The Dragyn's Lair: In Defense of the Online Pass - ShadowDragyn Blog - www.GameInformer.com
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The Dragyn's Lair: In Defense of the Online Pass

One of the most popular, not to mention controversial, topics in the world of video games today is the rise of the used games market and the creation of the game studios' countermeasure, the online pass. Gamers have been waving banners across this fence with a fervor almost as intense as the old Xbox versus PlayStation wars. As consumers, we feel we own the physical property that we purchase, and it appears the law agrees with us. I can sell my old CDs, DVDs, and yes, games in a garage sale if I want, and there's nothing EA, Activision, or Bob's Development Studio can do about it.

But there's a lot more to this issue than the piece of plastic my games live on. And that's what I want to dive into today, aspects of the argument that some of us may not have considered. Let's start with the basic comparison between entertainment properties: music, movies, and video games.

Music is arguably the easiest of the mediums to create, requiring nothing more than creative juices and a few thousand dollars worth of instruments to create. Before you demonize me for oversimplifying the process, I know it's much more difficult than that. If it were easy, we'd all be rock stars, right? But the bottom line is the financial investment to create an album isn't even comparable to that of the other two mainstream entertainment sources. I am pretty sure Lady Gaga's latest album did not have a budget of $150 million.

Well, I said not just anybody can do it, but...

In addition to the lower production costs, there is residual income in the music industry. Star performers take their show on the road and pull in hundreds of thousands of dollars per concert, and the only thing it costs them is the price of the venue and a buttload of alcohol. In many cases, this can continue long after they have faded into obscurity (there is a venue near my house advertising a Rick Springfield concert next month).

So let's look at the contrasts between that industry and ours (by "ours", of course, I mean video games). With the exception of MMOs and microtransactions, most games never realize any residual income. Yes, there is DLC, but it can easily be argued that DLC is basically just another game, or at least a smaller version of the one it's built on. That DLC requires development time beyond what was spent on the original product, and therefore has its own costs to cover. And that development time involves a hell of a lot more than five guys in a basement.

In addition, there are significant distribution differences. Games still mostly come on a disk. This means capital for manufacturing disks, packaging, shipping, and even shelf space. On the other side we have music, which is far and away the cheapest in terms of distribution. Yes, record companies still produce CDs, but I wonder for how much longer. Many of us now buy our music digitally, and we don't even have to buy the whole album if we don't want to. Basically, music was the first microtransaction business in the world when you think about it.

Movies are pretty similar on the surface to video games. Both have large teams working on them and tens (if not hundreds) of millions of dollars in production costs. But movies have one massive advantage that neither video games or music possess. For the first few months, there is only one way to experience it, and that's to carry your ass down to the local theater and pony up the dough. No pirated copies on the internet, no used disk sales, no borrowing from a friend. Either you give the production company your money or you don't. There's really no second option.

The biggest advantage of all

Video games can be, and often are, sold used within a day or two of launch. Music can be ripped immediately after purchase and will hit ten thousand bittorrent sites overnight. But movies have a captive paying audience up front. And once the live version has run its course, they get to make money again on home video. In addition, distributors have contracts with digital distributors such as Netflix. Revenues for these services don't tie directly to a title like they do with something like Steam, but it's still revenue.

And that may be the biggest issue with used sales of video games. Movies make their money up front, and then make plenty more on the back end. Music may start slow, but the residual income from concerts and digital sales continue for years, even decades. But video games typically have only a few weeks to make the bulk of their money. This is undermined almost immediately by the consumer's ability to trade in a game they either didn't like or pulled a ten-hour marathon session to complete, followed up by another consumer who buys that game at a slightly reduced price with zero - ZERO - benefit for the developer that made it.

So what is a developer who sees an increasing decline in their game sales to do? Simple. Implement the "online pass".

The "solution"?

And just what is the online pass? Typically, it's a code that's included with every new copy of a game that gives the owner access to either multiplayer content or some kind of free DLC. These are two fundamentally different offerings, so I'll address them separately, starting with the DLC.

There are many who argue that DLC should always be free, including some outspoken game developers. However, I must respectfully disagree. While I do believe that some should be offered for free, as it helps generate interest and maintain an audience for your game, there are a lot of add-ons that require significant investment by the developer to create. Take the Undead Nightmare content for Red Dead Redemption as an example. That was a pretty big addition to the game, and I doubt most people would argue against that carrying a price tag. Then again, it wasn't day one DLC either, and was obviously worked on after the game was either completed or nearing completion, and also before the online pass was prevalent.

A more recent, and certainly inflammatory, example would be the Catwoman content for Batman: Arkham City. Since Batman doesn't have multiplayer, the solution was to offer the Catwoman DLC free for those who chose to buy the game new.  All others were charged $10 to get the same content. This caused many gamers to cry foul. But seriously, why? The game is complete without the Catwoman sections, and to be honest I didn't find they added anything particularly significant to the overall experience. Yes, they obviously worked on that content along with the game itself, but it wasn't a part of the game, at least not in the strictest sense of the word. In fact, it's comparable for me to the Undead Nightmare DLC in that it's a cool companion piece, but far from necessary to get tons of enjoyment out of the basic game.

In other words, the only reason in my humble opinion to be upset about it is the desire to get something for nothing. That's not an attitude that exists only for the video game industry, but everywhere. I've known plenty of people that believe when they buy a new car, they should automatically get custom leather seats or an aftermarket radio as part of the deal. Sometimes they get it if the sales person wants the sale bad enough, but then again it's a hell of a lot easier to justify a few hundred dollars in the face of $30,000. This DLC that you don't even need is $10-$15, folks. And you are not being "ripped off" by the development studio. You are getting something for your money. If you don't think it's worth the price, then don't buy it. I know that's a foreign concept to some of you, but try to wrap your head around it.

The other case, charging $10 to access multiplayer functionality for anyone who buys the game used, is fundamentally different in that the blocked content is a major part of the game. But again, I have no problem with this. And why is that? Simple. It may look free to you, but it's far from it.

Any online functionality requires ongoing support. There are servers that either host games or at minimum link players together. There are support staff that ensure those servers stay in good working condition and don't go offline. And there are continual bug fixes and updates to an environment that is constantly being exercised and possibly hacked. All of this amounts to costs, and those costs are paid by the developers. Where does the money come from? Why, from the game sales, of course.

But then there's a huge number of gamers who are using those servers and requiring technical support from that staff who never contributed a single dollar to the studio that has to foot that bill. Instead, the money went to a retailer who is profiting on a portion of the population who wants to save five whole dollars on a sixty dollar game. And that's all well and good. But you still need to understand what that means for the developer who poured tens of millions of dollars into the creation of that game, and what it means for the industry in general.

First world problems

Look, I'm a GameFly member myself. Yes, I understand that renting a game might not give you access to some of the most important aspects of that game. Yes, I understand that borrowing from a friend can render a greatly reduced experience. And no, I DON'T CARE. It is infinitely more important to me that the developer reap the rewards for the game they labored to create. Because more money for the studio means more capital for their next game. And that is a good thing, no matter what your personal opinion is.

Shadow out

preparing to be burned in effigy

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