Study Claims Point-of-Sale Activation Could Generate Billions In Revenue 140
Late last year we discussed news that the Entertainment Merchants Association was pondering a plan to develop technology that requires games and movies to be "activated" when they are sold at retail outlets, primarily to reduce theft and piracy. Now, the EMA claims a study they commissioned has indicated that employing such a system for video games, DVDs, and Blu-ray products would generate an additional $6 billion in revenues each year. Critics of the idea are skeptical about the numbers, pointing out that the majority of game piracy comes from downloading PC games, which this plan won't even affect. There are other problems as well: "In order for benefit denial to work, the EMA would presumably require the three major consoles to have some sort of activation verification function to ensure that games were legally purchased. It will be interesting to see if Nintendo, Sony, and Microsoft agree to that. There is also a lucrative market for used video games to consider. After some gamers complete a title, they sell it back to the retailer. How will benefit denial handle that situation?"
not about piracy (Score:5, Insightful)
Re:not about piracy (Score:5, Insightful)
This is about stopping used games sales, nothing more, nothing less
No, there's more to it than that. It's also about adding an extra level of complexity to your purchase and guaranteeing that yet another thing could go wrong with your already insanely expensive purchase. If the industry is looking to profit $6 billion dollars from this move, I can almost assure you that it's going to be about $6 billion in annoyance to the consumer. For some reason treating your customer like a criminal from square one is the latest rage these days.
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They are looking at $6 billion of additional revenue. The profits aren't likely to be anywhere near that.
The $6 billion is probably a decent percentage of their current revenues though, and if they figure that the system won't do much to their profit margins (who knows what they figure), it should mean more dollars for them.
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Re:not about piracy (Score:5, Insightful)
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It's probably very similar to the 'lost revenue' theory that's thrown at piracy I think. They're probably looking at the used video game market and counting every sale as a 'loss'. By forcing activations they eliminate that sale/market. So therefore 'of course' every used-game sale (where the creator gets $0 additional profits) would actually be a new, retail unit sale (thus generating profit).
Software/game makers are really getting out of hand. They're right behind the MAFIAA in scumbag-ness. Trying t
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It's always been that way when it comes to the trade/resale pricing. If you don't like it, sell privately for a couple bucks more. Otherwise, you pay the price for the convenience of retail trade-in and used sales.
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No, there's more to it than that. It's also about adding an extra level of complexity to your purchase and guaranteeing that yet another thing could go wrong with your already insanely expensive purchase.
That's not their goal. They don't specifically want to give their customers headaches, because unless they're invested in asprin manufacturing, creating headaches doesn't get them any more money.
Rather, they take a problem that's affecting their bottom line (real or perceived) and come up with a ham-fisted solution. The actual motivation is nothing more than the OP said (eliminate the used market).
Re:not about piracy (Score:5, Insightful)
I for one wonders how the game industry still manage to make money. I buy all games legally in hope that they will keep on producing them.
Take Crysis for instance, I bought both releases and like anybody, after a while, I got tired of playing the AI versions of the game and moved to online "Crysis Wars" which I have been playing on-line for hours. The time spent on Crysis Wars is at least an order of magnitude greater that the time I have spent playing the AI versions and there is no recursive cost involved ! My investment has performed in a way so it might have cost me maybe on average 0.01$ an hour to play with the given product.
Have you ever coded any games ? Do you know how long it takes ? Do you know that it is impossible to release something like Crysis with only a handful of developers ?
I find that the money I gave them was a cheap price to pay ;-) Before piracy on a large scale, I could have agreed with you that some gaming companies might have charged to much for their products. This time is over, companies have to provide more competitive prices for people to actually buy the product instead of just opting for the pirated version.
Additionally, it doesn't matter what measures are put in place, there will always be cracked versions available.
Finally, I view this issue in a different way than the one about music rights for instance, because of the colossal amount of work required to release the final product :
http://slashdot.org/comments.pl?sid=1273015&cid=28371645 [slashdot.org]
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Have you ever coded any games ? Do you know how long it takes ?
Depends on the game but not always that long. What takes longer is designing levels, artwork, playability, testing, music and all the other stuff.
Do you know that it is impossible to release something like Crysis with only a handful of developers ?
Impossible? Maybe for you. Game companies spend more time and effort these days on making it look & sound pretty than making it fun.
Music and cut scenes are not an essential part of a game. The
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> Impossible? Maybe for you. Game companies spend more time and effort these days on making it
> look & sound pretty than making it fun.
> Music and cut scenes are not an essential part of a game. They're a way to promote games for use
> in shops & adverts.
I totally agree, try the demo before buying. Heck ! If there is no demo, try the pirated version !
> * 10% sale = 35% increase in sales (real dollars, not units shipped)
> * 25% sale = 245% increase in sales
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"They probably won't without re-using the engine for other games..."
And that's important to keep in mind. 3D engines are very often re-used (well, usually the good ones).
One bigger point you miss - much more time and money goes into artwork, cut-scenes, and so on (i.e. the pretty stuff) than actually coding the engine. Some of this work is done by graphic artists, some by people with mixed creative skills (someone had to create all the data points for the world map in fallout 3).
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Unless you're on a multi-year project (and you might be, considering the anonymous posting), coding does take a long time. I'd guess that an average project these days takes minimum 50 people over the course of a year and a half, with some on yearly cycles and others on that 5+ year "when it's ready" burn. And, of course, some developers get to have 200+ people on a title simultaneously. So yes, 20 million budgets are pretty common these days for a mainstream release, with 100 million budgets probably no
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Unless you're on a multi-year project (and you might be, considering the anonymous posting), coding does take a long time. I'd guess that an average project these days takes minimum 50 people over the course of a year and a half
Pfft. I used to work in the video game industry, and we had exactly two programmers. My friends at Midway San Diego had exactly two programmers (an engine coder and a tools coder). Various playstation games a friend of mine at Sony worked for had a team of like 5 to 10 programmers. I
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Have you ever coded any games ? Do you know how long it takes ?
I've been waiting on Duke Nuke'em forever.
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No, there's more to it than that. It's also about adding an extra level of complexity to your purchase and guaranteeing that yet another thing could go wrong with your already insanely expensive purchase.
No offense, but point of sale activation is pretty much bulletproof by now.
Between gift cards and cell phone minutes, almost all the SNAFUs have been worked out of the system.
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Except that this doesn't have anything to do with used game sales unless your "used" games fell off a truck somewhere. Once the disc's activated it's activated, and that's that.
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Except that this doesn't have anything to do with used game sales unless your "used" games fell off a truck somewhere. Once the disc's activated it's activated, and that's that.
Unless the activation is tied to your (mandatory) account, like Steam [steampowered.com].
It must require an internet connection for activation anyway, otherwise how does this differ from an activation code included in the box?
Can't play it offline? Tough.
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Yeah, unless it's tied to an account. Which it isn't. RTFA.
Yeah, I RTFA. It doesn't specifically say anything about not being tied to an account either.
And since you must connect to the internet to activate the game anyway, then that's the next logical step.
Otherwise, you didn't answer the question of how this differs from an activation code included in the box.
Remember, regardless of what they say, the whole purpose of this "activation" scheme is to kill the used game market.
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Except we don't believe that's what they are actually planning, to be able to really "unlock" a disc it has to either be part writeable (it has to work with existing drives) with the last bit being written at the counter, or has to come with a dongle. These are just not a realistic solution. So we assume that they will actually unlock the disc ID by sending it to gestapo headquarters, which will then let you perform online activation at home on your console ... which may or may not tie the software to your
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Yup (Score:2)
That code is now used and it is tied to you.
The reason why you now never see any 2nd hand PC games in shops, is if you walk in with a physical game, with the manual, with the code - precisely as how it came - there's no way the poor guy in the shop can know if when he resells the game it'll work.
So they just drop the PC section and the console secti
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What games is this true for? I play PC games exclusively and I cannot recall ever having to do such a thing.
I think you are referring to CD keys. There is no online activation. Its a check before installing to determine if you have a valid serial key to go along with the disc. If it is a game with multiplayer this acts as a fairly effective anti piracy mechanism since they can detect if 2 people with the same CD key are trying to access the multiplayer through their servers at the same time. If you are
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Then you have all of Valve's games. They don't allow you single player without online activation and a full update of the game.
It is a damned shame that they have done this to PC gaming. I can not describe how my blood boils everytime I see a buy used console game or rent used console game section somewhere. Most console games are just as
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Re:not about piracy (Score:4, Interesting)
Problem is that the game prices are so high that preventing used sales, might effect new game sales hugely in a negative way!
Simply if you cannot sell the game anymore you think twice even buying it new. I am rather sure it will backfire big time!
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Sony (PSP Go), Nintendo (DSi), and Microsoft (360 downloads of retail games) are all working on download services for their AAA titles. Considering the margins they make on downloaded titles, I'd be surprised if they weren't about stopping all retail game sales.
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Since it covers movies as well as games, "used games sales, nothing more, nothing less" is clearly wrong.
I think its more about killing off the entire physical distribution chain; in the short term, it stops sales of used copies of the media produced with activation, but it also makes physical purchase even more inconvenient, encouraging abandoning that entire mechanism. Since, in physical purchase, part of what the customer is willing to pa
Re:not about piracy (Score:5, Funny)
an additional six billion? (Score:4, Insightful)
You know, they could make an additional six billion by creating games people actually want to play in the first place.
Just nonsense (Score:5, Informative)
Re:Just nonsense (Score:5, Insightful)
It's true, all these measures do is make the product available through copyright infringement better than that if you give them your money.
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are there any stats on this?
I completely stopped buying CDs after almost purchasing protected ones three times, yet where are the numbers showing the (negative) imoact of such measures on sales?
Re:Just nonsense (Score:4, Insightful)
They will just lump those into the piracy bucket and whine more.
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Won't Bother (Score:5, Insightful)
There is also a lucrative market for used video games to consider. After some gamers complete a title, they sell it back to the retailer. How will benefit denial handle that situation?"
It won't handle that situation, because it's exactly the one they're really trying to stop. Illicit copying on consoles is a lot more difficult than PCs; it's always possible, but you're cutting out a big chunk of the potential copying going on if it requires a soldering iron to get it done. Publishers can afford to completely ignore illicit copying on consoles.
However, they can use "piracy" as a rallying cry to put in measures to kill the used game market.
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Actually it's not possible to copy games on the PS3, period. It's also not possible to copy internet distributed games on PS3 or Xbox 360. It is possible to copy game discs on the 360, but it requires some convoluted modding process and if Microsoft detect you the console will be banned from Xbox Live. At least for me, that's a major part of the Xbox 360 value, so, getting the box banned would be a big risk.
Silly question. (Score:3, Insightful)
There is also a lucrative market for used video games to consider. After some gamers complete a title, they sell it back to the retailer. How will benefit denial handle that situation?
Simple: it will not be allowed.
You *really* think that they'd all the used market to exist if they had a choice?
Read this [bruceongames.com] for an idea of what the game publishers think about the used market. (Yes, the guy is an obvious shill.)
The big problem with these numbers (Score:5, Insightful)
Another link in a long chain. (Score:3, Insightful)
"In order for benefit denial to work, the EMA would presumably require the three major consoles to have some sort of activation verification function to ensure that games were legally purchased.
Correct me if I'm wrong, but isn't that what they already do? I remember the original Xbox had a challenge response function signed with 2048bit RSA specifically designed to verify if the game was legitimate (regardless of homebrew implications). I fail to see how this generates anything except another spot for something to go wrong (ever have the cashier forget to give you change? Now have him forget to activate your $60 game).
Honestly, the best thing to combat piracy is to release better quality games. I'm looking at you EA (a.k.a. carbon copy gaming).
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No, they're talking about activating the game at the point of sale, probably in addition to all the arcane DRM techniques they use.
And how would your console determine it has been activated? By going online.
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Great so now console gaming is going to get securerom with full online activation awesome just what I always wanted
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And I don't see anyway this would be even possible with DVDs.
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Something like they're talking about would require you to have online connectivity to play a game, at least at startup.
This has been the case for Final Fantasy XI, Phantasy Star Online, and other console MMORPGs since day one, and it has been the case for PC games that use Steam since day one.
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Crazy.. (Score:3, Insightful)
These people really are insane. They wont be happy until they can charge us every time an IP protected thought crosses our brain. The idea that IP is charged 'per brain' as it were, is slowly coming to be. No more sharing with friends, that would be illegal!
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and soon it will become 'per brain per second'
they assume (Score:2, Informative)
This solves nothing until ... (Score:5, Insightful)
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There's that term again. "Reason to buy." Why would a publisher want to do that? Isn't it better to make the game, then complain about being entitled to money without providing any reason. Clearly, treating all your customers as criminals is the answer.
Yes, instead of treating the people who legitimately buy things as what they are, Paying customers who as the saying goes, "are always right", let's just the assume the people who are buying the thing are the ones that are going to pirate it. That makes perfe
History Shows ... (Score:2)
Out-of-warranty Wii repairs (Score:2)
I've heard people don't even have the homebrew channel disabled when they get a Wii back from repair
And I've read anecdotes to the contrary [hackmii.com]. People sending in a Wii console out-of-warranty to replace a broken disc drive (should be about $75 if that) are charged for essentially a new console because Nintendo detected a "Softwarehack".
How will this work for people who don't have high (Score:4, Insightful)
How will this work for people who don't have high speed internet? None of today DVDs, Blu-ray players, xboxs, ps3 have dial up and for some people that is all they can get.
will they have to use usb keys that act as Dongles?
Big retailers won't stand for it (Score:5, Insightful)
The big retailers won't stand for the slowdown at checkout this would cause. Various schemes like this have been proposed before, and Wal-Mart isn't interested.
If everybody who wants activation at checkout, from cell phones to gift cards to videos, gets together and standardizes on a system, maybe.
Re:Big retailers won't stand for it (Score:4, Interesting)
This is currently how pre-paid cell phone cards and lottery tickets are sold.
You buy the card, for example a $20 Virgin Mobile card at Target, and during the checkout process, the cashier takes your money and scans the card. The number from the card is sent to Virgin as "enabled". This allows Target and Virgin to not worry about anyone stealing a rack full of phone cards as only "enabled" cards are allowed to be used to add minutes to your cell phone.
All on the retailer (Score:2)
The pressure is being put on the retailer. As a condition of selling the media, the retailer must agree to activating it.
Customer has a bad experience with the activation? No problem, blame the retailer.
No more right of first sale (Score:5, Insightful)
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They don't want you to have a license either, or they'd be willing to replace your damaged media. When you buy a CD you quite simply aren't buying...anything.
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The value of things (Score:5, Insightful)
I realize my perspective on what the value of something is might be a little strange, but I hold that it is quite logical.
I don't buy diamonds primarily because of the blood and scandal associated with them, but also because of the resale value problem. "Used diamonds" sell for SIGNIFICANTLY less than "New diamonds." Why is that? The real and true value of diamonds must be closer to that of used diamonds than that of new. I also don't buy "new cars" for the same reason. There is a huge loss in price between the two states of new and used and it's not equal to or less than the value of the use I get from it in my opinion. Therefore new cars represent a big waste of money and is a bad investment... same as diamonds.
How does this reflect on the topic? Simple. This "activated at POS" notion serves only to limit or kill the resale potential for a single title. They seek to control not only the copyright, but also the access to the media. And without the possibility of being able to resell the games or music or movies one has purchased, you are looking at an even greater disparity between the first sale price and the resale value. When they decide a title is no longer available or eligible for activation, the owner's purchase becomes completely worthless. (And let's say a game activation was tied to an XBOX Live or similar account system and for whatever reason, the XBOX Live account is no longer available and the same person needs to create another account... will he be able to take his game activations over to the new account? I DOUBT IT. This could mean the loss of several hundred or possibly more than thousands of dollars of first owner cost at the discretion of the policy of the hosts of the accounts used to manage activations.) This is a step worse than the "DRM nightmares" that people have encountered when DRM content providers shut down servers or their servers fail or their data is somehow lost or corrupted resulting in the loss of access to content that the user legally paid for.
This is yet another way in which the public domain becomes a casualty of the greed of copyrighted content owners. We seriously need to crank up the volume when it comes to expressing the loss of the public domain to legislators. Large parts of our history and culture have been lost forever already due to the way copyright is abusing the public's good faith. (Yes, I said good faith because MOST consumers don't infringe on copyrights... MOST don't have a clue as to how they can even do it.)
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I agree, and from a purely financial point of view the calculation is actually easy:
If you used to resell your games after a few weeks at half price (just an example), you would get to play them "effectively" at half of the first sale price for a while. Adjust this number for your actual buying and selling habits.
Enter activation, and lets make the worst case assumption that your console will break someday and the games won't run on the replacement console/next model. Now you also get to play the games "for
They'll just shut down the servers (Score:2)
If you as user don't want to pay more for your games, you'll have to switch to buying only older games that are no longer in the full price category. This also means that the publisher makes the sale half a year (or more) later. I wonder how the industry will like it if people do that ;-)
When one tries to play an older PS2 game online, it fails with DNAS error code -103: "This software title is not in service." I've seen this happen with even new-in-box games from the bargain bin, such as Konami's Dance Dance Revolution Supernova.
Re:The value of things (Score:4, Insightful)
There is some factors into the price difference between new an used cars other then perception. A diamond, after, does not age, any defects are readily visible to a jeweler that knows what he is doing etc. A car has hundreds of different factors that affect it's condition and life. A new car is in a more or less known state ("lemons" that are defective from the factory aside). A used car, even if it is only just a few years old, has an unknown history. How well the car was maintained by the previous owner, any possible accidents that could have caused hidden damage, a long history of service problems, etc. There's a lack of information. What you do know, is the previous owner sold the car for a reason. That reason could be mundane, like they got a raise or new position and wanted a better car, they moved or can no longer afford it, or it could be because the car is a piece of shit and they are tired of it. Even a skilled mechanic cannot fully access the state of the car without a lot of expensive labor costs. Information has value, and there is more information about the new car then the used car, so that in part accounts for the difference in value when you drive it off the lot. There are of course other factors, a big one being the "cool" factor, the fact noone else's smelly butt has been in your drivers seat, warranties, etc.
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All that sounds great. But when you buy a car and sell it even 6 months later, you will not get a "new car" price from it. There is a generally accepted drop in value the moment you drive it off the lot. Hrm... gives me an idea for the next time I feel like jacking around with a car salesman -- ask them about that value drop and then ask them to discount the price of the car by that much so that I don't have to suffer a loss immediately after buying it. From the moment you buy a new car, you are "upside
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There is some factors into the price difference between new an used cars other then perception. A diamond, after, does not age, any defects are readily visible to a jeweler that knows what he is doing etc. A car has hundreds of different factors that affect it's condition and life.
The main factor which sets the price of both used diamonds and used cars is perception.
In his excellent 1982 book The Rise and Fall of Diamonds: The Shattering of a Brilliant Illusion, Edward Jay Epstein [wikipedia.org] lays out quite clearly the story of the Diamond industry. Without going into extensive detail, the used diamond market has been completely depreciated by DeBeers. It is reputed that if they sold every diamond in their vaults at once, diamonds would become a semi-precious stone. Through their network of dist
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The reason that used cars sell for less is economics: On the average, people preferentially sell cars that are causing problems, so a used car is more likely to have problems than an average car of that age. The market takes that into consideration. This is why an almost new car sells for so much less than a new car: the mileage isn't that different, but the fact that the used car is on the market at all indicates a greater likelihood of having problems.
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But very little explains the IMMEDIATE drop in price once someone takes ownership of a vehicle whether it is actually used or not...even when the "used" car has full factory warranty just as if it were new.
piracy (Score:2, Interesting)
Resale market (Score:4, Insightful)
There is also a lucrative market for used video games to consider. After some gamers complete a title, they sell it back to the retailer. How will benefit denial handle that situation?"
If I understand their reasoning correctly, that's part of the piracy they're trying to stop.
That's the useful part about calling coypright infringement piracy instead of copyright infringement: It has no real meaning, so it means whatever they want it to mean.
Last time I checked... (Score:1)
It's about killing the Pre-release (Score:5, Insightful)
On the subject of the used market, publishers will be shooting themselves in the feet if they want to go ahead with killing the used market. It's estimated that a substantial number of new game buyers partially fund their games buying through trading in their old titles. So the loss of the used market will more than likely have a negative effect on new sales close to the value of
I think that peple need to realize that there is simply not an infinite amount of money in the ecconomy and that somwhere you reach a point where no more sales can be made until more cash flows back to the pockets of your customers. However, if you keep the money moving around fast enough, it can seem like there's an infinite amount of it.
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Re:It's about killing the Pre-release (Score:4, Informative)
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I believe there has been talk in the past of not including a main game executable on the disk and only copies that have been activated at checkout will be able to download it.
Yeah, Sony is starting to roll this out. Patapon 2 is a download only title, which means that if you buy it at Gamestop, the box only contains a little code that you type in to download at home. So you need to buy your own media (a memory stick) to hold their software on it. It takes up about a third of mine.
Sony allows you to download
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The issue in this thread is "It's about stopping the pirates from getting the game much earlier than it's retail release date."
In the context of that problem, we're only talking about cracked systems, or PCs.
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The solution has been simple.
XBox has an e-penis system called achievements. If you play a game before a release date, you can get banned and your e-penis tucked away by Microsoft. So, even if people download the data before the pre-release date, they don't dare to play it before the release date which can coincide with the marke
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Besides, the bans for playing games early on live have been stopped for a while now, there were too many complaints from legitimate customers who'd orderd the game from web/mail order and were unaware that the retailer had broken street date.
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Movies WTF? (Score:2)
It's just slave talk. (Score:1)
Every once in a while some greedy bald guy in a suit will have coffee with his buddies to talk about restricting content for profit, and this is one of those ideas.
Activating dvds, games, and anything else on a disc is absolutely impossible. Not every single hardware maker in the world is going to raise the cost of production to apply this crap to there devices.
Now lets look at some more facts. Not everyone has internet, you would have to replace or have seperate hardware for the "activated" media, and most
You know... (Score:3, Funny)
I've said it before and I'll say it again: The only real thing that needs to happen to completely lock down physical media on consoles is for a small portion of the disc to be writeable, and require retailers to write that with a specialized burner on purchase, containing all pertinent information including console serial number, date of purchase, place of purchase, etc etc. Encode/burn it in a way otherwise unreadable by normal players (like the Dreamcast's GD-ROM format, which was, to grossly over-simplify, more or less an inversion of the expected TOC with the data written backwards), give the console(s) in question the ability to read and require that track via firmware, and you have a completely locked-down, no-resale system that's directly tied to your console and your console alone. Charge an extra 50% per disc for "unlocked" versions to be used solely at video rental stores, perhaps with a re-writeable layer containing a date string to lock the game once the due-back date arrives.
Sure, it'd cost an arm and a leg and the soul of your first-born son, but who cares? You're saving yourself from PIRATES. Plus, you get all the benefits of the online distribution racket, too - Your friend wants to play? They need to get their own copy! You lost your disc? Buy another one, just like people who lost their accounts do! Console broke? Well, buy a new one and buy all your games again! Best of all, no pesky internet connection required to verify the license. That's a plus for the consumer!
Sure, you might be able to get around it, but good luck with that.
Entertainment MERCHANTS, not Publishers (Score:3, Interesting)
This study was published by the Entertainment Merchants Association, which is a trade group for the retailers who sell and rent games. The members are companies like Toys R Us, Blockbuster, Target, etc. All the posts here read like the publishers are the ones sponsoring this study- eg this is the publishers trying to kill used sales.
I'm not convinced that is the motivation given that the merchants are the primary beneficiaries of used sales. For merchants, in store theft is a huge issue, and I imagine it was a primary motivation for at least starting this study on POS activation.
These guys are looking to a future where downloaded games reduce the need for physical retailers, and I'm sure they are scrambling to ensure their place in the world through whatever means necessary- including some dumb ideas like POS activation.
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OTOH if I were a publisher I would definitely want to support this, because it would push more people towards my online downloads, which give me more control and a larger percentage of the sale. It's entirely possible that a consumer group could force them to allow unlimited re-activation in support of first sale law, and then where would they be? Lots of cost with no benefit.
Make it too hard to be legal (Score:2)
And more people will go the illegal route.
Yes! (Score:2)
Console games are the bane of computing! Any innovation that drastically reduces the console game market, moving those people to netbooks and set top boxes is a massive boon for humanity!
generate ? (Score:2)
Would generate an additional $6 billion in revenues for media corporations each year
or
Would consume an additional $6 billion in revenues from consumers each year
In related news... (Score:3, Interesting)
Climb the mountain because it's there! (Score:2)
Code a (stupid) activation function because you (think you) can.
This is called, of course, blind hacking. Some people can't tell the difference between a computer and a magic box.