It matters who pays the freight The phenomenon of video game piracy looks very different in independent studies than in industry studies

Various entertainment industry trade and lobbyist groups, including the RIAA, MPAA, and ESA, have all spend boatloads of cash and plenty of time trying to make copyright infringement appear to be one of the biggest threats to the fabric of democracy since lying. And their campaign been largely successful, culminating in the U.S. with the Digital Millennium Copyright Act, which criminalized copyright infringement for the first time, and included a raft of draconian provisions which have been limiting competition, creativity, and innovation ever since.

As part of this campaign, these industry trade groups have paid for any number of "studies" over the years, all of which painted piracy as rampant, and the costs of piracy as enormous. Oddly, though, independent researchers have been studying the same phenomenon for years, and consistently reaching different conclusions. And today, we got another example of the way independence, and freedom from pressure by the lobbyists who are commissioning the study, result in profoundly different results.

As reported by Motherboard:

Study after study continues to show that the best approach to tackling internet piracy is to provide these would-be customers with high quality, low cost alternatives. For decades the entertainment industry has waged a scorched-earth assault on internet pirates. Usually this involves either filing mass lawsuits against these users, or in some instances trying to kick them off of the internet entirely. These efforts historically have not proven successful.

Throughout that time, data has consistently showcased how treating such users like irredeemable criminals may not be the smartest approach. For one, studies show that pirates are routinely among the biggest purchasers of legitimate content, and when you provide these users access to above-board options, they’ll usually take you up on the proposition.

The bare minimum, done under duress Facebook's anemic new pro-privacy measures don't impress me much

In a week which started with the UK Parliament condemning Facebook as "digital gangsters," it appears that Zuck & Co. have decided that they have to do something to turn back the tide of negative PR, and have chosen to make a couple of changes that, frankly, should have been made months ago.

First, as reported by TechCrunch, they're finally going to shut down their spyware-disguised-as-VPN "service," Onavo:

Facebook will end its unpaid market research programs and proactively take its Onavo VPN app off the Google Play store in the wake of backlash following TechCrunch’s investigation about Onavo code being used in a Facebook Research app the sucked up data about teens. The Onavo Protect app will eventually shut down, and will immediately cease pulling in data from users for market research though it will continue operating as a Virtual Private Network in the short-term to allow users to find a replacement.

Facebook has also ceased to recruit new users for the Facebook Research app that still runs on Android but was forced off of iOS by Apple after we reported on how it violated Apple’s Enterprise Certificate program for employee-only apps. Existing Facebook Research app studies will continue to run, though.

With the suspicions about tech giants and looming regulation leading to more intense scrutiny of privacy practices, Facebook has decided that giving users a utility like a VPN in exchange for quietly examining their app usage and mobile browsing data isn’t a wise strategy. Instead, it will focus on paid programs where users explicitly understand what privacy they’re giving up for direct financial compensation.

Second, as reported by TechZim, Facebook are also making changes to their app which will allow users to opt out of having Facebook collect their location data even when the app was not in use:

To address user concerns about the extent to which Facebook’s Android app can access location data, Facebook has now updated its location controls. The new privacy settings will enable Android users to opt out of location tracking when they aren’t actively using the app and have greater control over how much of their location data is saved by the social media giant. With a new option in place, Android users will now be able to decide whether or not they want Facebook to be aware of their location at all times.

Again, while both of these are good changes, they're also obvious changes which should have been implemented months ago. If they'd announced these changes immediately after these scandals broke, I'd have been impressed with the speed of their response, even if it took them a little while to actually patch the changes into their app; instead, I can only cynically assume that they've been keeping these in their back pocket, ready to deploy in a week where Facebook desperately needed some good PR.

"Digital gangsters"

Facebook's had a relatively quiet couple of weeks, with no major new scandals breaking and not much news on the investigation front. That period of calm appears to be drawing to a close, though, with the UK Parliament firing the starting gun on the race to end Facebook's current status quo, as reported by Gizmodo:

The UK Parliament’s Digital, Culture, Media and Sport Committee was spurred to launch an investigation of social media in 2017 following revelations regarding Russian election-meddling and later, the Cambridge Analytica scandal. The resulting 108-page report takes Facebook to task on numerous issues including violating its own privacy agreement with users and participating in anti-competitive practices. “Companies like Facebook should not be allowed to behave like ‘digital gangsters’ in the online world, considering themselves to be ahead of and beyond the law,” the committee wrote.

[...]

One of the report’s more interesting details is that it claims the Information Commissioner’s Office (ICO) shared the names of three “senior managers” at Facebook with the committee who allegedly were aware of the Cambridge Analytica data breach prior to the 2015 date that Facebook has claimed it first learned about the incident. The managers’ names were not revealed in the report but the committee found it unconscionable that the issue wasn’t brought to Zuckerberg’s attention until 2018. “The incident displays the fundamental weakness of Facebook in managing its responsibilities to the people whose data is used for its own commercial interests,” the committee wrote.

That sounds... potentially actionable. I wonder if the names have been withheld because active criminal investigations are underway?

Epic's other other problem

When Epic announced that their digital storefront would be opening itself up to games from other publishers in a bid to eclipse Valve's Steam service, the general reaction from developer-friendly games media outlets was positive. People who spent a lot of time talking to developers, and none at all talking to average consumers, were convinced that Steam was desperately in need of a new competitor, one that would somehow succeed where GoG, Origin, Uplay, and even Microsoft's built-in Windows 10 storefront had not.

The assumption, one which even Epic seemed to share, was that Fortnite had given Epic a large enough base of customers that could be leveraged to take market share away from Steam, while their richer-for-developers revenue cut would necessarily pull disgruntled indie devs away from the more established platform. I have doubts about both points, of course, but it turns out that we're didn't need to wait all that long for the loyalty of Epic's customer base to be tested. The test has come in the form of a competing game: Apex Legends, which combines Battle Royale and Hero Shooter gameplay into a package that's become the top game on Twitch, dethroning Epic's Fortnite less than a week after its launch.

This is the customer base on whose loyalty the success of Epic's storefront depends, already abandoning Epic in favour of a newer, shinier game that is every bit as finished and polished as Fortnite, but with the more conventional look and gameplay of the Titanfall series. These are the customers that are supposed to abandon Steam, which they've been happily using for years, and buy into yet another ecosystem, even though that ecosystem offers nothing by way of features that are absent or inadequate on the platform they already use.

Why platforms aren't your friends

I tripped over this video on YouTube, and couldn't help but think of the recent Epic/Valve drama. The video, by Dan Olson a.k.a. Folding Ideas, was all about aspiring YouTube competitor VidMe, but made some pretty salient points about how a young, growing platform needs small content creators in order to add content and value to their platform, but that the interests of those small content creators diverge from the interests of the platform owners as the platform's popularity grows.



I couldn't help but think of Epic Games' pitch to indie developers, with revolves entirely around giving them a bigger cut of revenue, but proposes nothing by way of structural codification of those developers' actual needs vis-à-vis better long-term discoverability and promotion of their games. Epic Games are doing for video games exactly what VidMe was attempting in the online video hosting space: it's effectively providing a clone of Steam with no additional functional or structural improvements beyond, effectively, a tip jar.

The fact that Epic are already struggling with customer service, refunds, and other basic functions that any online competitor to a well-established digital storefront is expected to have in place at launch is...a bad sign, frankly. To paraphrase Olson's video, the most charitable reading is that Epic are unprepared, which is already not a good look.

Less charitably, it makes Epic look like grifters, deliberately exploiting vulnerable indie developers to grow their own market presence, all the while knowing full well that the promises of better discoverability and long-term partnership are hollow, since Epic's storefront isn't going to be any more beholden to any single indie developer than Valve's is, or Nintendo's.

Disney's different take on EA's lack of Star Wars games

After days of sustained criticism from numerous quarters over EA's handling of the Star Wars license, IP owner Disney has finally weighed in... and their take on the situation was surprising, to say the least. As reported by WIRED:

One of the most uneasy partnerships in games is the one between publisher EA and Disney. For several years now, since the shuttering of LucasArts games, EA has had an exclusive deal with Disney to make Star Wars console titles. That's all well and good—except for the fact that none of those games have been unmitigated successes and there haven't exactly been a lot of them, either. As a result, many have speculated that Disney's deal with EA might not be long for this world—but apparently the Mouse House is fine with things as they are.

In a recent earnings call, Disney CEO Bob Iger replied to questions about the company's relationship with EA by saying that the deal works well for both parties. "We've had good relationships with some of those we're licensing to, notably EA and the relationship on the Star Wars properties, and we're probably going to stay on that side of the business and put our capital elsewhere," Iger said. "We're good at making movies and television shows and theme parks and cruise ships and the like, we've just never managed to demonstrate much skill on the publishing side of games." Welp, at least Disney is happy. Because, uh, no one else is.

Now, I'll admit that I was as surprised as anybody, at first. Even if Disney didn't have a great video game track record, LucasArts did, at least up to the point when Disney acquired and then gutted their operation. Surely, given how aggressively Disney planned to push the boundaries of the Star Wars franchise, it would have made more sense to keep that team in place, along with their solid track record of doing exactly what Disney needed, rather than reducing them to a skeleton crew that would struggle to oversee anything much... and then outsourcing all responsibility for this huge part of the Star Wars portfolio.

After taking a few days to think about it, though, I've come around to Iger's way of thinking, and not only because Disney doesn't have a great track record when it comes to video games. EA's problems putting out decent Star Wars games are only one symptom of Disney's larger problem: that their entire strategy for Star Wars has been wrong-headed, basically from the very start.

First, the planned pace of Disney's Star Wars releases appears to have been simply too aggressive. True, the flopping of Solo: A Star Wars Story could easily be partly attributed to the boycott espoused by the Star Wars fandom's most toxic and misogynistic elements, but I don't believe that Star Wars fandom as a whole is that virulently toxic or blindly bigoted. After three lacklustre prequels, two more main story films (both of which received decidedly mixed responses from fans), and Rogue One: A Star Wars Story, a lot of Star Wars fans were simply suffering from Star Wars fatigue.

This is how Facebook's week ends

It's been something of a roller-coaster week for Zuck & co. With the revelations of their creepy teen-surveillance Facebook Research app and their complicity in teen credit card fraud book-ending their strong financials and resulting share price gain, it was a little tough to tell whether this week should go on the books as a win or a loss for FB.

Well, it turns out the week wasn't over yet, and the latest report resolves that question in style: this week is definitely an "L" for Facebook.

From Gizmodo:

Amid the constant scandals swirling around social media giant Facebook and its questionable handling of user data, at least six state attorneys general have launched their own investigations of the company, Bloomberg reported this week.

Two distinct groups have formed, according to Bloomberg’s report: Pennsylvania and Illinois have joined Connecticut in an investigation of “existing allegations,” though the report does not mention what those are. Officials in New York, New Jersey, and Massachusetts, “which were already known to be probing Facebook, are seeking to uncover any potential unknown violations,” a source told the news agency.

Oh, my. That doesn't sound good.

EA: The fun is about to end

It the process of writing my post about the Epic Games/Metro:Exodus mess, I came across this SeekingAlpha article on what the future holds for EA Games, and OMG is it ever a must-read.

EA needs to change its business model fundamentally. Its current model alienates players and makes EA more susceptible to competition. A significant source of profits, lootboxes, are being regulated away. Players are moving to mobile and free to play, where EA is weaker than its competitor Activision Blizzard. We believe that EA is currently heading towards another inflection point where players will start leaving en masse. EA could've already crossed the inflection point. Either way, things aren't looking good.

EA has a very tiny pipeline ahead, with Anthem and Respawn Entertainment's Titanfall 3 and Star Wars: Jedi Fallen Order being the only major non sports games EA is planning to launch. This is after releasing a bunch of old games that are not selling well. This is the perfect recipe for a massive revenue shortfall in 2019. This situation isn't helped by EA's terrible reputation, the upcoming lootbox bans, or increasing competition from developers around the world.

Although downside is reduced by the low valuation, we believe this valuation will look high when considering the secular decline in EA's revenues and profits. We believe EA will make a good short candidate if the market continues running up and brings EA up with it.

"Good short candidate" refers to the investment strategy of short-selling, essentially selling stock that you've only borrowed for just that purpose. It's basically a bet that the stock's value is about to drop; if it does, they you pocket the difference between what the stock was worth when you sold it, and what it was worth when you had to buy it back to "return" the shares that you'd "borrowed."

The quoted passage, BTW, is the conclusion from fifteen pages of analysis, all of which are worth reading if you're at all interested in the video game business. Seriously, go read the whole thing, because it's fascinating in a way that stock analysis normally isn't.

The various section titles in the article should give you some idea what to expect, though:

• Lootboxes: Regulation is coming
• Destroying franchises
• FIFA - How long can it last?
• Star Wars: An unmitigated disaster
• Battlefield V: Soldier up, EA!
• Competition: A quickly narrowing moat
• Dubious tactics: Denying valid refunds
• Significant insider selling
• Anthem: Not looking good

The "Star Wars" section features one of the most glorious EA Star Wars memes I've ever seen, too:

EA's Star Wars games in a nutshell.

Did I mention that this article was a great read? Seriously, go read the whole thing right now.

Metro:Exodus proves several of my points about Epic's new marketplace

When I posted at length about Epic Games' new storefront, and why it was a much bigger gamble than a lot of people were assuming when it was announced,  fair chunk of that post was about two big points:

1. Steam has a very loyal customer base, who will not be happy if strong-armed into buying into any other ecosystem. Nobody uses Microsoft's storefront, either, remember.
2. Individual indie games, no matter how good, are simply not big enough to act as system-sellers. Yes, having indie games on their platforms did wonders for Steam (and later for the PS4 and eventually Nintendo Switch; even Microsoft's XBox division belated came around to the need for them) but no one indie title or indie developer was responsible for that, and none of them are individually essential to any platform's success.

The sole possible exception to point #2 would, of course, be Fortnite... which launched on Steam, and arguably owes its success to Steam's existence. It's also the only reason that Epic Games have a hundred million or so customers with Epic accounts, customers who don't want anything from Epic except more Fortnite.

The fact that Fortnite players are likely not looking to Epic to satisfy their hunger for varied, non-Fortnite gaming experiences, something which Fortnite can't offer many of anyway, was a clear weakness that Epic needed to address, so it's no surprise that they were actively trying to lure other developers to their storefront, up to and including "poaching" them away from Steam after they'd already announced planned Steam launches. None of those early indie exclusives had moved over to Epic after already selling their product on Steam, but it really was the obvious next move.

It should be no surprise that Epic found some greedy indie dev willing to screw over their Steam customers in an ill-advised "hardball" power play, but I will admit to being slightly surprised that the makers of Metro:Exodus volunteered to be exactly this kind of test case so soon. The problem? Up until five minutes ago, the game was being advertised as a Steam launch, and has been available for pre-order on Steam.

Oh, and the move to Epic came with a $10 price drop, which wasn't immediately offered to customers who'd already bought the game on Steam.

And then there's the fact that the makers of Metro:Exodus are still advertising the game and its DLC on Steam, even though neither the game nor its DLC can be installed from Steam.

Screwed-over Steam consumers are, naturally enough, pissed, and threatening to boycott the game's launch entirely... which, in a world where The Pirate Bay exists, means that they're planning to play the game anyway, but just not pay for it, because fuck Epic and fuck the makers of Metro:Exodus for this egregiously anti-consumer bit of bullshit. All of which has the makers of Metro:Exodus threatening to boycott PC gaming entirely in the future... because that's going to help, isn't it?

Statistics are weird

After losing market share for six straight months, Windows managed a very slight uptick last month, gaining 0.03% to 86.23%. This very slight gain appears to have come at the expense of MacOS and Linux, both of which ticked down slightly, by 0.06% and 0.33%, respectively; ChromeOS gained, though, climbing 0.05% to sit at 0.37% overall, its highest point in the last month.

Windows' slight uptick didn't help its 6 month average decline, which actually worsened as last July's 0.55% increase finally moved out of frame:

This month's 0.03% increase is unlikely to have the same salutary effect in Windows' 6mo average, though -- it's just not large enough to have much of an impact, falling below the ±0.05% threshold for actual significance. ChromeOS and MacOS changes this month were right on the significance bubble, too; only Linux' 0.33% drop was large enough to have a long-term depressing effect on its 6mo average tracking.

The picture gets even muddier when you dig into the different OS versions. Sure, Windows 10 gained last month, from 39.22% to 40.90%, but Windows 7 also gained, from 36.90% to 37.19%; these gains were offset by losses by Windows 8 (-0.06% to 0.82%), 8.1 (-0.11% to 4.34%), and XP (-1.78% to 2.76%). On the Linux side, the generic "Linux" category declined 0.28% to 1.72%, but Ubuntu only declined by 0.03% to 0.68%, while the "Unknown" category gained 0.30% to reach a whopping 0.35%, which sure looks like NetMarketShare had trouble detecting peoples' OS versions this time around.

So, with statistical anomalies all over the place this month, I'm going out on a limb to call this a case of sub-optimal data, and putting a great big asterisk next to the whole mess until next month. If this month's numbers truly do represent some sort of inflection point, then we'll see similar changes in coming months, too; if these are just July-like blips in the data, then we should return to the trend lines of the past 6 months.

Either way, I want more data before I even try to guess at what's happening here.