Is Amazon fanning the Kindle(ing) flames?

I've been following the Kindle with some interest for a while. I *really* want one, but not as long as it's as closed a model as they are currently pursuing. I want to get e-books from other places, and I'd like an RSS reader please... which really means an open development platform so that RSS readers can compete... which quickly leads to other ebook retailers, and you see why they aren't that interested in it.

Anyhow, Amazon got themselves in a pickle when they had a licensing issue with a number of books from a publisher, which in turn led to them reaching out an disabling them on users Kindles out in the wild - something the users didn't know Amazon could do.

Kind of like coming down to your kitchen in the morning, seeing the toaster missing, and finding a note from Sears saying "Sorry, we decided we shouldn't have sold this to you, so we took it back. Here's your $20. Hope you weren't expecting toast this morning. Might we suggest oatmeal?"

A kerfuffle took place on the intertubes, and Amazon went on to issue an apology:

This is an apology for the way we previously handled illegally sold copies of 1984 and other novels on Kindle. Our "solution" to the problem was stupid, thoughtless, and painfully out of line with our principles. It is wholly self-inflicted, and we deserve the criticism we've received. We will use the scar tissue from this painful mistake to help make better decisions going forward, ones that match our mission.

With deep apology to our customers,

Jeff Bezos, Founder & CEO, Amazon.com

Sounds really good. I beleive he think's doing the right thing. He is.

Except he's doing the right thing about the wrong problem.

One problem is that some people had their books taken from them post-purchase, and yes, it's good to apologize for that.

However, this problem is only symptomatic of the REAL problem, which is that people bought a device which comes with hidden restrictions, unclear terms of service, and the capability to change behavior and functionality at any point in the future. (Cory at BoingBoing has been on a bit of a crusade to get answers on exactly this)

So, kids, what have we learned?

1) There's a lesson here in the growing awareness of, and intolerance for, DRM in all it's forms. Every story about a consumer being burned by DRM adds to that awareness and intolerance.

2) While it was good for Bezos to publicly apologize, he's created another problem: He's shown that he's aware of the situation and therefore what was a puzzling silence on questions around the Kindle's functionality and DRM now seems like a deliberate silence.

In the meantime, I'll stick to dead trees. They tend to not disappear from the nightstand while I sleep.

Braid PC release announced: Mar 15, $15, no DRM

Jon's announced the first release of the PC version of Braid (he's doing several releases with different distributors). This one is with Stardock, whom you may have heard of from their forward-looking anti-DRM stance. Initially it was announced at $20, but Jon dropped the price to $15 following grumblings on the web. Note the DRM stance:

Where possible, the game will be released without DRM. Some online publishers include their own DRM as a matter of policy, and of those guys, I am only signing with the ones that have light and non-intrusive DRM. My goal is to give people a reasonable choice about where to get the game, and if they don’t like someone’s DRM or someone else’s launcher client, they can get it from whoever they like most.

Now everybody be good boys and girls and buy the game! Support indie development and don't provide fodder for pro-DRM folk to say "I told you so".

Oh, and I love this comment from Jon in the discussion thread, where someone criticized his late PC release as indicative of his being 'anti-PC':

I’m not some kind of weird platform loyalist. The PC is not some sports team that is playing the Xbox 360 for the World Cup.

Indeed, it's not, though I think the PC would kick the 360's tail if it did! (Though continuing this analogy, it would be more like a soccer match of 16 pro athletes on one side, against 1600 guys on the other side, most of whom weren't in as quite good shape.... but I digress).

iTunes Abandons Music DRM - Could Games be Next?

The internets are afire with news that Apple is abandoning DRM from their music on iTunes. Apple fans everywhere will say that this was Jobs intent all along, naysayers will say it was pressure from customer defection to places like Amazon MP3 (where I currently buy my tunes). Regardless, it's a good thing.

[As an aside, it's interesting that Apple caved to the labels' request for tiered pricing, which they've lobbied for in the past. Songs will be $0.69 and $1.29. Compared to Amazon's $0.99. I think the labels are entering a dangerous game by opening the pricing can of worms. They may end up getting the whip 'o the long tail. It's also cool that they are letting people un-DRM their previously-purchased songs, but kind of shitty that a customer has to pay them $0.30c/song to basically uncripple it]

Anyhow, while this is good, as BoingBoing points out there's still DRM-crippled sales around audio books (through an exclusive arrangement with Audible), and Video. Also, BB didn't point it out, but games too, are DRM-crippled at this time.

In the past, I've posited that it seems inevitable that the same consumer demand for DRM-free content will spread from music to video and eventually to games. However, I thought it would go in that order. Movies first after music, games last.

My thinking there was that (a) games tend to have the highest price point ($60 retail titles) and a fanbase most aligned, stereotypically anyway, with the 'young male hacker type' stereotype, they are played on connected compute platforms, so less 'owning the media as incentive to go legit', and (c) movies tend to have a glut of hit-driven inventory even more so than games (not sure about this, but that was my thinking).

In thinking about this in the context of iphone, I'm now rethinking that position.

When looking at iPhone games, or all apps for that matter:

• The vast majority of paid-for apps are $0.99 price point, so similar to music. The convenience of purchase vs pirate is similar to music
  
• The biggest obstacle for most devs isn't piracy, it's obscurity, just as it is for authors and musicians.
• As apps get connected, and I assume more of this will come, there's the possibility of connecting them to services that are for legit customers only
• It's a new platform with a new base of apps, unlike movies which are shackled to a lot legacy agreements about distribution rights and rev sharing and the like.

The question that remains, of course, is whether customers will actually ASK for DRM-free game titles, and if so, for what? 

Music and video content are consumable on other devices. I might want to back them up, play them on my 360 or in the car. DRM stops me from doing that, or at best tells me how and when I can. Thus the bad taste.

The games, on the other hand, are written only for an iphone. so what do I stand to gain from DRM removal: moving to your spouse's iPhone? Upgrading phones? Play the games on an iphone emulator on my PC or mac? I'm not sure, but I'd like to know I have the option. Still that's likely a minority sentiment. Real pressure will only come if masses of customers have something they want to do, today, and start to demand it, as they've done with music. 

The only legit reason that comes to mind that would be truly compelling is if someone (Google? Nokia? RIM?) were to come out with a competitive phone that could (natively or through emulation) run iPhone apps. If that were the case, as a customer, I might be tempted with the other device, but faced with a software library that won't come with it. 

And that might tick me off... and remind me of when I had the same issue with music...

RIAA To Stop Prosecuting Individual File Sharers

Well, it's about time the lawyers learned that punishing customers and stomping on the little man and other such acts weren't going to help them in the popularity department.

Next up, video.

It will be interesting to see where this gets us with games, as that will likely be the next area of heated debate. 

In the meantime, a few in the games business are already boldly stepping outside of DRM shackles and hoping that maybe fewer hurdles between the customer and the cash register may actually result in more of them getting there. Some recent examples:

Stardock's Sins of a Solar Empire ships DRM-free, sells 500k units (back of napkin: 500k thru retail at revenue of ~$15$/unit = 7.5-10M, on a game with a $1M budget).

Ubisoft's Prince of Persia to be released DRM-free.

Good Old Games enters digital distribution with DRM-free PC classic titles.

Spore DRM-haters create anti-DRM Spore creatures within Spore

There's a been a bunch of people griping about the SecureROM DRM in Spore. Some of those people have now created creatures within Spore to voice their opinions. Crafty, given that the game is built around the sharing of player-generated content.

At right, the VeROFLaptor, "hails from the planet EADisappointsMe and is known to spray excessive DRM and overhype on it's attackers".

via GameCulture.

It's Bizarro Internetz time!

The Internet is a conundrum of opposites!

• Competing Loanwords! GD Mag's Brandon Sheffield argues we've reached a Graphics Plateau. On the other hand, Crytek's Cevat Yerli argues we're at the beginning of a Graphics Renaissance! While both make some valid points, I'll side with Yerli. I've heard the 'mips fatigue' argument for 15 years, and it's graphics variant for at least the last 5. We still have *very* far to go in graphics, and in computing for that matter.
  
• I posted yesterday about Cliff Harris' concluding that DRM was bad for business. Id's Todd Hollenshead apparently thinks the evil lies with platform vendors, who won't bake DRM into their platforms. Do we really have to learn the painful lessons that the music biz did, for ourselves?
• Apparently we do. Hey, we can NOT learn from those lessons even better by hiring on RIAA legal beagles. Ugh. No opposites there, just bone-headed behavior on both sides of the pond.

It's all too much to ponder. Probably best pondered while sweating in a sauna, cause that's where all tech talk happens, right. Warning. Footage of pudgy nerds talkin' mobile gaming. You have bene warned. (seriously though. I like that it's pretty out of the box approach to pitching. Then I like nothing else about it. shudder. Those guys should seriously check their image)

One way to get to the root of a problem...

Awesome post up by Positech Games' Cliff Harris, in which he, when trying to figure out why people pirate his games, decided to ASK THEM, via his blog.

The comments back were detailed, thoughtful and enlightening. Cliff also outlines a plan to take action based on the feedback received. Put another check in the 'DRM does more harm than good' column:

1) No more DRM

I only used DRM for one game (Democracy 2) and it's trivial. It's a one-time only internet code lookup for the full version. I've read enough otherwise honest people complain about DRM to see that its probably hurting more than it help's. I had planned on using the same system for Kudos 2, but I've changed my mind on that. I have also removed it from Democracy 2 today. I now use no DRM at all."

It's a cool read for a bunch of reasons. Check it out.

Kindle(ing) for Games Industry?

Seth Godin has an interesting post up about the Amazon's e-book device, the Kindle.

I must first fault his post for one thing. For all the pros and cons he discusses, there's not one mention of the device's use of DRM. While he's correct in citing some of it's limitations, he fails to note what is by far the most significant one. Surprising, given that he talks about his own affection for 'buying books to give to someone else', something you can't do with DRM'ed e-books.

This one complaint aside, he offers some intriguing ideas about how the Kindle could be improved, and many of which I beleive apply equally to games. Most of them fall under the umbrella of viewing the 'connected device' as a social platform, and not just a distribution platform.

Much of the talk about Kindle has centered around the convenience of having all your books on one device and purchasing them over the internet, and also around digital distribution, and what this *could* mean in terms of savings to consumers and/or increased royalties to authors. (In fact, much of complaint-camp posting has been about how this has not yet translated into such savings, but that may just be a matter of time as existing books are still paper - and thus publisher - dependant).

Seth instead talks about how the device falls short of it's opportunity to capitalize on it's connected nature. How books should ship with/connect to the readership's commentary. How I should be able to see what books my friends are reading and what htey thought of them. How I should be able to see (if desired) notes in margins, highlighted paragraphs, stickies, disputed facts, links to corroborating or conflicting points of view. How I should be able to link to any word in the text to get a dictionary definition, wikipedia entry, etc. All fantastic points.

I think there's a parallel here with digital distribution as it pertains to games.

Much of the discussion around digital distribution has been about how it might (or might not) translate to increased savings to consumers and/or increased revenue share to developers. Also discussed is how it's allowing for feasibility of certain formats/genres/etc that might not otherwise be feasible, as they wouldn't acheive the revenue needed to justify retail shelf space allocation.

While all of that's true, Seth's comments bring to mind some ideas about how the connectivity of game platforms could enhance the social aspect of games. We are seeing the beginnings of this with Wii's service allowing user rating of game titles, Xbox Live letting you see what your friends are playing, and Steam letting you see what your friends have purchased and commented on.

However, I beleive these things might only be the beginning.

Connecting user ratings & recommendations with a social network allows for networks of trust, as well as 'networks of taste' (not the 'people who liked this also liked' amazon thing, but letting you develop networks of people who've enjoyed games similarly). Connecting the online distribution with the social network potentially could allow for gifting of games, friend discounts, etc.

The idea of annotation is also intriguing. Note how the video I linked to in this post, uses Viddler and someone's commented on a particular point in the stream. We've also seen how games like Portal have shipped with 'Director Commentary' features in the game where they've annotated the game with facts about it's design and development. I find the idea of user-contributed commentary intriguing. Players could opt to play through with commentary on, and could do so with comments from a given person or group. This could be their friends, from a group like the reviewers at JayIsGames, or a favorite blogger/designer/luminary, etc.

In any case, there's a lot of room for innovation as these platforms connect. It will be interesting to see where it takes place. In general, the PC is the place that has the most rapid churn and innovation, but it's often a closed vertical model that allows for consistency of experience (e.g. annotation of games would need some kind of API to allow for linking to a particular object or event, and usage of that API would need to exist across all games on that platform). My bet is that we'll see the first instance of this on somehting like Raph's Metaplace system, though someone like Sony or Microsoft could chose to drive it across theirs (not likely, as Sony's been hands off with theirs, and Microsoft's been letting others catch up as of late, it seems). Other potentials could be Flash or Silverlight, or perhaps whatever secret-sauce gaming thing Google's working on.

Deal(s) with the Devil

So, long after giving other folks crap about it, I cracked and bought an iPhone this week.

My windows mobile phone had died, I'd gone back to and old phone, and was shopping around for something new. In the meantime, I went to DICE and watched people using theirs and realized that I was willing to trade off my complaint about 'sub-optimal phone' in order to get 'Internet in your Pocket'.

Phone's not as bad as I thought, though still far from perfect. But the device is fantastic. Really fun and useful.

Of course, going with it meant that I had to click through no less than FOUR separate EULA's (thus the title of this post) with Apple and AT&T.

To top it off, when all that was done, I got a message asking (paraphrasing, I forget the exact words): "Would you like to go to iTunes and see what songs the record companies have granted permission for using as ringtones". Excuse me? Ummm, no thanks!

DRM-free big-budget PC Game

Stardock Games has shipped Sins of a Solar Empire (developed by IronClad Games). Stardock also published Galactic Civilizations II. Both are big-budget retail titles, and both shipped without DRM, with the publisher refusing to DRM-cripple it.

In my Gamasutra piece (original post) on the subject of curbing piracy through personalized content, I pointed to a commitment to a customer relationship. Stardock's a perfect example. They put it best:

I remember hearing at a conference that when an executive at a big publisher heard that Galactic Civilizations II shipped with no CD copy protection that they quipped “I hope bankruptcy treats them well.” Millions of dollars in sales later as one of the top selling PC strategy games at retail (according to NPD) over the past couple of years let’s me say “Ha!” in response. And this is on a game that made most of its money on digital sales.

and...

The bottom line on copy protection is that if you create a greater incentive for someone to buy your game than to steal it, those who might possibly buy your game will make the choice to buy it.

With Galactic Civilizations II, we put no copy protection on the CD. But to get updates, users had to use their unique serial # in the box. That’s because our system is backed by TotalGaming.net’s unique SSD service (secure software delivery) which forgoes DRM and copy protection as we know it to take a more common sense (I think so anyway as a gamer) approach of just making sure you are delivering your game to the actual customer.

Any system out there will get cracked and distributed. But if you provide reasonable after-release support in the form of free updates that add new content and features that are painless for customers to get, you create a real incentive to be a customer.

As I mentioned earlier, Galactic Civilizations II was success in terms of actual sales, critical reception, and most importantly, satisfaction by strategy gamers.

Sins of a Solar Empire is taking the same route. In fact, we hope to have a free update available the first week of availability with new maps, new options, and new features. We consider ourselves lucky. We get to make a game and play it and then get to update it based on talking to our customers. It’s a great system.

And I think most gamers will agree that a system that rewards people for buying your product is preferable to one that treats them like potential criminals.

Amen!

(via BoingBoing)

Gaming and Worst Consumer Trends

So minutes after posting the Bronfman quote and saying we should take heed, this came across my desktop:

DRM, Fanboys, Region Encoding among PC World's "10 Worst Consumer Tech Trends".

Of the 10 sins cited, the games industry hits on the majority of them. Some of course, are an artifact of business and of other industries as well (e.g. licensing fees around GH tracks). However, a couple of them really resonated.

#7 Region coding: I know there are business reasons for it, and that there are sometimes technical reasons for it. That doesn't change the fact that it's a kick in the teeth to the consumer who just wants to play the game you didn't release in her region.

#1: DRM: Amen. I *really* don't know the solution here, but man, we need to figure it out. One look at the writeups for the PC version of Bioshock vs the Xbox360 version, and you know we have a problem.

Lessig's TED Talk

...is just brilliant. He's such an awesome presenter and his talk is right on the money (pun intended). Go watch:

More on games learning from music

There were a couple comments and some follow-up posts regarding my comments about the music business. In a follow up email thread with Jane, I added:

One of my favorite comments on the most recent cracks in the music industry's foundations (those exemplified by recent moves by Radiohead, Madonna and others) was made by Seth Godin. In a post entitled "Radiohead and the mediocre middle", I think he really hits it on the head.

Godin makes the point that industries innovate from both ends. Small guys because they have nothing to lose and everything to win. Big guys because they have the bankroll and a fanbase that will follow them. The 'mediocre middle' sits and watches. They are unwilling to jump out of the frypan for fear of the fire. I think this applies to the game industry as well as it does the music industry.

Indies and small casual devs were the first to leap to the digital distribution channels, largely because they had no choice. You also have large developers like Valve (or in the casual space, Popcap), building distribution and other services - building relationships with customers.

As with the music business, I think the last to sense or react to any disruptive shift in the business will be the mid-sized developers who are dependent on the functions traditional publishers provide them, and the traditional publishers, who will be reluctant to abandon any business model that has been lucrative to date.

Jane asks in her post whether there's an equivalent to the "give the music away, make money off the concerts". There is. Can you guess what it is?

First the BNL and Radiohead, then Nine Inch Nails, now Madonna. Oasis and Jamiroquai too.

Seems ditching the labels in favor of direct-to-consumer (or in Madonna's case, signing a very different kind of disty deal) is all the rage the days.

Big labels are getting exactly what the deserve for putting up artificial barriers for too long, and bilking the customer for some time now (phasing out singles, forcing DRM, etc, etc). Sure would suck to be in their shoes, but I have to say I'm enjoying watching their towers crumble from the sidelines.

Game Industry folk: Should we be watching and learning? How long before the torch-n-pitchfork mob finds their next target?

Quote of the day

Yahoo Music's Ian Rogers to music industry execs, clearly stating what the industry as a whole has been feeling, and stating that he's not licensing any more DRM-protected music, period.

I'm here to tell you today that I for one am no longer going to fall into this trap. If the licensing labels offer their content to Yahoo! put more barriers in front of the users, I'm not interested. Do what you feel you need to do for your business, I'll be polite, say thank you, and decline to sign. I won't let Yahoo! invest any more money in consumer inconvenience. I will tell Yahoo! to give the money they were going to give me to build awesome media applications to Yahoo! Mail or Answers or some other deserving endeavor. I personally don't have any more time to give and can't bear to see any more money spent on pathetic attempts for control instead of building consumer value. Life's too short. I want to delight consumers, not bum them out.

If, on the other hand, you've seen the light too, there's a very fun road ahead for us all. Lets get beyond talking about how you get the music and into building context: reasons and ways to experience the music. The opportunity is in the chasm between the way we experience the content and the incredible user-created context of the Web.

By way of illustration (and via exaggeration), in a manner of speaking iTunes is a spreadsheet that plays music. It's context-free. You just paid $10 for that album -- who plays drums? I dunno, WHY DON'T YOU GO TO THE WEB TO FIND OUT, BECAUSE THAT'S WHERE THE CONTEXT IS.

Beautiful!

link. (Gracias, BoingBoing)

Cutting through Music Biz BS

This recent Freakonomics Quorum on the Freakonomics blog is the best read I've had on the music business so far this year. Nothing like the lense of economics to dispell the bull that the RIAA and others spew out.

Five people from very different walks of life are asked their opinion on the subject, some of which aren't so good, but a couple are really quite thorough and insightful. Here's the money quote right here:

From Koleman Strumpf (a business economics prof who's written extensively on the subject):


(from a list of other factors contributing to the industry's decline): recorded music has had trouble competing against other products that vie for consumers’ entertainment spending. Consider home video products like the DVD. It does not seem implausible that a good chunk of the $11 billion rise in spending on home video products since 1999 represents foregone CD sales. (Music industry revenues only fell $2 billion over this period.) Entertainment spending was also likely channeled into cell phones and video games, both of which experienced large sales growth and have been particularly popular with the key teen demographic.


From Peter Rojas (founder of Engadget):

The emergence of Napster (the original one) was the wake-up call, but the record industry would be in trouble now even if no one had invented peer-to-peer file sharing.

The fact of the matter is that the majors thrived in an era of inefficiency, when there was value in physically producing and distributing music. There isn’t any value in that any more (or at least, it’s very quickly declining), and there’s no good way for labels to compete given that the cost structure of the business was designed around physical releases

Those being said, it's amazing to see how some of the other opinions come from heads firmly stuck in the sand. Amazing.


I'm extrememly curious to see how the industry fares with iTunes, Walmart and Amazon all offering DRM-free music downloads. If it has a positive effect on the market, maybe the games industry can learn a lesson or two from the music industry and rid ourselves of DRM, as it seems to be one of the factors that is hurting the PC platform in particular.