GOG’s managing director: Gamer resistance to DRM is stronger than ever
Guillaume Rambourg talks about how Good Old Games makes money.
GOG.com's Guillaume Rambourg giving Jenga advice.
Wired.co.uk: What was the story behind setting up the GOG.com website?
Rambourg: It all began in the mid-90s, when friends Marcin Iwinski and Michal Kicinski started their business as retail distributors in Poland. Back then, Poland was a very highly pirated market, with most gamers using outdated hardware and not having too much money to spend on games. That's a tough market to break into: one where people aren't used to paying for games.
To convert pirates to paying customers, the founders of CD Projekt introduced a budget series of classic PC games which quickly became one of the company's best sellers. The reasons for the budget titles' success was both kind of simple and also kind of complex. The budget line was made of carefully picked top quality games with tons of goodies (manuals, posters, world maps, and whatnot) made available at an attractive price.
It's since been proven in many arenas that pirates are willing to pay for computer games if they feel that the price is equivalent to the game's value, but this was new and crazy thinking at the time. From there, Michal and Marcin dreamed bigger: if it worked in Poland, why shouldn't it work worldwide? Going DRM-free was a natural consequence of this train of thought: if you trusted your customers to pay for reasonably priced games, why would you want to use copy protection and treat gamers like potential thieves?
Wired.co.uk: Did the situation in Poland regarding piracy mean you considered DRM in a different way from other digital distribution sites, or is it a universal problem that you were hoping to find an alternative solution for?
Rambourg: Trust and respect for your customer is quite a universal set of values, I think. It's not always been a very popular value in the computer gaming industry, sadly. Our founders' Polish market experience was important, because it proved that you could build a successful business model on trust, even in a difficult market. DRM is an ineffectual tool (games are still being pirated at launch—if not earlier!—even with state-of-the-art DRM systems) and it antagonizes paying customers, because effectively the pirate is getting a less constricted gaming experience. This is crazy. Our belief in trusting and respecting our gamers who are part of GOG.com remains at the core of how we approach our customers.
Wired.co.uk: Do you feel that DRM policies are getting better or getting worse overall?
Rambourg: I wouldn't necessarily like to differentiate between those policies. Sure, some are more annoying than others, like the always-online requirement, which practically stops you from playing your game if you don't have an Internet connection available at all times, but all in all, DRM is just terrible as a concept. With no real progress in its efficacy, big publishers and developers are trying new, more aggravating ways of copy-protection. Thankfully, the resistance from gamers is stronger than ever before. Wins, like the recent Xbox DRM policy reversal, caused entirely by gamers' strong reaction, prove that tolerance for DRM is dropping.
Wired.co.uk: Have you been tracking data or researching how DRM-free gaming impacts sales?
Rambourg: We haven't been conducting any research ourselves, but we are obviously up to date with findings from other companies. You could argue that both music and publishing industries are slowly coming to terms with the fact that removing DRM actually boosts sales. Tor Books shared a rather convincing analysis of sales numbers in their first year after dropping DRM entirely, proving that removing copy protection had no effect on sales whatsoever.
There is an even more recent research under way that seems to prove that dropping DRM in the music industry resulted in an up to 41 percent increase in sales. GOG.com's DRM-free, day-one release of The Witcher 2: Assassins of Kings, a AAA+ game by any standards, is a great case study. At release, the version widely available on torrent sites was not the DRM-free GOG version but the one that posed any sort of challenge to the hackers, the one that included DRM.
The game was downloaded illegally roughly 4.5 million times, but to use the industry-wide practice and treat those entirely as "lost sales" is a massive misunderstanding. Most pirates never had any intent to buy the game in the first place; some surely became paying customers after trying it out or when the title became available at a discounted price. To drive the point home, CDP Red won't be using any DRM for their upcoming release of The Witcher 3: The Wild Hunt. As Marcin Iwinski recently put it: "Will it be more pirated than if we put DRM on it? I definitely don't think so. [...] With a DRM-free release, we're hoping to build more trust between us and gamers."
Finally, in our own experience we've found that trusting users to treat us well pays off and that our DRM-free approach is certainly not costing us business. Two of the many examples that come to mind: we see an average number of downloads per game that's somewhere below two—which means that users aren't taking advantage of DRM-free gaming to share accounts around.
Another great example comes from our recent launch of our 30-day, money-back guarantee where, if a game bought on GOG.com ends up not working despite what we can do to help you, we'll refund you your money. While we've seen an uptick in customer support requests, it's in the realm of a 200 percent or 300 percent increase in queries that seem legitimate for the most part, not a titanic flood of people who want to try to find a way to scam GOG.com out of a free game. I believe that people, by and large, try to be good; treating them that way for five years at GOG.com seems to bear out our hypothesis.
Wired.co.uk: What's it like negotiating DRM-free distribution deals with publishers and developers?
Rambourg: Back in the very early days of GOG, to build up our catalog, we decided to focus on big publishers, mostly due to the fact that CD Projekt already had solid relationships with those companies from their retail distribution days. Also, publishers own rights to the most worthwhile classic titles we wanted to get our hands on. Still, even with all those connections, it was very difficult to convince them to partner up with us.
Their back catalog was very heavily pirated and almost written off in terms of possible revenue, and so the publishers did not want to invest time and resources into reviving any of their older titles. From a business perspective it was understandable. From the gamers' point of view, though, it was extremely saddening.
We have turned this situation into an opportunity both for us and them by basically telling them: "No problem guys, please just double-check if you own the worldwide digital distribution rights, let's sign a deal, and then we will do everything for you." We find the original game masters, make them compatible with modern operating systems, prepare lots of free goodies, make abandonware websites our affiliates to obtain their support in promoting your titles. GOG also provides customer support for all technical queries, takes over marketing the re-releases to gamers and press, and makes these titles profitable again.
Our partners' main concern was obviously the lack of DRM, but we chose a pragmatic approach to this one: "Almost all of your classics have been pirated for more than 10 years. Adding a technical constraint for such titles won't help us revive them for the paying public." Interplay was the first to jump on board, and we were able to launch our platform. From then on, we had to earn credibility and solid sales numbers to convince more big companies to follow suit. And we did.
Today gamers worldwide are not only paying our wages, they also helped us get Activision, Ubisoft, Atari, Square-Enix, and even Electronic Arts on-board. All in all, after slightly more than five years of existence, we've got more than 570 DRM-free classic titles for PC and Mac, and we've become the number one source for classic content revenue, which is not too shabby. Of course, more than a few great old games remain to be signed, but we are constantly working on that front.
Wired.co.uk: How is the indie submission portal going?
Rambourg: It's worth mentioning that we have been receiving plenty of indie submissions even before we launched our indie program in August 2013. [The program] is faring better than we've expected, actually, with between 20-25 weekly submissions and a total number of over 500 submitted games. Some of them have already been released on GOG, like Aqua Kitty or MrBree, and many more are waiting for their upcoming 2014 launch.
Wired.co.uk: You've previously spoken about sales not devaluing games and pricing needing to reflect value—how did you settle on the winter sale prices? There are some hefty discounts there.
Rambourg: That's something that we struggled with. There's no doubting that big game discounts generate a lot of revenues, but it's also true that we're teaching a whole generation of gamers that their hobby is worth roughly the same as an iPhone app. Many gamers are getting games in bundles, and they're paying less than 99 cents per game! This is good for gamers in the short run, because they amass huge collections, but it's not good for the industry in the long run, because we will eventually reach the point where we can't sell games at full price because gamers know that the title will be 70, 80, or 90 percent off soon enough.
On the other hand, that's the market we're in. You adapt or you die, and this is something that has definitely proven to be good for our growth in the short-term, even though we can see that it definitely impacts the sale of games at full price outside of discount periods.
Wired.co.uk: Fallout, Fallout 2, and Fallout Tactics were 100 percent off on GOG at the beginning of the sale. Why was that?
Rambourg:The Fallout giveaway was mainly our way of reaching out to younger gamers who know this awesome IP only from the last two Fallout games—Fallout 3 and Fallout New Vegas—and never really felt like checking out the immortal classics. Gaming, as an industry, doesn't make much of an effort to preserve its history. Older games, even the acclaimed classics, fall into obscurity with time as they become incompatible with newer operating systems or simply become harder and harder to learn about. We thought that giving away the early games in one of the best franchises in RPG history will convince hundreds of thousands of younger gamers not to fear the classics and, obviously, to come to GOG.com to get them.
Wired.co.uk: Are you doing any work to combat the "Steam library-type problem" where you pick up so many affordable games you can never hope to play them all?
Rambourg: Actually we are thinking of running an anti-sale next year [laughs], where, for a day, our entire catalog will be priced at 150 percent of original price with a big message splattered across our main page: PLAY THE ONES YOU OWN!
On a more serious note, I have so many unplayed (or unfinished) games myself, it's just scary. I actually got an e-mail from Steam a few days ago, offering me GTA San Andreas with 75 percent off for Mac OS X, a game straight from my wishlist. Heart and reason were fighting hard on this one, but in the end, I decided not to buy it, simply because I realized just how many untouched games I still own. As most gamers over thirty, I find myself with less and less time on my hands, and so I am giving each purchase more thought than before. Most GOG employees deal with a similar situation. And that is why our approach is a little different than Steam's: we prefer to put as much attention as possible into every single one of our releases, and we try to give each release a chance to shine.
This makes our release calendar a bit more sparse—you'll never see us dumping 100 games into our catalog in one day—but at the same time gamers are making more informed decisions. It is not a perfect solution to that problem, but one that seems to work for the 2 million+ unique gamers visiting our platform every month.
Wired.co.uk: What has GOG got lined up for 2014?
Rambourg: We'll have some big site changes in 2014—we are working hard this very moment to make them public sooner rather than later in the coming year. Also, we have two major projects underway, both of which should be huge news for our users and the community. I can't go into much detail—I'd have to kill you—but it's going to be awesome.
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