-aid will only hurt for a little bit. By making a clean cut at the same time as everything above it will be a non-issue. Think about this scenario:
On Release all Xbox One games are download only. PS4 games are all disc or download. PS4 games are $59.99 while Xbox One games are $39.99. Game Over. We don’t need Target, GameStop, Best Buy or any other retailer to deliver our games any more. Put a fork in them, they are done.
The good part about all of this….
Microsoft you still have plenty of time to clear this up and do the right thing. It might be tough for now, but it was tough for Apple when they started iTunes and it was tough for Valve when they started Steam. Look at both of them now.
Here is another suggestion: Stop letting the fluffy PR folks talk that are trying to “spin” this DRM stuff. Duct Tape their mouths shut and let more of the brains behind the scenes give us their views.
Here is a non-verified leak from a Microsoft engineer that explains their point of view that is TOTALLY different than the sissy-mary junk that MS has been spewing at their press conferences so far:
Whoever that guy/gal is… put them in charge of the remainder of the PR content dealing with DRM. I honestly believe that is a legitimate source of information because EVERYTHING they are saying makes sense for what the future is going to be like.