Paradox: DRM is a waste of money, only pleases investors

By on January 26, 2012, 5:30 PM

DRM has been a major point of contention between publishers and gamers in recent years. The former argues that restrictions are needed to prevent piracy, while the latter says that's a load of baloney because DRM-laced software lands on filesharing sites anyway. It's somewhat uncommon that you can count a large name among the naysayers, but Paradox Interactive CEO Fred Wester isn't afraid to stand among the critics.

Speaking with GameSpy, Wester said he's surprised his industry peers are still pushing DRM because Paradox discovered nearly a decade ago that it simply doesn't work. "If you take something like Sony's DRM, SecuROM -- it's a waste of money. It will keep you protected for three days, it will create a lot of technical support, and it will not increase sales. And I know this for a fact, because we tried it eight years ago," said Wester.

As a gamer, Wester hates DRM, recalling his launch experience with Civilization III. "I bought Civilization III when it first came out, and for the first three days I couldn't play it. It installed some other software, and it just shut down. I had to contact Atari support three times before I even got help. And that experience is terrible," he said. "No one should have to purchase a product that they're unable to install because of the DRM."

Wester believes companies like Ubisoft still defend DRM because of politics -- that is, managers trying to please investors who are clueless about gaming. Being the CEO and half-owner of Paradox, he has more leeway. "I think it's been a way to cover your back, previously. Now, I see no reasonable explanation for why people keep on adding it. Especially the kind where you have to be online all the time, like Ubisoft," Wester explained.

Despite shunning DRM, PC games like Magicka have far exceeded Paradox's expectations. The company would've been happy selling 150,000 copies of its fantasy adventure, but it's moved nearly 10 times that amount -- all through digital services. In fact, over 95% of Paradox's business is on PC, with 97% of that being digital. The company wants to keep things that way and it's working to sign deals with more services, including Origin.

So, what's the secret to selling gobs of DRM-free, digital PC games? Develop something people want to play! Wester points to the wild success of Minecraft which has sold over four million units through one website, without the aid of distribution titans like Steam. What's more, Minecraft creator Notch has repeatedly encouraged cash-strapped gamers to pirate his title with the intentions of paying for it later if they enjoy it.




User Comments: 16

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treetops treetops said:

Pleasing investors isn't a waste of money.

SalaSSin said:

Wow. I'm kinda speechless. You know, maybe it's a marketing tactic, but this interview just makes me want to buy Paradox' games, if only to support someone that doesn't just go along with the others.

Thumbs up to you, Mr. Wester, and please keep up the good work with the games you produce, even if they're really hard (looking at you Hearts of Iron!!), I do love them.

Vrmithrax Vrmithrax, TechSpot Paladin, said:

treetops said:

Pleasing investors isn't a waste of money.

True, as long as you aren't putting investors ahead of customer experience. You can please investors all you want, but if your end product is a steaming pile that's impossible to run due to restrictive DRM, your sales will likely be horrible (as well as your reputation). Which means your investors won't get much (if any) return on their investment. Which means you'll likely be struggling to find investors for your next project... It can be a pretty slippery slope...

bexwhitt said:

I am not that interested in PC games as a gamer consoles with the dedicated controller and definite hardware seem the way to go. That said as a nerd I am aware of pirate games, and DRM is an easily surmountable for the types that like to fiddle. Games will always be cracked very quickly. For every coder to implement drm, there is a smarter socially awkward coder to get round it (probably five).

Burty117 Burty117, TechSpot Chancellor, said:

Now this guy speaks my kind of language!

Dear every other developer/publisher, read carefully and understand well, your customers do not want DRM!

Rasta211 said:

I think low prices of games is part of the solution to avoid the need for DRM.

thewind said:

If its to long for you don't read! Otherwise feel free to comment! and sorry about any grammar errors.

@ rasta211

I totally agree with you. I am a huge movie buff and with 50+ good titles coming out every year who has the $20-30 (for blu-ray) to pay for each one? Thats $1500 just for movies! Not including games... I already have a list of 25 games that I want to play this year! (list follows: dates may not be 100% accurate)

Kingdoms of Amalur: Reconing; Feb 7, 2012

Inversion; Feb 7, 2012

The Darkness 2; Feb 7, 2012

Syndicate; Feb 21, 2012

Mass Effect 3; March 6, 2012*

XCOM; March 6, 2012*

Max Payne 3; March 2012*

The Devil May Cry; April 3, 2012

Prototype 2; April 24, 2012*

Bioshock Infinate; June 1*

Borderlands 2; June 30, 2012*

Tome Rader; Q3 2012

Metro 2033 last light; Q3

Prey 2; TBA 2012*

Farcry 3; TBA 2012

Hitman Absolution; TBA 2012

Alan Wake?s American Nightmare; TBA 2012

Guild Wars 2; TBA 2012

I am Alive; TBA 2012*

Quantum conundrum; TBA 2012

Beyond Good and Evil 2; TBA 2012

Dishonored; TBA 2012

Overstrike; TBA 2012

Risen 2; TBA 2012

GTA V; TBA 2013*

Even at $50 a game that's $1250! Who can afford that? If games were cheaper (aka steam) people would buy them more. I confess I usually pirate games and then when they are cheap enough buy I get them on steam to support the companies I like. (sometimes when I have the money I will pay full price but only when I Love the company hint (valve)) Can you guess whats my favorite game? (Hint: HL) anyway point being Call of Duty sold somewhere of 16 million copy (or more!) Just think how many would of been sold if the game was only $10! So lets say MW3 was $10 and sales doubled as a result. 32 million x $10 is $320 million dollars! Now the budget for THE WITCHER 2 was less than $10 million dollars and in my opinion was a better game. But even if you spend money on advertisements you still would make a huge profit! Cheaper games means more people would buy which means less piracy. I personally have around 60 games on steam. 90% of them I got on steam sales. You have a great service that steam offers with steam cloud saving your game saves and being able to have friends you can voice chat with while playing the game ect.. and the game itself all for $5 -$10! If people want to stop piracy they need to start innovating. Look at the frostbyte engine sure it may of cost a lot to develop but they made a great engine that other games are now using like need for speed: the run (may not be the best game but visually great!) There is no reason a company can make a great game for under $50 million and there is no reason for a company not to make there money back and then some. And thats only if they have to make a new engine once you have an engine there is no way it should cost that much for other games... Just checked and marketing budget for BF3 was $100 million and development was $25 million. Even after paying Microsoft and Sony They still made a killing. Developers need to stop being greedy and realize if they put a good game out people will buy it.

Best article about piracy I've ever read!:

[link]

Guest said:

DRM is a major pain in the bottom, especially if you have a poor Internet connection.

Steam is ok although some titles still require large downloads.

Darth Shiv Darth Shiv said:

treetops said:

Pleasing investors isn't a waste of money.

Unfortunately though, it IS holding the industry back from spending money on things that are worth spending money on. The sooner investors get that, the more profit they will make.

VitalyT VitalyT said:

DRM is like buying a car with preinstalled clamp, with electrical chainsaw that ships separately.

TJGeezer said:

Vrmithrax said:

treetops said:

Pleasing investors isn't a waste of money.

True, as long as you aren't putting investors ahead of customer experience. You can please investors all you want, but if your end product is a steaming pile that's impossible to run due to restrictive DRM, your sales will likely be horrible (as well as your reputation). Which means your investors won't get much (if any) return on their investment. Which means you'll likely be struggling to find investors for your next project... It can be a pretty slippery slope...

Not to mention, pleasing stupid investors might drive off smart investors. Which leaves you at the mercy of self-defeating stupid investors who will blame you for their own witless failures. That may not waste money, exactly, but how smart is it?

Darkshadoe Darkshadoe said:

Treating customers with respect is how you sell anything.

veLa veLa said:

I guess STEAM is technically DRM isn't it

LNCPapa LNCPapa said:

Yes - but Steam is also so much more. Steam is so unobtrusive that the benefits far outweigh the negatives of it being DRM.

Vrmithrax Vrmithrax, TechSpot Paladin, said:

LNCPapa said:

Yes - but Steam is also so much more. Steam is so unobtrusive that the benefits far outweigh the negatives of it being DRM.

Couldn't have said it better myself. The DRM almost feels like more of a side-effect, with the digital delivery system being the primary purpose for STEAM. It didn't necessarily start out with that feeling, but they've really managed to fade it into the background. I think the massive sales and community improvements have helped immensely, in that regard.

spydercanopus spydercanopus said:

Blizzard has the right model to prevent piracy.

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