Gabe Newel on digital ownership and DRM

Valve’s founder, Gabe Newell, has said the chief concern of a company dealing with digital rights management and the question of digital ownership should always be customer satisfaction.

Speaking to The PA Report, Newell avoided the legal concerns raised by a recent case involving a Russian Steam user who had his account blocked without explanation by Valve.

"If you’re asking me to render a legal opinion then I’m just not the super useful person to render a legal opinion," said Newell.

But he was not without an opinion on the incident, and continued, "At first blush it sounded like we were doing something stupid and then we’ll get it fixed."

The case, first reported by the British PC gaming site Rock Paper Shotgun, raised a flood of questions regarding the ownership of digitally distributed games.

"It’s never been completely resolved for software generally," said games lawyer Jas Purewal told RPS when asked about legal ownership of games. He went on to explain that for boxed games, the customer owns the CD/DVD containing the software, but the software itself is under license from the publisher..

This end user license agreement, or EULA, has never been tested in court against consumer protection laws, but these laws do apply, and the position is being clarified by recent legislation in the European Union.

This legal arrangement has been complicated by the relatively recent addition of DRM.

Digital rights management systems are third-party applications that launch, install, or run alongside the game. These systems are commonplace, but becoming increasingly invasive, and have raised a great deal of consumer backlash.

Newell doubts that these programs do anything but turn paying customers away. "Recently I was in a meeting and there’s a company that had a third party DRM solution and we showed them look, this is what happens, at this point in your life cycle your DRM got hacked, right? Now let’s look at the data, did your sales change at all? No, your sales didn’t change one bit. Right?"

"You know," continued Newell, "then we tell them you actually probably lost a whole bunch of sales as near as we can tell, here’s how much money you lost by bundling that [DRM] with your product."

As more and more games sales occur digitally, it would not be out of the question to see some of these issues move to court.

Does a company have the right to deny a customer access to games they purchased because they swore on the forums, as EA has?

On what legal grounds can a company like Valve close down an account with over £1000 in purchased games- offering no explanation to the customer?

The new EU legislation concerning digital distribution may help to clarify these issues, but until then, we have Newell’s solution: "If you’re not making your customers happy you’re doing something stupid."