Guest Editorial: Own v. Rent

Entertainment Consumers Association (ECA) President Hal Halpin offers his insights on video game ownership – a topic that has caused cheers for Sony and jeers for Microsoft at E3 in Los Angeles this week.

In polling and marketing, each and every percentage point represents something tangible, a reality that's inescapable, a definitive number of X as opposed to Y. If you're a "piracy professional" that worldview translates…well, just fine. You extrapolate each known piece of data from the thing being pirated and, in a very left-brained fashion, turn it into a Z. This is not a variable process, but rather… wait for it… definitive. Herein lies the problem with piracy as it relates to games, generally.

The very premise of what makes – frankly any – game a "good game" is, quite simply, this: it's 1) easy to play, 2) tough to master, and 3) fun. Period. Nothing more, nothing less. Done. Right?!

Yes and no. That's certainly a truism that can be applied to the vast majority of commercially successful games out there. It's even a fair-enough rule to make your purchases by. Therein lies the rub. Are you actually purchasing said game, or merely licensing the right to use it?

If it's the former, you've likely paid twice the price (~$60.00 in the U.S.) for the RIGHT to OWN said product. You've purchased it. The publisher and developer have been compensated in whatever revenue share they have jointly determined and are transferring ownership to you, the consumer. You may do with it whatever you deem appropriate: destroy, sell, rent, collect, or simply save it. It's yours to do with as you see fit.

After 20 years in the business, I have plenty of close personal friends, who are (as I see them) phenomenally talented game developers. Some of them would adamantly disagree with my perspective. They would say that the artist should also be compensated for each and every transaction that occurring post-sale, regardless of whether it is rental, purchase of a pre-owned game, or otherwise. To them, the transaction between the publisher and the developer, when it occurred, didn't take into account the fact that the lawful purchaser didn't compensate them for additional uses. For that reason, they're against the consumer retaining those "first sale" rights.

I continue to respectfully disagree with those friends, and the many from the artistic community who disagree with that position.

We know that, to be blunt, consumers consume. We purchase, rent or license what content providers like to call "Intellectual Property." I believe that, if we legally purchase it, we buy the right to own it, use it, rent it, and sell it as we see fit – again, a doctrine which falls comfortably under First Sale.

If we rent it, it's with the understanding that the financial principles are fundamentally different: we don't own the product; we simply have the right to use it for a specified period of time, in an extraordinarily specific way, and for a LOT less money (typically ~$5.00).

If we license the product, we have a reasonable expectation that our rights to the product lay somewhere in between owning and renting. We certainly don't own it, but the restrictions on use and for how long as Draconian as with a rental. Price is typically about half as much as those who outright own the product (typically ~$30.00).

A truly multi-platform gamer will instantly see the distinguishing points above. We own a console game, and pay a premium for it. There may well be DLC (downloadable content) that is pinned on, but the buy/sell arrangement is fairly well established.

Renting a game severely inhibits one's rights to the duration of time in which the publisher grants temporary ownership/custodianship of it. Rental also severely limits how one may use it and whether, and how, such rights may be transferred (temporarily).

The third option is where we typically lose PC gamers…

A licensed game is one that you do not own – in any way, shape or form. You own nothing. You can almost never confer/transfer your rights . If such transfer is allowed at all, it would be limited to nearly zero times. So you can't sell nor resell it. It's not yours – beyond whatever rights the publisher is temporarily granting you… which may be revoked or changed at any time. How you even use it is governed by the Terms of Use or End User License Agreement (EULA) that you've likely agreed to without even knowing – also called a Click-wrap. It's a license. It's not ownership. It's a license. Did I mention that it’s simply a license?

These are the facts, which I presented to a Federal Telecommunications Commission (FTC) conference on the subject years ago.

We are beginning to hear how first-party console manufacturers plan to deal with the transition from CD to BRD, from disc-based technology to downloadable, from offline/non-DRM (digital rights management) embedded technology, to "always-on" technology (and the potential privacy and civil rights related implications of those). This shift from the traditional developer-publisher-retailer-consumer model to creator-based tech is forcing publishers to alter their strategies and business models. We should all be quite aware of their actions in these changing times, as they’re of paramount importance to publishers, developers and consumers – all of whom are impacted by .

We've reached a crossroads, where the wants and needs of corporations are weighing mightily against those of consumers. While cliché, it may well come down to one of two things: vote with your wallet, or vote with your voice. If it's the latter, there are many free online tools with which to give your voice more power. If it's the former, time will most certainly tell how it plays out for all involved.

Hal Halpin, President
Entertainment Consumers Association (ECA)

[Full disclosure: GamePolitics is an ECA publication.]

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