Network now...NEWS
Riccitiello: Pirates Present A New Marketplace
Electronic Arts CEO John Riccitiello believes that if a publisher can offer compelling downloadable content, people who pirates games could be persuaded to buying the original product.
Riccitiello says there's a “sizable pirate market and a sizable second sale market” and he wants to try to generate revenue in that marketplace." DLC could be a way to do it. "I don't think anybody should pirate anything. I believe in the artistry of the people who build [the games industry.] I profoundly believe that. And when you steal from us, you steal from them. Having said that, there's a lot of people who do."
The CEO believes services like EA Sports' community hub or the BioWare social site that could make it "increasingly less likely that people will pirate because there is so much value on the other side of the door."
"They can steal the disc, but they can't steal the DLC," Riccitiello told Kotaku. EA says that paid for DLC, such as last month’s Dragon Age Origins release, generated a million downloads in its first week.
Contact Us / About Us / Advertise With Us / BeltwayBlips / TechBlips / MassiveBlips / GamerBlips / FAQ
Subscribe To Edge Magazine / Corrections / Terms & Conditions / Privacy Policy
Copyright 2006 - 2009 Future Publishing Limited, Beauford Court 30 Monmouth Street Bath, UK BA1 2BW
England and Wales company registration number 2008885
Subscribe To Edge Magazine / Corrections / Terms & Conditions / Privacy Policy
Copyright 2006 - 2009 Future Publishing Limited, Beauford Court 30 Monmouth Street Bath, UK BA1 2BW
England and Wales company registration number 2008885
Try making more games that aren't cookie-cutter sequels that don't cost $60+
They made Mirrors Edge. No one bought it.
They made FIFA 10. Sure it's the best ever football game, but it's still an annual update. Biggest selling sports game ever.
This is pretty much the opposite to the viewpoint of Stardock's Brad Wardell, which is that pirates simply aren't part of your market. When working out your target audience you should exclude pirates entirely and make development decisions based on your "real" audience (including whether or not the game would be profitable). I thought that was a fairly progressive stance rather than the typical "the pirates are stealing from us and destroying livelihoods" line.
I think Riccitiello is correct that compelling DLC and extras will disincentivise pirates but what he's *probably* arguing for (a) justifies continuing the flawed argument that each pirated game is a loss sale; (b) legitimises overpriced DLC as an anti-piracy method; and (c) legitimises stifling the secondary market as an anti-piracy method.
What Bioware did with Dragon Age was actually to give away free DLC with pre-orders. While ostensibly just a pre-order bonus, it also meant legitimate copies of the game we much more desirable. That's the right approach. Bioware's paid-for DLC had nothing to do with this.
Even if he means free DLC, that suggests he's looking to reduce value in the secondary market of used games by removing access to content from people who buy them. Publishers still fail to realise that by stifling the secondary market they reduce the value of their original product so far fewer people will be willing to pay £40 at launch for an average game they can no longer trade in at a decent value.
If there was enough room for it you should make this your signature. Very, very well put.
Oh wow, that's an angle I totally missed.
To his credit, though, I don't think he's trying to rely on necessarily over-priced DLC. If he's smart, and I suspect he is, he's talking about using each game as a quasi-platform on which continued development and profit can take place long after the release of the game.
And your point about the used market is well made, but I'm going to play devil's advocate in support of EA. Their goal with the secondary market may not be to stifle it, per se, and thus reduce the value of the game at any stage in its life, but instead transfer some of the value from the secondary market into primary channels from which they profit.
For example, a person buys a game. The purchase has a set value because of the secondary market and also because of possible access to free and purchasable DLC that is only accessible via the game. After beating the game, its value has dropped and a new game's value has increased. He sells the old game for money to gain access to the new game.
Now even if we assume that the free DLC is accessible by anyone with a disc, and not some one-time code, the original buyer has a much stronger incentive to keep the game than before. He has DLC he won't be able to use and he loses access to future DLC.
So, if we look at a new game as a new experience, as opposed to a new product, adding the possibility of DLC increases the number of new experiences available. Thus, the value of the new experience of an entirely new game is reduced.
This might seem counter-intuitive, because how could a reduction in value result in more money? But the new game value represents a possible total loss to the publisher. There's a good chance the person will not buy a new game, but instead a used game which is a zero profit for the publisher. They've increased the value of the already purchased game and decreased the value of games yet to be purchased.
It would hypothetically result in the gamer buying fewer games, since his revenue from used sales has dropped, but a percentage of the money he would have spent can now go directly to the publisher via DLC. And once all DLC has been exhausted, if the free content is available to anyone with a disc, we're simply back at square one. He's able to sell the game with all the value that it contained when he purchased it. Then, when someone else buys it, they become locked in the same value trap, where there are experiences that are valuable to them that are accessible only via the game.
Basically, they're transferring the value of a new experience from a new game to new DLC. It might reduce the value of the publishers own new games, but that's a might. They've got a higher probability of revenue via the already-owned game than in a competitive market filled with other publishers.
The downside of putting more emphasis on DLC is that they'll start removing more and more content from the games to sell as overpriced DLC. I've decided that I'm going to start waiting for more GOTY editions of games, especially those which have DLC ready at launch (that means you EA).
Games are outrageously expensive in southern Europe. I'm currently ordering my PS3 games from Amazon UK or EBAY UK as they're 1/3 of its full price in Spain (60 euros GRID, anyone).
As long as videogame makers continue to abuse of the EURO zone piracy will be rife here, and with good reason.
Amen Brother
I like his direction, but he's still clinging to some old ideas.
1: Pirates aren't stealing. Stealing is the deprivation of another of something they own. That implicitly means a finite good. Infinite goods, like data, cannot possibly be stolen.
If a pirate was then packaging that data and trying to sell it as an genuine game, that would be stealing because the pirate was depriving the company of a sale of a physical good. But that's not piracy, that's counterfeit goods and an entirely different thing.
Hypothetically, I could steal data that was meant to be private, such as encoded data for a company. Large companies try to wedge this clause into stuff that is distributed widely. Remember how the NFL and other sports industries mention that "this broadcast is meant for the private use of our audience," and how any discussion, reproduction, or recording of the event is strictly prohibited.
But what I'm actually stealing there is the privacy, which is a finite good. The data is worthless, it's the privacy and finite nature of the data that is valuable. Trying to claim privacy over a widely available piece of data is stupid, and the few times that it's come up in court, the NFL has lost.
2: It's very easy to pirate DLC. I don't know what he's talking about. That's why Microsoft is on the warpath to stop modded Xboxes. The only reason why piracy is difficult is because the Xbox is a tightly closed system with, let's face it, zero freedom.
He should be phrasing it as a service. DLC is valuable because of how easy it is. Right through the game interface, barely have to move, click-click, done. That's value! Piracy, even easy piracy, is time-consuming. Eliminating the hour needed to pirate and charging $4.99 is the business model, not eliminating the ability to pirate.
What CANNOT be pirated, and perhaps he should think about this, is a service. World of Warcraft isn't about the data. It's about the service. It's the servers, the events, the people, the interactions, and the communication. If he wants invincible software, he needs to turn it into a service.
Piracy isn't stealing no, but it is copyright infringement which is illegal at worst, and morally questionable at best.
I know people who have modded Xboxes who play copied games. I know of absolutely no one who plays pirated DLC. I really don't think that problem is as rampant as you think it is.
At best, there's nothing at all wrong with it. For it to be morally questionable, harm must possible, if not probable. There is no cogent argument to be made that piracy is harmful.
I also know no one who pirates DLC. I know of people who do, but that's it. I didn't mean for it to sound like I was arguing that piracy of DLC was THE problem that has put Microsoft on the warpath, only that the opening up of the closed system is dangerous to their business model and modded boxes are a serious threat.