EU Rules You Can Resell Downloaded Games

[TronPaul]

Crikey: EU Rules You Can Resell Downloaded Games

Well here’s some pretty huge news. The Court Of Justice of the European Union has just ruled that people should be able to resell downloaded games. In an environment where publishers are trying to destroy basic consumer rights like the ability to resell physical products you’ve paid for, this could be one heck of a turnaround for customers. And that’s no matter what it might say in the EULAs. This could have absolutely enormous implications on how services like Steam, Origin, GamersGate and the like work, and finally restore some rights back to the gamer.

The draconian and almost inevitably unenforceable rules we all pretend we’ve read and agreed to whenever we buy an online game are packed with ridiculous attempts to remove our rights of ownership. At best, when those rules are held to their letter, we’re long-term renting the games, with no rights to protect their being taken away from us at any point. So a ruling saying we have enough ownership that we can actually sell them on to others is a massive difference. Of course, it does ask one rather huge question: Er, how?

The preliminary ruling states,

“The first sale in the EU of a copy of a computer program by the copyright holder or with his consent exhausts the right of distribution of that copy in the EU. A rightholder who has marketed a copy in the territory of a Member State of the EU thus loses the right to rely on his monopoly of exploitation in order to oppose the resale of that copy… The principle of exhaustion of the distribution right applies not only where the copyright holder markets copies of his software on a material medium (CD-ROM or DVD) but also where he distributes them by means of downloads from his website.”

This was a result of software developers Oracle taking German company UsedSoft to court for reselling licenses to Oracle products. However, after reaching the European Court, a surprise blow came against the big publisher. And it has massive implications for all of online purchases, including games bought from places such as Steam, Origin, GamersGate, etc. And even further implications for those publishers attempting to ban the far more commonplace reselling of boxed products too.

The specific rule seems to be that if a license is sold indefinitely – i.e. not a license for a year, or similar – that the rightholder “exhausts his exclusive distribution right”.

“Such a transaction involves a transfer of the right of ownership of the copy.”

That sentence is a really massive deal. It’s the very first time there has been any official sense of ownership via digital distribution, and if it gets implemented by courts, it’s going to change a great deal. From our having the legal right to sell games in our Origin accounts, right down to surely taking away the ability for companies like Valve and EA to block customers’ access to their purchased games for other infractions.

Right now we have companies like Microsoft and Sony looking for ways to make reselling of their products impossible for their next generation of consoles, and presumably relying heavily on the perceived redundancy of the argument if those games were purchased online (as surely the next gen consoles will want to focus on). But pow, maybe not. With a ruling that states,

“The Court observes in particular that limiting the application of the principle of the exhaustion of the distribution right solely to copies of computer programs that are sold on a material medium would allow the copyright holder to control the resale of copies downloaded from the internet and to demand further remuneration on the occasion of each new sale, even though the first sale of the copy had already enabled the rightholder to obtain appropriate remuneration. Such a restriction of the resale of copies of computer programs downloaded from the internet would go beyond what is necessary to safeguard the specific subject-matter of the intellectual property concerned.”

this whole deal just got an awful lot more interesting. It appears to be directly stating that it is inappropriate for copyright holders to insist on the right to be remunerated with every re-sale, which could even have legal implications for the current systems various console publishers have introduced, forcing pre-owned customers to pay a tithe before the game will work properly.

The ruling also makes it clear that if someone does resell a digital copy of a product, they must remove their version of it from their computer – because at that point it does become a copyright violation, as it’s become a reproduction, not a resale. But fascinatingly, it adds, “However, the directive authorises any reproduction that is necessary for the use of the computer program by the lawful acquirer in accordance with its intended purpose. Such reproduction may not be prohibited by contract.” What does that mean for the current exploits publishers are using, too? Could they now be illegal?

How companies like Steam, EA, etc will react will be very interesting. Their current infrastructures certainly don’t support reselling, and they’d probably ban your account if they caught you trying to. This is a ruling whose implications could stretch a very long way. There are bound to be challenges to the ruling made, and we can assume this one will stay in courts for a good while longer.

Software is going to be very interesting in the EU in the near future.

[General Zod]

Greenman-gaming has had a resale service for awhile now, but the titles you could resell have been limited. This sounds great if it means they can expand the titles they're allowed to buyback.

[TheFeniX]

I can understand how this would work with something like Steam. Well, not exactly how, but the general concept of the Steam Gift system would work to transfer ownership of a title.

But how will this apply to games like D3 that is fully functional online? Your character and everything else is tied to your B.net account, which makes it even more annoying because I couldn't hand over my copy of D3 to anyone without also giving them access to SC2 and/or WoW (which is still like $100 for all the expansions). I assume they'll have to rework the system in order to make CD or activation codes transferable.

Anyways, good on the EU. I'm tired of people actually using "it's in the EULA, you don't actually own the game/software" for the circular argument it is.

[Edward Yee]

I should note though that apparently GMG only offers pennies for games (you remove the game from your library -- I don't know if GMG formally requires removal from any installed systems as well, but I guess that the ruling would make this a definite -- and in return your account is credited), so from what I understand it's just trade-in to GMG and not resale between customers. I'd also note that Steam's gifting basically grants two levels of ownership, except one of them IS limited simply to "transferring ownership".

[bilateralrope]

The specific rule seems to be that if a license is sold indefinitely – i.e. not a license for a year, or similar – that the rightholder “exhausts his exclusive distribution right”.

I expect a lot of games moving to temporary licenses in order to keep second hand sales blocked.

Assuming they don't just decide that, since they aren't based in the EU, they have no reason to comply with EU laws.

[Serafina]

Assuming they don't just decide that, since they aren't based in the EU, they have no reason to comply with EU laws.

Heh. Good one

The EU actually sued Microsoft for a good part of a billion for ignoring their laws, and got that money as well. Not to mention that they're a market just as large as the United States.

[Wing Commander MAD]

This is only going hasten the move to server side gameplay and constant online connection requirements for use, of course now it'll affect single player games as well. Well, that and maybe add monthly fees for all games to deal with the issue of servers and bandwidth cost. The only thing done on the user end is going to be rendering and input handling (well obvisiouly there'll be networking). Good luck reselling your input handler, net code, and render to someone. Without the game logic those are all pretty much worthless. Hell, if they can figure out a way to do the rendering server side in an affordable manner*, say good bye to even having the assets. Gaming litterally becomes interactive television.

Oh, and have fun if the company goes out of business or otherwise decides to cut hosting, even more so than current services like Steam.

Note*: Basically, the biggest hurdle here is the bandwidth needed to transmit the screenspace at the specified resolution and the requisite 30-60 FPS.

[General Zod]

This is only going hasten the move to server side gameplay and constant online connection requirements for use, of course now it'll affect single player games as well. Well, that and maybe add monthly fees for all games to deal with the issue of servers and bandwidth cost. The only thing done on the user end is going to be rendering and input handling (well obvisiouly there'll be networking). Good luck reselling your input handler, net code, and render to someone. Without the game logic those are all pretty much worthless. Hell, if they can figure out a way to do the rendering server side in an affordable manner*, say good bye to even having the assets. Gaming litterally becomes interactive television.

Oh, and have fun if the company goes out of business or otherwise decides to cut hosting, even more so than current services like Steam.

Note*: Basically, the biggest hurdle here is the bandwidth needed to transmit the screenspace at the specified resolution and the requisite 30-60 FPS.

You know that Onlive is a working thing now, right?

[Wing Commander MAD]

That mostly has gone under my radar, but a quick look on wikipedia shows there are still some quality issues with the service directly related to bandwidth when compared to running the same software locally. Mind you that may change in time, though someone with a better handle on the data infrastructure could probably give you a better idea than I could on the probability of that happening.

[Mr Bean]

Onlive still has that built in delay that utterly kills some games. Your not going to be playing the latest twitch shooter, racer or any other first person anything which gives you a dodge button. A Gear type shooter is fine but all games are like playing on a 500 ms ping delay. There's a hitch to all your actions. You'll notice it quickly and that's with a high end steady connection. Any type of doggedness adds to the overhead and increases the delay.

[atg]

Does anyone know how OnLive is going from a financial state? I heard a while (a year maybe?) that things weren't so rosy but havn't heard anything since then.

[Oculus_Mortis]

Wow, lets hope even with this ruling this doesn't become to big of a thing; this could kill a lot of companies on the edge in the games community, those in the know have long feared second hand selling far more than piracy.

[atg]

those in the know have long feared second hand selling far more than piracy.

Can I ask why? Its not like second hand sales of games/books/music/etc is anything new...

[Oculus_Mortis]

those in the know have long feared second hand selling far more than piracy.

Can I ask why? Its not like second hand sales of games/books/music/etc is anything new...

Despite what a lot of game company PR types say, people in the industry realise that a lot of pirates were not actually a "lost sale". However in most cases, at least near the launch of a game, pre-owned sales are literally a lost sale; say you buy COD7 for 50 quid (a lot of that goes to the publisher, developer etc, some goes to Game), then you sell it back to Game for 10 quid, Game then sell that copy for 45 quid (none of this goes to the publisher or developer, all of it goes to Game, bar the 10 quid it cost them), if you are paying this much already then you are actually a lost sale.

Game shops will push used copies because it is all profit for them, they don't have to cut in those who made it. Now imagine something that has no physical copy, stores and even users can resell a product that doesn't even suffer physical wear, not only is it a lost sale, the pre-owned purchaser gets exactly what a new purchaser would get; this is the primary reason for companies using "first day" DLC or pre-order bonuses.

[General Zod]

Despite what a lot of game company PR types say, people in the industry realise that a lot of pirates were not actually a "lost sale". However in most cases, at least near the launch of a game, pre-owned sales are literally a lost sale; say you buy COD7 for 50 quid (a lot of that goes to the publisher, developer etc, some goes to Game), then you sell it back to Game for 10 quid, Game then sell that copy for 45 quid (none of this goes to the publisher or developer, all of it goes to Game, bar the 10 quid it cost them), if you are paying this much already then you are actually a lost sale.

Game shops will push used copies because it is all profit for them, they don't have to cut in those who made it. Now imagine something that has no physical copy, stores and even users can resell a product that doesn't even suffer physical wear, not only is it a lost sale, the pre-owned purchaser gets exactly what a new purchaser would get; this is the primary reason for companies using "first day" DLC or pre-order bonuses.

Sony disagrees. http://www.escapistmagazine.com/news/vi ... Used-Games

The SCEA president calls blocking used games "anti-consumer."

According to market analyst, Michael Pachter, who recounted a meeting he had with Tretton at E3.

"He said, 'for the record, I'm totally opposed to blocking used games. I think it's great for the consumer that they can buy those. We have a customer that buys our console late in the cycle, pays less, is looking for value priced games, and I think it would be anti-consumer for us to do that'," Pachter told GameTrailers.com

Tretton was responding to rumors that the as-of-yet unannounced successor to the PS3 - which, according to Kotaku, will be called the Orbis - won't support PS3 games and will block the use of used games. Similar claims have been made about whatever console will follow the Xbox 360.

Tretton's support of used games seems somewhat hollow, however, given that Sony is currently pushing the PSN Pass system, which requires second hand game owners to buy codes to use their games online. He did qualify his statements by adding that Japanese Sony executives may not see eye to eye with him on the matter.

[TronPaul]

Pre-owned game purchases are not a lost sale. People are unlikely to sell a used game then turn around and buy a used game with that store credit. They're much more likely to buy a new game, or a new console with that credit. Used games also provide a way for individuals who don't have 60 or even 40 dollars for "new" games to purchase games.

Also even though the original article I linked focuses on games, this also has a huge impact on software sales in general. The ruling came out of a case where Oracle believed a company that owned licenses to its software couldn't resell those licenses. This means you can resell your Window's OS, CAD software, or any other myraid of licensed software.

I'm looking forward to being able to pick up old licenses of professional music and video production software and unloading some of my unplayed games so I can buy Half Life 3, whenever it does come out.

[salm]

I'm looking forward to being able to pick up old licenses of professional music and video production software and unloading some of my unplayed games so I can buy Half Life 3, whenever it does come out.

Same here. I don´t care that much about games but companies like Autodesk making you pay a 500€ license transfer fee for buying a used copy of their software is ridiculous.

[Oculus_Mortis]

Despite what a lot of game company PR types say, people in the industry realise that a lot of pirates were not actually a "lost sale". However in most cases, at least near the launch of a game, pre-owned sales are literally a lost sale; say you buy COD7 for 50 quid (a lot of that goes to the publisher, developer etc, some goes to Game), then you sell it back to Game for 10 quid, Game then sell that copy for 45 quid (none of this goes to the publisher or developer, all of it goes to Game, bar the 10 quid it cost them), if you are paying this much already then you are actually a lost sale.

Game shops will push used copies because it is all profit for them, they don't have to cut in those who made it. Now imagine something that has no physical copy, stores and even users can resell a product that doesn't even suffer physical wear, not only is it a lost sale, the pre-owned purchaser gets exactly what a new purchaser would get; this is the primary reason for companies using "first day" DLC or pre-order bonuses.

Sony disagrees. http://www.escapistmagazine.com/news/vi ... Used-Games

The SCEA president calls blocking used games "anti-consumer."

According to market analyst, Michael Pachter, who recounted a meeting he had with Tretton at E3.

"He said, 'for the record, I'm totally opposed to blocking used games. I think it's great for the consumer that they can buy those. We have a customer that buys our console late in the cycle, pays less, is looking for value priced games, and I think it would be anti-consumer for us to do that'," Pachter told GameTrailers.com

Tretton was responding to rumors that the as-of-yet unannounced successor to the PS3 - which, according to Kotaku, will be called the Orbis - won't support PS3 games and will block the use of used games. Similar claims have been made about whatever console will follow the Xbox 360.

Tretton's support of used games seems somewhat hollow, however, given that Sony is currently pushing the PSN Pass system, which requires second hand game owners to buy codes to use their games online. He did qualify his statements by adding that Japanese Sony executives may not see eye to eye with him on the matter.

Thankfully Sony are not the final arbiters of the gaming industry, also did you bother reading your own quote as to how hollow his position actually is?

[TheFeniX]

Despite what a lot of game company PR types say, people in the industry realise that a lot of pirates were not actually a "lost sale". However in most cases, at least near the launch of a game, pre-owned sales are literally a lost sale; say you buy COD7 for 50 quid (a lot of that goes to the publisher, developer etc, some goes to Game), then you sell it back to Game for 10 quid, Game then sell that copy for 45 quid (none of this goes to the publisher or developer, all of it goes to Game, bar the 10 quid it cost them), if you are paying this much already then you are actually a lost sale.

That makes no sense. You aren't getting a used copy of CoD 58: wheelchair warrior on release day. If you actually do get one, you aren't saving more than $5 for doing so if the game has any kind of hype behind it. Also, if there's a plethora of used copies available on release day: maybe your game isn't selling well because is sucks shit, not because "USED GAMES!!!!" A used copy cannot be a lost sale because at some point, it was a new game that the publisher made money on. It's no different than Dodge complaining about people buying used cars: fuck you, you made your money once, you don't have the right to make more because I want to sell the product I paid money for. FUCK, even the federal government isn't this greedy as you don't pay sales tax on used items provided you aren't making a large profit from the sale. What makes software developement so fucking special that they deserve money every time their game changes hands?

Maybe they could just go the Dodge route and make really shitty products: oh wait, EA already does that.

Game shops will push used copies because it is all profit for them, they don't have to cut in those who made it. Now imagine something that has no physical copy, stores and even users can resell a product that doesn't even suffer physical wear, not only is it a lost sale, the pre-owned purchaser gets exactly what a new purchaser would get; this is the primary reason for companies using "first day" DLC or pre-order bonuses.

It's not the consumers fault publishers used easily damaged and copyable media. The medium is which software is distributed doesn't matter: it's just 1s and 0s. Final Fantasy being on a cartridge doesn't change the fact the game would fit on a 1.44MB floppy. And publishers didn't shy away from cartridges due to people trading/selling them. They moved away due to production costs as you could press out something like 100 DVDs for the cost of one cartridge. Bandwidth and HDD storage is cheap now and not worrying about manuals or boxes means even more profit for publishers, so it's no surprise they moved to that as quickly as they could.

If it weren't for stupidly restrictive DRM, people could just backup their own CDs, use the backup, and keep their original in 100% condition, ready to be dumped onto the used market when they got bored with the game. Basically, any "physical wear" only exists because publishers allow it to because they're cheap and don't give a shit what happens after they made their money. That doesn't change the fact that "physical wear" WRT to "Software" is a balls retarded concept anyway.

[General Zod]

Thankfully Sony are not the final arbiters of the gaming industry, also did you bother reading your own quote as to how hollow his position actually is?

I don't see how it's any more hollow than considering a "used sale" to be a "lost sale" based on some arbitrary percentage.

[bilateralrope]

Assuming they don't just decide that, since they aren't based in the EU, they have no reason to comply with EU laws.

Heh. Good one

The EU actually sued Microsoft for a good part of a billion for ignoring their laws, and got that money as well. Not to mention that they're a market just as large as the United States.

Steam already ignores consumer protection laws in countries other than the US. When a broken game is released, the best you can hope for is a refund into your Steam wallet. Not a full refund like the law demands.

Also, short of blocking all internet access to Steam servers (and the outcry that will go along with it), what leverage does the EU have over Valve ?
Microsoft has physical products that get imported to the EU. Cut off those imports, and the EU cuts MS out of the market. But Steam can operate even if it's only servers are in the US.

[Thanas]

Also, short of blocking all internet access to Steam servers (and the outcry that will go along with it), what leverage does the EU have over Valve ?

Sale-taxing them to oblivion?

[Ralin]

Sale-taxing them to oblivion?

How exactly does that work if they don't sell any physical products in Europe or have any employees or offices there?

[Thanas]

Sale-taxing them to oblivion?

How exactly does that work if they don't sell any physical products in Europe or have any employees or offices there?

Quite simple by declaring that Steam shall pay X amount of money for any game sold to Europeans. Or force Europeans who buy from steam to pay a surcharge.

It is not as if tax laws exempt steam.

[Ralin]

Quite simple by declaring that Steam shall pay X amount of money for any game sold to Europeans. Or force Europeans who buy from steam to pay a surcharge.

It is not as if tax laws exempt steam.

I wasn't aware that they could pass a "Fuck you, Steam" tax. Or am I misunderstanding something?