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The Online Pass Problem

Online Pass MonopolyJason Roberts over at Lens of Truth, wrote a great op-ed about the trend of game publishers forcing gamers to have to buy into online passes. I would highly recommend taking out the time to read the original piece, titled, The Online Pass Strikes Again, before continuing beyond this point.

I’ve been seeing this piece linked around quite a bit over the past 24 hours: saw several links for it shared on my Twitter feed, a couple shares for it on my Facebook wall, seen it show up at Reddit, among other places. The piece really seems to be striking a raw nerve with gamers everywhere. And it should, as quite frankly, the piece is spot on, and paints a pretty grim picture for the future of the hobby. Especially as costs associated with game development (currently between $30 million to $50 million for the average multi-platform game) are due to double, and potentially triple with the release of next-gen hardware right around the corner.

. . . I Get Paid To Do the Wild Thing!

The problem facing game publishers (the people who pay to have games developed), is how to continually keep game development profitable as costs keep on the rise. Game publishers’ most recent absurdity of an answer to their fiscal woes, comes in the form of online passes which restrict huge chunks of the game from the user, should the user prove fiscally savvy, and choose to either rent, or purchase the game used. The online pass works by requiring the user to validate a pass that sold with the game at time of purchase, online at the publisher’s web portal. Should the user not have access to said pass, then the user can purchase the pass separately for an additional fee. Some publishers are even offering DLC (downloadable content) at a discount or for free, as an added incentive to get gamers to buy into the online pass. On the surface, online passes seem like a great idea . . . until you realize that over 50% of all console gamers do not, or cannot access the internet from their game console, and as a result, are automatically locked out of all online pass content, despite paying full price for the game in cases where the game was purchased brand new. Oh, and then there is the matter that online passes are not transferable. Want to play at a friends house, go on holiday and play in whatever city you happen to vacation in? Well you better bring your game console along with you, as all that online pass content you are supposed to own, does not follow you all that much.

Originally, online passes were targeted exclusively at gamers who were getting extra value out of their game purchases by playing games online. However, starting this fall, that trend now extends to chunks of the single-player (non-online) campaign of the game. And were that not enough, remember that DLC some publishers are using as an incentive to purchase online passes? Well increasing number of that DLC is coming from content that was originally planned as part of the original game – basically, publishers are now taking chunks out of the games, to insure gamers pay extra for online passes. Ultimately, online passes have become a way to punish any gamer who purchases their games (new or used) legally. Ironically, if you happen to pirate games, then you are in luck. The full game, plus all that DLC, and online pass content can be yours for the price of free, so long as you don’t mind modding your console, and have no plans to play online. And considering that over 50% of all console gamers already do not play online . . . I foresee a growing sector of an as yet, hardly tapped market for console gamers in the near future.

Online Pass Frustration

As I peruse this subject around the net, there is an equally disturbing (and growing) counter trend being proffered by the gaming community; doing away with DLC completely. It’s like Newtonian physics, every action has an equal and opposite reaction. Of course the problem here being that the equal and opposite reaction, is just as equally wrong a solution as online passes are to begin with. For starters, the ‘DLC incentive’ only represents part of the online pass proposition to begin with. Doing away with DLC, or even making it free, still does not do away with online passes. Matter of fact, doing away with DLC altogether will only serve to make programs like online passes even worse in the long run.

DLC was created in the first place as a means for publishers to help defer the cost of game development, by creating supplemental content to a game that would yield higher profit margins, due to the lack of necessity of doing further R&D to create the expansions. Anytime you are developing a game, as much as 70% of the development costs can sometimes go to R&D: getting the engine up and running, getting the game to run on the hardware, getting the game to work in the engine, discovering which parts of the game design are too ambitious to get into the completed game, sending crews out on location to photograph and video environments for replication in-game, or the creation of in-game assets, etc. The point of DLC, is since all those expenses are already paid for during the development of the parent game, it should be cheap to just make more levels for the game, and amortize the expense of having made the parent game, across an extended value chain of expansions that would continue to sell to the same fans who purchased the parent game.

But despite the recent (2002) rebranding, DLC is nothing new. Back in the day, expansion paks were quite common on PC. Common to the point where any PC game that did not get an expansion, was kind of looked down upon, at one point. Of course back then, expansions were meaty additions to an already complete gameplay experience, and were considered by myself and just about every other PC gamer, as something extra to look forward to when they arrived. And getting expansions was considered by many console gamers (myself included) as something we wished would ultimately come to consoles.

When DLC originally got started, it was a lot like mini-expansion paks (or even full expansion paks in the case of games like Oblivion and GTA4). If you never bought into the DLC, you still got your monies worth from the complete game experience found in the parent game. A return to expansion paks or mini-expansion paks would be a very welcome change to what DLC has turned into of late. And Lens of Truth is right, publishers have begun taking parts of the main story out and reserving them for DLC; but I said as much when I realized Ubisoft had pulled that BS with Prince of Persia (2009). Now it has gotten to the point where an increasing number of games are doing the same thing – yanking out chunks of the original game, just to create their DLC; which Jason Roberts aptly points out, is the exact same thing as an online pass. This practice is a complete world of difference between proper expansion paks, or even mini-expansion paks that DLC originally represented.

Yet free DLC is not the answer, either. As a working stiff, I have too much respect for the working man to expect any other working stiff (blue collar or white collar) to do any work for free; the world has enough problems with the greedy fucks on Wall Street trying to milk it dry. We don’t need to turn on each other demanding free shit, because we are all flat broke, or are a bunch of cheap assess. So free DLC, as some are calling for, is simply not the answer. However, quality DLC worth actually paying for? Is more in line with what is fair for all parties involved.

A Real Expansion Pak

What happens when it takes a dev 9, 12, 18 months to develop DLC/expansion pak like it did in the case of GTA4, Oblivion, or was standard wait in most PC games of yore (Half-Life 2‘s third expansion pak, Episode 3, still has not come out, and how many years has it been since Episode 2 – four years). What? As gamers, we are magically just supposed to be entitled to get that stuff for free simply because we say so? By charging for DLC, those developers did not spend all that time making quality DLC/expansions only to not get paid for their work at the end of the cycle. Just giving away DLC for free only encourages devs who would invest in more ambitious expansion paks, to not even bother. And that is a clear loss for gamers, not the developers, or the publishers

That stated, like previously with the piracy issue, I am a firm believer that if you price something low enough where it is more an effort to buy, resell, and then hunt down and rebuy/rent, and oft times, busted and incomplete copies (no manual, case, with scratches, etc.) again, every time a bit of DLC surfaces, you can cut out the cycle of pre-ownership altogether. And this differs greatly from giving away the DLC for free in many key areas. I can tell you from experience, that even though it was yanked out of the middle of the game, I have no problems purchasing the Deus Ex: Human Revolution‘s upcoming DLC, Missing Link . . . I only paid $17.50 for the game the day it was released, and adding to that, I am getting an additional 30% discount on all DLC for the game. If DXHR winds up getting a long tail of DLC, for me it will ultimately work out as if I waited around for the GOTY edition – even though I did not have to. And even if the game does not come with a long tail, and only ever has the single DLC, it works out that I only paid $24.50 for the entire experience. Needless to say, I wind up winning either way.

Not that I am trying to say that it is okay to yank chunks out of a game so long as the game is priced low and the DLC is priced low as well – while that may make buying into the whole thing easier to swallow, yanking a chunk out of a game is something that simply should never happen. What I am saying is that if Netflix can come up with the one definitively proven cure for media piracy, thanks largely to lowered prices reaching a broad enough audience, then there is a lesson to be learned from that discovery by everyone in the business of providing entertainment to the masses. The Netflix model need not be copied exactly, but when the price is low enough, the size of the audience expands, and so does revenue. Meanwhile, piracy shrinks. Applying those lessons to the used game “problem” would go a lot further to eliminating pre-owned game sales, than anything the games industry has done to date.

DLC and expansion paks should never go away. Likewise, they should never be free unless it is an explicit case where the developer (not the publisher, or the platform holder, or the retailer) feels they want to give it away for free (look at Team Fortress 2). But instead, these things (the games and the DLC/expansions) should be priced so they maximize the penetration of the product into the targeted audience, as well as sell far beyond that initial targeted audience. The fact that next-gen, games will cost as much to make as cinematic blockbuster films, yet movies reach audiences of tens of millions, and often hundreds of millions of fans per film, and most games barely crack the 2 million units sold in a lifetime (global sales figures), is very telling. Angry Birds doesn’t have a problem reaching 350 million people, and Farmville does not seem to suffer the issue either. Not saying that core games should be $1, or free, just saying that game publishers need to get off their asses and make like the home video market circa 1986, and create a happy-medium market point between Angry Birds and Gears of War, so that EVERY game can sell like its got ‘Call of Duty‘ in the title. You fix that problem, and the pre-owned and piracy problems will fix themselves . . . which in turns leads to lower priced, more ambitious DLC and expansion paks, expanding out the tail of the game.

But ultimately for the pre-owned cycle to be cut, publishers have to go back to the days of long tails, instead of playing Pavlovian tricks to get gamers to purchase all their games in the first six weeks the game surfaces. But that – that is a whole other topic of discussion for another day . . .

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3 responses

  1. Pingback: Thoughts on the Definition of “Gamer” « Retro-Ish Gaming Critic

  2. Pingback: Thoughts on the Definition of “Gamer” « Retro-Ish Gaming Critic

  3. Pingback: Thoughts on On-Line Passes « Retro-Ish Gaming Critic

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