Why online activation sucks

[AstralWanderer]

Originally Posted by TippeX

drm exists because of piracy, there's no argument there..

Well, I really do have my doubts here. Piracy seems to be more the excuse than the reason and given that obnoxious DRM makes warez a better product, it begs the question: are games publishers chronically stupid or is there a hidden agenda?

I'd go for the second, in part due to a cynical nature but also since I find it difficult to believe that any publisher would be prepared to alienate even part of their customer base without good reason (long post follows - please position your pillows now....).

Consider the games industry currently - we have a continuous stream of products, all competing for limited marketing and shelf space. Retailers therefore savagely discount anything more than a few months old in order to make room for new releases. This means that even (or especially) AAA titles have only a couple of months to recoup their development costs. At the same time, games are initially released in an increasingly buggy state, meaning that those who buy "early" (before the first one or two patches) are likely to have serious quality issues.

On the other hand, gamers who purchase late not only benefit from greatly reduced prices (case in point, I picked up a new copy of TitanQuest - Collector's Edition for £7 = US$12 just 7 months after its release) but also a better gaming experience. Correspondingly, the publisher will see little or no profit from such transactions.

The early birds on which the industry relies are getting repeatedly burned. This is clearly unsustainable.

Now digital distribution could be the Holy Grail here. No retailer/distributor margins to worry about, no physical production/transportation/storage costs and best of all, no need for the savage discounting to clear shelves of old stock. If publishers can create their own digital distribution network, then they could even control pricing to a large degree, limiting discounts and maximising profits.

The problem though, is getting the gaming public to embrace digital distribution and, for each publisher, getting their electronic store installed on as many PCs as possible. The more installs, the better their exposure and future sales - but also the better their negotiating position in terms of acquiring exclusives on new products ("Hey developers! We've got 60 million installs of EnemaApocalypse ready to market your goodies! Our royalties may be a little less than those of HotMoistAir, but we've got three times their marketshare - sign with us!").

Building an installed software base is normally a long, hard slog. But product activation can provide a short cut.

The game plan runs as follows:

• Include online activation with all new games - make it lightweight to start with (i.e. one check per install), just to get people used to the idea.
• Prepare your electronic store.
• Wait until your average customer has a few games using activation.
• Tighten up the activation to check on game startup - ensuring that subsequent changes can be forced through quickly. Apologise to customers but explain that this change is needed "to fight piracy".
• Make installation of your electronic store a new activation requirement. Sweeten the deal by offering a discount on the first purchase - the stick being that refuseniks lose access to any games bought from you previously.
• Now you have a guaranteed market, pressure users into a subscription (e.g. charge an annual or monthly "maintenance fee" if no new games are purchased during that period).
• Bask in your newly acquired, steady income stream. Flick finger at Blizzard.

The downside for gamers? Having electronic store software from multiple publishers, some or all of which may use popups to push their latest wares could make this the new adware nightmare. Having subscription fees to pay to multiple services (which you'd have to keep up or lose access to all previously bought games) would be unpleasantly pricey. And publishers, with guaranteed monthly income regardless of the quality of their products, may then focus on recruiting new customers ("Free Game! PS Online Activation and Account Creation Required.") rather than rewarding existing ones.

Now this scenario may seem a little far-fetched for some - but it's the only one I can see where online DRM actually provides a benefit for the publishers pushing it, to compensate for the lost sales. And some electronic store systems already seem close to completing the above steps - anyone think they would drop their Steam account if Valve added a maintenance charge?