Why DRM Decreases Revenue

[bullbert]

How many of the IP addresses are dynamic, anyway? Makes tracing moot.

 

[Eeezee]

Originally posted by: Skott

Originally posted by: videogames101
I've been doing some thinking on the purposes and effects of DRM on PC gaming and revenue of publishers like EA.

To begin, I'l like to establish some facts that are true, no matter what angle your coming from. These aren't disputed, they are true FACTS.

1. The primary goal of adding DRM onto a game title is to prevent the title from being pirated.

2. DRM is often added in ways that add hassle to paying customers, such as the 3-install limit on Spore.

3. I could go out and pirate any game you care to mention, assuming it's not online only, in which case DRM is part of the online servers and piracy isn't an issue.

4. There are people who will not buy a publisher's titles if DRM hassles them.


If we understand that those 3 statements are true, then we can easily draw several conclusions about the effectiveness of DRM on increasing a publisher's revenue.

-Based on statements 1 and 3, we can say that DRM fails at achieving it's primary goal.

-Since DRM doesn't achieve it's primary goal, it does not increase a publisher's revenue.

-Looking at statements 2 and 4, we see that DRM actually decreases a publishers sales, because some people will not buy that publisher's games if they are hassled by DRM.


In conclusion, DRM fails at preventing piracy, and decreases sales.

The only possible outcome for a publisher that adds DRM which hassles consumers, is a net loss in revenue.

Apparently EA doesnt agree with your conclusion. EA is in the business to make money and if DRM was losing them huge sales/profits then they'd drop it pretty quick I would think. Which they are not doing or going to do from what I have been hearing. I know there is a lot of grumbling online about DRM but EA seems to be ignoring it. My guess is that they dont feel its losing them that many sales.

Note: I'm not taking EA's side but the so called complaints seem to be falling on deaf ears.

Or their analysts don't realize the full impact that DRM has on sales (EA employees are not infallible)

Or it's all corporate politics, and the people in charge of these decisions aren't using the facts

 

[Eeezee]

Originally posted by: s44

Originally posted by: videogames101

Originally posted by: s44
This isn't analysis. It's self-justification. Try not starting at the conclusion.

I don't pirate, so, how is that justification?

Because you want to avoid the hassle of DRM.

I, on the other hand, want to have the PC continue as a non-MMO platform. So a real analysis with real numbers would interest me. This isn't it.

You're asking for the impossible. It is impossible to know exactly how many sales were lost due to DRM. It is impossible to know exactly how much pirating was prevented due to DRM.

What we can do is argue the logic. DRM costs money to implement. Especially intrusive DRM prevents sales. It is possible that DRM could prevent some minor piracy (copying the disc for a friend), but I have no way of telling you how much. I'd be willing to bet that the number of sales lost due to intrusive DRM in Spore was a number greater than the number of prevented pirated copies, but once again no one has any way of verifying or refuting this. In any case, we know that there were many people who did not buy Spore due to the DRM. Thus, EA probably lost revenue by implementing DRM.

Obviously they're not losing tens of millions of dollars over this, but they are losing something substantial if they're willing to "tone down" the DRM on RA3.

 

[Modelworks]

Originally posted by: videogames101

Originally posted by: Modelworks

Originally posted by: videogames101

Originally posted by: Modelworks

Right now people say that using any protection at all is pointless because it will be cracked anyway and that just hurts the legitimate user. This is only true for the most common used protections. There are protections out there that are VERY hard to break and do deter and prevent copying.

I think the criteria for a perfect protection would be:

Does not interfere with making backups
Can be installed on as many pc and as many times as I want
Does not make any changes to my pc that would affect other programs
Does not require a internet connection to install or use the program

Hard to break, like the "unbreakble" HD-DVD Protection? :laugh:

No like GDROM.

wikipedia

"With modified firmware that looks for a second TOC in the high-density region it is possible to read data from the high-density region even on a normal CD-reader."

and

"The NetBSD project has developed a GDRom driver for netBSD"

so, wrong

And what will you do with the data once you have it ?
You cannot burn a gdrom so people were stuck with removing content to make it work on a cdrom.

 

[Skott]

Originally posted by: Eeezee

Originally posted by: Skott

Originally posted by: videogames101
I've been doing some thinking on the purposes and effects of DRM on PC gaming and revenue of publishers like EA.

To begin, I'l like to establish some facts that are true, no matter what angle your coming from. These aren't disputed, they are true FACTS.

1. The primary goal of adding DRM onto a game title is to prevent the title from being pirated.

2. DRM is often added in ways that add hassle to paying customers, such as the 3-install limit on Spore.

3. I could go out and pirate any game you care to mention, assuming it's not online only, in which case DRM is part of the online servers and piracy isn't an issue.

4. There are people who will not buy a publisher's titles if DRM hassles them.


If we understand that those 3 statements are true, then we can easily draw several conclusions about the effectiveness of DRM on increasing a publisher's revenue.

-Based on statements 1 and 3, we can say that DRM fails at achieving it's primary goal.

-Since DRM doesn't achieve it's primary goal, it does not increase a publisher's revenue.

-Looking at statements 2 and 4, we see that DRM actually decreases a publishers sales, because some people will not buy that publisher's games if they are hassled by DRM.


In conclusion, DRM fails at preventing piracy, and decreases sales.

The only possible outcome for a publisher that adds DRM which hassles consumers, is a net loss in revenue.

Apparently EA doesnt agree with your conclusion. EA is in the business to make money and if DRM was losing them huge sales/profits then they'd drop it pretty quick I would think. Which they are not doing or going to do from what I have been hearing. I know there is a lot of grumbling online about DRM but EA seems to be ignoring it. My guess is that they dont feel its losing them that many sales.

Note: I'm not taking EA's side but the so called complaints seem to be falling on deaf ears.

Or their analysts don't realize the full impact that DRM has on sales (EA employees are not infallible)

Or it's all corporate politics, and the people in charge of these decisions aren't using the facts

I'm sure there are corp. politics at play here. We can only hope EA will lose this fight and have the DRM back broken. Time will tell. It doesnt look good so far though.

 

[TheKub]

Originally posted by: bullbert
How many of the IP addresses are dynamic, anyway? Makes tracing moot.

Not that I believe that agreeing to a TOS will somehow make a relevant case in court but saying a dynamic IP will keep the authorities from tracing you is flat out wrong.

Think about it. All the virus authors\spammers\child pornographers\credit card fraudsters that have been arrested do you think its only the static IP users that could have been caught. It is not difficult nor burdensome to track which accounts where attached to which IPs during what times.

So, if you do happen to do some questionable activities online and think the "dynamic" IP you are using is keeping you anonymous you need to educate yourself.