Valve head talks digital ownership

Valve boss Gabe Newell talks about the tricky legal ground of digital ownership, and how service providers must take care of their customers to avoid conflicts.

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Analysts are constantly proclaiming a digital future for games, but that notion is still uneasy for some customers. The lack of a physical object brings up questions of ownership, and Valve boss Gabe Newell has addressed those concerns head-on in an interview.

"It's sort of like this kind of messy issue, and it doesn’t really matter a whole lot what the legal issues are, the real thing is that you have to make your customers happy at the end of the day," he said.

Speaking to The PA Report, Newell side-stepped the legal issue brought up by a recent customer complaint, and consistently stated that satisfaction must be the number one priority. "If you're not making your customers happy you're doing something stupid and we certainly always want to make our customers happy," Newell said. "And I think we have a track record of having done that."

The instance of the Russian gamer who lost his games, in particular, is being dealt with from a customer service angle. "If you're asking me to render a legal opinion then I'm just not the super useful person to render a legal opinion," he explained. "At first blush it sounded like we were doing something stupid and then we'll get it fixed."

He also points out that the issue of ownership doesn't worry customers as much after they've had some experience with Steam. "So, you know, people were worried when we started using Steam initially because, oh my gosh, if I don’t have my discs what happens when I get a new machine?" he said. "And after they’ve done this a couple times they're like 'oh my god, this is so much better, I'm so much more likely' - you know, this isn't a legal argument, this is a real world argument - 'I'm so much more likely to lose my discs than I am to have any problem with my Steam account, that seems way better than having a physical token that I use to access my content.'"

While the question of ownership isn't fully settled, Newell's remarks are a good reminder that customers can vote for their wallets. If Steam or a service like it mistreats its customers as we burrow more heavily into the digital future, they can at least be held accountable by taking business elsewhere. Of course, doing such would mean sacrificing all semblance of "ownership" one has over their purchased digital content.

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  • reply
    February 21, 2012 9:00 AM

    Steve Watts posted a new article, Valve head talks digital ownership.

    Valve boss Gabe Newell talks about the tricky legal ground of digital ownership, and how service providers must take care of their customers to avoid conflicts.

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      February 21, 2012 9:59 AM

      [deleted]

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        February 21, 2012 10:03 AM

        The problem is your average Russian (or whatever) income isn't as high as some other countries. So to make it affordable there needs to be a price difference between regions.

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          February 21, 2012 10:16 AM

          This argument is bullshit. A game should be the same price world wide (plus or minus any vat taxes). being cheaper just because people are poor or more because "people are rich" is pure horse crap.

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            February 21, 2012 10:28 AM

            I hate to break it to you, but that is not how the global economic system works.

            An item is valued at what a consumer is willing to pay for it.

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              February 21, 2012 10:29 AM

              willing and able, I should say.

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              February 21, 2012 10:33 AM

              [deleted]

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                February 21, 2012 10:50 AM

                You could also argue that people in lower cost-of-living parts of the country are paying a higher premium for their software than people who live in California/New York.

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                February 21, 2012 10:59 AM

                "Cost to produce" doesn't really apply to digital media.

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                  February 21, 2012 11:12 AM

                  The product still needs to be developed, aka produced.

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                    February 21, 2012 12:03 PM

                    I'm dumb and misread it. Nothing to see here. Carry on.

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                  February 21, 2012 11:25 AM

                  Yup, games like Left 4 Dead 2 and BF3 don't cost anything to produce.

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                February 21, 2012 11:04 AM

                I understand your desire to get something you like for less money, but making the argument that "oh, they get it for less than why shouldn't I" is akin to making a fuss over the fact that the kid in front you in the lunch line in high school is getting a discount on his slice of pizza because his parent's are poor. Or your dorm mate got more money in scholarships because he came from the projects while you came from suburbia.

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                February 21, 2012 11:12 AM

                Wrong, Australians are subsidizing the US

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                  February 21, 2012 11:19 AM

                  [deleted]

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                    February 21, 2012 11:27 AM

                    Seeing as Batman AC is $99 USD and I'm pretty sure we dont have 50% sales tax then its at least somewhat pricing

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                February 21, 2012 12:02 PM

                But the fact that we are willing to pay more says that it's WORTH that price to us. People won't pay more than the games are worth to them, right?

                And it sounds like you are arguing that they sell games in poor countries at a "loss" that is subsidized by sales in rich countries. But that implies that not selling the game at all in a poor country (and keeping the rich-price the same) would make the publisher more money. So why don't they do that? I think you have to assume they make money on every sale of a digital product since the incremental cost to "produce" a copy is tiny.

                So basically I think it comes down to the fact that publishers charge as much as they can, which is as much as people will pay. If the aggregate global revenue is higher than the total development/marketing costs then a game makes money in the end and no customers in any country are getting screwed.

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                  February 21, 2012 12:30 PM

                  [deleted]

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                    February 21, 2012 12:48 PM

                    It sounds like you are saying that if they are making money on the Russian pricing then why not make that money with lower Russian pricing in the US. But that means less revenue per sale, so you have to be assuming they would make it up by selling more copies. I think that's a tough argument without any data because it's just basically saying the pricing is incorrect in the US and they'd make more total money selling more copies at a lower price. And that would be true regardless of the "rest-of-world" pricing.

                    Or maybe you mean the poor world should pay the same price as the rich world, but I think we agree that you would just not sell many copies in the poor world because they can't/won't pay that much. So that loses you revenue, too.

                    I guess I just don't see how variable pricing is a bad idea for publishers. Globally "rich world" prices means same sales in the rich world and less everywhere else (net loss in revenue). Globally "poor world" prices means the same sales in the poor world and increased unit sales for the rich world at a lower unit revenue (plus you cut off any cross region trading like you seem to dislike). So unless you get a really big spike in sales in the rich world to offset the lost unit revenue you will make the same, less, or equal money. But the difference seems to come down to ONLY how the rich world market deals with lower prices. So it's not really even an global pricing issue, right? It's just whether the rich world price is too high.

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                      February 21, 2012 1:36 PM

                      [deleted]

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                        February 21, 2012 1:52 PM

                        The problem with saying that they should all wait is that people don't want to wait. If you wait, you're either losing sales to the next big thing, or you're losing sales to piracy. Publishers realize this even if you don't, and that is why they make new games available at prices that consumers in less affluent countries can afford from day zero.

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                        February 21, 2012 2:26 PM

                        No need to be defensive. "It sounds like you are saying" is me literally trying to make sure I understand what your argument is, because it wasn't clear to me.

                        Now I understand that you mean everyone should get the rich world price, and the poor world should just wait for the eventual price drop. Is that right? if so, then you are proposing that publishers trade "low price sales in Russia now" for "low price sales in Russia later when the price drops" which is a terrible proposition for a publisher. It's better to have $10 now on that sale and earn interest for a year than to wait and get $10 in a year. If you aren't familiar with how this is calculated you can look up "net present value" for the math used to make these assessments.

                        Segmentation based on geography (really, based on local markets) may be unintuitive but can you explain why global pricing would make more money for publishers?

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                  February 21, 2012 12:33 PM

                  This post right here is spot on. It's the stuff they teach you in Econ 101. Consumers in wealthy countries pay more because they are willing and able to pay more. See Economic Surplus: http://en.wikipedia.org/wiki/Economic_surplus

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            February 21, 2012 10:29 AM

            No.

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            February 21, 2012 11:23 AM

            [deleted]

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            February 21, 2012 11:31 AM

            This is the argument for a single global gov't with a single currency. Then we get Starfleet. Then we get the alien babes.

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            February 21, 2012 1:09 PM

            A game should cost the yearly wage of a third world farmer.

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          February 21, 2012 11:19 AM

          Could they buy the game in russia and then gift me the product?

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        February 21, 2012 10:03 AM

        [deleted]

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          February 21, 2012 10:28 AM

          [deleted]

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          February 21, 2012 1:52 PM

          I guess it's not exactly the peace of mind you want, but Valve is insanely profitable and 100% privately owned, and there is pretty much no chance of them being bought or taken over since most of the employees are only there in the first place because they like being private. Any attempt to buy out Steam would only be laughed at.

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        February 21, 2012 12:47 PM

        There's some really shady aspect to how you 'own' game son Steam- namely, you don't you. Basically pay a fee to license the game, and Valve gives you various perks because of it. But they can apparently take it from you, at any time, with no compensation.

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        February 21, 2012 12:56 PM

        perhaps it's my age, or my profession, but i have more faith in my ability to retain digital media than physical media. considerably so. discs scratch, get lost, etc etc. my data is safe as fuck compared to anything you can physically put in my hands.

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          February 21, 2012 1:37 PM

          Have you lost anything on steam before?

          I have.

          Physical medium it's up to your discretion what kind of shape it's in, digital is not. That is really the bottomline.

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      February 21, 2012 10:18 AM

      did those people who got locked out of Steam due to paypal chargebacks get that resolved?

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        February 21, 2012 11:18 AM

        I'm pretty sure if you chargeback you lose your account. No questions or recourse allowed.

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      February 21, 2012 10:42 AM

      [deleted]

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        February 21, 2012 1:05 PM

        Off-Topic What are the Shack's thoughts on the Penny Arcade Report?

        I like the way Mike described it in the post where he introduced it. So far I like their first article with GabeN. Hopefully the rest is as high quality.

        I also believe he'll stick to his guns and keep it from turning into another Kotaku "1 paragraph stories with zero useful content stolen from a blog that doesn't cite it's sources" game-spam site. After watching him go after the Ocean Marketing guy, he doesn't seem the type to hold back.

        I gotta say though: Watching PA grow up from John Romero jokes and radscorpions to PAX and now this fills my little Grinch heart with joy.

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      February 21, 2012 1:43 PM

      I'm not quite sure why Steam always seems to get a 'free pass' just because Gabe is a good guy. I have some real issues with the way everything you 'own' on Steam is linked directly to your single account, and you can't easily sell your old games. No trading with friends/family, which is especially problematic for short single player games. Total loss of control of your purchased product. It wouldn't be so bad if they actually has some decent support, but it is extremely lacking (like not having a phone number to call - no 'live' people to ask questions to). So when there is a problem, it's often impossible to get it fixed. Or if it is fixed, it may be after the weeks it took to get an actual response.

      A recent personal example, which IMO should not have been an issue at all. Especially with Valve/Steam being a bunch of 'really nice guys'. I bought a game (rollercoastrer tycoon) on a Christmas sale for my kids. Great game by the way... but I made the mistake of buying with my Steam account and not creating a new one for the kids. So, whenever they want to play on 'their' computer in the back room, I have to go and physically type in my password, logging off of Steam on my primary desktop. So I can't even browse the Steam store, much less play my own games while they are playing a singleplayer game OFFLINE in the other room. Within 2 weeks of the purchase I contacted Valve support to try to switch the game to the kids' account, but I got the boilerplate letter 2 weeks (shouldn't take that long to get a response) later stating that games can't be switched, no matter what. Very frustrating and pointless.

      This should have been easy for Steam. The game is obviously meant for kids. I've had an account since HL2 came out and have never bought kids games before. There should have been no issues switching the game over.

      More generally, there is no rational reason why single player offline games should be tied to a single online account. This applies to Blizzard at well. I bought Starcraft 2 last year specifically to play on my laptop while I was out of town working at a field camp. Guess what... no internet at camp = no play. Ridiculous. I still haven't got around to installing on my home computer.

      end rant

      TLDR summary: I don't understand why Steam has such loyal Fanbois. It's no better than lots of other DRM. And their support needs to be improved dramatically before I will ever feel comfortable long term. I would never buy a game full price on Steam. I don't mind so much with the heavily discounted sale prices, because I fell that those prices reflect the risk somewhat.

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        February 21, 2012 1:46 PM

        [deleted]

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        February 21, 2012 3:11 PM

        So you wanted to give it to your kids as a gift ? Hm!

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        February 21, 2012 3:30 PM

        This is absurd. You made the mistake when it clearly gives you two options for purchase and this is Valve's fault why?

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          February 21, 2012 3:52 PM

          Well it shouldn't be impossible to correct such a mistake. That would be an example of a very good customer support.

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            February 21, 2012 4:00 PM

            The reason is it's not possible to fix the mistake is to stop people from trading games they bought and played to friends accounts. Yes it sucks if you have an honest mistake but they can't allow transfer of ownership for a reason.

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              February 21, 2012 4:04 PM

              Yeah I know that. But why not make a game tradable only among family members? Or some other solution that I can't think of right now.
              Well I guess that's the price of all the other benefits your getting with "digital ownership".

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                February 21, 2012 5:05 PM

                An this is where the bullshit comes in: "... the real thing is that you have to make your customers happy at the end of the day,"

                How do you know you are a customer that fits into that group. The formula is such: majority - # unhappy customers < profit goal = unhappy shit out of luck

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                February 21, 2012 6:27 PM

                And how do you prove who's in a family? Start giving Valve personal information they wouldn't otherwise have, or maybe start banning family-linked accounts if they log in from IPs too far apart?

                A group of friends could just set themselves up as friends, and collectively buy 1/4 the games they otherwise would.

                I would imagine worries like this cause the "no transfer ever" thing to be part of publisher agreements. Otherwise, sure it would make sense to allow 1-2 transfers here and there for established customers.

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          February 22, 2012 9:55 AM

          It's not absurd. It's called basic customer support. It was an honest mistake, and I would think that my 7 year relationship with Steam would show that I am a 'responsible' (if we want to categorize Steam users) user of their services who has never bought kids games before. I don't think I have even gifted a product. I contacted them right away once I realized my mistake, and they told me that I just had to 'eat it'. You would think my 'clean record' would speak for itself. They know my age etc. and it's pretty obvious I'm not a college student playing hours of multiplayer with my buddies and trying to get a free game. It's Roller Coaster Tycoon for crying out loud.

          I don't see how my mistake should be uncorrectable. That is my problem with the whole situation. Just the fact that I am even mentioning my past history with their service gives me the creeps (and it should to you too). Does Walmart check your history before deciding if they should allow you to return that couch that doesn't fit in your living room after all?

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        February 21, 2012 4:02 PM

        " much less play my own games while they are playing a singleplayer game OFFLINE in the other room. " This is totally wrong. If you set their steam to offline mode you can log back into Steam on your computer and play your games just fine.

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          February 21, 2012 5:12 PM

          While I've seen this suggested in the past I could never get it to work properly for whatever reason. I'll have to mess around with this a bit.

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            February 21, 2012 6:23 PM

            I bet it requires physically unplugging their PC from the network after going into offline mode.

            I'm sure being in offline mode doesn't mean Steam won't contact any servers if it can. They DO have to offer DRM to publishers after all.

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        February 21, 2012 5:06 PM

        While I agree that Steam's support can really blow, you contacted support 2 weeks after you purchased the game. By the way your wrote your post, you had presumably already played the game for a period of time. I've heard that Steam can allow a one-time refund of a game, but there's probably some criterion which you did not meet (like not contacting support as soon as possible and instead playing the game).


        Also, you're misunderstanding how offline mode works. I haven't had great experiences with offline mode either, but it doesn't mean that you can use your account concurrently on any number of computers. Of course you cannot log in even if the other computer has Steam in offline mode. If multiple computers can log into the same Steam account at all that totally undermines Steam's DRM. How else are they going to verify whether or not you legitimately own the games on the machine?

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          February 22, 2012 9:26 AM

          The game hadn't been played until the day before I contacted Valve. It was then that I realized the issues with the game being on the same account and inability to run in offline mode while I was logged in on the other computer.

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        February 21, 2012 5:35 PM

        TLDR: Entitled gamer fucks up and blames somebody else, film at 11.

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          February 21, 2012 8:13 PM

          pretty much

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          February 22, 2012 10:12 AM

          I know that I shouldn't even bother replying to this dickhead comment, but I will anyway.

          I don't feel entitled at all, except that there needs to be a better way to manage customer mistakes in the system. For one thing, Steam support needs to respond in less than 10 days. They need to have a phone number to call for problems that don't fit into their very specific reporting categories. I'm not trying to return the game. I'm not trying to gift it to a multiplayer buddy. What if I had meant to gift it and had clicked the wrong button accidentally during the purchase of a game I didn't want?

          If I had known the system better, I would have set up the kids' account first and then purchased it from there. But I didn't. Are you suggesting that there shouldn't be a way to correct mistakes?

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        February 21, 2012 6:13 PM

        Extremely convenient (almost all of the time), connects you with your friends, fair prices, and good sales. It's not a mystery.

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          February 21, 2012 9:31 PM

          Prices are definitely not fair.I live in Europe.Most game on steam, I can order a freakin retail copy for 30% less money.I admit that buying indie games is good, and getting games for TF2 items, but the prices are crap most of the time.Example: Modern Warfare 3 on steam - 60 euros, Price on Zavvi.com - 31 euros and that includes shipping.Scratch 30%, it's 50% less expensive.

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        February 21, 2012 6:18 PM

        The second sentence of your TLDR is flat wrong. It *IS* better than pretty much any other DRM. That's what you're missing, and that's why you don't "understand" why people like it. (I figure you really understand, you just don't agree)

        It's a fantastic system that make the PC platform a joy to use, frankly. The fact that my games are tied to a simple single account, and that I have my entire library just a click away any time I log in to a different machine, and the complete ease of installation, uninstallation, updates, and even DLC are unmatched.

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        February 21, 2012 6:20 PM

        You also start out wrong with your "purchased product" terminology. Like it or not, games are licensed software and are increasingly treated as such.

        This is not a bad thing to people who keep/collect/replay their old games anyway, and who like supporting the industry.

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          February 22, 2012 9:45 AM

          Maybe I'm just 'oldschool', but I like to think of my purchases as things I own. For example, I could take a book off my shelf and sell it to my neighbor, or I could just give it to him.

          Generally, this is not a real problem. Often it will expand the awareness of people to the author and if it is good, it will likely lead to more sales for that author in the future as more people look forward to his new books.

          I realize that the publishers are slowly trying to move away from this 'old' model when it comes to intellectual property 'products', and it seems that they are getting pretty successful at it.

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        February 21, 2012 6:24 PM

        Technically, you don't own software purchases. You may own the discs the software is on, but its presumptively licensed, and the terms of the license dictate what you can do with it.

        Video games for home systems are a different story all together because it's generally treated like any other media purchase (music, movies, and books). Publishers are trying to more more towards the software model, but face it; we're headed for a future of purchasing access to things, not the things themselves. Shitty in a lot of ways, but it seems to be the way technology is going for various reasons.

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        February 21, 2012 6:38 PM

        because used game sales are bad for the industry and its something they want to avoid.

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          February 22, 2012 10:02 AM

          I don't believe that used games are bad for the industry (private sales). But yes, they are definitely trying to avoid it.

          I will agree that used game sales though EBgames is not good for anyone except EBgames.

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        February 21, 2012 7:48 PM

        All that I know is that back in the day, I could loan my brother StarCraft, he could play it, and then give it back when he was done/I wanted to play it. Separate houses, same game copy. How does this work? He can play it because I don't have access to it. Same as loaning out a movie.

        Why can't a game be disabled on my account and enabled on my brother's on a loan basis? And when I want it back, being the owner of said copy, I re-enable it on my account, and it is automatically disabled on any other account. Hmmm?

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          February 21, 2012 8:58 PM

          That is up to the developer or publisher if they want to give out guest keys. I know Blizzard in the past used to have "spawn" installs that lets that copy play with the person who paid for the original copy. It wouldn't be hard to implement something but there isn't obvious money in doing it. The best you can get now is free weekends and passes.

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        February 21, 2012 8:38 PM

        Steam gets a 'free pass' because Steam as a service and the people running it aren't dicks, take care of shit when it's broken, provide the best service on earth for what they offer, promote the SHIT out of the PC as a gaming platform, give tons of free shit away for FREE, and generally make me the customer feel loved and important.

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        February 21, 2012 9:07 PM

        and you can't easily sell your old games can you sell old downloads from itunes?

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          February 22, 2012 9:23 AM

          That's why I don't have itunes on my computers. I buy CD's and rip them to play on my various devices.

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      February 21, 2012 4:17 PM

      When I first started using steam, I had issues with not actually owning anything physical. But honestly, after having used steam for many years now and owning over 300 games I actually feel more ownership towards steam games than physical copies of games. If I purchase a physical copy (which I haven't in years) and I cannot attach it to Steam I feel like a pirate. It just doesn't feel official and it isn't "linked" to anything. It's just another game installed on your PC that you'll forget you own after uninstalling. I can't exactly explain what I mean but I'm sure you'll understand.

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        February 21, 2012 6:22 PM

        For me it's not so much the "official" feel of linking it to my account, but disc-based games definitely do feel detached and almost crude in comparison. I love how once I have a game in steam, it's so easily available in perpetuity. I know I'm not the only one (not even close) to have re-purchased games that I have on disc, especially when you have GOTY editions really cheap and things like that.

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          February 21, 2012 7:22 PM

          I almost re-bought Borderlands for those reasons. BORDERLANDS!

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      February 21, 2012 10:20 PM

      i wish he'd talk about his new workout program

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