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"Or don't use DRM at all."

It's too late for that. DRM was invented as a result of rampant piracy. You should be blaming the pirates rather than the company using it.

"Instead of relying on a single instance of a product making money for years to come, focus more on new games or in-game content sales."

Now I know you have never tried to sell software. No product anyone sells works like that. There is support, bug fixes, updates, and features. If you don't keep this up, you will sell less and be forced to make changes. This is how the market works.

I LOLd at the part where you said they should concentrate on "new games". If their old games are getting pirated and making it difficult to support legitimate customers, how would making a new game be any different?

"Better yet, focus more on positive features and bugfixes/polish for present games than on ways to defeat crackers. Knowing your limitations, try social solutions for social problems. Make your brand the trusted good source for awesome games of your niche."

This doesn't work. No matter how hard you focus on new features, if you are losing customers left and right because they are downloading it for free (or because the people downloading it for free are making it increasingly difficult to support your existing customers and they leave), you will go out of business.

"In other words, the system is about trust, and if your brand matches or exceeds its customers' expectations, you will earn and maintain their trust and their loyalty. Sure, some people may be cheap, but at the same time, they can be bought with a certain amount of guarantee of security. People are concerned about their things."

If something is free, it can be found easily with little or no risk, people will find a reason to download it over spending their hard-earned cash.

It's too late for that. DRM was invented as a result of rampant piracy. You should be blaming the pirates rather than the company using it.

People were sharing programs long before p2p became popular. Only difference in recent years to accessibility to the copying mechanisms. Blame it on the Internet taking off and creating a world where bits are no longer a scarcity, where purchasing a physical media containing those bits is becoming legacy. With the Internet making it easy for anyone to copy anything suddenly those that made those physical copies weren't needed as much. Certainly their value has been questioned.

DRM became widespread as a way for the content distributors to maintain their status quo without having to change their business model in any way.

"People were sharing programs long before p2p became popular. Only difference in recent years to accessibility to the copying mechanisms. Blame it on the Internet taking off and creating a world where bits are no longer a scarcity,"

The bits were never a scarcity. The creative work and thousands of man-hours that it takes to place those bits in a specific order is the scarcity. If this were not the case, anybody could create (not copy) an application like Photoshop.

"where purchasing a physical media containing those bits is becoming legacy. With the Internet making it easy for anyone to copy anything suddenly those that made those physical copies weren't needed as much. Certainly their value has been questioned."

A dollar bill is just ink and paper. But it's worth much more than that. Paintings are worth much more than the sum of the items used to create them. There are many more examples like this. I know you aren't this dense.

"DRM became widespread as a way for the content distributors to maintain their status quo without having to change their business model in any way."

How are they going to make money? A service? We see how well people like that with assassin's creed 2. Advertising? works very well with all of the adblockers out there.

Companies aren't going to change their business model because they don't need to. The games are still just as good, people are playing them, they just aren't paying for them.

If the community really wants to change the business, they need to actually compete. This means developing real applications and games that are better than the ones already out there. But this will never happen because it's easier to just copy games and tell everyone why you deserve to get it for free.

The bits were never a scarcity.

Software sellers have attempted to make them so with the use of legal wording, sternly-worded threats, and excellent politics. Before it was easy to transmit things electronically, we had to pass around physical media that held them if we wanted to share with others.

Excepting people trying to inch out that extra cent out of people, nobody thinks there is something wrong with this sharing. You can borrow a car, borrow a book, borrow an NES cartridge, even borrow a whole computer, and this is seen as socially acceptable (we learned the value of sharing in Kindergarten). Sometimes you determine that you want this item for yourself, so you buy it, and you might not have bought it at all had it not been for your exposure to and enjoyment of it.

The problem with PC software is that unlike these other works of art, it is trivial to copy. That should be a warning flag that a business model around software needs to approach things a little differently. Sure, a good percentage of people will look for something for nothing and feel no guilt over it, will not try to compensate for it; in this medium, they will often succeed, too. This is a fact of the technology.

The creative work and thousands of man-hours

This is noble, but do you really expect customers to offer up money for software because of the actions of somebody behind the scenes of that software? I know when I browse games on the shelves, I am not thinking about the programmers, the artists, the voice actors, the publishers, or anyone else involved. I am thinking of how fun I expect that game to be and if I can afford it this month. I am also thinking of the brand of that game; for example, Ubisoft has disappointed me enough times with their MMOs that I refuse to be fooled again, no matter how cool it looks. On the other hand, I am a consistent sucker for games by Square and Bioware. Your average consumer does not place the same value on the workers as the workers place on themselves.

Companies aren't going to change their business model because they don't need to. The games are still just as good, people are playing them, they just aren't paying for them.

This is a contradiction. Admittedly, DRM is one way to change the business model. It is working for some companies in the way it is implemented. As you mention later, competition can demonstrate this model's weaknesses, but that is also the nature of business: you must keep evolving to meet the challenges of the times.

I think that their target audience is already educated, and there's no way of generating trust from those who do not wish to pay.

For many - myself included in my high school years - Linux is all about free as in beer.

I don't see any particular aversion to buying games among Linux users, at least more than among Mac or Windows users. Linux users actually account for substantially larger proportions of indie-game sales than Linux marketshare would predict: http://www.koonsolo.com/news/linux-users-show-their-love-for...

My responses will focus on the PC market, mostly. The console market is a different beast altogether.

> Instead of relying on a single instance of a product making money for years to come, focus more on new games

Sell it at a loss, make it up in volume? Right.

> or in-game content sales.

That's exactly what I DON'T want. Dragon Age has a guy in your camp with the "I have a quest!" marker above his head. Except it's a paid quest. And you can't make him go away. Die. And what, exactly, is supposed to prevent someone from pirating in-game content sales?

DRM sucks. But so do people. LGP is a small company fighting the good fight. They have clear evidence that piracy is taking place. There are only a few things they can do about it:

- Suck it up and take it. This is the route that most indie/small companies take. Estimates at the piracy rates from other indie devs seem to be about 80-90% [1][2][3].

- Build DRM like 2k games, using SecuROM and like technologies, that make users despise you. This option is expensive in both money and reputation.

- Build DRM like Steam or Stardock's Impulse, where the pain of DRM is offset by the community aspects and other perks. This option is expensive in money, but the reputation damage is minimal.

- Do something quick and simple. LGP seems to have implemented this option.

I posit[1] that DRM does reduce piracy. It cannot stop it, but it can reduce it. Most vendors try to come up with a 100% solution that turns out to be an 80% solution while screwing the legit user over. LGP has chosen to aim for an 80% solution, and I bet it will be just as effective as the other DRM schemes (which is to say, maybe 10-20% of people who would have pirated won't. It only has to pay for itself, remember!). The LGP solution isn't described in much detail, but if it works the way they claim (no internet connection, etc) it seems to fail open. How common is that? I really hope this works for them, because evidence that this works would be a great precedent.

Due to this scheme, when LGP says they're giving you a license for the game and not the game itself, they really mean it. They're giving you the benefits of a license-based scheme rather than just the usual punishments. This sort of scheme is exactly what I want the RIAA to implement; I want my collection in the cloud, and I want to be able to download and play the music on any computer I want, as many times as I want.

1) http://www.gamasutra.com/php-bin/news_index.php?story=17350

2) http://2dboy.com/2008/11/13/90/

3) http://www.gamasutra.com/view/news/25809/TapFu_Developer_Cla...

> Sell it at a loss, make it up in volume? Right.

Or diversify. Do not put all your eggs in one basket. This is the games business, the entertainment industry, where the audience is fickle and diverse in their interests. When it comes to volume, avoid repackaging the same game; you want to hit other player interests.

If your ROI for a game is particularly low, that should be an interesting clue into what players like (and it may not have anything to do with the game itself). "Piracy" is a convenient scapegoat.

> That's exactly what I DON'T want.

Dragon Age is an interesting example with its own history as to why this bit of content was silly. Better comparisons would be to in-game sales for several FPSes. They work for DDO and other MMOs. Let's also recognize that these do not account for 100% of the sales; that would be a bit narrow.

> Estimates at the piracy rates

Strangely, this does not lead to good estimates of potential sales loss, as we have learned from the ridiculous figures RIAA has presented. Pirates are not the problem. We are selling air. Know your customers. If you want to make money, sell something people are willing to pay for.