Always-On DRM, Used Game Restrictions Will Destroy Next Xbox, PlayStation

Now that the Wii U is in stores, we can look forward to new game consoles from Microsoft and Sony - let's call them the Xbox 720 and the PlayStation 4, for now.

There have been some rumors about these systems, like that they'll have always-on DRM and prevent gamers from playing used games. Considering the actions of many game publishers in the past, these rumors could be true.

If they are, it means Sony and Microsoft are actively trying to destroy their gaming divisions, because the new systems will flop harder than a 32X plugged into a Virtual Boy.

Gamers put up with a lot of crap from publishers and manufacturers. I mean a lot of crap. Always-on DRM from EA, convoluted launches from Ubisoft, limited downloaded game transfers from Nintendo, and obligatory DLC from Capcom are just some what what we tolerate. We get angry, we whine about it, then we play the games and download the DLC and generally enjoy the games after jumping through hoops.

However, gamers do have a breaking point when it comes to being abused by the people to whom they're giving their money, and EA and Square-Enix have already come close to that point with the upcoming SimCity and recently released Final Fantasy: All The Bravest. If this garbage starts across the board on a console level, with no ability to pick and choose the actual games you buy to avoid these measures, gamers will no longer accept it.

The gaming console market is in a precarious place right now. The Wii U hasn't made a huge splash, and people are still religiously playing their PS3s and Xbox 360s. With the Ouya coming out and the Steam Box on the horizon, it will be a tough sell to get people to pay at least $300 for another console just to be able to play the hot new games that won't come out for at least half a year after the system comes out (again, see the Wii U). Adding an aspect that would literally cripple the system's functionality would doom it. ExtremeTech's James Plafke explored this subject this week, saying the very idea was nuts.

Unfortunately, it's not really nuts. When you consider the increasingly draconian DRM measures used by game publishers and manufacturers and a clear lack of respect for their customers, is it hard to believe that they would try to clamp down further on used games? A generation ago, the idea of a system without backwards compatibility seemed ludicrous. Now we're paying good money to get last-generation games on our current-generation systems and backwards compatibility as an idea not driven by downloadable purchases has withered. Always-on DRM and banning gamers from playing used games is not only possible, it's fairly likely.

We have alternatives now. Console exclusives are no longer particularly interesting and sequel-itis has crept into the biggest names in gaming. Indie games have become incredibly popular, and thanks to services like Steam and Desura, PC users can get them cheaply and conveniently with minimum DRM (for Steam, depending on the publisher's limitations, but again at least the choice is there). The Steam Box could make putting Steam on your HDTV an easy process, and between it, the Android-powered Ouya, and the pile of increasingly dirt cheap, last-gen systems (of which the Xbox 360 and PS3 will join in a year or two), gamers have a wealth of options that aren't just economical, but really easy to set up.

New games are expensive. New systems are expensive. Used discs, indie titles, Humble Bundles, and Steam sales dominate a lot of gamers' libraries because, outside of Gabe Newell and Notch, few people can afford every new AAA title that comes out when it launches. If you take away used discs, you leave gamers with indie games and Steam sales, and that gives us a pretty huge selection. When new AAA titles seem only slightly interesting compared to promising indie projects (of games coming out in the next year, only Metal Gear Rising: Revengeance, Bayonetta 2, Bioshock: Infinite, and any Shin Megami Tensei game really pique my interest), we don't have much reason to sink huge money into them. Brand loyalty only goes so far until we say "Another Call of Duty game? $60? I can't get it used and I can't trade it? Well, for that much I can buy 20 indie games that offer unique and entertaining gameplay and have little or no DRM. I wonder what I should do with my money."

Instead of these extreme measures to squeeze more money out of gamers, Microsoft, Sony, and even Nintendo could actually make money from used games and put a dent in adversarial retail outlets like GameStop (which would suffer in one of the most spectacularly Pyrrhic victories ever seen in the gaming world) by taking the used game idea and turning it on its side: used digital distribution transfer. Charge a dollar or two for smaller games and five or ten for full, retail-available games that players buy on Xbox Live, PSN, or the Nintendo eStore. Let gamers buy used downloaded games from their friends for a nominal fee. Refund some of the fee in points so gamers can buy even more games. And, if you're worried about losing that sweet, sweet AAA title launch money, prevent gamers from trading games until a few weeks or months after purchase. Most importantly, cut $5 or $10 off of major titles' digital distributed versions instead of charging full price because despite the massive (and arguably overkill) cost of development of AAA titles you know damn well you're saving money by distributing them digitally instead of managing retail distribution.

Suddenly you're making money from pushing gamers towards digital distribution and weakening retail outlets instead of driving gamers away by the hundreds of thousands. Even if used games remain a factor, you could provide a marked incentive to get digitally distributed games and get money from gamers each time they share with their friends, as long as it's not an obnoxiously unreasonable amount. A few dollars to transfer a game from your friend and your friend gets some points for it (which they'll combine with more money to get more digitally distributed games)? It's a steal! More importantly, everyone's happy and gamers aren't grumbling bitterly as straws pile on their figurative camel's back from companies jealously guarding every single aspect of distribution for financial gain.

There is no perfect solution that will please everyone, but the customers should come first. Companies won't get nearly as much money if they chop out a big chunk of functionality and economic incentives by banning used games. For every full-priced game they sell with these methods, a handful of gamers will shrug and turn to Steam, or keep their old console and play the games they missed, or look into the indie scene, or get the $99 Ouya and Steam Box devices, and every big name on top will lose out. Customer loyalty counts for something, and gamers' loyalty is powerful, but it can't last forever. Destroying the ability to play used games (and in doing so destroying the ability to enjoy older games or share with friends) is the surest way to lose that loyalty. It will surely kill the next Xbox and PlayStation system.