DVDGuy’s Blog @ Digital Digest

Welcome to this slightly late edition of the WNR. Normally, I would link to the latest edition of the monthly NPD analysis here for your consumption, but as it turns out, neither Nintendo nor Sony decided to release hardware figures for the month. This means that there’s no NPD analysis for this month, an all too frequent occurrence lately. I’ll try to give you what I have in the gaming section.

Another fairly substantial news week, well in my opinion anyway, so let’s get started.

In copyright news, let’s start with the MPAA’s response to the recent well publicized filtering of The Pirate Bay, happening as I type across Europe.

Unsurprisingly, the MPAA backed the recent court decisions around Europe to have The Pirate Bay blocked, and also rather unsurprisingly, spun this form of censorship as being ultimately good for the consumer. The reasoning, they say, is that by removing the threat of websites like The Pirate Bay, it gives the creative community more incentive to not only create, but also to “provide consumers with content when they want it”. Apparently, the mere fact that consumers want it is not enough of a reason for the “creative community” to cater to their needs, but you also need the right environment (although the real creative community, the artists and the like, usually have no power to decide how something is released, a decision that’s usually left to men in suits). This might at least be a point you could argue, but only if filtering actually works.

If the MPAA had their way, this VHS tape would have never existed - photo by Jared C. Benedict, Creative Commons License

It’s also rich hearing it from the MPAA, considering their own history with innovations, to suggest that websites like The Pirate Bay are the only reason why they’ve not yet bothered to fulfil the needs of today’s consumers. Remember that these were the guys that were against the VCR, were for region control that barred consumers from getting content “when they want it”, and possibly still pretty angry at the whole Interweb thing. Apple, Netflix, Amazon have done much more to fulfil the consumer’s needs in recent times, and the interesting thing here is that all of these companies are tech companies, not film or music companies.

If anything, it’s BitTorrent and The Pirate Bay that has forced the industry to be more malleable to the demands of consumers. They can no longer afford to fool around with release windows (which are now far shorter than they were a decade ago), with region control (much less common on Blu-rays than compared to DVDs), with price control (note the ever decreasing price of discs), and they’re now forced to support services like Netflix, even if it means making less money. They’ve had to compete with the likes of The Pirate Bay out of necessity, but maybe they’re hoping censorship can allow them to turn back the clock, although  in my opinion – and if you’ll allow me to use another cliche – the genie may already be out of the bottle.

And does piracy really affect revenue that much? A new research paper suggests that pre-release piracy, the worst kind according to the MPAA and RIAA, may actually help sales. The research paper by North Carolina State University’s Robert Hammond suggests that pre-release piracy may actually help album sales. No theory is given as to why this may be the case, but I suspect it’s because piracy has become just another way to advertise. This follow another study a couple of months ago which found no correlation between pre-release movie piracy and US movie ticket sales. Both studies seems to go against industry sponsored studies, and the common believe that, piracy, especially pre-release piracy, is costing the industry billions. But the industry has never really looked at the reasons why people prefer pirated content, instead, choosing to believe it’s simply a case of freeloaders “stealing” because they’re freeloaders.

People pirate because they might not have the money to pursue the legal alternatives; or they never felt it was worth the money and want to try it out for free; or they might feel piracy is more accessible than the legal alternatives; or they just like to get stuff for free, even if they have the money for it. Two of the above scenarios will not lead to any extra revenue, no matter how many websites you block, while one of them is clearly the fault of the content owner. Only the last scenario, probably the least likely (that people who have loads of money are shunning the likes of  iTunes and Blu-rays in favour of manually loading MP3s onto iPhones, and watching blurry movies on their laptops), derives any benefit from blocking out piracy altogether, which in itself is a fantastically unrealistic proposition (although I suspect Hollywood execs are used to the fantastically unrealistic, considering they produce so much of the same crap for our consumption).

Speaking of unrealistic propositions, Microsoft is providing funding to a Russian company working on a way to block BitTorrent downloads. With no details being available about how it works, and little detail about how it actually works in the real world, there’s not much one can actually say about it. Most of these types of blocks works by seeding fake data into streams, and this is not new. BitTorrent is incredibly adept at filtering out the bad and leaving the good, so while it may temporarily make downloads a pain, it won’t do it forever. At the end of the day, BitTorrent is just another file transfer protocol, so the problem with going after the protocol is that you’ll have a new and even more robust protocols to deal with later down the track. If you really want to solve the problem of piracy, you’ve got to go back and examine the reasons why people choose to pirate in the first place (and take note of the people who don’t have a valid legal alternative, due to regional restrictions or release windows, or unrealistic pricing, and maybe offer them a choice).

The dreaded Error 37 plagued Diablo III on launch day, as it becomes the highest profile DRM-fail in the history of gaming

A lot of people saw it coming, but as expected, the launch of Diablo III turned into a DRM-tastic disaster for Blizzard this week. One of the most anticipated games of the year (or decade), with one of the most controversial DRM decisions in regards to the single player campaign, and a near simultaneous global launch – a recipe for disaster, unless Blizzard go beyond the call of duty to provide adequate servers for all. Unfortunately, they did not.

Back when Blizzard first announced the controversial DRM, they were keen to stress that it wasn’t piracy related. Rather, it was suppose to be a sort of elaborate anti-cheating system, although that seemed confusing at the time for a game that was always largely a single player experience. But as we now know more about the game, and especially the built-in Auction House system, it’s much more clear why Blizzard went with the “always-on” DRM approach (and they were right, it’s not about piracy, or at least not all about it). In order to ensure the subscription-free Diablo III doesn’t cannibalize Blizzard’s major subscription based property, WoW, and to take the “black market” trade for in-game items in-house, the Auction House system was devised as the solution. But in order for the market place to remain rational, cheating, hacking and other unfair tactics had to be stopped – the always-on DRM is Blizzard’s solution to this. It’s a valid explanation as to why it’s present, and why it may be needed, but having a valid, non anti-piracy related explanation, won’t please diehard fans, who were none too pleased with the Auction House addition in the first place. But Diablo III is the only Diablo game in town, so to speak, so it’s not as if they have a choice if they want their fix of Diablo (disclaimer: I’ve purchased Diablo, even though I should know better).

But for games where it’s easy to make the decision not to bother buying, I’d caution publishers against taking gamers for granted in this way. DRM should either not exist, or it should be invisible, as otherwise, it becomes a liability.

Does the world need another physical media based format, even if it is a royalty free, open standard, based one?

Well, whether you think one is needed or not, free software advocate (free as in freedom, not as in beer) Terry Hancock is going to make one. Dubbed “Lib-Ray”, it’s based on a MKV container, using the VP8 video codec, with an HTML5 based menu system, with everything stored on SD media. The name may sound similar, but this is definitely not a Blu-ray challenger (and not intended to be), although it could give independent filmmakers a nice standardized way to distribute a physical copy of their films, without having to pay the likes of Sony, Panasonic and Microsoft for the privilege. It’s not the worst idea in the world, although without real hardware support, the format will have a long and hard struggle for acceptance, even by the indie scene.

Very much related to Blu-ray, but also very much a gaming related news item, was a former Microsoft boss’s take on the relative “success” of the Xbox 360, and why it actually happened.

Robbie Bach, the former president of Microsoft’s Entertainment & Devices Division, says that Sony’s ill planned and badly managed transition from the hugely successful PS2 (70% market share) to the expensive, delayed PS3 (30% market share) made it possible for the Xbox brand to triple its market share during the same period. The expense and delay had a lot to do with the inclusion of Blu-ray support for the PS3, although it did help Sony win the HD format wars.

The PS2 dominated the video games market with 70% market share, but the transition to the PS3 was problematic for Sony, not just because developers were actively backing a second horse in the race - the Xbox 360

The ease in which developers could develop on the Xbox 360, compared to the PS3, also seems to be a factor (something that even Sony admits), but the same developers also had a vested interest in seeing Sony’s standing knocked down a peg or two – nobody wants to publish in a market with only one big player, and support and investment by publishers like Activision and EA, in Microsoft’s then new console, made it possible for a second major player to emerge, according to Bach. Of course at the time, nobody expected Nintendo to ultimately come up with the most popular console of this generation, but that didn’t really change the strategy for publishers much, as the Wii was never a serious platform revenue wise for them.

As mentioned earlier, lack of NPD hardware stats means our monthly NPD analysis is not going to happen, and so I’ll talk about it in brief here instead.

The Xbox 360 was the most popular home-based console for the month, with 42% market share amongst the home based console, selling 236,000 consoles (down 21% compared to the same month last year). This leaves 326,000 units sold between the other two, and using a similar split as last month for the Wii/PS3, then it’s about 214,500 for the PS3, and 111,500 for the Wii – but the split is probably a bit more even, as the Wii numbers looks too small, and Easter is usually kinder to the cheaper consoles.

Software wise, Prototype 2 dominated, but it looks like it sold less than 236,000 copies on all platforms combined, which is pretty weak for a top selling title. Kinect Star Wars was in second place, decent in terms of ranking, but still weak in terms of actual unit sales probably.

Hopefully, normality resumes for the NPD analysis next month, but we’ll have to wait and see.

And with that, we come to the end of another WNR. Hope you’ve had a good week, hope the next week will be better, and see you again in seven days.