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> There does not exist a single peer-reviewed study that shows a correlation between increased sales and DRM systems.

I'm not aware of a peer-reviewed study saying the other way, either. This is such a weird thing to say. Do you only believe information that comes from peer-reviewed studies?

Many indie developers who might be sympathetic to the anti-DRM cause still choose DRM platforms, because they perceive it makes money for them. Or maybe they choose to make webapp type software, which conveniently avoids the issue while being the most unfree method of all.

Since they are closest to the market, they posses what economists call 'local knowledge'. Some have released numbers to back up their claims, which is more than you've done. (Also, how many people do you think had a VHS copier when Blade Runner came out? 0% of people I knew growing up could copy VHS tapes.) Anyway, I think it is correct to look at market behavior if you want to talk about market behavior, not what bloggers say when they aim to maximize pageviews.

Just to be clear in case anyone doesn't know: while Steam offers DRM, it's possible to distribute games through Steam without DRM, and many developers do so. The DRM part of Steam is optional for the developer.

I think the most effective DRM systems are those on consoles like the Xbox and devices like the iphone/ipad. In other words when you have a "Don't run by default" policy. Because here you can actually block binaries from running on an un jailbroken device. As soon as you allow execution of user specified code it's game over for DRM.

This present a sort of problem in that there is still a need for computers which can run software that wasn't bought through some particular channel such as an app store, therefor there are still computers that can run pirate content.

I have a bunch of games on Steam, I have no idea which ones use DRM but I'd wager strongly that every single one of them is available DRM-free on a torrent website.

Speaking personally the main incentive not to pirate games is the Steam sales and humble bundles which give me games so cheap that I'd really feel like a bit of an idiot jumping through whatever hoops in order to get the games for free.

We do live in a society based on evidence gathering, and thus market behavior should be based on it. My attempt to address the issue is mostly to point that out, and then do some observation regarding the market. Observation is the first step before evidence is gathered, while theory/best practice is the last step after Observation, evidence and analysis has proven something to be "true".

When people give out best practices, or gives out necessities of the market based on nothing but opinion and theory, it become pure myth and superstition. Sysadmin work which is my line of work, has a bunch of myths. Some people still making firewall rules against win95 ping of deaths, even if everyone in the company is running around with this years gadgets.

But you did ask if I have any evidence of my own, and here I relied on common sense and observations. DRM cost money, in both time, effort and support. Additional, I looked at the indy crowd of movie makes which has only has weak/no DRM, and the indy crowd of games which has all from strong to no DRM. What I can see, there are no major difference what so ever, and both groups often suffer from low revenues in products that later get critical acclaimed as a master piece.

But Im sorry, no, I do not have any research paper to support that observation. That would be the second step, through one can glimpse some truth by checking if anyone are disagreeing with it. Also, since DRM cost money, it should naturally require a higher burden of evidence to become best practice or necessity in the industry.

Minor note about Blade runner: It took several years before the movie reached a cult status. By the time it did, people started to have dual VHS players at home or could call some dude in the campus to do a copy.

I am just confused why you require a peer review study to prove DRM is good while your evidence it is bad is "common sense" and "well I think Blade Runner didn't make money till people passed around VHS tapes".

I do not think we need to provide evidence that a developers time cost money (ie, to code/acquire DRM software). Second, I don't think we need to provide evidence that running a server and having bandwidth to run authentication servers cost money. Last, I doubt we need to provide evidence that extra support calls thanks to DRM issues cost money.

Each three of those are what I call common sense, ie, we know them all to be true. Those are also the only assumptions I included in my "I relied on common sense and observations". The rest is observations, which is the first step in a honest and scientific discussion about the effect of DRM. First you do observations, second you collect evidence, third you do analysis and last you create theory. Only once you done each step and reached theory should economic decision be made in the case of including DRM to increase revenue. Before that, only the cost of DRM is know and everything else is speculations. Those speculations has both those that say its great and those that say its crap and there is nothing in the world that will convince them beyond a scientific approach.

How would you propose that such a study be performed?

The same game released with and without DRM? Different games with and without DRM?

Large sample size over as much types of media possible (game, music, movies, and software). Afterward, I would start digging down further by separating producers, market groups and market targets, and then do statistics to find correlations. I would ask questions like: Do a indy game being released on steam have similar economic characteristics of a indy movie being released on netflix.

Then I would collect data on piracy rate vs initial buy rate vs long tail and find product types that share those. Then, with all that data, one can start looking into DRM and individual products from groups with shared economic traits but which differ primarily on the DRM question. With a decent sample size, some kind of answer should pop out.

That would be my guess of a simplified study. Statisticians and economics has surely more to say on this and where the corner cases are. There might also be smaller studies to do if one accept some early assumptions.

I'm far from a statistician, but the difficulty in the study seems to be that you have products which are radically different from each other in demand structures.

How do you tell whether the sales delta is driven by DRM or a much, much higher quality artist?

If someone is out there on HN with some ideas, I'd love to hear them, not for this problem (I don't really care), but for other problems that may be difficult to solve later on.

> I'm far from a statistician, but the difficulty in the study seems to be that you have products which are radically different from each other in demand structures.

>How do you tell whether the sales delta is driven by DRM or a much, much higher quality artist?

I'm not going to weigh in on DRM vs. non DRM, but you'd get around that problem by explicit randomization. If you have enough observations then differences in quality, etc., literally average out. If you have more information up front you can randomize conditional on the observed characteristics, which reduces the number of observations you need.

They only average out if they're uncorrelated. I'd say it's pretty likely that high-budget, expensive games are more likely to be released with DRM than low-budget indie ones. You could try randomizing on budget, dev size, etc..., but there's really so many random variables to account for in game development (expected sales? platforms released on?) that you'd need a ton of data before you really got something that's statistically significant.

Although I'm no statistician either, so whatever.

Yeah, I should clarify that I meant you could do it if you control whether they're released under DRM or not. If a group of indie developers wanted to pool together and run an experiment, they could do it in a way that was really informative about its effect on revenues (the conclusions might not hold up if you tried to extrapolate too far beyond indie games though).

I agree that the existing data aren't much like the random experiment I was talking about.

Maybe, but what if indie games are less susceptible to piracy than blockbuster games.

There are really just massive statistical hurdles to overcome with this type of analysis.

You could prove that indie games with strict DRM will perform differently than indie games without strict DRM, but extrapolating that to feature, blockbuster games is problematic.

> I'm not aware of a peer-reviewed study saying the other way, either.

DRM costs money (dev time, QA, etc.) and may hurt legit customers when done wrong (all too frequent). Rightfully, the onus should be on proving it to be worth the costs, but people add it without even testing the effects.

Can you provide the link for the peer-reviewed study that says all that?

Why should the onus be on the party making the DRM? It is their product and their copyright, why should they have to prove it is effective?

You've misinterpreted what I said completely if you think they should be compelled to do that, rather than for it being a waste of money. One would do something more like A/B testing, anyhow. The fact that GOG.com makes good money off of old games with the DRM removed could be considered evidence. Publishers are certainly free to waste money if they want to, it's simply not good business. Right now, we know it costs money and available evidence indicates that it doesn't help at all.

I don't really think you want them to fail, so I can't see why you would argue that they should continue wasting money?

I played World of Goo pirated.

One year later I bought two licenses in Steam.

I also have heard lots of similar anecdotes, I would be very interested in an study about this phenomena.

This actually appears in music much more than games.

With music, discovery is a major problem, and pirating allows for music to be heard by a larger audience. Some of those people become fans and ultimately buy tickets to concerts (artists accrete more money this way, incidentally)

When you bought it one year later, did you pay the full price of it as it cost 1 year ago when you actually played it, or did you buy 2 licenses at a highly discounted rate on one of the frequent steam sales?

If you have 200 game developers slaving away to push out a to push out a 50-EUR game, pirating and then a year later buying it at a 10-EUR sale will not do them as much good.

Only true if the 50-EUR sale would have been made instead. This is RIAA logic to suggest that every single download is a lost sale. If they would have made 0-EUR out of him with no piracy then piracy hasn't really lost them anything. Besides, they only charge 50-EUR as part of a market segmentation strategy ie so they can get more money from people who would pay more.

Buzz is important, and products like games are heavily buzz-dependent. Piracy exposes more people to your product and generates that buzz.

However, while hardware manufacturers give out latest hardware to reviewers in order to generate buzz, they don't just hand out alienware laptops in the local mall. I think piracy needs to be tedious, unreliable and a compromise to the genuine game for it to be effective.

My understanding is that the research that has been done on music and films suggests that small (relatively obscure) titles are helped by piracy (and significantly) and blockbusters are harmed by it. I assume the same is true of computer games too.

>World of Goo of the past has shown that indy games a worth the risk of buying a copy and testing it out (if one would ignore the paradox).

Indie game devs have an advantage here. Indies can release honest demos of their games because they're not necessarily concerned with polishing the turd for E3 or a console release - they're much more interested in polishing the final result and having people buy their game because it is good. Indie game devs can also go back to the shareware model (not that they have to, but they can) which no modern game studio would touch. Indies have that flexibility because they're indie.