Freemium Part Deux: DRM in Disguise

In my article, Freemium: It’s Real, It Sucks, It Really Sucks I discussed the latest bait and switch from the gaming industry. The concept of micro-transactions isn’t new; but now instead of it being an afterthought, games are being BUILT around picking your pocket, $.99-$99.99 at a time. Games like Simpsons: Tapped Out show how the model works; take a four hour game, give it away for free – and drag those four hours out to over a year of “click and wait” while offering time-compressing “donuts” at top dollar.

The press is alive with stories of kids racking up $2500+ worth of “donuts” or “Smurfberries” or other such In App Purchases. While I place the blame SQUARELY on the parents for these transactions, it doesn’t help that the game developers are contributing to the delinquency of the gaming industry. Judge Judy likes to use the term “If not for …” and in this case, “If not for the fact that an obvious kid’s game like Smurf Village wasn’t designed and executed to harvest money as much as possible whenever possible, the children playing wouldn’t have racked up $2700 in transactions.”

Let me say that there are reasonable Freemium models out there but they are far and few between; and that gap is closing rapidly as Big Business is learning how to better screw the consumer over. When Freemium is used as a carrot, it can be executed well. When a game is created from the ground up as a Freemium game, the lines of “value” get crossed quickly.

Remember When Freemium Was Called ‘Shareware’?

I liked Freemium back when it was fair to the consumer – when it was called Shareware. Sure, there is still some of that going on out there; get the first couple of levels of the game for free, and if you like what you see – you pay a reasonably fee to unlock the rest of the game. Signed, sealed and delivered.

Today, this model is what I call “Ad Ransomware”. Simple – halt the game every few minutes and slap a GIANT AD on the screen. Technically free to play, but eventually you’re going to tire of that ad being there (and if you’re not, the developer is still getting revenue from it) and pay the ransom to have it removed.

When did gaming become like the Mafia?

Freemium: The New DRM

Game publishers like EA with their recent Real Racing 3 claim that “the people have spoken” and that “they want Freemium” – as evidenced by their self-proclaimed success with the high octane racer. The game reviews of the title are generally negative; citing IAP as too aggressive and ruining the fun of the game. I believe that. What I do NOT believe is that the game is the runaway success that EA is claiming.

But why would they lie?

EA has been been in the news a lot lately, namely for the launch abortion of the new Sim City game – a title that requires a full-time connection to the internet (which went horribly wrong). A requirement that, according to EA, was necessary for a game of this magnitude and followed “their vision” even if it didn’t sit well with gamers. Later, when a cracked copy of the game appears on warez sites (and it worked just fine), EA retracted their statement.

Again, why would they lie?

EA has been one of the most outspoken developers against used games. They were the first to disable online play with used copies of games. They have been first in line to discuss the positives of consoles blocking used game. You see, EA is crying about used games costing them a fortune (remember when PIRACY was the great evil of game publishers? They have a new patsy, it would seem) – that Gamestop is actually the Second Incarnation of Satan. Yet, the numbers belay that:

Looking at just the fourth quarter of 2012, EA’s total net revenue stacked up at $1.36 billion, a 24 percent increase over the $1.09 billion reported at the end of this same period last year.

So wait, EA is raking in $1.36B a quarter, and they are crying poor?

So EA wants to make more money and what business wouldn’t want that, right? It is the American way. Artificially tying their games to a server-side check hampers piracy, after all. Didn’t you hear? All the cool kids are doing it – like Blizzard.

Unfortunately for them, used games aren’t going anywhere – and neither is Gamestop. Believe me, this chaps their ass. They desperately want to find a way to reclaim the “lost revenue” of used game sales – and it turns out that Freemium kills two birds with one stone. Not only does Freemium allow a constant, daily revenue stream (often far in excess of retail by consumers too dumb to realize they are being gutted like a fish) but it finally delivers to them what they so desperately desire; complete control of game ownership.

Game Ownership and Why You Should Care

The bottom line? Game publishers do not want you owning games. It is not in their best interest. After all, owning a game gives you rights. Your rights affect their profit margin. Besides, make games that are disposable in nature and who cares ANYWAY? I’ve already argued that used games are a necessary part of the ecosystem in various other articles and postings – but the publishers need a bit more convincing. They won’t be satisfied until the gaming industry is burned to the ground before they realize that people want to own games.

Freemium takes the removal of gamer’s rights to a whole new level.

First, it allows publishers to “reasonably” tether you to an internet connection under the guise of “just in case you want to buy something …” when in reality, it’s all about control.

Full time connection ensures they have oversight on what and how you’re playing the game. This is worth tons to them in research and gamer behaviors. Of course the tethering allows them to “stop piracy” (tell that to Skidrow, the cracking team that busted Sim City wide open).

Tethering also has an ugly side effect; no internet = no play. In a world where we feel there is ubiquitous internet access everywhere, it sure does seem that I’m without signal an awful lot. Plus, if I have an internet connection, I have better things to do than play games. I suspect I’m not alone. In fact, I’d say my best gaming periods are when I have internet outage, downtime or “no signal”.

Second, Freemium eliminates the ownership model and the responsibilities that come with it from the publisher’s point of view.

Consider this; if you download Real Racing 3 from Google Play – who are you going to contact if you have issues? Certainly not EA; at least, not as the first stop. There is no disc to scratch. No box to create, no famous athlete’s face to license. Sounds win-win.

Of course, without ownership you have no investment. Consider Freemium the equivalent of renting an apartment instead of buying a house. It’s great while it lasts, but at the end of the day – you have nothing to show for your cash. You cannot bargain, sell, trade or otherwise negotiate what you have paid for. I’d call that “bad news” for consumers.

Third, you can’t take it with you – but they can take it away anytime without consulting you.

Oh sure, everyone says Steam is a great thing. They even let you “backup” the games you “own”. You might as well just take a blank DVD from the spindle, write MY GAME BACKUP on it – then throw that in the drawer. Blank or “with backup” is the same thing in the end. After all, if Steam goes away (sure, it will be around forever – just like Google Reader and Walmart Music store) – that blank DVD has just as much chance of running Game X as the backup they provided for you to burn.

Do you REALLY believe that if Steam goes under they will unlock all those backups? If so, you and I need to do some serious business together involving a bridge and some land in New York.  Heck, there are numerous complaints of Steam backups not working even when the server is up.

When EA (or anyone else) decides that Real Racing 3 has made enough money for them and is costing them too much to host and run – they will simply turn it off. Will the game continue to work when it can’t call home? Will your tens/dozens/hundreds of dollars of IAP be safe? Who knows? I don’t – and neither do you.

The best part is, since it is “free”, EA and company won’t even have to shed a tear when they pull it down. The concept of “you can’t bitch when you get something for free” will ALSO be part of EA’s “vision”.

DRM is Bad; Secret DRM is Worse

Getting kicked in the nuts outright sucks. But getting a shiv in your back when you least expect it? That’s worse.

When you buy a game for your Xbox or PS3, you know you can’t copy it. You know you can’t back it up. You do know your rights and limitations with that purchase.

With Freemium “DRM” you have no idea what lies behind the curtain. What do you “own”? What can you reasonably say will still be around tomorrow? What if you get a new phone/tablet? What if your Google account gets hacked? What if EA pulls the server? How much IAP do you have to buy to actually get the game proper?

Truth is – there is no truth. EA (nor Google or Apple) will disclose to you the answers to these questions.

Mange Your Rights? You have no rights; digital or otherwise.

Each and every day, less and less of what we “pay” for is ours to do with what we will. This growing epidemic will continue to spread; whether it’s making EA (or other publishers) more or less money than the status quo. Not because “the times they are a’changin’ …” but because like traditional media (movies, TV) those that hold the keys to the kingdom truly believe they can better profit from your loss; by removing true ownership. By turning your “purchases” into “rentals” – revocable, disposable and outside your control.

Maybe they are right.

But regardless of how their record high profits are earned – in the end, only the consumer ends up suffering. Not just the one that did pay for it outright – but the trickle down customers that could have been exposed to the game, it’s IPs and the company that made it had the title been accessible through traditional channels such as lending, trading and used game sales.

Many people speculate that a video game crash could happen again. Too much product, too much junk product and an all out cash grab by developers.

I guess the times really aren’t a’changin’ that much, eh?

About Shane Monroe

Shane R. Monroe has been doing technical and social commentary writing for over 20 years. Google+