Digital property: Entering the Third Age

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It is the 6th of September, 2007, in a little town in the middle of nowhere, Netherlands. A 13-year-old boy, let’s call him Petey McShade for ease-of-use, is alone in his room playing RuneScape. Apparently his friends have failed to smack him upside the head for still playing RuneScape in this day and age. Their judgment will come later, but first there are more important matters to discuss. At about a quarter to three, two classmates of this boy enter his house with ill intent. Under threats of beating him up they demand Petey to log into his RuneScape account and transfer all of his gold and items to their own characters. Afterwards the incident is reported to the police, and both classmates are caught and prosecuted for, among others, assaulting and threatening. Justice has been done.

But much like in LOST, pressing questions remain unanswered. Questions such as “What was up with the numbers?”, “Why did the Others want Walt so badly?” and “Seriously, who still plays RuneScape?!”

But the most pressing question of all is this: did those two classmates steal Petey’s gold and items? While you ponder that, let me discuss some other highly important points on digital property, and I’ll come back to this case in a little bit.

Digital Property: The Ages Past
Digital property as I understand it is a very broad thing. It comprises digital videogames and their licenses first and foremost, but also virtual items, in-game currency and potentially much more. The question is whether or not we can say we “own” them. This is important because ownership grants a whole slew of important rights: uncompromisable enjoyment of your property, being able to resell it, you name it! You can do a lot more with something you own than with something you have gotten “licensed”, especially considering the hugely restrictive licenses we’re currently dealing with. From the recent developments I’ve seen, I think we may soon be seeing important revolutions in the way we look at our digital property rights. The above case is one of them, which I’ll come to later. I want to use this case to illustrate a bigger point. The point that maybe — maybe — we’re about to enter the Third Age of digital property rights.

First things first, though. If I’m going to claim that the Third Age is upon us, let me first explain what I believe the previous two Ages have been.

The First Age ranges from the very start of videogaming up until not more than 10 – 15 years ago. Back then, videogame ownership was incredibly simple. There was only one principle: you own what you buy.

Sometimes this came in the form of cartridges, like with the Nintendo and Sega consoles, sometimes the game would be built into the system, as with Pong, and later on most companies went on to use CDs. Sure you had to blow on the cartridge every once in a while to get it to work or your disc would get scratched, but otherwise the enjoyment of your property was completely uncompromised. You bought your game, you played your game until you were done, and all was well in the world. The whole digital thing was new, and publishers and consumers alike didn’t really think of the implications, nor were they ever a problem. Technically, even then you were buying a copyright license rather than an actual game, but back then that simply didn’t worry anyone. The game was yours.

In short, the First Age looked much like this:

The Second Age is where it gets a tad more complicated. This era only really started a couple of years ago, but it took an enormous flight very quickly. Videogame publishers came to realize that they were really only selling a game’s copyright license rather than an actual product, and that interesting things could be done with a model like that. This is the model that is still prevalent today.

Owning the CD didn’t necessarily mean anymore that you could play the game. Your license could be revoked for cheating or trying to mod the game, for example. And remember those games you could only install a limited number of times? What does that say about your property rights? Little good, I fear. The same applies to online passes, and games like Diablo 3 and SimCity have also shown quite well that you no longer own what you buy. You own what the publisher lets you own, which is to say as little as they can get away with. This model of selling a restrictive license spread even more quickly in light of digital distribution. Steam, XBLA, PSN: you name it. Every one of them sells you a license instead of a game, more restrictive than ever before, and don’t ever make the mistake of thinking those companies aren’t fully aware of the implications.

For fun and profit, I decided to take a quick look at the license agreement that Steam uses. I came across some neat things which I think very nicely summarize the current state of digital property. In that context, I think the very best one is this:

“Valve hereby grants, and you accept, a limited, terminable, non-exclusive license and right to use the Software for your personal use in accordance with this Agreement, including the Subscription Terms. The Software is licensed, not sold. Your license confers no title or ownership in the Software.” (emphasis mine)

Remember: as a Steam user you agreed to this. And I don’t know about you, but I’d say that quote makes this next screen rather… interesting.

Apparently Valve PR and Valve Legal disagree over whether or not I own my Steam games.

As it stands the implications of this model are quite worrisome indeed. It implies that the distributer can simply revoke your right to access the game for any reason they remember to put in the license agreement. Cheats and hacks are often in there, but we’re seeing other things as well. Technically, Valve could even put a clause in their agreement that says “These licenses may not be used on Tuesdays” and there would be nothing we could do about it. There have even been cases where legal troubles on the publisher’s side led to every single sold license being revoked. Finally, in another of Steam’s license agreement provision it says that Valve explicitly does not guarantee access to your games. Firstly, that means that when it comes to non-functioning games, say because of an always-online model, you’re simply shit out of luck. But taken to its logical extreme, any reason whatsoever could be grounds for revoking your game. Because hey, it’s not like you own those games anyway, right? What rights do you even have?

I use these points not because I hate Steam (far from it), but simply to illustrate that in the current videogame climate there does not exist such a thing as ownership or consumer rights. Even if you hold a physical disc in your hands this model applies: you can own the disc, but never the game. Publishers simply don’t want that, they’re much too happy selling an easily revokable license to you. I fully suggest that you read the license agreement to any videogame or distribution service you have, because I’m sure you’ll find similar terminology there, if not worse.

So summing up the Second Age:

Fortunately, however, we may already be on the brink of the Third Age.

Entering the Third Age
Nowadays, it seems that increasingly many people understand the big implications behind the current practices of digital ownership. This number is only likely to grow in the future.

First and foremost, the gamers themselves are starting to get fed up with a lot of this. People were very critical of Origin’s licensing when that came out, for one. Even now the common consensus seems to be that as long as a game doesn’t force you to use Origin, you stay away from it like it’s Final Fantasy: All the Bravest. We just don’t trust EA with a Steam-like system. Besides that, if there is anyone who knows what our feelings our towards restrictions on our games, it’s Microsoft. The backlash to their proposed model for the Xbox One was so huge that they had no choice but to completely strip away all of their plans and give us a console we’re used to. When the license agreement prescribes that we need to be online for the game or the console to function, we immediately see that this definitely wasn’t what we as gamers signed up for. After all, how will we play the games we bought and own?

We have also seen a rise in services that try to be more consumer-friendly in selling their games. One reason for why the Humble Indie Bundles have become so very popular is that you can simply get an installer if you so desire. No more digital platform with a restrictive license that may prove unreliable in the future: you make a back-up of your installer somewhere, and the game will forever be yours. Singular indie devs often allow you to download an installer from their site as well, as does GOG. Strictly speaking this practice of giving you an installer that you’re free to back up does not by definition mean that you “own” all of those games now, but we are already getting to a situation that is quite similar to the First Age. You technically may not own it, but you’re getting so close it doesn’t really matter anymore. Everything you could do with your NES-cartridges you can also do with those installers, short of tossing them out the window to see if they really are indestructible. Finally, Steam’s Family Sharing program is also a step in the right direction; the digital license-based nature of their games have not stopped them from allowing my to borrow my friend’s games, and vice versa. It can be done.

While gamers and some distributers have already seen the light, non-gamers are starting to wise up as well. They too are starting to realize that selling a software license is a model that is very open to abuse, and that digital ownership needs to become a real thing. Consumer organizations are starting to get worried over some of these practices and some countries that have extensive consumer rights regulation have already put restrictions on the publishers and distributers alike. By Valve’s own admission some parts of Steam’s license agreement aren’t applicable to the EU, and for good reason: that shit just doesn’t fly there. Moreover, just last year the European Court of Justice took a major step in the right direction, when it ruled that a copyright holder cannot prevent you from reselling his license. Think about the implications this may have for digital videogame distribution! This judgment could (should!) make it possible to set up a market for used Steam games! And don’t lie to me; you and I both know you’ve got games on your Steam account you’d be better off selling.

There are some other interesting things to be taken from this particular judgment. For example, at one point the Court explicitly states that downloading a game and concluding a license cannot be seen separately, but must be taken together as a whole. Once again I can’t help but see the seeds of a true property right on digital games and software. The Court sees that your Setup.exe is useless if you’re not allowed to actually install your game. So doesn’t it makes sense to see it as one product? One that you can own? I think so. The license model has already been dealt a hefty blow with this judgment, a blow that not even a binding contract could parry, so I don’t think it’s a stretch to say that a true property right may yet be on the horizon.

In fact, there is reason to believe that the Third Age may go farther than even the first. Back in the NES days it was almost unfathomable that you could actually own not only your videogame, but even your in-game items. I already explained that owning your videogames is starting to become a reality. However, with cases like the RuneScape one described above, even ownership of virtual in-game items is becoming a very good possibility.

I was withholding this information from you earlier to get you thinking, but Petey’s classmates were actually first and foremost prosecuted for theft. But only if we own our virtual items can they be stolen. So the question before the Dutch Supreme Court was: do we?

There are definitely some strong technical arguments you could bring into this to argue that this isn’t the case. You could say that the items never existed, that they were nothing more than “bits and bytes” inherently unsuitable for ownership. Or you could say the items never belonged to Petey in the first place. Don’t the items technically belong to the guys running RuneScape? It’s their game after all. In that case, nothing was ever stolen, because the items never left their owner.

The court, however said that virtual items are indeed property. Petey was the owner of his items, and the conduct by his classmates amounted to theft. What was at stake, in my view, was our expectations as gamers as to the ownership of our virtual goods. The court brought the law in line with those expectations, with the reality of the digital world, and I for one applaud the judges for taking a very modern and worldly view on this matter. The court explicitly took into account that the items are felt to have a value to their original owner (in fact, the victim testified that he was “rich” in RuneScape) as well as to the suspects. Moreover, acquiring these riches requires time and effort on the player’s part. I think I speak for all of us when I say that this is exactly and entirely correct. Acquiring in-game items does take a heck of a lot of time, and of course these items have a value to us. And if that’s the case, why shouldn’t we own them?

But let’s change the facts of the case a little bit, to show how important this really is. In actuality, a RuneScape amulet was stolen. It had some sort of worth, but it couldn’t have been a whole lot. But now: let’s change “RuneScape amulet” to “Second Life house”, or to “EVE Online spaceship”. After all, if there’s any place where there is real money to be found in virtual items, it’s there. Without ownership of virtual items, entire virtual houses worth thousands of dollars can be stolen without significant repercussions and without compensation for the victim. You could even simply consider this issue with games featuring micro-transactions, as so many MMO’s have nowadays. What if Petey had bought his amulet for two dollars? That’s undeniably a worth right there. And what about the recent rise in Bitcoin usage? I can only imagine that the court foresaw this and judged accordingly. And with that in mind, I couldn’t be happier that it took this brave step.

Closing off
In short, recent developments in law, as well as the growing awareness among gamers and even many others as to the problems with the current state of digital property, are sending me a clear message. The message that this model will not last forever. This applies both to the license model and the virtual items situation. For both, a turning point is coming; we may yet come to truly own them.

So what about you?
What would digital property mean for you? What do you hope owning your games would change? Do you want to go in and mod them? Do you want to be able to resell your games, or do you want protection against loss of your save files? What about virtual items; do you think they should be protected as your property, and does it matter if we’re talking about an MMO or a singleplayer game; is the Master Sword any different from the +2 Sword of Orcslaying? Should they be shown the same respect as physical items?

In short, where would you want the Third Age to lead us?