Showing posts with label Opinion. Show all posts
Showing posts with label Opinion. Show all posts

Thursday, October 2, 2008

OPINION: Hindsight is 20/20

The topic du jour seems to be DRM, both on my own blog and around industry news.  With the recent development of Spore/EA’s stance on Securom and other DRM practices, it seems that we are headed towards the same road as what consumers are currently seeing in the music industry.

With Napster and MP3 gaining huge momentum in the mid 90’s, music industry noticed that their sales of physical media were declining.  There were two possibilities for this:

a)       People are now pirating songs and downloading them illegally because of MP3’s

b)      People are realizing that songs in MP3 format produced a far better listening experience logistically and prefer a medium change

And we all know which option the music industry, mostly RIAA, choose to see as the reason for declining sales.  So what we have then is the evolution from heavy DRM which really started with audio CD’s that could not be played in every CD Player as they were formatted in CD-Rom format.  These were not readily introduced until 2002 while MP3 momentum continued.  What we can see is that in the beginning, the majority of consumers (read: over 50% of consumers – exact numbers are irrelevant in this discussion) were still buying their music.  There were a growing number of people that were interested in MP3 technology but that was relegated to mainly the tech savvy crowd and those that were able to afford $300 MP3 players that held 512MB of music.  In fact, more often than not, music was being “dubbed” onto other CD’s but not for the reason of not paying for your music, but for a way to create your own “mixed-tape” CD. 

I remember when there was talk of “burning stations” that would allow you to buy individual songs from a multitude of artists and labels and the machine would burn you a custom CD of those songs.  I personally was very excited by that possibility and believed it could have been commercially successful.  What the industry decided instead was to lock down CD copying (which was readily cracked anyway) which drove more legitimate users to seek alternative means.   If you told Suzie Soccer Mom that her new Tom Jones CD may not be able to play in her car’s CD-player (the most common player unable to handle DRM CD’s in the early 2000’s), she would have a fit.  She would ask the salesman at her local big boxed retailer what her alternatives were and there would be separate CD players with car adapters or this newer product called an MP3 player, which would allow her to fit hundreds of her favourite songs on one small device that won’t even skip!  When she gets this home and realizes that there isn’t a place where she can buy these songs in a MP3 format, she inevitability asks her teenage song what to do and he in turn sets her up with limewire.  This is only one scenario but most outcomes are the same.  This would also coincide with the success of iTunes and the iPod as the only player capable of accessing these songs. 

Now Apple does have their own DRM in the form of fairplay but it’s less intrusive and much more behind the scenes than Microsoft’s WMA’s or Sony’s DRM rootkits.

Fast forward to 2008 and what we have now is a music industry that is facing extinction in physical media sales and a giant elephant in the iTunes store.  iTunes and Apple are making money on music hand over fist and they want a piece of it.  And the only way to attack this problem is to offer the consumer a better alternative – that would be DRM free MP3 music.  E-tailers such as Amazon have already been selling DRM free music at a fraction of the price Apple is selling them.  This should have been the action in the very beginning but who’s to say that without iTunes, we would be without iPods today.  Although I believe that there will always be someone to step up and fill the void if it wasn’t Apple, it would have been someone else. 

We can take this same argument and apply it to the video games industry as it also sits on a precipice of similar elevation as the music industry did 10 years ago.  The tech savvy will always find a way to hack your DRM.  The major difference here is that there are a higher concentration of tech savvy users in the PC gaming sector than in the music scenario.  But if the industry offers a unified way to organize, distribute, and produce clean, consistent, and stable software, I believe sales will increase and piracy will decline (not by much but at least sales will increase).  If someone like me who can pirate my games quite easily would rather buy a game from Steam than pirate it, then I’m sure there are many others out there that would follow suit. 

Which is why I’m very excited by websites such as www.gog.com .  They are owned by Stardock, the Godfather of DRM free gaming, and are releasing working, supported, DRM free “Good Ol’ Games”.  Games such as Fallout 1 and 2, Decent, MDK, etc.  These are games that I’m very fond of and can remember clearly spending many hours playing.  Most of these games I have either lost or damaged the CD’s to or are simply incompatible with the latest operating systems and video cards.  But a site like GOG sells digital copies of these with working patches for XP and Vista while promising DRM free use and support. 

As I have said before, I’m not qualified to dissect the ins and outs of the industry or their business models.  I can only speak as a tech enthusiast and end user.  But to that end, EA and Activision/Blizzard seriously needs to take notice of models such as these because one day, an iTunes for PC games will happen and they will be left in the dust because they were too busy writing new Securom code (in the case of EA).  If I had my vote, I would like to see Activision/Blizzard merge with Valve and redesign Steam to follow a relaxed iTunes model.   

Wednesday, September 17, 2008

OPINION: Of Mergers and Slap Shots

With the stock market crash on September 15, lots of investors and advisors were scrambling to make sense of what happened.  This isn’t a financial blog so I won’t go into the details but I will say that the tech industry will be feeling the pinch right away.  This is an industry that is still cautious from the dot com boom and bust of the 90’s.  One of the ripples you see that already touched the tech sector is the EA and Take Two games merger that was just scrapped on Sunday September 14th. 

 

There were lots of speculations on why Take Two was still holding out after EA continued to come back with counter offers.  That’s a moot point now since EA decided to walk away which caused EA’s stock to close on Monday at $43.30, dropping from $44.90 on the previous Friday while Take Two’s stock fell to a $15.45 low even before the NASDAQ opened on Monday from their previous Friday closing of $21.89.  That’s almost a 30% decrease in stock prices over a weekend. 

 

What does all this mean for you and I where we are gamers and not investors?  As a gamer, the news has been that this merger wouldn’t have been in our best interest.  No one like EA for various reasons; they are currently the second largest publisher in the industry and certainly use that to their business advantage by consistently releasing buggy games and incomplete builds (Battlefield 2 is an example of this).  Their games do traditionally go on to sell very well but in general, the majority of the problems are not fixed until a 1.2-1.3 patch.  Blizzard, EA is not.  But the primary concern for gamers with the possibility of the now dead merger, was that there would be no more major league sports games competition.  Take Two, while being famous for Rockstar Studios, also owns the 2K Sports studio, the only other major league developer in gaming. 

 

The question is this: Is it really that bad to have only one player in the sports gaming genre?  I personally believe that competition is great for innovation and for the consumer since this gives us choice.  But in the specific instance of EA VS. 2K Sports, I don’t think it is as important as so may believe.  2K has lost the license to NFL, their NBA games are still very playable but innovative they are not, and their NHL offerings the last 2 years (including this year) has not been innovative either.  In the field of innovation, EA certainly has been busy with their NFL and especially NHL products.  But with the introduction of this year’s “Be A Pro” EA is positioning the sports genre for a transition into the MMO format.  Eventually, I could see sports games becoming subscription based, with real time statistical updates, roster changes, and online fantasy leagues.

 

Fantasy leagues are a huge hit with armchair quarterbacks and couch goalies, just look around your office especially if you are in Canada and the hockey season is about to start.  If you offer them a way to play out these fantasies in both an active format (actually playing the games with a controller) and a way to play it simulated (stat driven only) then what you have is a cross genre product that bridges the gap between the different armchair jocks.  Unfortunately, it seems that 2K and EA will continue their dance until EA decided to throw more money at the cash starved NHL and make that license exclusive as well (which would not be good). 

 

The real issue then is would EA have been as motivated to do crazy things like Right Stick actions and Be A Pro if NHL 2K7 wasn’t as good as it was.  That is something only EA would know but as it stands at the moment, innovation isn’t necessary every year.  I would even argue that a new sports game isn’t necessary every year.  Did FIFA 07 change much going to 08?  Would players have been just as satisfied with patches to the engine and rosters?  You are asked to pay full price for a game that’s guaranteed to be out of date in 8 months.  Replayability is much higher on sports games by nature, so that could justify the higher price but instead of charging another $60 for the next year’s update, how about charging us half that price for an expansion – because lets be honest, most year to year updates are just glorified expansion packs.

 

I hope that EA will continue to give fans innovation and challenge themselves year over year to be the only name in sports games.  If the Madden series is any indication, I think we are fairly safe since innovation and tweaks have continued even though they are the only name in NFL video games.  In the meantime, keep your eye on 2K stocks, if it continues to slide, might be a good time to buy – because you know ActivisionBlizzard or even Ubisoft is keeping their eye on this.