Brad Wardell's views about technology, politics, religion, world affairs, and all sorts of politically incorrect topics.
Make being your customer more convenient than being a pirate
Published on September 21, 2003 By Draginol In Gaming

I'm going on a trip tomorrow and where I go, so goes my laptop. The laptop is a pretty good game machine. Unfortunately, I can't play very many games on it when I travel. That's because most games now use rather obnoxious CD-ROM copy protection.

Copy protection on PC games is, in my opinion, not just ineffective, but stupid. I say that as a software developer and publisher of 10 years. And as time has gone one, I've become increasingly convinced that any copy protection that inconveniences customers does more harm than good.

Programs like Object Desktop have sold millions of dollars in unit sales directly over the Internet to end users. No CD. No hassles.  And on Galactic Civilizations, we insisted that our publisher, Strategy First, not put any CD copy protection on it.  When you purchase the game at the store you can literally install onto your machine and throw out the CD. Heck, you don't even need the CD in the box, you could just toss that out and keep the serial # and use Stardock Central to download the latest/greatest version of the game. Then you can put it on your main machine, put it on your laptop, whatever.

Who are the pirates?

But what about piracy?  Well, the first problem with piracy is that most people who worry about this kind of thing really don't have much experience in actually dealing with it in terms of what real world impact it has on sales.  We've been selling our stuff via the net for years and piracy, as an actual cost to business, is vastly overrated.

That's because there are really two groups of software pirates that one has to deal with:

1) "The kids". These are the guys who wouldn't buy the product anyway. The "scary" piracy stats thrown around always counts these guys as if they would have been buyers.  Many developers and publishers get really ticked off about this group. I know we did back when we got started. "These guys are stealing from us" and so all kinds of copy protections spring to the imagination to stop this group. "But what's the business objective here? These guys aren't going to buy the product anyway. If they can't crack it, they'll just not use it. And you punish legitimate customers.

2) "The casual pirate". This is where the biggest chunk of lost sales come from. For them, it's about convenience. These guys pirate not because they're cheap but because it's convenient.

To them, they'd love it if they could be reading a review at Gamespot and press a "one click buy" button and a link to an ISO CD image comes up for download.

Effectively Reducing Piracy

What we did with GalCiv was make Stardock Central in such a way so that you could play GalCiv with only a tiny percent of the game downloaded (i.e. figured out the meat vs. eye candy) so that a dial up user could just press a button and be playing the game in 30 minutes or so and get the rest electronically when they had time or wait for the CD to come in.

Our "copy protection" is three parts:

a) The serial #. Unique and virtually unbreakable since it's server generated (i.e. there's no "code" to crack).

Frequent updates.  The frequent updates are the key. Remember, because it's all about convenience for group 2, then it becomes increasingly more convenient to own the game than to pirate it if one has to hunt around warez sites for each update rather than just press a button and have the update in a minute or two.

c) Full download ability. This means that 3 years from now, when they've lost their serial #, lost their CD from moving or whatever that they can go to the site, put in their email address or some other piece of info that may not have changed and it will automatically email you all the info you need. (and if you've lost everything have a phone # that they can call so that they can find you in the database and update your info).  In Stardock's case, a user just goes to the support page, types in the email address that they registered with and they get everything (links to the full download of whatever they've purchased with serial #s). 

This is what we've done on Object Desktop and its yearly revenue direct from the Internet (right form Stardock.com) is in the millions of dollars annually. And it's what we've done with GalCiv and retail sales of GalCiv are looking to be about 3 and a half times what our publisher had estimated prior to release. Sure, there are lots of other factors involved but certainly having users see the value of being a customer has to be part of it. And we're tiny fish really. So if little guys like Stardock can do well with this kind of system, imagine how well it could work on a larger scale?

It's also relatively inexpensive to implement. It does, however, require sucking it in and making it easy for group 1 (the warez kiddies who wouldn't buy it anyway) to pirate it. But even then, some percent of group 1 is going to still buy it for various reasons (group 1 isn't a bunch of amoral robots, it gets increasingly difficult to pirate from people who are providing frequent and free updates).

This doesn't eliminate piracy. But over time, it does reduce is considerably while at the same time not unduly inconveniencing customers.  The easier you make it for someone to be your customer, the more customers you'll have.

The "Stupidity" of Copy Protection

There are no good statistics yet on what percentage of people are significantly affected by CD copy protection. But the anecdotal evidence is very disturbing.

I suspect that many reading this have either personally experienced what I'm about to describe or know someone who has gone through this:

Joe Gamer goes out and buys a game from the store. They get it home and play it and enjoy it. But one day, a few months later, they go to play it and can't find the CD. Where is the CD? There are piles of CDs everywhere. Maybe the kids took it. Maybe it fell into the trash.

Frustrated, Joe Gamer goes onto the net to look for a way to play the game without a CD. They go onto Google or Yahoo or whatever search engine they use and over the course of an hour or two they finally make their way to the "warez" world where cracks, file downloads, etc. are all easily available. More than that, warez has gotten frighteningly sophisticated with seamless distribution file systems and more.  They find not just the CD crack but links to all the latest titles.

So then Joe Gamer, who normally buys games, now has to look at his options:

a) He can do "the right thing" and drive out to the store. Spend $50 on the game, bring it home and deal with the CD copy protection.

or

He can click on a link and have the game in a few hours. No CDs to mess with and no cost.

What do you think many Joe Gamers of the world are going to do? And what about the Joe Gamer whose game won't work because the CD protection doesn't work on their model of CD-ROM drive or DVD drive? Talk about motivating people to learn about warez.

In short: CD Copy Protection Creates Pirates.

Joe Gamer previously knew nothing about this stuff. The demographic info on Joe Gamer (which we at Stardock over 10 years have a pretty good idea of) is that money isn't the issue, it's convenience.  And once he's invested the time to solve his lost CD problem, he then has a harder time justifying the hassle of buying future titles. And many people find it very easy to rationalize their piracy. Joe Gamer included.

So the game publishers, in their attempt to stop the 16 year old pirate (and failing) has instead turned the 25 year old casual PC gamer into a pirate. 

The Future of copy protection

So what should we do? Implement some sort of Microsoft-like product activation system? No. I don't think that is the solution. That doesn't solve the problem of people being able to install their game on their "main PC" as well as their laptop. 

My suggestion would be to recognize the people who buy games for what they are: CUSTOMERS. Treat them as CUSTOMERS. A scary suggestion I realize but it's worked pretty well for us over the years.  Make it easier to be a customer than a pirate. That can't be repeated enough.

So what does that mean? Specifically:

a) Have each game still have a serial # to it.

Give your users a personalized account. You can then tie those serial numbers to the account. You don't require it to play the game, only when they want to utilize some of the added benefits you create for being a customer. As I type this, there are approximately 654,000 Stardock.net "accounts".

c) Provide frequent and meaningful updates after release over the product's active lifespan. Like I said, you don't want to require people to have a net connection just to play your game. But if they're on the net anyway, you can then give them accounts tied to those serial #s. Since each serial # is unique, you can reduce piracy by keeping an eye out for duplicate serial #s floating around in accounts.  Through these personalized accounts users can then get convenient access to frequent updates. These updates should address suggestions and ideas presented by users. Just assign a developer or two to keep track of the good ideas that aren't too expensive to implement and put out an update. We've found that users like to see updates every 45 days or so for a period of at least 9 months after release.  The more updates you do, the more inconvenient you make it for people who are pirating your game to "keep up to date". Each update peels some pirates off and turns them into customers. And existing customers see the support they are getting and are more likely to purchase future products.

d) Provide added benefits to customers.  Don't stop at software updates. The Internet is the key to this strategy. You want people to be your customer. So make it worthwhile to them to be your customer in every way you can. For us, we have focused on creating on-line communities where customers gain added benefits. In Galactic Civilizations' case, that mean mod libraries, medals, ranks, fan fiction, blogs, etc.  Things that add to the benefit of being a customer. Check out this thread on the GalCiv.com forum. There are all kinds of rankings, users accesses, medals, etc.  that can enhance the post-purchase experience.

Now someone may point out that these suggestions only work for those with an Internet connection. True. But people without a net connection are also not likely to be hanging out on warez sites either. And for those people, being hassled by CD protection is still a big deal. In addition, people without a net connection are probably more likely to remember which companies inconvenienced them with CD-ROM protection and which ones did not which can affect future sales.

The Big Picture

Game companies just need to realize that software piracy is vastly overstated in terms of how much it affects real sales. And there are ways of reducing software piracy considerably by recognizing who their target audience is -- customers and potential customers.  Make the incentive for being a customer be greater than the incentive to pirate it and you'll see what we've seen -- piracy not having a significant affect on revenue and a lot of happy customers.

"
Comments (Page 1)
on Sep 21, 2003
Very interesting article. I fully agree with the philosophy used by Stardock and think that it would benefit all the other software companies.
on Sep 21, 2003
Brad, you are a fucking legend and I'm going to give you some money as soon as I've finished KotOR.
Smart, clear, focussed and simple. William Gibson called piracy a 'tax on reputation' which i think is fair, as well. The people who get pirated the most are normally those who can most afford it...
on Sep 22, 2003
I must admit, I originally fell into group 2 for Galactic Civilizations. What made me pirate it to start was not cd protections on earlier games, but rather the fact that I had pre-ordered Master of Orion 3, and suffered the biggest gaming dissapointment of my life. I had heard of Galactic Civilizations, and wanted to try it out before I bought it, but there was no demo available. After MOO3, I vowed not to buy a retail game at full price without playing it first.

So I downloaded an ISO, installed GalCiv, and played it for a while.
About 2 days later, I purchased the game. Add another few weeks, and I purchased Drengin.net

I applaud Stardock's methodology regarding to protecting their software, and I can't wait for their next release. I anticipate that as long as new games are being produced, Stardock will have me as a steady subscriber to Drengin.net
on Sep 22, 2003
Although I generally agree, I'm surprised you don't mention the retail drawback.
People buy the game on retail, install it and then go back to the store to get their money back.

I believe that you can't get rid of the CD protection when retail stores offer the customers the possibility to refund the game back if they're not satisfied with it. This possibility is very good for the consumer, because when you don't have that, you just don't buy as many games, for fear of wasting money.
What does the would-be-player do when confronted with a new game? They will want to know if it is any good. The publisher will say it's great. The developper will say it's great. Most fan sites will say it's great. Very often, if the publisher is big enough, magazines will say it's great too. Sometimes, a magazine you trust will hire a weirdo who will say the game is worth nothing when in fact he never played this kind of games before and doesn't know what he's talking about. So how do you get your opinion on the game?
-You can trust a reviewer (that's actually what I did for Galciv, because the reviewer was someone I knew I could trust). This is risky business in general, since most reviewers can't be trusted.
-You can play the game by yourself before you decide to buy it. This is the most secure option. This can be done in several ways:
You can buy and get a refund in case you don't like it, but in this case, the publisher will lose sales for abusive refunds.
You can download the warez. Even though some people will buy the game afterwards, it's not very satisfactory for anyone to have the consumers forced to do illegal things in order to appraise the product.
You can provide a demo.

Thus, in my opinion, a free demo is a must-have (available on the net or through magazines). There are several games I wouldn't have bought hadn't it been for a demo.
To be really effective, the demos would have to be available at stores (instead of an offer for a refund), not only on the web or in magazines.
on Sep 22, 2003
Well said. I only wish other companies thought like this. If they did, perhaps I could still play The Sims after having lost the cd a few years ago. The shiny box does little to comfort me
on Sep 22, 2003
I agree, i hate CD protection. When i want to play a game I dont want to look for the cd before i can run it. Most of my games i have installed have a no CD patch on them for conveniance, those that i cant get a no cd patch for i dont tend to play. Imagine how frustrating it would be if you had to put a CD in each time you went to run programmes like Windows, Office, Visual Studio and so on...
on Sep 22, 2003
I just installed Alcohol 52% from http://www.alcohol-software.com/ off a mag cover disk. It let me build an image of my protected game disk, store that on my HD, mount that image as a virtual drive and then play the game from it. Now the game CD is back in its case up on the shelf where it belongs. It looks worth buying
Good article. Similarly I get hacked off by DVDs that won't let me fast-forward through the copyright and company logos. I'm thinking of building my own DVD player (modded case, Linux etc) as my next project. Sigh, why do I feel it won't be that easy? See http://www.theregister.co.uk for various articles on the RIAA for a third take.
on Sep 22, 2003
Great article. As another person said, I was also in group 2, because at the time I heard of Galciv there was no demo available, and I have been burned too many times buying games that sucked and that I could not return. By I have since repented, bought Galciv, and really enjoyed the frequent updates. Since then I have looked at the other things you do more closely, and even started arguing on this site. We definitely do not agree as concerns politics, but count me in as a loyal customer
on Sep 22, 2003
I was also group2 for GalCiv. I also ordered MOO3 and was completely disappointed. Some friends said GalCiv was the true heir to MOO2 so I wanted to try it, but not waste money on it. I downloaded it, loved it and wanted the upgrades. So I made a special trip to Best Buy to get the full game.

I would like to say I have never bought a game I was allowed to bring back if I didn't like it. Where are these stores I keep hearing about?
on Sep 22, 2003
Hmmm, i bought the german version of the game today and guess what - the CD has a copy protection. This is bad enough but i cant even start the game because of this. As in my DVD as in my CD-RW drive it fails to load with a " please insert original cd-rom " message.. This is very bad because there is nocd.exe yet for this version... So yes - copyprotection can create mad customers ((
on Sep 22, 2003
A very smartly written article. I really don't buy a lot of games, because I suck at them lol, but the few I have it annoys me to no end having to insert the CD to be able to play. I guess its better than years ago trying to read black ink on red paper to put in a code to get past copy protection. I just wish as you said, they'd stop making it so hard to be a customer. You will never completely stop theft.
One person replied here that you could simply return the disc after using it and get your money back. That is untrue at least for most stores. Opened software generally is not accepted back, only even exchanged. Even if a place takes back used software, it is probably a low percentage of people who take advantage of that policy.
on Sep 22, 2003
As a long time developer I completely agree with this view. I've been trying to educate others on the "true" impact of piracy for a number of years. Nobody seems to understand the "they wouldn't have bought it anyway" group and refuse to believe that they actually would not have purchased the game.

One thing that must be understood is that by it's very nature no copy protection system (cd protection) is unbreakable. In contrast good "anti-piracy" measures can be used. Look at GalCiv - you need a valid serial number to submit your games and let's be honest, after a few dozen games this becomes the driving reason for most people to continue playing. For another example look at Warcraft III, you need a valid key to play on battle.net - and that's the only reason to play Warcraft III!

As for frequent updates being a deterent to piracy..... please get real! The 1.1 update was up on alt.binaries.warez.ibm-pc.0-day about 3 hours after it was up on stardock central. Someone obviously figured out how to do a diff on the files fairly quickly.

The biggest deterent by and large is to have quality software with quality support (which stardock has hit high on both). Crappy software (with or without serious protection) simply results in a large amount of piracy, and few purchases. I know a LOT of people who "check out" games and applications. Many of them never make it past a day before being deleted. A few make it a week and those that make it longer are the ones that are "keepers" and off to Best Buy or online to purchase them.



As for returned software. Some states (including mine) have a 72 hour return law which states that ANY product purchased may be returned within 72 hours for a full refund (some are less, 24 or 48 hours). This includes even such things as cars (though they can charge you a reasonable "rental" fee). Just hassle them with your states revised code and they will buckle. Some stores (a local software store in the mall, used to be walden software but changed now) will let you return any item for up to 7 days.

As far as game demos go. Fine, but they must be complete demos. Not demos that hide half of the features away. i.e. a Warcraft III demo would only be good if it would allow you to play on battle.net for say, 7 days. Many demos I find are so stripped that they only vaguely resemble the final product. Also, I read somewhere that demos are usually based on beta or pre-release code until months after the official release when they finally update the demo (and about the time they decide the game is dead and move onto another fast money maker)

Another thing that upsets me (and pushes me towards piracy) is the "one copy per computer" policy. I have 4 computers, one in my office at home (main home), one with the tv in the family room (entertainment and some games), one laptop and one at the office. My children are too young to start gaming yet, and my wife has no interest in such things so I am the only one who will ever play a game (actually, my wife uses the computer rarely, to check email, to count that point towards all other software!!!). So, if no one will ever be using the software (say office xp) on any two systems at the same time then why oh why am I forced to pay for it multiple times? Luckily I just flashed my student ID and got it for $5 at the bookstore per copy. But honestly. To me all these computers together are really just ONE COMPUTER because that is all I am capable of using at one time. I think one other form of anti-piracy would be the "end user license model" or the "end family license model" in this license model one license would cover all computers owned by the purchaser (charge me 10%or 15% more - I'll still be happy and I'll buy it instead of cussing you and finding it elsewhere!) But they are more than willing to allow you to uninstall your software, then install it on the other system to use, then uninstall it and move it back to the original computer all you want! The same thing just inconvenient!

I kind of assumed based on the stardock business model that it was okay to install on all my computers. I hope I wasn't wrong there.
on Sep 22, 2003
Rab,
I found Daemon-Tools to do a fantastic job of creating virtual drives which you can mount to a complete copy of a CD-ROM, or an ISO image, for essentially free (unless you're a business).
http://www.daemon-tools.cc/

on Sep 23, 2003
The server-generated serial number is an interesting idea, but I'm not really sure how well it'll work; in the long run it may actually cost you some customers. For example, I don't have Internet connection at home, and I'm not planing to have one in the forseeable future. If I understand it properly, one needs to have a connection to be able to use the serial number. As such, as much I was interested in GalCiv, I think I'll pass on this title.
on Sep 24, 2003
(Rab)
"Good article. Similarly I get hacked off by DVDs that won't let me fast-forward through the copyright and company logos. I'm thinking of building my own DVD player (modded case, Linux etc) as my next project. Sigh, why do I feel it won't be that easy? See http://www.theregister.co.uk for various articles on the RIAA for a third take"

No, it won't. Among other things, you'll have to break the law to do this: there is no legal DVD decoder for Linux. The wonders of the DMCA never cease.
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