Danielle Parr: Canada's video game industry needs copyright law that protects digital locks

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      By Danielle Parr

      The video-game industry is the fastest-growing sector of the entertainment industry in Canada, and one of the most vibrant, fastest-growing industries in the world. Canadian video-game companies are renowned for producing high-quality games, and are behind some of the world’s most successful titles. In fact, 20 percent of the top-selling games in North America and Europe in 2008 were developed by Canadian video-game companies, many of them in B.C., and Canada recently overtook the United Kingdom to become the third most successful producer of video games in the world.

      With increasing popularity, however, comes increasing instances of illicit activity, specifically piracy of video-game software and circumvention of digital locks (called technological protection measures or TPMs) that are built into consoles and handhelds that prevent illegally copied games from being played. According to industry research, some 34 percent of Canadian gamers have acquired pirated games (compared to only 17 percent in the United States), while 22 percent of gamers have modified their video-game consoles or handhelds to play pirated games. Furthermore, Internet piracy of video-game software in Canada has undergone explosive growth, and we detected a stunning 300 percent increase in the number of games illegally downloaded via Canadian ISPs between 2007 and 2008 (and this reflects but a fraction of the total illegal downloads in Canada detected by the industry as a whole).

      Today, it costs between $10 and $30 million to develop a top-tier video game, and few games actually sell enough to achieve profitability. In light of the substantial investment required and the high degree of risk associated with the production of entertainment software, piracy fundamentally undermines the industry’s ability to recover its investment, resulting in fewer games as well as lost revenue and employment opportunities.

      Particularly in this economic climate, where jobs are an especially precious commodity, it is critical that the government play its part in adequately protecting the Canadian video-game industry from piracy. Specifically, new copyright legislation must provide legal protection for TPMs, prohibit trafficking in “mod chips” and other circumvention devices and services specifically designed to facilitate piracy by defeating TPMs, and implement deterrent criminal and civil remedies against those who provide such services and tools—those who are profiting from piracy at the expense of legitimate businesses.

      For the video-game industry, TPMs are not only used to prevent piracy and cheating (e.g. “modding” game code to give an unfair advantage over other players); they also enable access to a greater range of features and options that would otherwise be unavailable. Things like parental controls (which allow parents to control what games are played by their children and what kinds of content they are exposed to), “trial” or “demo” versions of games, and new digital distribution platforms like Valve’s Steam, Xbox Live Arcade, or the PlayStation Network, all provide greater choice and access for consumers.

      Ultimately, implementing legal protections for TPMs will benefit consumers by providing greater certainty in the digital marketplace, which will, in turn, spur investment in the development of new digital products, services, and distribution methods; more consumer choice; and lower prices. Furthermore, legal protection for TPMs also enables a vibrant ecosystem of digital business models. If a creator or company chooses to sell their work as a digital product or service, legal protection for TPMs helps ensure that this choice is respected, much in the same way that locks on the doors of a bricks-and-mortar store allow the owners to determine when and how consumers can access their product. However, if they choose to give their work away and make money in some other manner (or not at all), they are free to do so.

      By ensuring that consumers have a variety of digital offerings to choose from, legal protection for TPMs allows market forces to protect consumer interests, so if a consumer does not like the conditions of sale or terms of service for one digital product or service, they can simply take their business elsewhere. Failing to protect TPMs under the law effectively means that the government is dictating the business model, which is bad news for business and for consumers.

      Canada urgently needs an updated copyright regime that protects our creators and rights holders, in recognition of the important role they play in the digital economy and in terms of Canada’s future prosperity. We have a lot to lose.

      Danielle Parr is the executive director of the Entertainment Software Association of Canada, the industry association representing companies that publish and distribute video and computer games for video-game consoles, handheld devices, personal computers, and the Internet.




      Aug 20, 2009 at 12:49pm

      Danielle Parr, and the Entertainment Software Association of Canada are completely out of touch on this issue. By failing to bend to an American lobby group such as the ESA I hardly think that the government of Canada can be seen as "dictating" any particular business model. By not favouring any particular model allows for flexibility in a reformed Copyright Act that provides for a dynamic law that can adapt to protect the interests of both creators and consumers while striking the balance being demanded by all.

      The ESA's pension for freely spewing unsubstantiated and exaggerated statistical data with the sole intention of striking fear into the hearts and minds of lawmakers is appalling. I think that the Government's recent move to launch public consultations on copyright sends a clear indication that decision makers in Ottawa also have doubts about the misinformation they are bombarded with by the likes of Ms. Parr and the lobby group she represents.

      Make sure that your voice is heard today by participating in the on-going consultations on copyright being conducted by the government of Canada. http://copyright.econsultation.ca/

      Arlo Bundsen

      Aug 20, 2009 at 1:47pm

      Recognizing Danielle Parr's self-serving interests for the Software Association of Canada, I take most of his comments with a heavy-dose of skepticism. If anything, TPMs or (DRMs) have proven to limit innovation, as is easily evidenced by the shift from music CD's to mp3. In this case the RIAA failed to anticipate consumer demand and is now subservient to Apple and its iTunes-model of distribution. The RIAA's efforts have limited development of competing distribution models (by not signing other distribution agreements), so many people without access to iTunes (e.g. GNU/Linux users) are left with few choices to obtain music---they may continue to collect an outgoing medium (CDs), or download albums through p2p networks.

      Similar arguments can be made for the movie studios, since people are forced to circumvent region encoding on DVDs by obtaining "cracked" versions posted on the internet. If, instead, consumers were given the right to do what they want with their products, or if the studios offered services meeting consumer needs, the demand for "cracked" versions would be less.

      I am also tired of corporate-shills drawing inappropriate and incoherent analogies of current technologies. The internet is not a series of pipes and tubes, and it is not a large pool we are all swimming in: the internet is a ground-breaking technology that really only deserves comparison with itself.

      Similarly TPM is not analogous to "...locks on the doors of a bricks-and-mortar store allow the owners to determine when and how consumers can access their product": this would be the case if we, the consumer, <b>bought the store</b>, only to find that we can only get inside the store whenever the previous owner decided it was okay. No, TPMs and DRMs place strict limits on what consumers can do with products they have purchases; they are kind of like TPMs and DRMs.


      Aug 20, 2009 at 2:32pm

      The problem is that TPM software can provide vectors for security vulnerabilities (see the Sony rootkit contraversy), or can limit the number of times a consumer can install a game on his computer before he has to purchase the game again (like Spore), and rarely do TPM software packages come with uninstallers until the consumers beat down the TPM company's door demanding them. I agree that measures should be taken to prevent piracy, but punishing your loyal customers with TPM, which will only mildly inconvenience real pirates for the few hours it takes them to remove it and distribute a clean version, will only make people want to buy fewer PC games. If you want consumers to buy more games instead of pirating them, make them see you as a company of people who deserve recompense for the many hours of work put into something that brings the consumer many hours of enjoyment, instead of a big, faceless, soulless corporation trying to tell them how they can use THEIR software that they bought and paid for.


      Aug 20, 2009 at 4:38pm

      DRM, rootkits and treating customers like crooks have worked out great for the music industry. I say we give it a go!


      Aug 21, 2009 at 8:27am

      One of the problems with making the action of breaking digital locks illegal (instead of the actual crime of copyright infringment) is that you give whoever the companies doing the locking veto power over all the fair dealing provisions. This is a bad idea in my opinion since the ones who are making the digital locks rarely have it in their best interest to do extra work to ensure all fair dealing provisions are not locked out, particularly since they often come from other countries with different fair dealing laws.


      Aug 21, 2009 at 9:01am

      It comes down to a simple question: do citizens have fair dealing rights, or not? If we don't have fair dealing rights, if they are some kind of loophole that needs to be closed for the benefit of corporations, then get rid of all fair dealing rights and be done with it.

      If we do have fair dealing rights, we cannot allow these rights to be overridden by corporations who don't like them. What good is a right if it becomes illegal to exercise that right? None. Providing legal protection for TPMs is simply giving corporations the ability to override our fair dealing rights at their whim.

      Either we link TPM protections to infringing activities, or we remove all fair dealing rights. Anything else is disingenuous, misleading, and logically inconsistent.

      Sébastien Duquette

      Aug 21, 2009 at 9:13am

      While I didn't expect someone from a lobby group to be totally honest, the comment regarding Valve made me laugh. Valve makes no use of DRM. In fact, they publicly said that "DRM are dumb" (http://arstechnica.com/gaming/news/2008/12/valve-calls-drm-stupid-micros...). What Valve does is that they distribute the games from the Internet and allows you to play or download the game anywhere, as long as the account is not used twice at the same time. That requires no DRM. Same goes for the other "neat" features Parr is mentioning : parental control and demo versions can be done without DRM.

      DRM is a failure : the music industry is going away from it because the consumers don't want it. The video game industry should get the message now because walking down further the DRM path is likely to reduce their sales.

      I really don't like Parr's fear-mongering tone. The industry of video game is flourishing, without DRM inforcement


      Aug 21, 2009 at 9:53am

      I have small kids at home. They crawl to and break things with regular abandon. If you think you're going to convince me that, in any universe, I should back my games up, you're nuts. I'm backing them up, breaking yourlocks to do so, and you're not going to stop me. TPMs are important. At least until EA decides to stop supporting their servers that unlock the game, or until it stops me from playing a game that I've legally bought a la Spore. At that point you can take you DRM, law, and high horse and shove it.

      TPM protection has a place in the new copyright law, but only if protection for consumers in the way of fair dealing usage/ personal use language accompanies it. Anything else only serves to alienate intelligent consumers who would side with you but for your short sighted view of the topic.

      Steve Bougerolle

      Aug 21, 2009 at 10:23am

      If laws work then we don't need technical protection measures.

      If they don't work, then anti-circumvention laws are pointless.

      Either way, there's no need to protect the protection hardware with laws. The ESA is pushing for laws that will give a teensy tiny extra little bit of protection to them while handing way too much power to companies and greatly undermining the rights of ordinary people.

      If they persist in this boneheadedness, I think a boycott may be in order.


      Aug 21, 2009 at 10:46am

      So, to summarize:

      Paragraph 1: the video game industry is doing super-great, and is experiencing explosive growth even with current copyright laws.

      Paragraphs 2-4: but if we don't change those laws, this trend will reverse itself for no apparent reason and we will lose all sorts of vital jobs.

      Paragraph 5: but TPMs are really about preventing cheating in online play and allowing parental controls, and enabling digital distribution. Even though we already do all of these things successfully, we need to make a law that will let us throw your kids in jail if they try to crack our TPMs, otherwise, they might get around the parental locks you put in place, and there won't be anything you can do about it, because without digital locks, you can't control your kids!

      Paragraphs 6-7: besides, TPMs are actually for the consumer because, somehow, adding restrictions to how you can acquire or use a game is all about consumer choice!

      Paragrpah 8: so you see, if we don't change copyright law so that we can prosecute people for modding their consoles or getting around the restrictions we put in games, the economy will collapse; people will cheat at WoW, and your kids will see boobies.

      All of this is old hat. The video game industry has claimed to be on the brink of collapse due to piracy since the 1980s, and yet it somehow continues to grow bigger and more profitable. About all that has changed is throwing in the argument that making it illegal to do anything the game companies don't want us to do is really all for our own good.

      Personally, I would encourage the game industry to concentrate on making good games rather than bad locks. There will always be free riders who don't pay for their copy, but that isn't relevant. It's how many games you sell, not how many you don't sell that matters; reducing the piracy rate doesn't necessarily increase sales, and may even have the opposite effect. This control-freak mentality is not helpful and serves only to create hostility between the industry the customers it expects to support it. Make good games, make them easy for people to buy and use, make them feel good about supporting the industry, and don't try to control what they can and can't do when they get them home. Honour and respect your customers, because without them, you are nothing.