Study: gift card style disc activation could boost game, movie sales by $6 billion
by Randy Nelson 
{ Jun 23rd 2009 at 9:00PM }
The issue isn't piracy in this case; it's shoplifting and the current measures used to prevent such theft. EMA president and CEO believes that if technology can "eliminate barriers erected to deter shoplifting, consumers will have easier access to the products, additional retail channels will carry these products, and costs will be eliminated from the supply chain."
Much in the way that stores must activate a gift card before it can be used, the EMA's proposed system would require games and movies to be scanned at checkout before use. There really are more questions than answers at this point. Will discs sold online be pre-activated? Will every copy of a game have a unique serial number? The only immediate solution we can think of is a car wheel boot -- but, as comical as it would be, that wouldn't conform to the EMA's requirement that packaging size must be unaffected.
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Reader Comments (Page 1 of 1)
vidGuy @ Jun 23rd 2009 9:04PM
If it could be done, it should be. This isn't like DRM or anything. It's more like the ink-tags on clothing.
BigD145 @ Jun 23rd 2009 9:06PM
Ink tags are reused. This would not be. This would allow businesses to further track your purchases and YOU would pay for it.
Ghen @ Jun 23rd 2009 9:41PM
It also sounds like a round-about way to stop the used games market dead in its tracks.
vidGuy @ Jun 23rd 2009 9:43PM
How would it track purchases? Activating at the register doesn't require me to give them my personal information. And I don't see how it would stop used games either: the game would be activated upon its initial purchase and shouldn't need reactivating after that, right?
Giroro @ Jun 23rd 2009 10:04PM
They'll find a way to turn this into DRM.
Thank god I use steam. . .
:{
NoughtSoClever @ Jun 23rd 2009 10:08PM
This is all based on the flawed assumption that when all the college students can no longer pirate the games, they will magically get the money to purchase them. Back in the day, I didn't pirate for the thrill of breaking the law. It did it because I couldn't afford the games otherwise.
vidGuy @ Jun 23rd 2009 11:02PM
@NoughtSoClever, this has nothing to do with pirates. As the above text says, "the issue isn't piracy in this case."
Second, your argument is based on the flawed assumption that content providers desire broad access. They don't; they want money. If "college students" can no longer pirate games, and cannot afford them, they should simply not get to enjoy them.
This isn't food or shelter we are talking about. If you couldn't afford the games, you shouldn't have them. There's really no morality in saying you stole it because you couldn't afford it.
BananaBoat @ Jun 23rd 2009 11:22PM
I don't understand how this thing is supposed to work. How do you activate a disc that is already pressed? You can't...you know...alter the disc in any way, since it's a pressed disc. It seems like you'd need internet access on the player side, in order to get some code from a database that would unlock the disc (basically, DRM from hell).
Obviously they'd love to set up this type of thing for games (since it would kill the used game market; trampling all over the first sale doctrine in the process) but I just don't see it being practical. Would they risk cutting off everyone that doesn't have internet access on their media player?
If there is some other implementation that could work, please, let me know. I for one have no idea what the hell they are talking about.
vidGuy @ Jun 24th 2009 12:03AM
@BananaBoat,
There's basically two ways I see. One is the DRM-style and would require Internet access but no personally identifiable information. It would encode each disc with a serial number that would be activated at the point of sale. The end user device would phone home every time it went to play the disc to ensure the disc had been activated. This would be a water-downed DRM, and could easily allow the game market because, once activated, the disc would be forever usable by any possessor of the physical media.
A decidedly low-tech way to accomplish the same thing would be very analogous to the ink-tags. It would involve a pin in the case that prevents the disc from being removed unless the pin is removed at the point of sale. This isn't really the activation they are going for but would reach the same goal of reducing shoplifting. See:
http://www.sentecheas.com/products.htm
Nobledevil @ Jun 24th 2009 4:19AM
Ghen got there before I could type it. Oh well, guess I'll just agree to agree.
sam @ Jun 24th 2009 11:52AM
@VidGuy: Your claims about the ethics of piracy, which you're stating as fact, are highly questionable. But they're also not relevant to this article, which you correctly point out, so I'll ignore them.
One way to implement this system without causing major privacy concerns would be for the game to require an internet check. The game checks its unique serial number. When you buy a game from the store, the purchase process links to a web service and automatically marks that serial number as 'purchased'. If you steal a game from a store, they don't. There would be a second barcode (as a sticker on the box or similar) that would have the serial number for this purpose.
It's possible to implement this without preventing online sales, used games, or piracy (but I find it hard to believe they wouldn't take the opportunity to also do that - for example, companies would probably make a game 'fail' an auth check if the same serial has been used from too many different locations within a time period).
A lower-tech solution to the same problem that doesn't require internet activation would be that when you buy the game, they also give you (printed) a CD key number that you have to type in when you install the game. Same deal: based on serial number, game checks it when you run it on new system.
vidGuy @ Jun 24th 2009 1:02PM
So, sam, you are suggesting that anyone should be permitted to steal a /luxury/ good simply because they cannot afford it? I understand that argument for necessities like food and shelter, but for a videogame?
If you can't afford it, you shouldn't get to enjoy it. Period. How would it be ethical to steal a 1962 Ferrari 250 GTO, for example, just because you couldn't collect the millions of dollars they sell for? And I don't see the point in arguing that piracy is intended to drop prices. If the market couldn't handle the price, the game wouldn't sell and prices would fall.
I don't see how theft for pure enjoyment could ever be ethical. Please enlighten me on how that position is "highly questionable."
NoughtSoClever @ Jun 24th 2009 2:18PM
They state that it isn't aimed at piracy, but the policy affects piracy all the same. But, fine, it's aimed at theft. My point is not about entitlement or morality. My point was that a person who downloads or steals a game is usually not a person that would or could buy that game if given no other choice.
But my point is moot, as I understand now that these companies are not expecting that this theft deterrent will transform thefts into sales, only prevent losses from thefts. I wonder if they would expect an immediate result though? I would guess that at least one or two generations of this tech would have to go around a significant amount of shoplifters understood that they can't play the games they are stealing. And it would need to be included on every game, or absolutely indicated with clarity, otherwise, they'll just keep on stealing, assuming that it will work.
Jawmuncher @ Jun 23rd 2009 9:04PM
That doesnt sound all that great.
Brodo @ Jun 23rd 2009 9:16PM
LOL Jawmuncher is pissed because he shoplifts on a regular basis.
But seriously, most people would still steal the games anyways because they sell them after they steal them. You would be buying games from pawn shops and they wouldnt work for you.
Erik Stroud @ Jun 23rd 2009 9:37PM
I know, too much of a problem in my opinion. What if the store loses the activation card or something? Then that store is losing sales because they can't sell products that won't work.
CzAr @ Jun 24th 2009 2:52AM
People only pirate because they don't want to buy it.
Making it impossible to pirate doesn't mean everyone is going to go out and buy it now.
Half the PC/PSP games I play, I'd never buy, so they still don't get my money.
Nook @ Jun 23rd 2009 9:06PM
I'm not a fan of this. We sure do like to walk around on slippery slopes talking about how the 'bad' people are requiring all these additional restrictions and procedures.
Got to be a better way.
BigD145 @ Jun 23rd 2009 9:07PM
$90 games, here we come. The bonus inside will be a microchip you can't use. If you tamper with it, you'll be jailed.
Foetoid @ Jun 23rd 2009 9:35PM
Since we here in Aus pay US$79 per brand new full-priced retail Wii game (and more the 360/Ps3 games), going to $90 aint that much more LOL. Our prices do include all taxes tho.
Ghen @ Jun 23rd 2009 9:42PM
That's some pretty screwed up taxes considering your ratings system is even more strict than ours.
B3astofthe3ast @ Jun 23rd 2009 9:16PM
Maybe when we remove the disc and just have cards to download said media.
PersonOfSorts @ Jun 23rd 2009 9:18PM
In-store theft of games has never struck me as big problem.
Every store I've shopped at either a) has games locked up behind cases (Target, Walmart, K-mart), b) magnetic anti-theft tags along with perceptive security personnel at the entrances (Best Buy), or c) gut their discs and sell as new (the one and only Gamestop).
I'm thinking this is more of a movie thing, and less of a games thing. Even still, $6 billion? The entertainment industry sure loves blindyly referring to stolen items as if it were, without question, a potential sale. My guess is they wouldn't even recoup the cost of implementing this activation scheme.
CarpeD1em500 @ Jun 23rd 2009 9:25PM
Exactly...it's like if some homeless guy steals an apple to eat it, but then he can't steal it anymore, he'll just magically come up with the cash to pay for it...
People steal because of various reasons, but the main ones are because they don't have the money for the game or they want to re-sell it. Either way, both of those do NOT result in $60 in retailers pockets if theft is eliminated. It just means theft will go down and stores will have a slightly smaller % of left over inventory.
Also how would rentals work? Used games? This idea just fails horribly.
Digital Distribution is right around the corner. There is no need to develop new tech like this now that will be simply unnecessary in 5-10 years. Just a waste of R&D and like someone said, we're gonna end up paying for it...
vidGuy @ Jun 23rd 2009 9:46PM
Rentals and used games: games get activated upon initial purchase, just as they would at retail. Games need no additional activation after that.
Giroro @ Jun 23rd 2009 10:05PM
how do you "activate" a movie anyway?
Will this break my DVD player, because it doesn't connect to the internet.
Josh @ Jun 23rd 2009 10:41PM
the only thing that doesn't work with the magnetic tags, is shoplifters just open the package and take the game
(I work at Kmart in the electronics department, I find an empty box at least twice a week)
KyleM785 @ Jun 24th 2009 1:49AM
unfortunately you clearly underestimate the common thief...Ive worked at a major electronics store for 5 years and having worked at several stores I can say the average store probably loses $10,000-$15,000 a year in Video Game theft....with some stores having even higher numbers, I don't doubt this could save them billions...
as for the activation, intuit has been doing this with their high end quickbook software for several years, it is activated at the point of sale and if it gets stolen first instead of costing us like $400 it is just around $14 to replace the product that is now useless to the thief
i will say implementation may be tricky as i'd imagine it would require the internet
undrssthemachine @ Jun 24th 2009 1:51AM
actually it's a huge issue, and places like gamestop get into a lot of trouble because of it, the idea being you shoplift a ton of games and sell them back to Gamestop or somewhere similar, it doesn't matter if you get shit for credit because they're stolen.
KyleM785 @ Jun 24th 2009 2:01AM
and theoretically....
if less games are stolen
less are traded into gamestop
therefore the demand on the games that are traded in goes up
and you may get $1 for your game instead of $0.50
:D
MarioSpitza @ Jun 24th 2009 8:54AM
"I'm thinking this is more of a movie thing, and less of a games thing. Even still, $6 billion? The entertainment industry sure loves blindyly referring to stolen items as if it were, without question, a potential sale. My guess is they wouldn't even recoup the cost of implementing this activation scheme."
They love to refer to it that way because it has the greatest impact and because, as far as they're concerned, someone out there is using their product without paying for it, so it's a lost sale, even if that person may not necessarily pay for it.
Aside from that, your snarky assumption that they wouldn't recoup the cost is rather unlikely. Even if they don't end up selling all of the merchandise, you forget that it costs them to get the merchandise to begin with, so having less theft would lower their cost by its own merit. If the merchandise then sell (not 100%, of course), then they're making more money.
Assumption they recoup even half of that ($3Bn), they should recoup any loses in a few years.
nukee @ Jun 23rd 2009 9:22PM
Yeah no.
Premature ejaculation man @ Jun 23rd 2009 9:30PM
6 billion is lost from shoplifting? That seems incredibly high. I was also under the impression that the publishers already got the money before they even ship their produce to a store, so isn't it only the retailer that loses out currently?
I wish I had access to this study, it would be an interesting read.
FNG @ Jun 23rd 2009 10:33PM
retail shoplifting is huge. I wish it was only 6 billion. yes, it does cost the retailers first, but as retailers move to lower their on hand inventory, it hurts the publishers as retailers lower the qty of their purchase orders. working in this field, I know this first hand. also, last week ADT released numbers for 2008 and they are sad.
http://finance.yahoo.com/news/Retailers-Report-Rise-in-prnews-15526596.html?.v=1
Professor Lario @ Jun 23rd 2009 9:36PM
The more complicated they make it, the simpler it is to hack - or so it seems.
WREturns @ Jun 23rd 2009 9:39PM
I can't see how this would be that hard to do and if it IS like a gift card then once it's activated, it's usable by anyone. That way you could still resell old games. What if when you bought a game you got a code on your receipt that was required to unlock it before you could play it? Fuck, if it cuts shoplifting by $60 billion, I'm for it.
WREturns @ Jun 23rd 2009 9:39PM
I meant $6 billion.
sleepypersons @ Jun 23rd 2009 9:52PM
This may sound good on paper but fails in practice for games, It just doesn't work because of the constant changes. Not to mention the fact that its really not that hard to by-pass this.
uncle jesse @ Jun 23rd 2009 9:52PM
I have no problems with this.
Giroro @ Jun 23rd 2009 10:02PM
What I hate about these things is that they assume that all those people shoplifting the games would buy them instead. Things don't work that way.
vidGuy @ Jun 23rd 2009 11:08PM
Not really. If this prevented some shoplifting, there would be more copies in stores for OTHERS to buy. Somebody would pay something for the media if it wasn't stolen first.
Stacky @ Jun 23rd 2009 11:24PM
Not really. When has there ever been a shortage of software/movies at the store?
vidGuy @ Jun 24th 2009 12:07AM
It's not about a "shortage," just pure volume. If a store gets 100 copies of a game and 3 are stolen, they have 97 to sell. If none are stolen, they have 100 to sell. Without the theft the store brings in ~$180 more in gross revenue.
Evi1d33d @ Jun 23rd 2009 10:06PM
Just like all the other DRM it can be easily cracked by pirates at the expense of honest customers. Shoplift? Yea right.
Jeff Smith @ Jun 23rd 2009 11:08PM
lol
Lets assume they try this, you think stores are just gonna magically put the games out on the floor? People who steal won't know the difference until they get home and try it, and the store will still end up losing a $60 game.
Just ask anyone who works in a used game store. Idiots steal the empty display cases all the time.
orcgolo @ Jun 23rd 2009 11:34PM
If I got home, put the game disc and it doesn't work because the cashier forgot to activate my game, I'll be so pissed. I would just go back to the store, shop lift all the games, just to prove they won't make $6 million incremental sales.
NoughtSoClever @ Jun 24th 2009 2:26PM
Thanks orcgolo! You ruined it for everyone!