Gabe Newell Talks about DRM and Piracy on Steam
In an interview with Penny Arcade, Gabe Newell expressed his thoughts on DRM and piracy with regards to Steam. Newell believes that customers shouldn’t be punished for the possibility that they will breach a game‘s terms of service, and that draconian DRM has no positive impact on sales. While he doesn’t want to enforce any kind of DRM protocols for games released on Steam, he does hope that developers should focus on creating value for customers rather than making their lives more difficult.
PA: There’s also this huge conversation going about used games and piracy. Do you feel like you’ve kind of successfully sidestepped those issues with Steam as a service provider?
Gabe Newell: I get fairly frustrated when I hear how the issue is framed in a lot of cases. To us it seems pretty obvious that people always want to treat it as a pricing issue, that people are doing this because they can get it for free and so we just need to create these draconian DRM systems or anti-piracy systems, and that just really doesn’t match up with the data.
As a customer, I want to be able to access my stuff wherever I am, and if you put in place a system that makes me wonder if I’ll be able to get it then you’ve significantly decreased the value of it. People were worried when we started using Steam initially because, oh my gosh, if I don’t have my discs what happens when I get a new machine? And after they’ve done this a couple times they’re like “oh my god, this is so much better, I’m so much more likely to lose my discs than I am to have any problem with my Steam account, that seems way better than having a physical token that I use to access my content.”
A lot of times the systems that are put in place to punish your evil customers for maybe doing something that’s not in their terms of service end up driving people towards service providers who don’t, right? So if I have to wait six months to get my Russian language translation when I can get at this other guy on the street to give me my Russian translation right away, it seems pretty obvious when you talk about it in those terms how the pirate selling pirated DVDs has a higher product than some of the people who try to DRM their way out of not giving customers what they really want.
PA: Have you ever been tempted to put a set of standards for DRM across games on Steam?
Gabe Newell: We tend to try to avoid being super dictatorial to either customers or partners. Recently I was in a meeting with a company that had a third party DRM solution, and we showed them, “Look; at this point in your life cycle your DRM got hacked, right? Now let’s look at the data; did your sales change at all? No, your sales didn’t change one bit. So here’s before and after, here’s where you have DRM that annoys your customers and causes huge numbers of support calls. In theory, you would think that you would see a huge drop off in sales after that got hacked, and instead there was absolutely no difference in sales before or after. You actually probably lost a whole bunch of sales as near as we can tell; here’s how much money you lost by bundling that with your product.”
We do that all the time. I wouldn’t be super happy if some other third party tried to tell me how to have relationships with our customers and I expect other people feel the same way, and I also tend to think that customers don’t really like it when you try to impose rigid rules on them as well, so we tend to think and hope that over time people will move towards doing the things that are in the best interests of both the customers and the content developers.
It’s a really bad idea to start off on the assumption that your customers are on the other side of some sort of battle with you. I really don’t think that is either accurate or a really good business strategy.
I think that we have a lot more credibility now with developers on issues like this simply because there’s so much data that we can show them where we say, “Look; we’ve run all of these experiments. This has been going on for many years now and we all can look at what the outcomes are and there are lots of compelling instances where giving customers a great experience and thinking of ways to create value for them is way more important than making it incredibly hard for the customers to move their products from one machine to another.