A quick search of a few various Torrent trackers turns up a surprising number of pirated, readily available video games.  I shouldn’t really be surprised I guess, as piracy in gaming has been running rampant since computer owners were able to insert disc+cntl c+ctrl v+wait a few hours and insert new 5.25 floppy when the first disk is full.

Bruce Everiss from bruceongames.com recently posted an excellent article concerning what the Nokia 5310 phone/mp3 player is doing for the music industry and what it might mean for games.

One answer that the gaming industry has come up with to fight digital piracy is the (dreaded) DRM or Digital Rights Management.  The recent EA/Spore DRM fiasco has brought to light the incredible downside of DRM – pi$$ing off customers.  While the DRM covers the ‘sales’ side of games, there’s obviously a growing number of alternative revenue models in place including microtransactions, in-game advertising, and subscriptions.

Unfortunately (or fortunately, depending on how you look at it), DRM doesn’t really apply very well to the music industry, as regulating a DRM across the entire scope of the internet is relatively impossible.  Combine that with an mp3’s relatively small file size and ability to be shared across a variety of media, and any possible revenue generation is, quite literally, lost in the wind.

Bruce and I seem to agree that Apple’s solution to the problem could and should be seen as the flagship of the microtransaction industry: iTunes.  What Apple did with the introduction of iTunes is take it’s wildly successful mp3 player, the iPod, and provided users with an ultra-slick interface providing them with features and availability that they could get elsewhere for free: but didn’t.  Tack on the added usability and convenience of a mobile iTunes store, and you’ve got a winning combination.

Taking this winning philosophy a step further, Nokia has implemented the “Give it to ‘em for free for a while, get ‘em used to it, and THEN charge ‘em for it later down the road,” model.  They’ve created a music store with over 2M tracks that users can use for free.  Yes, you heard that right, users can download as much as they want, whenever they want.  For free.  The cost of said service is cleverly built into the perchase price of the Nokia 5310 XpressMusic phone (the world’s best selling mp3 phone).  Once your one year quasi pre-paid subscription runs out, then, and only then, must you fork over a fee.  And will users pay for the service?  Of course they will.  They’ve grown accustomed to it, and will want to continue their enjoyment with said service.  Please note, I’ve specifically NOT said music, but service.  This is the crux of the entire model; users are not paying for a product, but rather a service.

Know any other industries that specialize in digital content delivery with a growing interest in a microtransaction business model?  It’s quite easy to see how this formula could very easily be applied to the gaming industry.  As more and more publishers and operators shift towards a pure digital delivery method and ‘boxed game’ sales move more and more into the history books, perhaps a monthly/yearly subscription to one (or more than one even) games provider(s), that would allow users to download and play their game of choice.

Bruce points out that EA Chief John Riccitello has suggested this theory in the past.  Perhaps Battlefield Heroes is more than just a testing of the microtransaction waters, but also an experiement in free-to-play and just how and where EA can drive this vehicle.   Perhaps the Spore debacle could even be a driving force in EA’s further investigation into the model?

We already know that David Perry’s a big fan of free-to-play fighting piracy, Alex St John says only microtransaction based games have a future, and Riccitello has been floating the idea around; perhaps it takes a mobile phone service to actually throw a bit of ‘proof positive’ on the fire.

Tags: Alex St John, Apple, Bruce Everiss, Chief John Riccitello, David Perry, digital rights management, drm, free to play, gaming industry, itunes, microtransaction, mp3 player, nokia 5310, revenue generation, revenue models, Spore

This entry was posted on Monday, October 6th, 2008 at 4:02 pm and is filed under industry news. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.