I recently read an article by Dan Gallagher of marketwatch.com. Usually just strictly financial stuff, I was amazed it talked about gamers and why publishers are experiencing a massive drop in revenue over the past few years and are finding their investors skipping town. If anyone is really interested in the numbers, I highly suggest checking out game publisher?s financial trends over the past 10 years. They?re freely available on Yahoo or Google?s financial trend pages. You?d think they?d be able to file for bankruptcy soon.
I started reading the article and thought everything was normal until I got to the explanation of why the game publisher?s investors are pulling out. I just couldn?t NOT write to the guy. It probably is TL;DR, but considering most of those ?analysts? don?t know their head from their arse when they talk about computer gaming I decided clarity was in order.
The following paragraph from the Market Watch report, I believe, is based on ?analysts? not understanding gamer culture at all:
?The culprit for diminished retail sales has been chalked up to several factors, including new multiplayer capabilities on the latest games that allow users to play popular titles like ?Call of Duty? for hundreds of hours, as well as the shift to new formats such as mobile and social games, though some analysts believe the latter?s effect has been exaggerated.?
It skips over several major issues with game publishers to date. I also believe it is the corporate side of game publishers that don?t ?get it? either, as far the issues are concerned.
First I?d like to address ?playing Call of Duty? for hundreds of hours. Considering that Gamers invest hundreds, if not thousands of dollars, yearly into PC and Console games, hardware and accessories, it really doesn?t lend well to the thought of game ?replayability? being a major factor in video game sales. I use a service called Steam, developed by Valve. It is a digital distribution platform for PC games. Steam allows me to add friends to my Steam friends list, recommend and buy/gift games to them and even see the games they?ve recently purchased or played.
Gamers, given the opportunity with major sales, such as the recent Steam Summer Sale, spend gobs of money on new games, whether the old games have a high replay value or not. So, analysts stating that ?playing games for hundreds of hours? is a major factor? pretty much, excuse the term, is B.S. Gamers play games, some play 1 or 2, but most ?Gamers? play at least 4 ? 5 games at a time.
As far as the second statement about mobile and social games, the analysts are probably right. At $0.99 to $5.99 a pop for mobile games, I don?t see this being a major contributor to a drop in PC or Console game sales.
I will however try to explain what could most definitely be impacting game sales.
I believe it all started with the incorporation of EULAs (End User License Agreements). Entertainment Software, in its infancy, wasn?t considered IP or Intellectual Property. It was just property that you purchased and owned. I went and bought a disk of Commander Keen and it was my disk of Commander Keen. Throughout the years, the vast resources of the internet, increased schooling in programming and computer use, people started creating modified games and office productivity software. This presented a problem to the publishers as their IP was slowly being modified and could result in stolen code. This resulted in EULAs being included in games and other software, which stated that you now didn?t own the game anymore. You couldn?t modify the publishers property anymore, since they owned the rights to the software. However, you did own a license that allowed you the use of the software within copyright law. I?don?t know if you?ve ever read a EULA, but I highly urge you to read Steam?s EULA, which recently was made even more unconscionable.
I?d like you to put yourself in my shoes?
I have over 95 games in my Steam library. Most games I bought full price and some I?ve purchased while they were available on Steam sales. So, I?ll use a conservative number, let?s say $30. So, throughout my years of use of Steam, I?ve invested almost $3,000 in-game licenses. But wait? I did say EULA earlier right? Please note that Valve refers to their EULA as a Steam Subscriber Agreement (SSA). If you spent the time to read the SSA you?ll also see that licenses are now referred to as subscriptions. Now, they weren?t always subscriptions. When I was vested, maybe, $1,000 in Steam licenses, they?d still called it a EULA. So, then the company forced the term subscriptions upon its users. The Steam client updated, and asked us to either acknowledge and agree to the new EULA (SSA) or disagree. If we agreed we would continue to be able to have access to our games. If we disagreed, the client would not launch and we would not be able to play our $1,000+ of games.
But, because Steam makes games easily available, has major sales and doesn?t require you to remember 100?s of serial numbers for different games, it still became a giant powerhouse in entertainment software distribution. Here is an excerpt from The Escapist forum:
?Valve co-founder Gabe Newell announced during a DICE keynote today that last weekend?s half-price sale of Left 4 Dead resulted in a 3000% increase in sales of the game, posting overall sales that beat the title?s original launch performance.
Newell also mentioned that new Steam customers jumped 1600% over the same weekend, according to G4TV. Retail sales remained constant.
Sales of Team Fortress 2 went up 106% following a free update to the game. Retail wasn?t left out in this case, with sales jumping 28%.
The massive Steam holiday sale was also a big win for Valve and its partners. The following holiday sales data was released, showing the sales breakdown organized by price reduction:
- 10% sale = 35% increase in sales (real dollars, not units shipped)
- 25% sale = 245% increase in sales
- 50% sale = 320% increase in sales
- 75% sale = 1470% increase in sales?
However, I?ll come back to digital distribution of games in a bit and I?d like to side track to how publishers have been developing and releasing games.
Publishers do not like investing money in the unknown. There?s been a trend for the past 9 years, just like in the movie industry, to ?play it safe.? Games or developers that were highly successful get swallowed up by big publishers like Activision, Electronic Arts, or Ubisoft (and others) to fill their investor?s pockets with known successful game designs. Call of Duty, Medal of Honor, Crysis, Silent Hunter, etc. Game publishers buy successful companies and have them develop sequels to these successful titles so they can reap the monetary benefits of their inevitable success. Let us look at Call of Duty:
Original Series
Call of Duty
Call of Duty: United Offensive
Call of Duty 2
Call of Duty 3
Call of Duty: World at War
Modern Warfare series
Call of Duty 4: Modern Warfare
Call of Duty: Modern Warfare 2
Call of Duty: Modern Warfare 3
Black Ops series
Call of Duty: Black Ops
Call of Duty: Black Ops II
Console and handheld games
Call of Duty: Finest Hour
Call of Duty 2: Big Red One
Call of Duty: Roads to Victory
Call of Duty: World at War: Final Fronts
Call of Duty: Modern Warfare: Mobilized
Call of Duty: World at War: Zombies 1 and 2
Call of Duty: The War Collection
Call of Duty: Black Ops Declassified
So, here we have one major contributor. Repetitive game titles that bring limited or no new content to Gamers. Why would we want to play something in 2012 that we already played in 2003? Consequently, once a title doesn?t perform well, the developer of that title gets split up, and occasionally redistributed throughout the publisher?s development staff, or fired. Hence, overall creativity bottoms out and slowly independent game developers get squashed by the big players.
Additionally, lets look at how publishers have released games in recent years. Let us use Creative Assembly (CA) as an example:
CA developed a major title called Shogun Total War (STW) in June 2000. It brought them huge success. They continued on to develop Medieval Total War (MTW), then Rome Total War (RTW), which was another major successful title. Then came Medieval 2: Total War (M2TW), followed by Empire: Total War (ETW). Throughout the development of each of the titles after Shogun was released, CA had to patched each game days and months after release. However, when a new title was released, issues from the previous title either migrated to the next one, or got progressively worse.
Consequently, ETW was not even in a working state on the day of release. Gamers spent the day pre-loading the game and when they entered the license key, the key was not recognized. This meant Gamers could not access their game. Now, one of ETW?s major selling points was ?Naval Battles? and Naval Invasions by the game?s super intelligent AI. Yet, those things were actually non-existent. Pathfinding for units was broken, the game AI was glitchy, etc. The list would be more reading than you already want to do. Some of these items were addressed months after release. Some game-play issues were not addressed at all, as if support for the game wasn?t even worth continuing.
Now consider that the previous titles had a full color fold-out map, a full color fold-out chart of skill and progression trees for ALL the units in the game and even had a poster. So, I decided to invest $70 in a Special Edition of ETW. You could imagine how I was a little perturbed.
I?m not even considering the fact, that CA advertised a ?special? map, a ?special? art booklet, a History Channel DVD of the Revolutionary War of 1775 and a special in-game unit you could use, with the Special Edition. The map was a pure black and white line drawing (not grey scale), like someone just traced a plain outline of the world. The DVD was really only a part one of an entire series and didn?t show much ?Total Warish? content at all. The 5 page mini-booklet of game development art had drawings that were plastered all over review websites that were offered the material as media content for their sites.
Consider please, that review magazines and websites, like PC Gamer, gave ETW a 9.4 rating! I honestly couldn?t see how they even played the same game. These issues weren?t just mine? hundreds if not thousands of buyers experienced the same things I did and posted their discontent on forums.
Since that day, I have refused to buy any title from CA on release day.
Now let us look at Digital Rights Management (DRM). In the days of Neuromancer (a PC game from 1988) we used to have in-game questions, that could only be answered by looking through pages in the game?s physical manual, that verified that we actually bought the game. There were code wheels, code charts that weren?t able to be copied on xerox machines because of the dark paper/lettering, etc. Then, game publishers started resorting to serial number and license keys, which progressed into true DRM such as Star Force, SecuROM and other almost malicious software that behaved like root-kit viruses. They were untraceable and you couldn?t remove them from your computer. Yet, if you had software installed, such as Daemon Tools, often used by pirates for mounting virtual CD/DVDs, it would prevent the game from starting, regardless if you had a real CD in the drive and the game previously authenticated fine with a legitimate key. Occasionally PCs would actually freeze, exhibit performance issues or even blue-screened without the ability to get back into the operating system, due to DRM such as SecuROM. To their credit, since those days, DRM vendors have become a bit more open and have given people the tools to remove their software or update it regularly to prevent major issues.
However, since DRM was so intrusive, digital distributors like Steam, Direct-2-Drive, and Impulse became vastly popular. Because of the high success of Steam, publishers opted to start using Steam as their distributor. Empire Total War for example, was available through Steam, yet you could also go to a brick-and-mortar store to purchase it as well. However, even though you had the physical disks and license key, you were required to use Steam to launch and run the game. We?ll get back to that particular point later.
Correspondingly, because of Steam?s awesome success as a digital distribution platform, it meant that publishers could use Steam?s service to increase sales and DRM to reduce piracy.
Because of this success publishers like EA and Ubisoft started development on their own distribution platform. EA had the EA Download Manager (EADM) to try to compete with the Steam platform and Ubisoft continued to utilize Steam for some time, and still does. Today, EA morphed EADM into the Origin service and Ubisoft created uPlay, both online digital distribution services.
Ubisoft also went a step further and developed a highly malicious DRM called OSP, or Online Services Platform, because of the bad reputation of SecuROM and Star Force. This meant games would require an internet connection to not only authenticate the game as being legitimate, via a license key and Ubisoft account, but also required the gamer to stay connected to the internet 100% of the time, or lose the ability to play the game.
OSP was first rolled out with Assassin?s Creed 2 and Silent Hunter 5, two highly successful Ubisoft titles. Since the use of OSP and the need for a persistent internet connection (which by the way was not, and in some cases still isn?t, listed in the game specifications before purchase), OSP has had nothing but problems because of infrastructure issues with Ubisoft?s authentication servers. A gamer could not even fathom the necessity to require an internet connection to play single player games like Assassin?s Creed 2 or Silent Hunter 5. Gamers couldn?t play the game they had purchased whenever and however they wanted. This was the primary reason why I?ve refused to buy any Ubisoft title since Assassin?s Creed 2, despite the fact that it is one of my favorite series, along with Silent Hunter.
I?ll also use my father as an example? a?US Air Force Lt. Colonel Retiree and avid RV traveler, my father loves Diablo, a single player game created by Blizzard. He played Diablo 2 into the dirt. Yet, when I explained to him, that Diablo 3 would require him to always be connected to the internet, he refused to buy it. He would not succumb to someone dictating when and where he could play his game.
Similarly, Electronic Arts and Ubisoft have done the same to their consumer base. They?ve plagued their ?fans? with beleaguering DRM and authentication requirements throughout the past 8 years. Legitimate buyers of entertainment software, Gamers, have been unduly burdened by the very people who should be kissing their feet for paying their salaries.
If publishers spent more time worrying about producing a solid, functional and working title, instead of trying to figure out more ways to restrict piracy (which they have managed to barely stave off to begin with, no matter what their analysts say), they might actually manage to increase their sales. One would also question their business strategies, considering that a popular series, a solid and very strong title like Battlefield 3, developed by Dice under EA, would require a 100 million dollar marketing campaign?
Instead, publishers like Ubisoft and EA followed in Sony?s footsteps and started amending their EULAs with Class Action Waiver clauses. Sony realized after their two month extended PSN (Playstation Network) outage, that they would reap the wrath of their users because of Sony?s own incompetence. It wasn?t the user?s fault that Sony had a network intrusion and 77 million user accounts, log-on accounts, including billing and private information were hacked. Yet, the new Class Action Waiver clause was added to their service after that incident so that the company could go about its business without too much of a blip, even if they screwed up to begin with.
Consequently, EA and Ubisoft followed suit. They added similar clauses, thereby limiting Gamers to only arbitrate on publisher?s terms.
Here?s a recent story that helps explain why this is a problem:
A friend of mine, a soon-to-be lawyer in Jacksonville, and a gamer, was in the Army. He played a game developed by Blizzard that had a gamer created modification called DOTA (Defense of the Ancients). To play the game, you?d have to log into Blizzard?s online network called BattleNet. Like many vets, my friend was stationed in Afghanistan and Iraq and he did not have access to play DOTA for several months. When he came back state-side he tried to log into BattleNet to play DOTA. However, his account appeared to be locked, so he contacted Blizzard?s technical support. They told him that his account was banned for cheating and that if he had issue with this, that he would have to fly to California and arbitrate with them to get his account reinstated. They accused him of cheating during the time he did not have access to the account.
I?m sure that my friend would not go to his law firm (where he was interning), and tell his boss that he?d like a few days leave to arbitrate with Blizzard over getting a video game account reinstated. Plus, the $500+ air fare and hotel stay and the stress of having to deal with an entire legal team vs just himself. Just to play a game he?d legally purchased? entertainment? something that is intended to be fun and enjoyable.
Now, let me come back to Valve and the Steam digital distribution service. Steam appeared to be the last vestige of a company that somewhat respected their consumers. Sure they pulled a fast one, required people to re-sign a new EULA, now called SSA, made people accept the fact that the game licenses they previously owned, now were ?subscriptions.? Steam recently announced a change to their SSA, stating that they, too, will include a Class Action Waiver clause.
Now, my games are not just ?not mine? anymore, but if something goes wrong and my account gets frozen or banned, I?ll lose access to over $3,000 worth of games and have to arbitrate over my reinstatement? I?ll lose access to $3,000 worth of games because I refuse to give up my right to use the power of the masses against the publisher? What about games that I have the physical software and license for, that I didn?t purchase through Steam, but require the use of Steam/Origin/uPlay to play?
Conversely, by all these requirements, more and more gamers consider piracy because they?re already being treated like criminals. Most people who have issues with, for example, Assassin Creed 2, and not being able to play it anywhere they want. Those Gamers may download a pirated, or cracked version, which will allow them to do exactly that. Gamers also go to sites that host game?s cracked executable files to allow games to run without the CD in the tray so they are not limited by publisher?s increasingly restrictive DRM.
Publisher?s Quality Assurance is virtually non-existent as is evident by games that are nearly unplayable on release.
Some publishers drop support of a game months after the release due to the flaws being a major money sink.
Publishers treat legitimate Gamers like criminals, dictating when and where their purchases can be used.
There is no legal precedent or judicial system to support Gamers if the above issues become problematic.
The real problem is, publishers don?t get it. The corporate world doesn?t get it. Hell, the legal world doesn?t care. There?s no protection out there for gamers?
Only the gamers get it, and they?re the ones being crapped on by the very people they?re trying to support.
?????????????
Now, if you survived through reading that, what are your thoughts on the matter? Do you think that I?m just freaking out, or should we really be worried? If you?re really worried and would like to make a difference, or at least be an informed gamer, I suggest checking out ReclaimYourGame.com and GamePolitics.com.
References:
http://www.marketwatch.com/story/videogame-makers-seek-way-out-of-slump-2012-08-09
http://store.steampowered.com/subscriber_agreement/
http://www.escapistmagazine.com/forums/read/9.383297-The-actual-Effect-of-Steam-Sales-or-putting-that-one-EA-argument-to-rest
http://www.geek.com/articles/games/ubisoft-drops-drm-but-future-games-require-internet-connection-20100127/
http://bf3blog.com/2011/04/battlefield-3-launching-this-november-with-a-100-million-ad-campaign/
http://preview.tinyurl.com/game-publisher-5yr-financials
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Source: http://geeksmash.com/games/video-games/downward-spiral-of-gamers-rights-81312/
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