EU Courts rule that you can resell downloaded software. And that means games.
<font face="Arial, Verdana" size="2" style="font-size: 10pt; font-family: Arial, Verdana; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal; ">From </font><a href="http://www.rockpapershotgun.com/2012/07/03/crikey-eu-rules-you-can-resell-downloaded-games/" style="font-size: 10pt; font-family: Arial, Verdana; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal; ">Rock Paper Shotgun</a><font face="Arial, Verdana" size="2" style="font-size: 10pt; "> or alternatively </font><a href="http://www.gamasutra.com/view/news/173513/Publishers_cannot_oppose_resale_of_digital_products_says_EU_court.php" style="font-size: 10pt; font-family: Arial, Verdana; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal; ">Gamasutra</a><font face="Arial, Verdana" size="2" style="font-size: 10pt; ">, and now one from </font><a href="http://arstechnica.com/tech-policy/2012/07/top-eu-court-upholds-right-to-resell-downloaded-software/" style="font-size: 10pt; font-family: Arial, Verdana; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal; ">Ars</a><font face="Arial, Verdana" size="2" style="font-size: 10pt; "> (I recommend the Ars article, but feel free to read them all)</font><div><font size="2"><br></font></div><div><font size="2">For an analysis there is <a href="http://www.gamerlaw.co.uk/2012/07/legality-of-second-hand-sales-in-eu.html">Gamer/Law</a>, and the great post for LexAquilla below.<br></font><div style="font-size: 10pt; font-family: Arial, Verdana; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal; "><br></div><div style="font-size: 10pt; font-family: Arial, Verdana; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal; ">To quote a part of the ruling</div><div style="font-size: 10pt; font-family: Arial, Verdana; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal; "><br></div><div style="font-size: 10pt; "><font face="Tahoma"><span style="text-align: left; background-color: rgb(255, 255, 255); "><i>“The Court observes in particular that limiting the application of the principle of the exhaustion of the distribution right solely to copies of computer programs that are sold on a material medium would allow the copyright holder to control the resale of copies downloaded from the internet and to demand further remuneration on the occasion of each new sale, even though the first sale of the copy had already enabled the rightholder to obtain appropriate remuneration. Such a restriction of the resale of copies of computer programs downloaded from the internet would go beyond what is necessary to safeguard the specific subject-matter of the intellectual property concerned.”</i></span>
</font></div><div style="font-size: 10pt; "><font face="Tahoma"><br></font></div><div style="font-size: 10pt; "><font face="Tahoma">This would imply that people, currently just in the EU, will be able to resell downloaded games. The ruling did state that this was on software with an indefinite licence agreement so we might see games where we are only given rights to play for 5 years.</font></div><div style="font-size: 10pt; "><font face="Tahoma"><br></font></div><div style="font-size: 10pt; "><font face="Tahoma">My concerns as a developer are that:</font></div><div style="font-size: 10pt; "><font face="Tahoma"><br></font></div><div style="font-size: 10pt; "><font face="Tahoma">A) Games are international, digital ones especially. Games made in SA will end up in the EU and subject to this.</font></div><div style="font-size: 10pt; "><font face="Tahoma">B) The resale of games (both physical and digital) give money to the platform they are sold through, but not to the developer.</font></div><div style="font-size: 10pt; "><font face="Tahoma"><br></font></div><div style="font-size: 10pt; "><font face="Tahoma">[Edit Log: #1 Updated with link to Ars article. #2 Analysis from Gamer/Law]</font></div></div>
</font></div><div style="font-size: 10pt; "><font face="Tahoma"><br></font></div><div style="font-size: 10pt; "><font face="Tahoma">This would imply that people, currently just in the EU, will be able to resell downloaded games. The ruling did state that this was on software with an indefinite licence agreement so we might see games where we are only given rights to play for 5 years.</font></div><div style="font-size: 10pt; "><font face="Tahoma"><br></font></div><div style="font-size: 10pt; "><font face="Tahoma">My concerns as a developer are that:</font></div><div style="font-size: 10pt; "><font face="Tahoma"><br></font></div><div style="font-size: 10pt; "><font face="Tahoma">A) Games are international, digital ones especially. Games made in SA will end up in the EU and subject to this.</font></div><div style="font-size: 10pt; "><font face="Tahoma">B) The resale of games (both physical and digital) give money to the platform they are sold through, but not to the developer.</font></div><div style="font-size: 10pt; "><font face="Tahoma"><br></font></div><div style="font-size: 10pt; "><font face="Tahoma">[Edit Log: #1 Updated with link to Ars article. #2 Analysis from Gamer/Law]</font></div></div>
Comments
Does this not mean owning the copyright mean you control the resale still? Or am I missing something?
reproduction that is necessary for the use of the computer program by
the lawful acquirer in accordance with its intended purpose."<br><br></i>Does that actually mean you are not allowed to put in some kind of copy protection? <br>
what the law says.</span></div><div>
<p class="MsoNormal">One aspect of copyright law is that as the copyright owner
you have the right to control who sells your works to the public. Basically
this is to ensure that the copyright owner gets fairly remunerated for their
work. However the right is exhausted after the first sale of a *specific* good.
</p>
<p class="MsoNormal">For example, the Authors of books can control where their
books are sold, but they cannot prevent people, who legitimately purchased a
book, from selling the book again to someone else. Furthermore the Author isn’t
entitled to any of the profits from the second sale (the reasoning is, the
Author has already been compensated for the sale *of that specific book*. This
is why second hand book stores are legal. </p>
<p class="MsoNormal">Another important point is that the right is only exhausted if
the specific work is sold (i.e. ownership of the specific good is transferred).
It is important to note, that even if a good is sold, the copyright owner doesn’t
lose their copyrights in the good sold.</p>
<p class="MsoNormal">Based on this, crafty lawyer types have structured the “sale”
agreements of software so that the software is never “sold” but is instead “rented”
(or as we would call it “licensed”) to end users. Technically this means that
if you bought a CD with software on you couldn’t sell it on to other people.
People got all uppity at this and eventually laws where edited or passed so
that if software was sold on a physical medium (like a CD or DVD) then the
purchaser would be allowed to sell on the physical medium, provided they
uninstalled the software and passed along any licence keys when they sold the
product. </p>
<p class="MsoNormal">Basically what this ruling has said is that even if you
download your software, you are allowed to transfer it, provided of course that
you “bought” it and are not renting it (and you delete the copy you downloaded,
and transfer any licence keys to the new user). </p>
<p class="MsoNormal">What is also of interest is that this case will have an
effect on what is considered “software as a service” and “licensing”. One of Oracles
arguments was that since the software was not sold, but licensed, their right
to limit resale was still intact. The court disagreed with this because the
licence Oracle granted to its end users was “perpetual” (it lasted for ever).
The court said that if you ‘rent’ something to someone forever, for a fee (It
is not stated in the case, but I assume it was a once off fee), you have
essentially sold it to them. If it looks like a duck, and sounds like a duck,
it is probably a duck. Because Oracle had “sold” the software, the clause in
the licence that made it non-transferable was deemed unlawful and excluded.</p><p class="MsoNormal">Now, this ruling only applies to EU, and also important to note is that in the US they have gone the otherway (Copyright owners CAN limit the resale of downloaded software). It is likely the SA courts would follow the EU since much of our law is based on their system.</p><p class="MsoNormal">What this means is that we will likely see more "subscription" games being developed, especially if the big developers are hell0bent on preventing second hand sales. Either that or people will start seeing limited time licences that a renewable on a yearly basis (or some other time period).</p><p class="MsoNormal"><span style="font-size: 10pt; ">In terms of the questions then:</span></p><p class="MsoNormal"><span style="font-size: 10pt; "> @edg3 as @Karuji and @Rigormortis have said, it doesn't matter how you "acquired" your legitimate copy, if you've been sold the licence you can resell it.</span></p><p class="MsoNormal"><span style="font-size: 10pt; ">@Rigormortis As I read the judgement the court is actually encouraging copy protection (the reason being the court states this will probably be the only way one can ensure that when the licence is sold, the seller doesn't keep a copy for himself and retain use of the good he "sold") </span></p></div>
There is still something bugging me though. @Karuji, I understand that you do not condone the exploitation that orgination x is using to make a (hefty) profit. What I'm asking is how does that directly affect the developer? The way I see it is that the developers will have some approximation of how many games they will sell and have to price the game accordingly. If they sell less than they predict that will be bad of course, but with something like this their predictions should become lower than before. Or am I missing something?
I just want to add that the digital resales will make the problem far worse than if it were not digital because of the ease with which it can be done. Like @Karuji mentioned earlier.
@Rigormortis I'm going to go with the worst case scenario I can think of here. There is developer McAwesome they make an Indie game which is a single play experience which lasts about six hours. McAwesome's in order to break even on their game McAwesome need to sell 50 000 units. On opening sales day they sell 10 000 units, which is great. Game sales, generally, following a decreasing exponential curve with regards to sales. So doing the math it looks like McAwesome are going to sell 75 000 units in their opening week.
One month after launch they have only sold 35 000 units. Since it was a digital game, and after 6 hours of play the player could sell the game back, and then the new purchasers bought the cheaper second hand digital game McAwesome never recoup their losses.
I know there is quite some hyperbole, imagination, and thumb suck number here, but like I said this is a worst case scenario.
But as I said at the beginning of this post @dislekcia gave a very good solution to the problem
I have a blizzard battle.net account with 2x copies of World of warcraft: Cataclysm, 1x copy of Starcraft 2 and 1x copy of Diablo 3 linked to it. All on EU.
Now, according to this ruling I have the right to sell anyone of these games to someone else.
Does this now mean Blizzard has to facilitate the option of doing so? Currently the only "black market" way of doing so was to sell the whole battle.net account, however this being legal now, aren't they now legally bound to allow us remove said game from account and remove the bound CD-key to be sold to someone else?
Can you think of the amount of red tape and paper work this will generate for a company with 10million copies sold of each of those game?
Just something i thought of the other day when first reading this ruling in the news.
Two important things to consider:
1) The judgement dealt with actual software as opposed to games, while it may seem minor, this is actually an important detail. There is a lot of room to argue that this judgement doesn't apply to games at all.
2) The judgement doesn't even go as far as saying that need provide facilities to enable you to sell games, all it says is that they cannot STOP you from selling them, if you decided to do so.
Hellish DRMs only inspire more badass hackers. Creating true (perceived) value (oxymoron) for people is the only way to get them to actually willingly pay for something - first hand, second hand or otherwise.
The reason that Apple's App Store works is a combination of good DRM (note that good means effective AND simple. Lots of "good" DRMs make the buyers hate it which means it drives people to pirate), good price point, and brand leverage through rigorous reputation maintenance. Plus there is value in going legit through the provision of services (Game Center, kind of), plus whatever more the game developers bring to the table (exclusive content, interaction, community).
To me it's really not about the legality but the mindset - both of the producers and the consumers. If it's hated, it'll get pirated. Building affinity with the people who will enjoy your product is the ultimate copy protection.
I think Steam is somewhat better than iOS since it has a lack of race to the bottom pricing which, I believe, is prevalent on iOS.
Steam does have really nice discounts which increase the amount of people who will buy the game.
@Actrox as LexAquilla said the ruling was for software not games. If I remember what Lex has said before games in SA are closer to movies than software, as far as the law is concerned.
Also selling one's battle.net account is a violation of the Blizz ToS which will lead to the account being deleted.
"I think Steam is somewhat better than iOS since it has a lack of race to the bottom pricing which, I believe, is prevalent on iOS.
Steam does have really nice discounts which increase the amount of people who will buy the game."
I see these two statements as being very contradictory. You just said that iOS is inferior for being a cheap platform, and that Steam is superior for offering discounts, as if AppStore doesn't do discounts. Fact is that daily there are discounts running on it. Hourly, in fact.
Hunh? :)
(And not having lower prices is a dev-side advantage not a consumer side advantage, remember I was talking about building affinity with consumers, and price friendliness is one of those points. AppStore moves more for cheaper - not less for more. Which one's better? It depends on the product. Not the platform.)
And to compare Steam and iOS is probably not going to work, as the market they cater for are quite different - the niche PC gamer market vs the popular general market. Remember that the AppStore wasn't even focussed on games until recently. It was created not to serve up games but to serve up content. That, combined with Apple's active drive to be the most popular mobile device ever by usability, ease and control, means that it did not appeal to the "core" gamers, which Steam does. The reach and depth are just too different between the two platforms.
@Tuism I was referencing to Tuism being rather similar, in appearance, to Taoism. So the nature of you being sagical (why is that not an actual word) with the name similarity just struck me as humorous.
Onto the actual discussion. I do not believe that it is contradictory, because Steam Sales and $0.99 apps function very differently. Steam Sales lower the pricing allowing people who wouldn't pay $X for a game to pay $X/2 or whatever the price it. Where the $0.99 is simply a low bar to entry in the hope that more people pick up the app.
As far as consumer side advantage. Well I know I have more stuff on Steam as opposed to 'Droid, and that's including free apps and the like. So as a consumer I find Steam more useful.
You made a really good point about the difference of the ecosystem between mobile, and PC. So I am going to have to read up about the about that.
Also, you have more stuff on steam than droid cos droid ecosystem is less profitable (fragmentation, piratability), which causes less less dev participation, which causes less quality and quantity. Which causes you to have less stuff cos you like good stuff (well, I do, I'm just assuming here now :p)
I've also had Steam since 2006 and a 'Droid since 2011 so that miiiiight be a factor there ;)
Fragmentation and piratability are factors. And the fact that a sizeable portion of Android users are on is honestly scary. On the other hand we have Humble Android bundle.
So I have to ask you, since you are highly familiar with the iOS app ecosystem, what do you think would happen if you could resell Apps on iOS? (Yay for swinging the thread around to being back on topic.)
So I'm not going to go on more of a tangent with the ios/droid versus thing :P
As for the iOS app resale conversation - remember the ruling is that resale is ALLOWED, and not forced to be facilitated. So... what does it mean for iOS apps to be resellable? It's actually a much bigger change than that what if question.
First apple will have to WANT TO let people resell to build it into the appstore. Then there's the question of what prices of resale are set at - if it's user set or set by Apple. Then after all that will the market start to respond - buying things first or second hand. Then after that will devs start to respond by making games desireable first hand - just like the console dev houses including unique once-off codes in their games on the shelves. Maybe there are other methods to do that with on the all-digital distrubution channel, but the principle would remain the same.
But I don't see that it'll clear the first couple of steps from Apple at all so there's no point talking about that :)