Did UbiSoft’s DRM System Work?

Digital Rights Management (DRM)  is a controversial issue, with hyperbole on both the pro- and anti-sides. Stripped of rhetoric, it’s actually a cost-vs-benefit issue: how many PC players are developers willing to irritate (cost) in exchange for reducing day 1 piracy (benefit)? what benefits do the PC gamers get in exchange for having to meet DRM specified requirements (cost)?

Valve’s Steam are probably the best example of having found a DRM cost and benefit balance, to the extent that it isn’t even really associated as DRM anymore. In Valve’s case, Steam has been a massive financial boon and made them a powerful distributor for the PC games industry. Without its DRM aspects, it’s arguable that Steam would have been as successful – still convenient as a source of games, sure, but probably drawing in less revenue or seeing higher piracy rates.

UbiSoft recently announced their PC DRM system, where constant internet access is required to play but the benefit is that games are (theoretically) account linked and save games can be kept online to be played anywhere. Due to the issue of a connection break to game servers results in an interrupted game experience and the loss of in-game progress, players weren’t happy with this system. Teething problems aren’t surprising – even Steam took a while to start getting things running smoothly – but there is certainly room for UbiSoft to improve the system and offer more benefits to meet or overcome player concerns. Right now, however, the most interesting question is whether or not the UbiSoft DRM system worked on the first titles it appeared on.

Stealing from Assassins

By ‘worked’, I don’t mean “was never cracked and worked flawlessly 100% of the time”. From UbiSoft’s perspective, the DRM worked if it helped prevent day 1 piracy on the PC and promoted more sales on the platform. It’s impossible to run a side-by-side comparison of UbiSoft releasing a PC title both with and without DRM, but there has been enough information released around Assassin’s Creed and Assassin’s Creed II (one of the first major UbiSoft titles to have the DRM system) to take a guess.

Assassin versus pirate image from Assassin's Creed: Bloodlines

Assassin versus Pirates: Pirates won round one.

Let’s start off by looking at the sales of Assassin’s Creed. It had no DRM and launched on the PC about 5 months after Assassin’s Creed appeared on the consoles. According to VGChartz.com, Assassin’s Creed sold 4.86m on Xbox 360 and 3.73m on PS3 for a total of 8.59m on consoles. UbiSoft has announced that Assassin’s Creed had over 8m sales, but that doesn’t include PC sales since the PC version launched in April 2009 while the financials are reported for the year ending March 31 2009.

Exact figures on PC sales appears impossible to locate, but there are signs that they weren’t that impressive. The PC launch of Assassin’s Creed certainly didn’t attract any specific attention in UbiSoft’s investor statements and was also leaked online (in a possibly broken form) two months before launch, potentially only shifting around 40k copies at retail from April to June 2008 in the US. Although Assassin’s Creed did top the PC sales chart at launch, it also managed to be one of the most torrented PC titles of 2008

There certainly are potential reasons for Assassin’s Creed to have poor sales on the PC – it was launched 5 months after the console version, there were complaints about the PC port’s performance – but before-day 1 piracy was certainly a factor.

It’sa Me, Ezio!

Assassin's Creed 2 artwork

Even the Italians thought Ezio's clothes were too flamboyant. You'd think an assassin would want to blend in more.

And now for Assassin’s Creed II. This title launched for the PS3 and the Xbox 360 in November 2009 and the PC version launching in March 2010. UbiSoft announced sales of around 9 million units up to March 31 2010, which would appear to cover all platforms. According to VGChartz.com Assassin’s Creed II sold about 3.51m for the PS3 and 4.86m for the Xbox 360 for a total of 8.37m at this point, although when I looked at these figures around a week ago the number was closer to 7.25m in total. This tended to suggest that that PC sales were much stronger for Assassin’s Creed II compared to the first game, possibly even over 1m units in its launch month (and we’ll see if UbiSoft makes a ’10 million units sold!’ announcement).

So, negative PR and player backlash and all, Assassin’s Creed II with DRM appears to have been a greater sales success on the PC than Assassin’s Creed without it. There isn’t a clear picture of when Assassin’s Creed II was cracked – some say in the first 24 hours of PC launch, although it appears it took over a month fo comprehensive crack to appear. Regardless, that timing difference appears to have made a significant positive impact on PC sales for this title.

Is DRM solely to thank? Probably not, given that Assassin’s Creed did suffer that leak of the client prior to launch while the reviews of Assassin’s Creed II were also better than its predecessor. However, these numbers do provide some support that despite the outrage, a lot of PC players still went out and bought the title. Whether they knew or not what they were getting is another story.

Yes, the numbers are rubbery, but based on the publicly available information I’ve seen they are the best available (but feel free to point me at any figures that would be more reliable). Also, what happened with the Assassin’s Creed franchise may not be reflected in other UbiSoft titles that contained the DRM – there really isn’t enough information available to tell how (say) Silent Hunter 5 sold.

More Like ‘GoingSoft’, Amirite?

It is reasonable to note that despite Assassin’s Creed II’s awesome sales (and some other good performers), UbiSoft reported a US$55.5m loss for their 2009/10 financial year. Although I’m sure that UbiSoft would have preferred a profit and did see a 18% decline in sales, they still brought in US$1.1b revenue. UbiSoft also have around US$52m in cash reserves and announced they’d grown in market share across the financial year, so overall they did alright.

Some people saw the loss as evidence that UbiSoft’s DRM was hurting them – the reality is that UbiSoft’s PC sales aren’t nearly as impressive as its console sales, so how much damage DRM did to UbiSoft’s revenue is open for debate. According to UbiSoft’s reports, what was more harmful to revenue was the 50% decline in back catalogue sales and issues related to those gross margins. And what do they say is a key issue behind this fall in back catalogue sales? Piracy.

Circuit board DRM

Is DRM a padlock holding back gamers or a level of protection for publishers / developers against people stealing their work?

The key issue here is whether the DRM turned people who would normally pirate a game into players – if it saw more people buy the DRM title than it drove away (including the DRM development and maintenance costs) then it wasn’t necessarily a negative decision… at least financially.

To Rent – Roost. Wanted – Chickens For A Homecoming.

Perhaps the DRM will have a longer-term negative impact on UbiSoft’s brand and  financials, but again UbiSoft sees a greater return from its major console titles. Its moves in PC gaming point to the development of its own Steam-like online distribution service (imaginatively called the Online Services Platform). UbiSoft also has five free-to-play MMOs in development, including a Heroes of Might and Magic title and Trackmania title that will probably be distributed through the Online Services Platform. Certain new UbiSoft titles disappearing off Steam in the UK might be more related to UbiSoft wanting to sell them through their own digital distribution service rather than anything to do with DRM.

UbiSoft will have to do better with its DRM offerings moving forward; in fact, it will have to take a leaf out of Valve’s book and try to make the kind of improvements that appeared in Steam but on a shorter time frame. There will always be people set against it, but if UbiSoft can offer a compelling offer and allow enough technical leeway so that legitimate users aren’t disadvantaged while still throwing up enough barriers to reduce piracy on their titles, their DRM may keep the PC platform as something UbiSoft develops for in the long-term. The alternative isn’t to drop the DRM, but rather to withdraw their development of ‘big’ titles for the PC and instead focus on MMOs and casual titles – game types where piracy isn’t an issue.

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