Experienced Points: Denuvo – Four Years Later

By Shamus Posted Wednesday Nov 7, 2018

Filed under: Column 78 comments

A funny story about my column this week: I finished writing it on Thursday. While polishing / proofing, I wanted to hunt down some citation links. And by accident I stumbled on an old column of mine that had exactly the same thesis. I had no memory of writing the original column.

As a result, I needed to re-write my column at the last minute. I changed the focus of the article but kept a few of my supporting arguments.

For years I was laser-focused on this argument. Let’s call it my Opening Salvo:

Games always end up on torrents on Day 1. Therefore, DRM does not impede piracy. DRM costs money. Moreover, many paying customers are very public about their refusal to buy games with certain types of DRM.

Therefore, DRM wastes money and hurts sales.

Now, this isn’t necessarily true these days. Like I said in my column, Denuvo does manage to protect games for a few weeks or months. But my Opening Salvo was the standard argument up until Denuvo appeared four years ago, and I felt like the debate never progressed beyond that point.

It’s not like I was the only person making this argument. Gaming forums were full of people making this same point again and again. Consumers would throw a fit, and then the publisher would roll out a new system that was more obnoxious / restrictive / intrusive than before, with the excuse that “We need to do this to stop pirates!” Not only was the DRM itself annoying, but we were also left with the impression that we were arguing with a wall.

After spending more than a decade ranting about DRM, I’d love to know what the publishers are thinking. Are they as dense as they seem to be, or is there some other explanation for their apparent bloody-mindedness? Which of these is it:

  1. The publishers 100% understand that DRM doesn’t stop piracy, but it DOES kill second-hand sales and the stuff about the pirates is just an infuriating misdirection.
  2. The publishers have literally never been exposed to the anti-DRM argument, or they’ve dismissed it due to systemic ignorance regarding consumers and technology.
  3. The publishers have data that indicates that DRM is actually beneficial to them, but they’ve never shared that information with their customers. For some reason.

I don’t know.

If their real goal is to kill secondhand sales, then why not push digital sales? Why pay for increasingly-annoying DRM when the old stuff effectively kills the secondhand market?

It’s hard to believe they’ve never been exposed to the Opening Salvo. On the other hand, they’ve never attempted to rebut it.

To me, Ubisoft has always come across as the most arrogant and tone deaf of the big publishers when it comes to DRM. Their reasoning for not porting I Am Alive to PC was the worst sort of lazy guilt-by-association. Their argument boiled down to “They’re all pirates so why port anything for them?” This argument didn’t generate a lot of outrage because I Am Alive was a trash gameI played the first hour on the Xbox 360 and quit due to toxic levels of boredom. and nobody cared, but their comments were still pretty shocking. It sounded like they were more interested in expressing their spite for pirates than they were in making sound financial decisions. If you move 100k units on the PC, that’s still $(100k × Sales Price) of revenue.

 

Footnotes:

[1] I played the first hour on the Xbox 360 and quit due to toxic levels of boredom.



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78 thoughts on “Experienced Points: Denuvo – Four Years Later

  1. Kamica says:

    I’ve not yet read your article, but I just wanted to rhetorically ask: Who at the Escapist thought that static header that takes up a quarter of the vertical space of the page at all times was a good idea!? Makes me feel claustrophobic D=.

    1. Olivier FAURE says:

      It’s even worse on mobile.

      1. tremor3258 says:

        I thought that was just my phone being weird. The fact it’s everyone is I guess, not really better.

    2. Gargamel Le Noir says:

      The problem is that it covers half of our most comfortable reading space, right at eye level. Pure idiocy.

      1. Karma The Alligator says:

        And half of it is empty, so it really could be reduced.

        1. Droid says:

          If you’re already using an AdBlocker, you could simply block the ad container and header as well. Takes care of everything blocking the main row.

          1. evileeyore says:

            I tried this… man, it’s an amazing difference!

            Here’s several screen shots as i blocked the elements in stages and the difference it made:

            Escapist AdBlock Stages

            (In case it isn’t clear the last thing I blocked was the “soc media div class”, basically the Facebook, Twiiter, etc links on the far right in the blue top border.)

    3. Alezul says:

      Wow you weren’t kidding. What an uncomfortable reading experience.

    4. ccesarano says:

      I haven’t jumped into the code but it seems like they’re either giving too much padding around the ad or simply leaving open space in case they have a larger ad. Regardless, that header is NOT responsive and really needs a fix.

      Fortunately I think they are going to get enough complaints to implement a proper solution.

      1. Paul Spooner says:

        I know what you meant, but I couldn’t help but read this as “complaints” being the crafting material that the web developer needs in order to craft a well-designed website.

    5. Wiseman says:

      I actually left a comment there recently, not quite believing this was a real thing and hoping it was a freak problem on my end.

    6. Lee says:

      https://alisdair.mcdiarmid.org/kill-sticky-headers/ Gives you a bookmarklet that works in Chrome, at least. No idea if it works for mobile.

      1. Wiseman says:

        It works!
        *Ode to joy*

      2. SADD1 says:

        Works great, Awesome!

        I love how they made the ad so obtrusive and irritating that the literally forced me to obliterate it if I want to imbibe the content, that’s some really poor design there…

    7. Scimitar says:

      They *definitely* should have put it on the bottom instead of the top. It’s less obnoxious, and more importantly where your eyes will be when you finish reading the article.

  2. guy says:

    I think the initial position of the publishers is that DRM at least means people have to torrent things to pirate them and a lot of people won’t or will have trouble with their firewalls or whatever.

    Then EA and co were blindly convinced that they would be able to break the key assumption that stuff always ended up on torrents and they embarked on ever crazier plans to pull it off that were then defeated. I don’t think Denuvo is notably invincible but they’re constantly updating their software to counter new crack methods and the arms race is keeping games off the torrents and teaching the important lesson that just because someone would like something free that doesn’t mean they’ll pay $60 for it.

  3. ElementalAlchemist says:

    I imagine DRM is mostly a sop to a publisher’s shareholders. Most of them likely fall under the #2 banner. Management at the various publishers would have to know by now that DRM is broadly a failure. Some AAA games have probably made minor sales gains in the week of release under Denuvo as people that were on the fence end up buying with no ability to isodemo, but as you say there is zero evidence of any substantial revenue gain thanks to Denuvo. You can be sure they would be trumpeting it to the hills if they had any actual evidence.

    As to Denuvo pivoting to an online focus, as you mention in the EP column, I think this is more a reaction to broader industry trends than something they decided on their own. Publishers are all about the “games as a service” model now. Always online and lots of microtransactions/lootboxes is the way of the future. The online component already takes care of piracy, but they are probably even more keen for the anti-tamper element in order to prevent people subverting their paywalls. Can’t have people finding a way to avoid opening up their wallets a second (or more) time.

    1. Joshua says:

      Shamus talked about this in the old post. What kind of shareholder understands the concept of what DRM is yet can’t understand an argument about why it may not be cost-effective? Obviously, you’re talking about institutional shareholders as opposed to individual day traders. Either way, I would think the shareholder focus would be more on the sales made than the (potential) sales that got away.

      1. Karma The Alligator says:

        If they’re just told it stops (or at least reduce) piracy, they probably won’t need much more convincing.

        1. Joshua says:

          But the argument is that they’re the ones pushing for it, not the ones needing persuading that it’s useful. Is there any documented evidence that the usage of DRM has been strongly pushed during meetings with principal shareholders by the shareholders?

          There’s just this weird argument that DRM exists because shareholders are strongly pushing operational decisions onto management of all of these different companies despite management’s (supposedly) superior knowledge of operations. That’s like the shareholders of various fast food franchises insisting that each store have some variety of ice cream, which may or may not be a good idea. Shareholders just usually don’t get into that kind of nitty-gritty decision-making, and they usually would have some kind of evidence behind them if they’re getting into a shoving match with management.

          1. RFS-81 says:

            I’m not sure how hard they really need to push. Obviously, I don’t live in that world, and we’re all just speculating, but: If someone asks what you’re doing against piracy, it’s easier to just say “We’re using Foo Software to protect our games” than to argue why their concern is irrelevant.

            1. Joshua says:

              I haven’t seen anything like this in the corporate world in my experience. The Board of Directors represents the shareholders, and they typically stay big picture. The argument for “shareholders make them do it” is basically saying that management thinks something is pointless, but the Board ignorantly thinks otherwise and thus Management goes along with it.

              Shareholders are typically viewing this through the lens of the return on their investment and whether that return met projections. They don’t get into a lot of hypothetical “Well, the company met projections and I received/exceeded my expected return, but what if the company had done X instead, would I have made more? I think the company should do X then, just in case, regardless of what management thinks.”

              Where it could come up was if the company failed to meet sales projections, and there was evidence that DRM had played a part. In that case, either management and shareholders would be in agreement, or the shareholders would be suing the company for mismanagement and would have to have substantial evidence to prevail, not just gut feelings or “everyone else is doing it, so this was obviously the issue”. Essentially, since management is involved with day to day operations and shareholders are not, there would have to be some pretty damning evidence for this kind of operational second-guessing. And for this scenario to be in place, virtually every computer game publishing company would have to be in this same situation with clueless yet pushy shareholders, and acquiescent management who can’t make a counter-argument.

              In short, I think management is fully on board with implementing DRM, good decision or bad.

  4. Daimbert says:

    It sounded like they were more interested in expressing their spite for pirates than they were in making sound financial decisions. If you move 100k units on the PC, that’s still $(100k × Sales Price) of revenue.

    Of course, you’d have to build in the cost of actually porting it — which, given the wide variety of PC hardware, is always significant — plus the lost opportunity cost of not being able to do other things with the team doing the port. It wouldn’t be a bad strategy to take a game that isn’t well-known but that has some appeal to PC gamers and say that you aren’t going to port it because of piracy to see how many people complain and say that they really, really want it.

    Of course, this presumes that they are thinking like a good business should, and it of course would have been better to use a GOOD game for that …

    1. Decius says:

      You don’t count BOTH the cost of the programmers who do it AND the opportunity cost of what those programmers didn’t do. You count the higher of the two- Either they wouldn’t do anything during that time, and they cost their direct expenses, or they would be, their direct expenses are a given, and they cost what they didn’t do.

      1. Daimbert says:

        The cost of the programmers is the money you are expending on doing the port, which then has to be balanced against the expected profits of the port itself, which maps directly to the calculation Shamus made: you take the number of sales * revenue per sale and subtract out the cost of doing the port, which includes the direct salaries of programmers. The opportunity cost is how much profit you could have made or how quickly you could have accelerated getting profit from something else if they had been working on that instead, which you would have to subtract their salaries from, of course, but it’s still separate because it’s money that you COULD have had if they were working on that instead.

        To use a simple example, take the choice of making a port for PC or making another console game in that same timeframe. You want to see how much money you could make on the port itself, so you take Shamus’ projected sales numbers and subtract the costs to get what that profit is. If that’s too small, you clearly won’t make the port. But you also have to consider what profits you’re missing out on by having them produce that port instead of the other game, so you figure out what the projected sales numbers are for that game and subtract out the costs of making the console game. If that’s bigger than what you’d get from the port, you shouldn’t do the port but should do the console game. But you have to consider the opportunity cost separately because it’s the money you’d be missing out on by doing the port, whereas the former is figuring out if the port will, in and of itself, be worth the money you’d have to put into it to do it in and of itself.

  5. Gethsemani says:

    Can’t it be all three coupled with four: Publishers have to, at least, put up a token effort of preventing piracy to calm investors, shareholders and board members. The idea that a lot of people are using your product or service without paying for it is never appealing to a company, no matter if you believe that they’d pay if they couldn’t use it for free or not. If nothing else, it sends a really bad message to actual paying customers if you don’t do anything to stop those that use the product or service without paying (“Why should I pay for this if all those other guys don’t?”).

    1. Dreadjaws says:

      Yeah, but, you know, investors and shareholders should be aware that this sort of thing happens in all industries. Shoplifting, industrial espionage, bootlegging, etc… all of those things have people taking advantage of your work to profit from it one way or another without you seeing any sort of compensation in return. It’s nothing new.

      Yes, this sort of thing has to be fought, of course, but notice how no other industries do it by actively attacking the customers. If a store has a shoplifting problem, it doesn’t demand to pat down the customers every time they exit, for instance. They know that If they did, people would stop going. Furthermore, as it has been already discussed here hundreds of times, DRM affects exclusively paying customers, which is even worse.

      Leaving aside that the answer to “Why should I pay for this if all those other guys don’t?” is “Most people are honest, so they don’t steal stuff just because they can”, what do you think a customer is going to react more strongly against? A company doing nothing to stop thieves or a company that actively punishes paying customers?

      1. guy says:

        Generally a store will have some cameras and RFID tags and security to deter just walking in, grabbing things, and carrying them out the front door. On the theory that lots of people would do that if it worked but won’t try to bypass security measures. The DRM version is CD keys that stop you from just handing someone a copy of the executable you installed.

        1. Scimitar says:

          Yeah the key design space is just stopping casual sharing like, as you said, cd keys. If it took absolutely no effort to pirate, many, many otherwise honest people would do it. If you have to download a key cracker, that cuts out 90% of the people would otherwise just hand out the cd like they’re loaning a book, because if nothing else it signals that “yeah you’re not supposed to pass this around like it’s a book on your coffee table”.

      2. Gethsemani says:

        Guy below already answered some of what stores do. If you buy clothes, the color packets attached to the clothes will have to be removed, if you buy DVDs or CDs these days it is not uncommon for them to be kept in locked, obtrusive cases that has to be removed. In the case of cigarettes or medication they are often kept behind counter and have to be asked for specifically. These are all “actively harming customers” in that they make it more of a hassle to get what you want and often involve additional waiting times, which affect all customers coming after me in line.

        Now, whether you feel that those measures are more or less of a hassle then DRM is entirely subjective. I have personally only had problem with DRM one time, when SecuROM on the original Witcher wouldn’t accept my DVD-reader/burner as a legitimate DVD-reader. So for me most DRM has been no more intrusive then having to wait as the cashier fiddled with removing the RFID tags and color packets when I buy clothes.

        DRM is not punishment against legitimate customers, but it might inconvenience a customer and, in the worst cases, accidentally deny legitimate customers access to the service. But that makes it no different from, say, ticket controls in airports or reservation checks at restaurants. They are not meant to punish people, but if someone makes a mistake (such as shoddy coding in Starforce) customers might end up having to work to access the service or product they’ve paid for.

        1. Blackbird71 says:

          “Now, whether you feel that those measures are more or less of a hassle then DRM is entirely subjective.”

          It’s not subjective at all. In each of your examples of physical protection, once I’ve made my purchase and left the store, my purchase is completely mine, and there is no more interference from any of those anti-theft measures. They’re not “actively harming consumers,” because their presence does not extend beyond the point of sale.

          With DRM, the hassle persists long after I’ve purchased the product, and it continues to cause problems for as long as I use it (often making the experience worse the longer I have it, with server shutdowns, etc.). Equating this level of intrusion with physical theft prevention measures that are removed upon purchase is ridiculous.

          A more accurate equivalent would be if I purchased a CD in one of those obtrusive cases, but I had to always keep the CD in that case even after I had bought it and gone home. Any time I wanted to take the CD out to listen to the music, I would have to call up the store where I purchased it and have one of their employees come over to my house, check my receipt, and unlock the case for me. Eventually, the store where I purchased the CD might go out of business, and if that happens, my CD would remain forever locked away and I’d be out of luck.

        2. Dreadjaws says:

          These are all “actively harming customers” in that they make it more of a hassle to get what you want and often involve additional waiting times, which affect all customers coming after me in line.

          This is a joke, right? These things are nowhere on the same level, and they affect thieves at least as much as paying customers, if not more. Again, DRM affects only paying customers.

          1. Shamus says:

            The analogy I like is a movie theater where the back door is always opened and people can sneak in freely without getting caught, so the theater begins adding more security theater to the FRONT door, hassling people who are trying to pay. It creates an incentive to sneak in. Not because you want to cheat the theater, but because you just want to be left alone and enjoy your movie in peace.

      3. Piaw Na says:

        You obviously haven’t been to a Costco, where your outgoing cart is checked against your receipt. And yes, I’ve been sent back once even and had a manager confirm that my receipt did match my cart.

        1. Joshua says:

          The only time we were stopped at Costco was because our receipt had one item more than what was in our basket, and we had thus been overcharged. I can’t remember the exact circumstance why it occurred, but we got a refund.

        2. shoeboxjeddy says:

          They’re checking that the cashier didn’t overcharge you. That part of their business is not loss prevention related.

  6. Gargamel Le Noir says:

    Yeah, nobody’s surprised that a successful DRM didn’t impact sales at all except a bunch of people in suits who are in charge of those very decisions… I wonder how much they paid for that thing.

    Also why has the Escapist started a one website war against my reading comfort? Their top banner now covers a quarter of my screen even when I scroll down, it’s horrible!

  7. Dreadjaws says:

    A funny story about my column this week: I finished writing it on Thursday. While polishing / proofing, I wanted to hunt down some citation links. And by accident I stumbled on an old column of mine that had exactly the same thesis. I had no memory of writing the original column.

    It reminds me of every time I see a game that I want on sale and I think “Oh, nice! Finally I can get this for cheap enough!” and go purchase it only to realize I already own it, sometimes even several different copies.

  8. Orillion says:

    I think lifelong Capitalists–the people most likely to be behind the reins at a large business–are just as much enamoured with the idea of keeping goods and services out of the hands of people who they think don’t deserve them as they are actually improving their own material worth. It’s also notable that the EU conducted an independent study that ended up showing that piracy not only didn’t hurt sales at all, but actually possibly helped them–which they withheld the results of, naturally

    Source: https://www.engadget.com/2017/09/22/eu-suppressed-study-piracy-no-sales-impact/

    1. C__ says:

      Here is the pessimistic view of the current situation: the big gaming portals are dirty as fuck (Kane & Lynch anyone?), the YouTubers are either corrupt or just plain dumb and there are no relevant game magazines anymore. So how can I be informed before spending 60 bucks (at least) in a new game?

      Many people do the following: if broadband limit is not an issue on your country, download a pirate copy and play sometime to see for yourself is a viable option. If the game is good, throw some money on it, if it is bad, forget and move on.

      1. Mousazz says:

        So how can I be informed before spending 60 bucks (at least) in a new game?

        Ehh… While definitely not the same experience, one can sort of get the idea about whether they’d like the game by watching part of a playthrough on Youtube. Sure, it doesn’t capture the gameplay feel, but for an experienced gamer it should be enough information to make an informed decision.

      2. shoeboxjeddy says:

        You can get a sense of how a game turned out through a mix of game reviews, streams, and youtubers. If you’re really unsure, you can buy and then take advantage of the refund policy if you quickly decide the game is not for you. If you’re asking “how can I completely remove the risk that I won’t end up liking the game overall?” you can’t… grow up. What kind of business has that guarantee, ever? Do you contemplate not paying at a restaurant after eating the whole meal?

    2. Blackbird71 says:

      You have a strange view of capitalism.

      Given Shamus’ prohibition on political discussion, that’s all I’ll say about that.

      1. houiostesmoiras says:

        At the risk of sounding political, I think it’s less about capitalism itself than the way older wealthy executives in a capitalist (in the economic sense) company are likely to think. I don’t think it’s the word I’d have used, but of the cuff, without trying to come up with the perfect word, I at least know what Orillion meant.

  9. Mephane says:

    When the end user activates the game online, the Denuvo activation server will send them the missing code, modified so that it will only run on their specific hardware. Note that this isn’t a simple check like the kind I described earlier in the article. The game doesn’t just check your hardware for a match; it uses code deliberately engineered to only work for your specific model of processor. This means that the game will only run on your machine, or on ones with an identical hardware configuration.

    As a software (not game) dev, this description invokes in me a strong sense of body horror followed by intense anger. It makes me wish I had 4 hands because I need to double-facepalm and flip my table at the same time.
    I feel sorrow for the games dev who have to put up with this abomination and integrate it into their code, while wishing that the deranged individuals complicit in designing and imposing this scheme will step on a piece of lego.

    1. guy says:

      I’d assume they basically just compile it all the way to the chip instruction set instead of leaving it at the ISA level or higher and have it converted on the user machine. At least, that’s what I’d try. Be pretty damn hard to make it processor-specific at a higher level; they’re too inter-compatible, especially within a manufacturer.

      That’s assuming Shamus picked the right explaination; I’d heard it was encrypted on the disk and decrypted on the fly, which could produce similar results if the encryption scheme uses a processor serial number or whatever and also gets a special key from the server so you need the right key for your processor. It’s possible this was Denuvo 1.0 and the crackers got good at collecting all the keys or capturing the decrypted stuff so they shifted to the other way for Denuvo 2.0.

      1. RFS-81 says:

        Time to show my lack of hardware knowledge: Don’t all CPUs in PCs use the same instruction set? (Apart from 32bit vs 64bit.)

        What I thought of when reading Shamus’s explanation was that they might use some features/bugs/quirks of different CPUs to distinguish them. Kind of like the anti-emulation measures in some GBA games.

        1. guy says:

          They do not. Also two processors may implement the same instruction differently, but I’m not sure whether a user program can be lower level than the instruction set architecture.

          1. RFS-81 says:

            Hm, a gaming PC will either have x86 or x86-64, but I didn’t know that there’s such a huge pile of extensions. I can see how you could use that for fingerprinting a CPU.

  10. ccesarano says:

    I can’t help but wonder what other factors may contribute. I’ve been out of College for ten years and any friends of mine that pirated games I no longer speak with. Anyone that does modify hardware are retro game collectors looking to play old NES, SNES, Genesis, etc. games on a Raspberry Pi or hacking the SNES Classic to include more games. Not quite the sort of thing these big time publishers are looking to defend (unless you’re Nintendo).

    My world view ten years ago was shaped by being one of the few people I knew that regularly used legal services to play games, be it purchasing them or using GameFly. Now, my entire world view is shaped by working adults that buy games, often gripe about not having time to buy games, children that play what their parents by, or children and adults playing free-to-play titles. As I’m not really a PC gamer the only thing that reminds me that DRM even exists is this blog. Piracy is like a foreign concept to me at this point. Yet it has to happen still. While the majority of people I know stream with Netflix and/or Hulu and/or Amazon, there’s still that odd fellow using a Plex server with pirated films. But it’s like how there’s that one fellow in town that figured out how to get Cable for free. It’s the singular example rather than the norm, whereas I was the oddball in College.

    If I were to go to a College campus, would kids still be pirating? Or has the nature and prevalence of Free to Play modified their behaviors? It’s not like all F2P are “bad games”, after all. Can’t afford Destiny? Play Warframe. Can’t get Overwatch or PUBG? Get Fortnite. Can’t get the game immediately? Get it a year later when it’s on Steam sale for $10, or when PS-Plus has it for free, etc. etc. I mean, if a College kid asked for PlayStation Plus for Christmas last year, they’d be downloading Bulletstorm: Full-Clip Edition and Yakuza Kiwami for free this month. Then you have things like Xbox Games Pass, which is evidently one of the only reasons to get yourself an Xbox One right now.

    This doesn’t solve the problem of the latest and greatest being pirated, but it just seems like it’s less likely to even occur to people due to all the free and cheap options that exist as opposed to piracy’s peak.

    I wish I had the resources to really research and see if things have changed that much. It just seems like DRM is even more pointless than ever, aside from second-hand sales. Even then, I feel like people are going to stop worrying about that as digital purchases become even more widespread.

    1. guy says:

      As far as I can tell the answer is that many people buy some games and pirate others and may torrent and also buy a given game. Making games more difficult to pirate is not likely to expand their game budget.

  11. Redrock says:

    I think there’s a fourth option for why publishers keep using DRM: pure stubborn vindictiveness. The idea of someone getting their stuff for free, even if it doesn’t hurt them in terms of sales, might just be unbearable to them. That’s why the argument that piracy doesn’t translate into actual lost sales never ever gets any response.

    1. Droid says:

      I’d say it’s a mix of that and the fact that in most other businesses, being a stubborn vindictive asshole actually hurts the person you try to withhold your goods from. They might still be able to get your can of beans, but only if purchased by someone else, which has a (financial or personal) cost for them. It’s only with software that you can easily produce as many copies of someone else’s good as you wish once you’ve broken through the layers of obfuscation. So managers without an idea of how different software is compared to physical goods will obviously favour a harsh line of “burn my side of the money pile” vindictiveness towards those dreaded pirates.

    2. BlueHorus says:

      I’m with Kdansky down below: It’s about second-hand sales as much as it is piracy. It’s similar to your theory, but its other stores that are the object of spite as well as pirates: it helps to ensure that there’s only one place to buy the product – direct from the publishers.

      And because it would be problematic to admit that publicly, pirates are used as a scapegoat.

  12. John says:

    Why do publishers like DRM so much? Here’s my theory. Publishers aren’t singular, indivisible entities. They’re organizations, composed of various corporate officers and other employees. I imagine–I don’t, of course, know–that most publishers, particularly the larger ones, have an officer or executive in charge of DRM and related activities. If the other executives figure out that DRM doesn’t work, that guy is out of a job. Fortunately for him, he is the organization’s DRM expert, the one the other executives rely on to tell them whether or not DRM works. Naturally, he tells them that it does. I’d even bet that he believes it; people tend to believe things that would, if true, be very convenient for them personally. And who would hire someone who believes that DRM is a waste of time to be their DRM guy?

    In other words, publishers keep pushing DRM because inside each publisher there is an enthusiastic DRM expert with a vested interest in the continuing presence of DRM advocating for it.

    1. BlueHorus says:

      I was thinking similar: maybe it’s the intra-company politics more than anything else?
      Maybe there’s a dedicated DRM guy who doesn’t want to lose his job.
      Maybe someone knows someone else at Denuvo Inc and wants to help their friends out by sending them business.
      Maybe someone’s being courted/paid by Denuvo and thus will keep pushing for it in meetings?

      These companies are run by humans, after all.

    2. Joshua says:

      Problem with that hypothesis is that the issue isn’t limited to one company, but virtually all of the big players in the industry, and smaller ones as well. Do all of these companies have the issue where they’ve got parasitic DRM employees who BS their way around how much the companies need them for 15-20 years now, because no one else there can look at research studies to check them?

  13. slug camargo says:

    It’s always worth remembering Gabe Newell’s words on the subject of piracy, back in late 2011:

    The easiest way to stop piracy is not by putting anti-piracy technology to work. It’s by giving those people a service that’s better than what they’re receiving from the pirates. For example, Russia. You say, oh, we’re going to enter Russia, people say, you’re doomed, they’ll pirate everything in Russia. Russia now outside of Germany is our largest continental European market.

    And the guy would seem to be doing pretty well in the whole getting-money-in-exchange-for-stuff thing, so maybe listen to him?

    As a side note, it had its fair share of problems, but I did like I am Alive quite a bit.

    1. Cubic says:

      Wise words; in the same vein, music streaming has largely replaced torrents or even physical media and the RIAA seems pretty quiet these days. And it seems to be the same story with Netflix and the other streaming services. (They still do care about DRM and stuff.)

      I assume game piracy too will sink below the horizon of attention once the (imagined) revenue loss becomes negligible compared to other sources of revenue. We’re of course already familiar with some approaches to this, like Steam, DLC or subscribing to a MMORPG, but presumably more will have to be done to complete the transformation. Personally, I have more or less dropped consoles and find myself just using Steam these days. I’m already there.

    2. Thomas says:

      Gabe Newell of course is the creator of the most widespread DRM in the industry (Steamworks DRM)

  14. kdansky says:

    I’ve always claimed it’s about the second hand market, which hurts publishers much more than piracy. A pirate does not pay, and if you force them, they will likely just ignore the product. A second-hand buyer DOES pay, only he pays someone else. Not only do you not get his money, but his gaming budget is depleted as well. It’s the very worst option.

    DRM is anti-reselling, and because that’s bad publicity it is branded anti-piracy.

    1. Boobah says:

      A couple problems with this scenario: The second-hand buyer isn’t buying at full price or at launch anyway, and while you can tap this guy with Steam sales and the like the inevitability of those sales can cut into full-price purchases; I know it does for me.

      Second problem: Sure, second-hand buyer has now spent his money, but second-hand seller now has that money… and he’s already demonstrated a willingness to buy at full price and early. Only now he doesn’t have the cash he’d previously have gotten from reselling, so he can’t buy the new hotness as often as he used to. He’s either buying fewer games or he (like the guy he used to sell to) is now waiting for sales.

      1. Daimbert says:

        Yeah, that’s pretty much the lesson from all of the other markets that have second-hand sales. People who don’t want or need a product anymore but that’s still usable will sell it to people who can’t afford to buy it new and then use that money to go buy something else. Additionally, a number of people who buy used products might decide to buy their next product from your company new if they can afford it and if they liked the used one they bought enough.

      2. BlueHorus says:

        Well it’s not so much about what the second-hand seller/buyer is or isn’t doing with their money…as much as it is making sure that the only place to buy the game is from us.
        Hence why publishers finally cottoned on to the power of Steam and launched Origin, Uplay, and other similar platforms. That way, they get the day-one sales AND the later, lower-price sales.

        If a third party’s selling the game – at any point in time – then that’s money that the publisher isn’t making. And DRM helps to stop that by making it harder for someone else to sell the game on/pirate it/give it away/whatever.

        1. Joshua says:

          Interesting enough that the comments about Gabe or GoG being against DRM or saying DRM is not the way to combat piracy are coming from positions where they don’t have to worry about second-hand sales.

  15. MadTinkerer says:

    4. There shareholders demand it because they’re the ones who don’t care about consumer rights.

    Executives aren’t in charge of broad strategy, only implementation. If you try to explain to a shareholder that implementing a DRM system might prevent some piracy but not implementing a DRM system will definitely allow pirates to make as many copies as they like on day 1, then there is no rest of the debate. Any problems the consumers have is not a problem that the shareholders have, so there is no downside. The company is publicly owned and therefore you protect the interests of the shareholders at the expense of the customers.

    (It may be true that some shareholders are actually capable of empathy with consumers, but you know if you get a crowd of them together there’s plenty that act like complete sociopaths on a good day. Most publicly owned companies are owned by crowds of shareholders, so generally speaking it’s more than safe to assume that any particular shareholder is not unlikely to be a sociopath, or at least act like one when it comes to their personal investments.)

    This is also the why of microtransactions and loot boxes and ridiculous limited editions and Diablo Immortal and so on.

    1. Daimbert says:

      Executives aren’t in charge of broad strategy, only implementation.

      Actually, in my experience with medium to large sized publicly traded companies, that’s not true. Executives — such as the CEO — are indeed in charge of broad strategy. Shareholders only care about profitability, not how anyone gets there. That’s why CEOs get fired and hired when things are going badly, in the hopes that the new one will have a better strategy that will increase profits.

      For piracy specifically, it would be trivial for executives to argue against DRM on the basis that it would increase costs and wouldn’t help profitability. I suspect that if there’s any push from shareholders for DRM it’s based on the executives using piracy as an excuse for weak sales/profitability.

    2. Adeon says:

      That’s my assumption. The DRM is basically a form of Security Theater. It’s not there to stop pirates so much as to convince shareholders that the company is doing something to stop pirates.

    3. Joshua says:

      This is incorrect. The Board of Directors, who is supposed to represent the shareholders, tends to look at things from a broad strategy perspective. Many of the directors are also executives of the company who do look at implementation. As Daimbert says, executives would also therefore be looking at broad strategy as well. Typically, problems with power balance between Executives and the Board would be a weak Board that rubber-stamped whatever the Executives were doing. Having the reverse where spineless Executives just went along with whatever the Board members suggested would be pretty unusual.

  16. Blake says:

    There’s another point you missed, corporations like to be risk-averse, and removing DRM from all their games might seem like a risky move.
    They’re probably more comfortable paying a known amount on every game to license Denuvo, than they are going DRM free and hoping piracy doesn’t become more mainstream as it becomes easy again.
    With big games costing 10s or 100s of millions of dollars, I’d imagine the cost of adding Denuvo would be small enough (relatively speaking) that they’d rather just pay it and stick with the status-quo than risk anything changing.

    1. Blake says:

      They might also see it a bit like herd-immunisation. As long as 95% of big games are DRM’d, most people won’t bother trying to pirate them. But if every new game was DRM-free, I’d imagine finding safe torrents for every release on day 1 would become easy and a number of people might see it as a reliable way to get new games causing the problem to multiply.

      I think they’re trying to vaccinate themselves against a potential large piracy problem.

  17. Misamoto says:

    You know what? The escapist website is obnoxious.
    https://imgur.com/4h9lOR9

  18. Zaxares says:

    I think the fact that GoG is a roaring success is more than sufficient proof to show that the presence or absence of DRM makes absolutely no difference as to whether or not people will buy a game. :P Shamus (along with what I and many other people have been saying) was right all along; the kind of people who would pirate your game are the type who would NEVER buy your game. UNDER ANY CIRCUMSTANCES. Trying to turn these people into paying customers is a fool’s errand because games are ultimately just entertainment; there’s plenty of free entertainment online these days that you don’t have to pay a cent for. If these people can’t get their games for free, they will simply find something else that’s free.

  19. Zak McKracken says:

    It’s hard to believe they’ve never been exposed to the Opening Salvo. On the other hand, they’ve never attempted to rebut it.

    I think not replying to an argument which you don’t like is a very good PR decision, (unless you’re one of the people who make that argument…). If you discussed it, you’d have to talk about its merits, possibly concede that at least part of it is based on reason, and in the meantime, you’d introduce it to more people. Even when arguing against it publicly, if you make on mistake, you might end up inadvertently persuading others that you’re wrong, and of course you’d validate the point by debating it.
    So, unless a majority of investors/customers were actively making the argument, it’s the better strategy to just not mention it and rather push your own narrative, and make sure that your own view is more present in the public than somebody else’s

    ==> This doesn’t give us any information on whether someone at those companies knows or thinks about it.

    I read a quote some year ago, I think by some ex record label manager, saying that everybody in the industry knew that piracy was good for business. So I think they’re well aware of not just this particular argument but even more so of the various studies which show that piracy isn’t actually hurting sales.

    But they will also be aware that especially in the space of creative products, piracy is a way for people who don’t like your prices to get the product for free. So if you could make piracy as uncomfortable as possible, you may be able to increase profit margins. Also, whether you get your games for free or not is a question of social position and attitude, and the public image of piracy. So if they can make piracy look like a bad crime in the public eye, they may be able to reduce it. Now, reducing piracy may not lead to larger sales, but they’re all control freaks, and who wants to bear the responsibility of publicly acknowledging that piracy is not so bad, and then how do you explain to your investors if the next game sells 0.5% fewer copies, if one of them asks whether that’s because you encouraged consumers to steal it?

    I think that “being tough on piracy” is pretty much emergent behaviour for game industry executives. I’m thinking that consumer protection law should put a limit on that at some point, and that many of the technical (and legal!) implementations of copyright protection are not only not achieving their stated goal but having a bunch of nasty side effects, but the same process that gets the “creative industry” to go “tough on piracy” does not have a counterweight on the consumer side, and that’s what got us where we are.

    1. Zak McKracken says:

      Oh, and one more point: I think piracy is just a very very easy thing to blame for anything that goes wrong with sales or profits, or consumer complaints about prices, so there’s another intrinsic motivation for video games companies to keep harping on about it. It’s just a super-convenient scapegoat.

      And I wouldn’t be surprised if many of the people who’ve used that excuse over the years actually come to believe it themselves. If believing in something makes you feel better about yourself you’re much more likely to believe it, independent of whether it’s true. (That goes for the pirates as well, of course … they’re not the noble Robin Hood figures they’d like to be, either).

  20. tariqk says:

    Here’s something I haven’t seen anyone look into:

    Thanks to the DMCA, and similar laws against circumvention of systems designed to keep users of computing systems from doing things to the hardware and software — basically, DRM — it is literally a felony for anyone, even security researchers, to make any research, much less reveal, any security issues with anything protected by that DRM.

    The upshot of this, of course, is that game publishers are able to carve out a space, on your hardware, on your system, that supposedly you bought with your money, for their exclusive use, and you can’t even be made aware of it’s existence without breaking the law.

    I wonder what kind of rent could a company extract from your resources with something like that? How much potential income could be made from exploiting that space that even you, the owner of the machine that runs that software, are not legally allowed to examine?

    Now, am I saying that there are pieces of DRM out there that are, I don’t know, mining your personal data for better targeted advertising, or, are turning your computers to botnets, or just outright using your rig to mine cryptocurrency? No. I’m just saying that 1) it’s not as if it isn’t happening right now in the hellish dytopian wasteland of online advertising, and 2) even if it wasn’t happening right now, you wouldn’t even have the right to be informed, unless someone else was willing to risk breaking the law.

    Of course, none of this applies to criminals who might stumble across such a flaw exploit it for their own purposes, and even if that were to happen, surely the idiots who allowed such a thing to happen ought to be held accountable, right? No?

    Guess we’re boned, then.

    1. Galad says:

      I wanted to read what yoy posted, but veey ironically, I was treated to a full screen of written crap, which I think amounted to “engadget is now part of oath, let us sell your data plskthxbai”. Sad

  21. It’s really funny to see recent online only multiplayer games “perform badly” “below expectations” etc. Hmm. must be due to all the piracy and … wait a sec. doh!

    A good game will sell good. GOG and CD Projekt RED has proven this with The Witcher 3 Wild Hunt. Was the game pirated? Sure it was, and it was probably among the most popular ones as well (Didn’t actually Google any numbers, I’m just guessing here), just like it’s sales numbers where really high.

    There have been surveys done showing that many of the music pirates are also the biggest spenders when it comes to buying music. In other words, high consumption consumers consume a lot.

    And the fanbase of a game or franchise will always buy the next game (assuming you don’t piss that fansbase off too much, in which case you are screwed as that was the “safe” reliable profit/income).

    If a game is uncrackable one of two things usually happen.
    1. While piracy drops from 90% (a claim made by a publisher?) to 0%, the sales will not increase by 90% it’s probably close to 1% increase.
    2. While piracy drops from 90% (a claim made by a publisher?) to 0%, the sales will drop 1%.

    The majority of those that pirate would not buy that particular game, they may buy lots of other games, just not “that one”. On the other side are those that pirate a game, and then later buys it.

    There is also the notion that a game might be worth spending time playing if it’s free or really cheap but if it’s “full price” it’s not worth it. There are too many things to pay for and money is a limited resource. Now that DIsney is pulling their stuff from Netflix and launching their Disney+ thingy, that’s one more thing to pay for.

    People can only afford to buy so many games per year, which is what Microsoft and a few other s have started to realize with their subscriptions (or Xbox Pass or whatever it’s called) that let you play any game from a large catalog, similar to how Spotify and Netflix work.

    They’ll make less money on the big spenders that buy 50+ games per year, but will earn a lot more from those that only get 2-3 big games per year as they won’t be using their subscription “that much”. A constant cash flow is also more lucrative than launch month bursts, not everyone can be GTA V.

    Needless to say, games like these will most likely not be singleplayer offline games (like The Witcher 3 Wild Hunt or Cyberpunk 2077).
    So look forward to subscription gaming where you get kicked to the desktop and loose your progress since last checkpoint each time your WiFi craps out.

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