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Summary:

Electronic Arts (NSDQ: ERTS) has owned up to the mess it created with the DRM-heavy launch of Spore last week — a fracas that may actually…

imageElectronic Arts (NSDQ: ERTS) has owned up to the mess it created with the DRM-heavy launch of Spore last week — a fracas that may actually have cost the gaming giant as much as $25 million in missed revenue. Gamers angry with the “draconian” content protection features opted out of the $50 a pop for Spore and copped it illegally instead, to the tune of an estimated 500,000 downloads across various BitTorrent sites. In fact, peer-to-peer research firm Big Champagne called the speed at which gamers downloaded pirated copies “extraordinary.”

Spore‘s DRM restrictions limited the number of times a user could activate the game, to curb piracy. But the features garnered thousands of buyer complaints and sparked a negative review frenzy on Amazon.com (NSDQ: AMZN). EA addressed the issues in an interview with MTV Multiplayer, responding to a number of gamers’ primary complaints:

– A legitimately bought copy of Spore couldn’t be activated on more than three different computers.”That will be changed,” promised a company spokesman, who compared the practice to iTunes. The difference is that iTunes lets users de-authorize a computer — while Spore’s DRM doesn’t. (Although the current version of iTunes 8 only offers me the option of deauthorizing all five at once, including two computers that have been reformatted and don’t even know they have an iTunes connection.) EA said that will change, with a patch coming out for it in the “near future.”

– Buyers worry that the game’s SecurROM copy protection software is actually installing spyware on their computer. “There’s no viruses, no spyware and no malware,” the spokesperson said. “The thing I would say to the consumer audience is that, if you’re concerned with a virus on your computer, the chances of that are infinitely higher when you’re downloading off of a hacked version than it would be downloading the authentic game. We would never put any spyware on anyone’s computers. That’s not going to happen.”

EA brass sidestepped questions about whether the slew of 1-star reviews on Amazon were from legitimate consumers or pirates, as well as why the DRM and online authorization policies were so strict. The spokesperson also shed some light on Spore’s rate of sales, touting that there had been at least 435,000 activations (representing only a “sample” of sales) — with a majority coming from one machine — as of Tuesday.

WSJ: “In a statement, Frank Gibeau, EA Games label president, said the company was ‘disappointed’ by the misunderstanding around its digital-rights-management software and that it would expand the installation limit to five machines. He added that EA is expediting the development of a system that will allow customers to ‘deauthorize’ computers and move the game to new machines, without needing to call the company.”

  1. Of course it's spyware. How else would it know to deduct an activation when you upgrade your hardware. My computer is my own business and EA has no right to spy on me to determine whether or not I am copying the game. How do limited activations combat piracy anyway? Surely if their DRM thought you were pirating it would just shut down your game? No, this DRM is being used to block resales and violates the First Sale Doctrine of the Copyright Act. Furthermore, Sony, the makers of Spore's SecuROM DRM have already been prosecuted by the FTC for using similar DRM in music:

    "Installations of secret software that create security risks are intrusive and unlawful," said FTC Chairman Deborah Platt Majoras. "Consumers' computers belong to them, and companies must adequately disclose unexpected limitations on the customary use of their products so consumers can make informed decisions regarding whether to purchase and install that content."

    http://www.ftc.gov/opa/2007/01/sony.shtm

    So where's the disclosure about the DRM and limited activations on the product labeling?

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  2. As soon as it is more trouble to legally do something than it is to illegally do it you are going to have this sort of situation. What is especially funny and enlightening is that despite the built in DRM it obviously didn't take long for DRM free pirated copies to emerge. Once again illustrating the fact that DRM doesn't even stop the very thing it was designed to stop but rather encourages it in some cases.

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  3. B. Scott Andersen Friday, September 19, 2008

    It is working. Those of us who refused to pay and made our thoughts known have been heard by the accounting offices of EA (and likely others in the gaming and related content industries). They now have a number, $25M, to think about. All those 1-star reviews on Amazon also relate to the balance sheet's "Good Will" column–and it is clear they lost a lot of good will in this ill-conceived ploy.

    In the end, companies are just like you and me: they do what's best for the bottom line. There is now compelling evidence–with the accounting to back it up–that this approach hurts their profits and degrades their balance sheet's Good Will.

    At this point, we can only wait and see if EA has learned from their mistake and if others will learn from this mistake as well: If you treat all customers like criminals, some will actually become criminals and steal your product, and the honest ones will feel insulted. Sadly, EA scored a direct hit on both groups.

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  4. It didn't have to come to this.

    EA had ample opportunity to listen to their customers on their very own official game site boards (the Sims2 and Mass Effect for PC to name just two) to forego this type of DRM and they did not. In fact, they could have learned from Take Two and their fiasco of a launch for Bioshock not to do this to their customers, but again, they did not.

    EA's (former) customers, previously burned by EA's use of SonyDADC Securom, know that this DRM has nothing to do with piracy, as it is and always has been utter failure at preventing it, and worse, causes chronic access or technical problems for end users who paid for their games. They will no longer stand for being the the fool patsies in this game of EA vs. the pirates.

    This reaction should've been seen from miles away.

    How irresponsible has EA been to shareholders and a formerly devoted fanbase to take aim at the last line of defense, paying customers, in this preposterous and presumptive 'war' on people they will never gain revenue from?

    Securom and any overly restrictive DRM only loses publishers actual sales – those that would buy but did not due to DRM.

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  5. My wife used to love playing the Sims2. I purchased the expansion pack, Bon Voyage for her and within minutes of installing the game her computer began to have serious malfunctions. We had her computer custom built just for her to play this game, now she no longer plays. For the husband of a housebound disabled wife, to see her sadness at not being able to play a game she once loved is heartbreaking.
    After weeks and weeks of searching the net for what the problem was, she came across a site that helped fix the problem. It was in fact SecuROM that was the culprit. That was the end of her loyalty to EA.
    Now when a stuff pack comes out, or a new expansion pack is released, I get to see the sad expression on her face as she knows she can't buy the product, or she risks further damage to the computer.
    I will never understand this company's treatment of their previously loyal fan base. If anyone is responsible for the increase in piracy, the finger points directly to EA and their poorly thought out decisions. How they ever thought that alienating their loyal customers made good business sense is totally beyond my comprehension.

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