Ah, Valve, How Charming

Valve has consistently been remaining the voice of reason in the PC game industry.

In a situation where Activision has been systematically crippling Blizzard games with DRM, Ubisoft caused a drop of their PC sales with their own folly (with pirates as a scapegoat, of course), and EA is pressing on BioWare to turn their RPGs into shooters (to say nothing of the spyware vomit that is Origin), Valve’s Gabe Newell isn’t afraid to state the obvious.

He’s fundamentally right. Digital distribution is a competition between publishers and… people who can offer the same services cheaper. I’ve been saying this a lot, and I’ll say it again: DRM, ultimately, does nothing but complicate life for legitimate customers.

In general, we think there is a fundamental misconception about piracy. Piracy is almost always a service problem and not a pricing problem. For example, if a pirate offers a product anywhere in the world, 24 x 7, purchasable from the convenience of your personal computer, and the legal provider says the product is region-locked, will come to your country 3 months after the US release, and can only be purchased at a brick and mortar store, then the pirate’s service is more valuable. Most DRM solutions diminish the value of the product by either directly restricting a customers use or by creating uncertainty.

Our goal is to create greater service value than pirates, and this has been successful enough for us that piracy is basically a non-issue for our company. For example, prior to entering the Russian market, we were told that Russia was a waste of time because everyone would pirate our products. Russia is now about to become our largest market in Europe.

I can see why.

Back in 2004, when Steam was introduced as a distribution platform with the release of Half-Life 2, the situation seemed hopeless. Russia was still covered with a network of semi-legal stores selling pirated games in heaps. Piracy was second nature for Russian software users through the nineties and early 2000s. Most people couldn’t afford licensed software or thought the prices were outrageous. It was not competitive. A lot of it still is. How many Russians do you know who have bought a retail copy of Windows? Or bought music in an online store? As long as there is no practical reason to prefer licensed versions, piracy will continue.

Meanwhile, back in those years, the prevalent forms of Internet access in Russia were dial-up and per-traffic billing plans for Ethernet ISPs. My ISP charged $0.05 per megabyte downloaded. Steam has an offline mode, sure, but Steam games, even those bought in retail, insist on downloading all available updates at first activation.

Under these conditions, introducing Steam in Russia seemed like tactical suicide.

And indeed, back then, Steam was widely unpopular around the world, and especially in Russia. Howeve, it has proven to be the right solution in the long term. Today, however, in the age of cheap and reliable Internet access, Steam has shown its true appeal.

Traditional DRM only makes users’ lives worse. With region locks, requirements for a CD in the drive, for perpetual Internet access (Ubisoft really shot itself in the foot with this one), registration forms, rootkits in the system, and so on. Under these conditions, pirated versions start looking more appealing — at least for purely single-player games. World of Warcraft, for example, has little to fear because you pay for an online service, one that private servers simply cannot hope to match.

Steam is a service, first and foremost. The convenience of having your games bound to your account, now and forever, on any computer you access. Automatic updates. No annoying third party DRM… usually (yes, I’m looking at you, Ubisoft). No tying to physical media.

Today’s Steam, a far cry from the messy state it was released in, found acceptance first and foremost in games where pirates couldn’t hope to compete with it. This includes, first and foremost, multiplayer games, where Steam provides instant tools for building communities. Even for single player games, now it is often more convenient to find a game on Steam than run around the city looking for a retail copy, or searching Google for a torrent.

I’m not saying Steam is perfect. A lot of its UI decisions are counterintuitive even now. Localization is often an issue: sometimes, for odd reasons, a Steam release is missing either the English version or the Russian version. (Steam has often allowed me to play English versions of foreign games, which I generally prefer, when only Russian versions are available in retail.) And now, since September, Valve has forced publishers to cut their prices in Russia. Not everyone likes this. Some publishers have decided not to release their games in Steam for CIS countries for this reason. I personally find it ridiculous. If the lowered price isn’t acceptable for you, let me pay the European price, just as long as I get worldwide access to the game. Why should I be treated as a second-class customer just because I have a Russian IP?

Nevertheless. Thank you, Valve. For not being evil.