Penny Arcade Defends Xbox One's Used Game Fees

[Update: Sony confirms the PS4 won't have mandatory used game DRM, fees or internet activation]

If you've been keeping up with all the news surrounding the Xbox One you may have come across a couple of gaming media websites defending certain features and functions that – according to Microsoft's own Larry “Major Nelson” Hryb – have not been entirely finalized. One of the more challenging pieces to read through has been Penny Arcade's summary of Microsoft's used game intentions.

Remember when I stuck up for gaming media when Microsoft tried putting the blame on the boys and girls who actually did their job and drilled Microsoft for answers shortly after the May 21st reveal of the Xbox One last week? Yeah well, this is one of those times where that opening paragraph kind of fits the bill and sticking up for them now feels like subjugating oneself to a Cinnamon Challenge while getting a Cleveland Steamer (don't Google that, please).

PA Report's Ben Kuchera wrote a somewhat backwards stepping piece that would have been perfect during a pre-Bolshevik era Russia when debilitating rights was all the rage before Lenin came in and whooped arse. Anyway, Kuchera feels as if giving up your rights for used game fees and restrictions is a good thing, an honest thing, an industry-helping thing.

According to Kuchera...

This is good news for a few reasons. The first is that piracy will likely be reduced. If the system phones home every so often to check on your licenses, and there is no way to play a game without that title being authenticated and a license being active, piracy becomes harder. You'll never be able to stop pirates, not entirely, but if you can make the act of pirating games non-trivial the incidence of piracy will drop. This is a good thing for everyone except those who want to play games for free.

From there everything goes downhill and basically is a plea for big government to be operated by private corporations who would love to do nothing more than strip the Constitution out of place, rip it to shreds and then take a nice, big, hot dump on the Bill of Rights.

To supposedly be a gaming site made, I don't know, for the interest of gamers – though, perhaps I should note that if the PA Report is actually an individual thing and selfishly made to reflect interests only amicable to the site owners then I recede the following statements – they would have at least thought about taking into consideration gamers who aren't rich, upper-class Americans who were born eating apple pie, watching the NFL, dancing to Usher's music in front of Kinect and enjoys game consoles that allows you to watch TV on your TV.

Now, before addressing the whole piracy thing, I'll throw something the way of Pro-Corporate White Knights that they may not have been informed of: First Sale Doctrine. It completely destroys Microsoft's attempt to double-dip with their proposed used game fees.

As noted on the Criminal Justice website, it doesn't matter if Pro-Corporate White Knights don't want you buying used games, selling used games or trading games with your friends or family, as stated on the site...

The first sale doctrine, codified at 17 U.S.C. § 109, provides that an individual who knowingly purchases a copy of a copyrighted work from the copyright holder receives the right to sell, display or otherwise dispose of that particular copy, notwithstanding the interests of the copyright owner. The right to distribute ends, however, once the owner has sold that particular copy. See 17 U.S.C. § 109(a) & (c).

In simple terms, according to copyright laws you are legally granted the right to trade, sell, destroy, giveaway, burn, throwaway or do whatever you want with your specific product that you paid for containing copyrighted material. In even simpler terms, it is illegal for Microsoft, EA, Activision, Ubisoft or any other company or corporation to prevent or circumvent ways for you to transfer, sell, trade or give away the content and the means of which that content is contained to anyone else after you paid for it.

We're not even talking about opinions here folks, we're talking about a company who is purposefully trying to find ways to prevent you from exercising your rights to do whatever with the content that you legally paid for. If you're unsure as to what this really means or how it applies to Microsoft's used game fees, refer to what Microsoft's vice president, Phil Harrison, tells Kotaku in a face-to-face interview, the quoted content comes directly from Kotaku's interview...

"The bits that are on that disc, you can give it to your friend and they can install it on an Xbox One," he said. "They would then have to purchase the right to play that game through Xbox Live.""They would be paying the same price we paid, or less?" we asked."Let’s assume it’s a new game, so the answer is yes, it will be the same price," Harrison said."We will have a solution—we’re not talking about it today—for you to be able to trade your previously-played games online," Harrison said.

The solution Harrison is talking about is called the Azure Cloud service. It's Microsoft's proprietary digital license acquisition, reacquisition and deaquisition marketplace portal.

If you have a new game that you want to lend to a friend but you don't want to give them your personal Xbox Live Master Account information, according to reports from both MCVUK and GameSpot, fees to acquire a new license for the game are rumored to be around $50 or £35. How on Earth is that consumer friendly?

Worse yet, the Penny Arcade Report feeds people an unconfirmed, false and presupposed postulation about prices coming down from the $60 limit for games, if Microsoft gets away with implementing this used game fee.

I'm not going to spend a lot of time debunking this because there's a more important issue to cover. As much as we all love Steam, just tell me how much Call of Duty games are available for, digitally, when they launch?

There are no used games to compete with in the PC market space (a $20 billion dollar space, I might add) so why the high price? Hey, right now (as of the publishing of this article) how much is BioShock: Infinite on Steam? Is the absence of the used game market for PC dropping AAA titles down below the $60 mark at launch? Oh, and how's that Games For Windows Live working out for you in the open market? Microsoft providing competitive pricing much? Right.

Barring a poor grasp of economics, the article's biggest stumble is that there is this poor misconception about the used game market cannibalizing the sales of new games. For about the hundredth time, this is a blatant lie and was covered in our own Top Misconceptions about the Gaming Industry. What's more is that used games are not deeply eating into the new game market as you're led to believe, and the proof is in the numerical pudding.

Now it's time to tear down the misinformation like the citizens tearing down the authoritarianism of the Berlin Wall: According to digital and retail trends, digital game consumption had risen to $10 billion in 2012, while (gasp) used game sales have dipped by 17.1% in 2012. Year over year, the used game market from retail sales are dropping. Let me repeat that, there has been a 17.1% drop in used game sales and a surge in digital media consumption. If you still don't believe the numbers and refuse to follow market trends, even Wedbush Morgan Securities analyst Michael Pachter buried the rumors of used games killing the retail market when he pointed out that, at max, there is an approximate 5% cannibalization rate of used games on the new games market. And as the final nail in the coffin, Inside Gaming Daily reported that 70% of Gamestop's used game trade-ins go toward new game purchases, effectively fueling new game sales that directly resonates as revenue for publishers.

Last but certainly not least is a little issue of piracy. Yes the quote above is about piracy but I figured I would get to that last because it's a stupid thing to bring up regarding DRM. You see, piracy and DRM go together like a married couple who stays together arguing for 30 years and never separating, both needing each other in order to survive. It's like Sonny and Cher, Arnold and Stallone, or Rihanna and Chris Brown. The whole point of piracy existing is to break into things that aren't intended to be cracked. Thus, the cycle will never end. DRM is made to be cracked.

For a few examples, CD Projekt RED reported more copies of The Witcher 2 laced with DRM being pirated more than the DRM-free version, as reported by Tom's Hardware. Despite SimCity being touted as an always-on game, it only took modders just over a week to crack the game's code and enable an offline mode, effectively bypassing the draconian DRM methods. Heck, Far Cry 3: Blood Dragon was leaked early all because of Ubisoft's Uplay DRM, as noted by GMA News.

So why would Kuchera think that more restrictions would somehow prevent pirates, hackers, coders and security miners from cracking into Microsoft's private junk? I mean, it's not a matter of if it will be hacked but a matter of when. There is nothing that stands to be impenetrable to hackers and if they want to get in, they'll find a way sooner or later. Inconveniencing legitimate consumers with authoritarian services for the sake of stopping a few pirates is both misguided and ill-conceived.

However, perhaps I'm overreacting, perhaps Ben wrote the piece as satire and it was all just a purposefully misinformed and non-researched topic to give people a laugh? If it was serious then I feel bad for all the gamers out there who may be tricked into misinformation and a lack of proper rights that they should be informed about regarding these matters.

If you're actually concerned about many of Microsoft's policies and want to read up more on the Xbox One's consumer concerns, be sure to check out the complete consumer's guide right here.

Will Usher

Staff Writer at CinemaBlend.