Gabe Newell gets Steamed up over piracy discussions

Subject: Editorial, General Tech | February 20, 2012 - 08:08 PM |
Tagged: valve, piracy, Gabe Newell

Ben Kuchera of Penny Arcade caught an interview with Valve Software’s managing director and co-founder, Gabe Newell. The topics were quite typical for a Gabe Newell interview and involve working at Valve, the future of gaming, and DRM. Gabe also joined the beard club; welcome Gabe!

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Photo Credit: Giant Bomb

A little over halfway through the interview, Penny Arcade asked Gabe whether they believe that they sidestepped the problems of used games and piracy with Steam. Gabe instead responded to the premise of the question, rather than the question itself:

You know, I get fairly frustrated when I hear how the issue is framed in a lot of cases. To us it seems pretty obvious that people always want to treat it as a pricing issue, that people are doing this because they can get it for free and so we just need to create these draconian DRM systems or ani-piracy(sic) systems, and that just really doesn’t match up with the data.

This quote echoes a problem I have had with the piracy discussion for quite some time. The main problem with the concept of piracy is that people wish to frame it in a context that seems intuitive to them rather than experiment to discover what actually occurs. Piracy is seen as a problem which must be controlled. This logic is fundamentally flawed because piracy is not itself a problem but rather a measurement of potential problems.

Gabe continues with an anecdote of a discussion between a company who used third-party DRM for their title and himself:

Recently I was in a meeting and there’s a company that had a third party DRM solution and we showed them look, this is what happens, at this point in your life cycle your DRM got hacked, right? Now let’s look at the data, did your sales change at all? No, your sales didn’t change one bit. Right? So here’s before and after, here’s where you have DRM that annoys your customers and causing huge numbers of support calls and in theory you would think that you would see a huge drop off in sales after that got hacked, and instead there was absolutely no difference in sales before or after. You know, and then we tell them you actually probably lost a whole bunch of sales as near as we can tell, here’s how much money you lost by bundling that with your product.

Gabe highlights what a business should actually be concerned with: increasing your measurement of revenue and profits, rather than decreasing your measurement of piracy. You as a company could simply not develop products and completely kill piracy, but that would also entirely kill your revenue as you would have nothing to gain revenue from.

Before we begin to discuss piracy, the very first step is that we need to frame it as what it really is: a measurement. While violating terms of a license agreement is in fact wrong, if you focus your business on what is right or wrong you will go broke.

If you believe that there is value in preventing non-paying users from using your product then you will only hurt yourself (and if SOPA/PIPA taught us anything, innocent adjacent companies). It is possible that the factors which contribute to piracy also contribute to your revenue positively as well as potentially negatively. It is also entirely possible that increased piracy could be a measurement of a much bigger problem: your business practices.

You know, it’s a really bad idea to start off on the assumption that your customers are on the other side of some sort of battle with you. I really don’t think that is either accurate or a really good business strategy ((…)) we’ve run all of these experiments, you know, this has been going on for many years now and we all can look at what the outcomes are and there really isn’t – there are lots of compelling instances where making customers – you know, giving customers a great experience and thinking of ways to create value for them is way more important than making it incredibly hard for the customers to move their products from one machine to another.

Source: Penny Arcade

February 22, 2012 | 01:30 PM - Posted by sotoa

Nice little interview.

February 22, 2012 | 04:11 PM - Posted by Anonymous (not verified)

That's a little hypocritical of him considering Steam is itself a form of DRM. He can't have it both ways.

February 22, 2012 | 04:48 PM - Posted by Scott Michaud

He is not saying that DRM is evil, he is saying that DRM probably will not help you but will piss off some or all of your customers.

February 22, 2012 | 04:24 PM - Posted by Anonymous (not verified)

Steam is a form of reasonable DRM. Gabe is referring to unreasonable DRM.

February 22, 2012 | 05:41 PM - Posted by Steve (not verified)

Yea Valves games allow you to install and play them on any computer you can use and all you need is your steam login. That is very reasonable DRM, its not 100% effective as it can be cracked but they don't enforce say 3 install limit or 5 in some cases. Treating the end user like a pirate so after that number is hit they gotta get it reset if they can but by then most ppl will just download pirate crack and not deal with support department of the game company.

February 22, 2012 | 07:10 PM - Posted by Octavean (not verified)

I’ve actually stopped playing PC games due to DRM restrictions. Basically I was unwilling to deal with DRM on the PC in order to play a new game title and I was equally unwilling to circumvent said DRM. I’m not now nor have I ever been the least bit interested in misappropriating copyrighted material. I think if more people had the will power and discipline to say “no you can keep your product, I’ll have nothing to do with it due to your DRM”, it would send a much clearer message.

February 22, 2012 | 07:38 PM - Posted by Scott Michaud

Which is why we are very vocal about DRM restrictions.

Jumping to the consoles will just leave you one less place to jump back to as DRM progressively comes to them. Used game and anti-lending countermeasures is a dagger looming over the entire industry, not just the PC.

Sony CD-Key:

Xbox 360 anti-used game:

February 23, 2012 | 10:22 AM - Posted by Octavean (not verified)

Quite right,…

However, willpower and discipline don’t end at PC gaming for me. If I feel that I am being pushed I am prepared to leave just about any platform. As alluded to before, games are not a necessity to everyday life. I partake due to the perceived pleasure and enjoyment but DRM negates that.

The industry certainly isn’t going to suffer without me but it would if others had similar values.

Also of note, if SOPA/PIPA like initiatives would be meet with long term revenue sucking boycotts in addition to the political backlash we likely wouldn’t see it’s like again. People and industries only do what they can get away with (barring fits of passion). If the perception is that they will lose revenue from their primary sources if they take such action it will almost certainly stop.

I for one was amazed when Apple dropped DRM for their music and it was only then that I would consider buying from them.

February 23, 2012 | 05:27 PM - Posted by Scott Michaud

That is reasonable of course.

Personally I prefer pushing companies into doing changing their ways -- rather than just leaving the platform and letting them just assume any drop in sales is piracy and must be countered by more and more aggressive misguided initiatives.

February 23, 2012 | 07:34 PM - Posted by Octavean (not verified)

I can accept that but this is an issue of interpretation on their part. It can be very difficult to get an industry to read the data in that way. Also companies that develop and sell this type of DRM aren't sitting by waiting for their customers to come to their senses. they are constantly promising a better mouse trap, inticing the ignorant to continue down the same road.

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