Used Video Games: The New Software Piracy: Part Four

Part One: Introduction
Part Two: Becoming the Stop For Games
Part Three: The Feeling of Being Used
Part Four: A Programmed Response
Part Five: A Conclusion on Distribution; Corrections

Speaking against the ills of the used game market was going nowhere. From those failures, phase two would begin. While developers would continue to voice their opinion on the topic of used video games, “Please stop buying used games!” wasn’t working. How about “Please buy more new games? We’ll throw some sugar on top?” Pre-order bonuses were nothing new. GameStop had been doing them since the PlayStation 2 days.** The internet simply made it easier. In the past, those pre-orders gave access to physical items, which had to be carefully manufactured and handed out based on the demand for the game. We could now sell “virtual goods” for use on our video game consoles. As early as November of 2008, Rock Band 2 was packaged with a one-time voucher for twenty “bonus downloadable tracks”, a means of getting customers to purchase the game new. If you were putting cash up-front to purchase Left 4 Dead 2 on launch day, you would get an “exclusive in-game baseball bat”, as the GameStop commercial so painfully explained.* (Yes, in their attempt to quash used video game sales, developers would work directly with GameStop.) With these pre-order bonuses, the developer had very little to lose. The only thing it cost the company was the time to develop the content and the bandwidth to transfer it across the internet. You didn’t need to worry about anticipating supply. You only had to make sure that the servers were working properly.

The problem? Look at Army of Two. That pre-order promotion granted access to the “Extraction” multiplayer mode for the first thirty days after its launch.* Yes, the idea of restricting access to multiplayer modes that require open access to maintain activity is as dumb as its sounds. Look at Grand Theft Auto: Chinatown Wars. If you pre-ordered that game, you got free in-game cash and weapons.* That’s right, you could pre-order the game and break the delicate process of balancing a game’s difficulty level. Well, if players were patient enough to wait for a used copy of the game to hit retail, if they were patient enough to wait for a price break, they were patient enough to wait for critical content or earn the in-game content themselves.

My rendering of what a hypothetical “GameStop pre-order commercial” may look like.

As you may or may not know, good capitalism is about what the consumer does not own, lest you refuse to purchase Call of Duty 12 at the midnight launch and miss out on playing the game through the night with your friends, lest everyone on the leaderboards leave you in the dust. Giving the player early access won’t work. Revoking functionality once considered integral? That can do it. Technically speaking, the game industry wasn’t changing their approach. When they offered pre-order bonuses, they were giving something to those who purchased new video games and restricting the owners of used video games from having that same access. Nothing changed. Companies were only changing the terminology and the target of these marketing schemes. Where they once positioned extra content as a bonus for early adoption, they were punishing people for buying the game later.

Resigned to the idea that they had little recourse against used video game sales, the video game industry did what it usually does. Early in the aughts, Valve looked at the rampant and unauthorized copying of video games in the era of digital distribution and used digital distribution to their own ends, requiring players to activate Valve games through Steam and creating a successful market through the service. While video game consoles had separated themselves from computers by providing large-budget games without the hassle of playing them on a computer, console devs would derive inspiration from that hassle of all hassles, the product key.

In February of 2010, Sony quietly announced that in order to play SOCOM Fireteam Bravo 3 for the PlayStation Portable, the game would come with a one-time voucher, required to unlock multiplayer content for play on one specific hardware unit. If the game was sold back to a game retailer, it was likely the new consumer would have to purchase a new voucher. Sony decided that the price of the voucher would be twenty dollars.* It was pretty simple: Sony decided that if you’re not going to buy new video games, they were going to design them so “buying new” was the only realistic option. (Although in Sony’s defense, the device was dogged by software piracy and the company decided that they had no other defense for the use of unauthorized software on their servers. Developers had long used product keys to prevent unsigned code from accessing their servers, and obviously, PSP games used no such system.) Two months later, SOCOM‘s big brother for the PlayStation 3, SOCOM 4, would be released and it would also feature an online pass. (And yes, this release came after George Hotz’ jailbreak of the PlayStation 3. The “unsigned code” excuse is still valid.)

Three months following, Electronic Arts emulated the Sony approach. The company revealed that they were planning an “Online Pass” program that would be packaged with their 2010 lineup of sports video games. “Project Ten Dollar” entailed that the owners of used E.A. sports games would have to pay, well, ten dollars. According to E.A., this was about compensation the creator for their services.

In order to continue to enhance the online experiences that are attracting nearly five million connected game sessions a day, again, we think it’s fair to get paid for the services we provide and to reserve these online services for people who pay EA to access them. In return, we’ll continue to invest in creating great games and offer industry-leading online services to extend the game experience to everyone.

“Senior Vice President of World Wide Development” Andrew Wilson, “EA Sports Online Pass”; originally published May 10, 2010*

(Just to note: I’ve heard a lot of people suggest this program was implemented to prevent the purchasers of second-hand games from using E.A.’s game servers, i.e. “leeching their bandwidth”. That’s a load of bullshit. If these companies can determine the number of copies that they’ve sold and the number of times that the game can and eventually will be resold, they can adjust server load accordingly, and that is the cost of doing business, especially when you refuse to let your players host their own servers because of “intelectual poperty right’s loll”. Regardless, the majority of console video games use peer-to-peer hosting technology. This means that the service merely acts as an arbiter and directs traffic. Your internet connection does the heavy lifting. That’s how has sustained millions of users free of charge since 1996, that’s how the PlayStation 3 features free online play, and that’s why paying monthly for Xbox Live is a scam.)

Also in May, THQ announced that a similar system would be required to access the multiplayer mode in the upcoming UFC Undisputed 2010. Unfortunately, the company hasn’t published a game worth buying since about 2006, so nobody has been able to check on whether this is actually true. (And I can’t imagine why someone would have preferred to purchase a copy of Undisputed 2010 used. You know, a product portraying the exploits of a combat sport that barely changes on a year-to-year basis, a product only twelve months removed from the previous game in the series.) In August, it was reported that Sony was exploring the use of an online pass system for all first-party Sony titles. They would eventually follow through and use the system, restricting used game purchasers from the multiplayer content in Ratchet & Clank: All 4 One, Resistance 3, Wipeout 2048, and 2012’s Twisted Metal.

The real slap in the face would come the following year. Despite the constant claims that the purpose of these online passes were to prevent either software pirates or used game owners from accessing the multiplayer servers, the “online pass” model would find its way into single-player games during the course of 2011. At which point, we can say that the pretense over the purpose of online passes was formally dropped. As these particular content programs were initially linked to low-profile releases (Alice: Madness Returns) and games best classified as flops (Dragon Age II, Rage), not much of a stink was made over the matter. But just five days prior to the October 2011 release of Batman: Arkham City, it was reported that the single-player missions featuring Catwoman would be locked behind an online pass.* This set off considerable anger from readers in the game journalism sector, as these portions of the game had not only been hyped for months, but had been portrayed as integral content in the campaign game mode. (Alas, Catwoman is the first playable character in the game.) 2012’s Kingdoms of Amalur: Reckoning would be packaged with a similar online pass, leading to enough dissent in the game’s official forums (concerning whether Electronic Arts had performed some hand-wringing) that 38 Studios founder Curt Schilling was forced to respond.

The industry is in a very odd place. The data coming in on used game sales is not saying the things many thought it should, or would. But companies are still trying to figure out how to receive dollars spent on games they make, when they are bought. Is that wrong? if so please tell me how.

Again, you can argue with methods, or process, and you absolutely can ***** and gripe about ANY DAY 1 DLC you are charged for, because I think I agree with many on that, but we are trying to create something here, product and company wise, and it takes dollars to do that.

Curt Schilling (posting as “Ngruk”), responding to a comment thread entitled “Did you push back at EA at all over this? Quest content gated by online pass.”; posted on January 27, 2012*

With the record established, we should discuss whether these restrictions on used video games helped put more money into the retail market. They did not. In 2011, American video game retail contracted by another eight percent. In a year featuring the most heavily-hyped holiday game lineup in the history of the industry, software sales fell close to six percent.* GameStop’s 2011 sales would break roughly even with 2010.* (As of this writing, the 2011 Annual Report and its breakdowns of company business has yet to be released.)

As it currently stands, all developers and publishers can do is front-load their games with online passes, attempt to entice players with pre-order bonuses. All the while, people such as David Braben and Silicon Knights head Dennis Dyack will continue to insist that used video games, for instance, are killing single player video games.** But while they attack retailers, they will continue to make feeble compromise with GameStop because GameStop will never stop ever, until your game has been resold in six different GameStop stores. Software creators are powerless to do anything about it, much in the way that they were powerless to stand against Nintendo in the mid-to-late eighties. Let us remember that when Square-Enix and the public discovered that GameStop was removing codes for a free trial of OnLive in retail boxes of Deus Ex: Human Revolution for the personal computer, Square-Enix apologized for failing to inform the retailer that they would be packaging the game with the promotional materials.* Square-Enix apologized to them. That’s their predicament. In the meantime, the game industry will continue to bring up the subject of used games and they’ll keep the argument churning. You can expect this phase of the debate to continue indefinitely, regardless of what it is they actually plan to do. In their current business model and their current situation, they can’t do a fucking thing about it. So, theoretically, how could game companies get the respect they deserve?

There’s two ways. The first option has to come from the top. Individual developers and publishers can’t push back on their own. They need the hardware manufacturers to step up. Microsoft or Sony could create a system similar to Steam for use with their video game consoles, possibly locking the games to a unique console unit or linking purchased games with an online game account. With the eighth generation of video games looming, it’s a situation worth analyzing. Such a system would forfeit any pretense that the video game console is anything other than a personal computer for people who aren’t smart enough to operate personal computers, and the consoles would lose some of their identity in the process. (Consoles now receive constant game updates and product keys for use with online game modes. The restriction of media to a unique device or account would be icing on the cake.) But such a system would likely entail significant use of digital distribution for the games, and beyond the politics of retail used video games, what video game retailer is going to stock hardware whose software is purchased through the device and not the store? It didn’t work out too well for the PSPGo. As it currently stands, whether the successors to the PlayStation 3 and the Xbox 360 will block used video games is currently in rumor territory, with current GameStop C.E.O. Paul Raines stating that such technology, at least in the next Xbox, is “unlikely”.* But in March of 2012, a report circulated suggesting that the successor to the PlayStation 3 would use a system akin to Steam.* (Should either Sony or Microsoft implement such a system into their devices, an addendum to this entry will be necessary.)

What’s the second option? Much as Japanese publishers banded together against used sales, North American publishers could do the same thing. And while the first-sale doctrine is still the beast it once was, precedent is possibly in favor of the software creators. In 2005, eBay auctioneer Timothy Vernor purchased a used copy of the content creation program AutoCAD at an “office sale” and proceeded to sell it through eBay’s online auction service. Developer Autodesk didn’t like that. A pretty hefty pissing match over the auction listing would eventually turn into a legal battle. Predictably, Vernor’s legal team argued that their client was entitled to the first-sale doctrine. Autodesk argued that the first-sale doctrine was trumped by their End User License Agreement, those install screens where you sell your soul and all future children to the company for non-commercial use. The contract stated that the software was licensed and not sold. By the terms that the company set, no resale can legally occur. When the previous owner upgraded his copy of Autodesk to a newer version, he was supposed to eliminate all copies of the older version.*

1996’s ProCD, Inc. v. Zeidenberg affirmed the legal validity of the “shrink-wrap EULA”, the EULA packaged on the software that cannot be read before making a purchase at the store. Vernor never agreed to the licensing agreement. He never loaded the software into the machine, agreed to the terms, and then used that software. He was simply selling software that he found at a sale. He saw none of that EULA business. Initially, the district court agreed with Vernor, and he won. Autodesk appealed, and the Ninth Circuit Court of Appeals overruled the decision. According to the appeals court, it didn’t matter whether or not Vernor “agreed” or not. The EULA was the rules laid out by the company for how to use the product.* In-effect, the court ruled that the EULA acted as an extension of existing law, and the consumer did not have to acknowledge the agreement to be under its jurisdiction, much in the way you can get in trouble for breaking a law without knowing the law was a law. So currently, in America, End User License Agreements are as valid as the content within.

Don’t argue with my forum alter-egos. You forfeited the right to do that
when you clicked the EULA embedded in the link to this web site.

So who does that affect? We’ve been long comfortable with the idea that it’s difficult to resell a computer game. But perhaps you should look at the back of the box for a console video game. All I needed to do was look at my copy of Rock Band 3: “Licensed for distribution in North America on the Playstation®3 computer entertainment system.” Licensed. Licensed and not sold. No, purchase is not yours. Should publishers decide to use the courts to settle the issue of used video games in the United States, there is a very good chance they will win.

Of course, we need to see which actions are taken before we can go further on that matter. In both circumstances, the obstacle is GameStop. There are over 6,500 GameStop stores on this planet and they rule the largest retail video game market on the planet. Either publishers deal with it or they find a way to eliminate the GameStop used video game model. Unless, of course, GameStop wants to settle with the publishers. You know, cut a deal. Hand out a percentage of the profits from those used game sales. You know, as a means to protect the GameStop business model.

Shit, at least the mafia admitted they were organized crime.

Continue to Part 5: A Conclusion on Distribution