Why DRM Doesn’t Work
I don’t have to tell you that DRM has been a hot topic in 2008. Headlines have flashed across gaming and tech news websites repeatedly, including this one, which published two articles in the later half of this year, one about the horrible, broken DRM supposedly protecting the PC version of Grand Theft Auto IV, and another general article giving a brief history of popular DRM arguments. Both of these articles were extremely effective at explaining the topics they covered, but I want to argue one thing, and one thing only - that DRM is ineffective at stopping piracy.
The concern about piracy of games is not a new one. Games have always been “pirated”, although in the infancy of the gaming industry, pirating a game was a more personal affair, and therefore was not considered to be as large a threat to the industry. While it had always been fairly easy to make a copy of a game, distribution of that copy was difficult. If you wanted to give someone a copy of Quake, for example, any exchange of information was likely to be done through a physical swap. Broadband technology just wasn’t available yet, and because a physical exchange of the data was needed for piracy to occur, it was unlikely that the common person would do anything more than make a copy for a friend. It is one thing, after all, to make copy a game and distribute it to a friend - it probably feels more like sharing than copyright infringement, and some would even argue that sharing is exactly what the exchange represents. Mass distribution would require loading up a white van full of pirated content, but that amount of effort only appealed to pirates who wanted to re-sell bootleg copies of games and other media.
Then broadband Internet came to the masses. Suddenly, a new method of distribution had emerged, one that required virtually no effort for any of the parties involved. Someone who wanted to make a pirated copy available merely needed to upload the file to a public place or make the file available on a torrent, while those who wanted to download pirated material could do so with a few simple clicks of their mouse. Piracy became easy. To speak of it in economic terms, the opportunity cost of illegally distributing or downloading copyrighted material became very, very low.
“The digital age has actually resulted in a dramatic increase in the amount of information available to those who are keeping an eye on piracy.”But it wasn’t just the availability of copyrighted content that resulted in the current situation, one in which many publishers see piracy as a dire threat to their profitability. Equally important is the fact that digital distribution of copyrighted content is relatively easy to track. Before, if a customer shared a copy of a game with their entire family by burning copies of the disk, there was no way that those who made the game would know. The exchange of copyrighted material was out of sight, and therefore out of mind. Digital distribution changed that. Companies gained the ability to make a tally of how many copies of their games were available for download by searching websites that encouraged piracy. In addition, every torrent program available actively lists the number of people seeding and downloading a particular file. The boldest pirate strongholds, such as The Pirate Bay, even have lists which display which files are being downloaded the most. Although the Internet is often seen as a place where people are kept largely anonymous, the digital age has actually resulted in a dramatic increase in the amount of information available to those who are keeping an eye on piracy.
It is the ease with which companies can now track piracy which has caused the current climate, not the ease of availability - if copyrighted content was somehow easy to illegally obtain, but companies had no way of tracking the number of people who had obtained their product without paying for it, then companies would not have changed their behavior. A company cannot react to a trend it is not aware of.
But companies have been aware. They have been bathed in data regarding how often their content is being pirated, and this data has rarely been encouraging, no matter if you’re an independent developer or a big-name publisher. Most figures regarding the rate at which games are pirated, in relation to the rate at which games are purchased, indicate that the number is probably well over 50%. Infinity Ward, the studio behind Call Of Duty 4, has claimed that the piracy rate is “astounding,” while independent developer 2D Boy claims that the piracy rate of their indie hit World Of Goo approaches 90%.
Those are understandably scary figures, but there is a problem with how many in the game industry interprets these figures. The knee-jerk reaction from most developers and publishers has been to hurl these figures up like a banner, proclaiming that if it weren’t for piracy, their businesses would be in far better shape. But there is a problem with that argument, and it comes back to point I made earlier about the low opportunity cost of downloading copyrighted content. The claim often made by the games industry is that a pirated copy of a game is essentially a lost sale. This is a rather egotistical assumption, however, because games are not free. It is wrong to assume that anyone who pirates a game is someone who would want to pay for it. You don’t need to be a genius to figure out that if a person can obtain a product at the cost of a few mouse clicks, they will be incredibly inclined to do so, even if the product in question isn’t one they’ve previously desired. If, for example, you told me that I could obtain a bag of chips by pressing a button, I’d be would do so, even if I wasn’t hungry. Maybe I would use them, maybe I wouldn’t - the point is that they cost me nothing more than the second or two I spent pressing the button, so even if I never actually use this metaphorical bag of chips, I haven’t lost anything.
“You don’t need to be a genius to figure out that if a person can obtain a product at the cost of a few mouse clicks, they will be incredibly inclined to do so, even if the product in question isn’t one they’ve previously desired”This basic misunderstanding between pirates and companies is the reason why anti-piracy measures will never work as a means of increasing profits. Game companies assume that if they decrease the ease with which people can pirate their game, they will increase their sales. But that is not the case. The vast majority of people will, if they lose the ability to download an illegal copy of a game, simply choose to not pirate the game and not purchase the game. I’m not making this up, either - independent game developer Reflexive published an article on Gamasutra about their experience trying to curtail piracy to increase sales. Their conclusion was that making pirated copies of their game more difficult to obtain did not increase sales. And this, mind you, was regarding game that only cost 10 dollars to purchase.
“It is silly to believe that game companies are better off working against their customers than with their customers”In the end, attempts to decrease piracy and increase sales not only fail to have their intended effect, but they actually cause the opposite result. Although the executives of companies like Rockstar and Electronic Arts seem to be essentially ignoring the outcry of gamers angry about how DRM programs like SecuROM are adversely affecting the games they’ve legally purchased, their failure to acknowledge the problem isn’t going to make it go away. Take a journey over to the Amazon product pages of games like Crysis Warhead, and you’ll find that despite the fairly solid quality of many titles, those which choose to use restrictive DRM are attracting massive amounts of negative publicity. Mass Effect, Far Cry 2, and Spore are all titles which have been hit by negative reviews by consumers on numerous websites, and there is no reason to believe the negative press will end any time soon. Meanwhile, game companies like Stardock continue to do well for themselves by making fun games which do not restrict how the consumer chooses to use them. Public relations does matter, and while it is impossible to quantify how many people may decide not to purchase a game because of the DRM safe-guarding it, it is silly to believe that game companies are better off working against their customers than with their customers. As has often been ironically pointed out, the current state of DRM causes many consumers to be more satisfied with an illegally downloaded game than a legally purchased one.
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