Counting Rupees: Day of Crisis

Each week Jeff Engel and Geoff Brooks contribute Counting Rupees, a column on the business behind gaming:

One of the issues I've been talking a lot about recently has been the concept of crisis management – how companies respond to problems that may impact their relationship with consumers. Crises don't need to be big to matter; even relatively minor issues can grow big enough to cause headaches. And so it was instructive to see the brouhaha over Spore's DRM, and how EA responded.

For those who don't remember the issue, the basic problem was that Spore limited the number of installations allowed per user as well as the number of user accounts per game copy. I'm not particularly interested in debating whether or not this was a good idea (I'm opposed), but am very interested in talking about how EA responded as concerns began to bubble up from the internet. So, how did EA do?

Recognizing the Problem

The first step in determining whether or not a company has a problem is to see how important the issue is to consumers. I'd argue that DRM is, if not critical, at least of some concern to gamers. The first sign that clouds were on the horizon was actually way back in May. That was the first announcement of the SecuROM solution for both Mass Effect and Spore PC, and it sparked a minor uproar. Clearly, the issue was of some importance for gamers, although the fact that neither game had been released probably helped mute some of the criticism. All in all, this seems like it should have been a red flag for EA. Prior DRM problems from Microsoft, Sony, Apple, and others sparked similar concerns as early as two or three years ago. This was something that was important to gamers and they were willing to act.

The second step is to figure out how visible you are to your consumers. As one of the two biggest entities in gaming today, EA walks around with a big bullseye on its back – even though it may not be the root cause of all of gaming's problems, it's one of the first things you think of as a symbol for the industry. It stands in for everyone else. And so you could be forgiven for thinking that EA would become a lightning rod for DRM controversy, too.

And to its credit, it appears that EA did know that it needed to respond: BioWare dropped the 10-day validation requirement from Mass Effect just two days after the initial announcement was posted. But it wasn't enough ... gamers weren't concerned with the 10-day requirement alone; they felt that the entire DRM system was draconian. Whether or not it was draconian is irrelevant.

Containing the Problem

One of the things they tell you in business school is that the first thing you're supposed to do in figuring out how to respond is to look at your company's basic values: those should tell you what to do. For example, if your firm wants to provide innovative solutions to improve customers' lives, you ask whether or not your actions fit with that mission. I couldn't find a particular statement of EA's values online, but I'm guessing that it's probably something similar.

Ironically, I think BioWare's initial response probably made things worse. Immediately afterward, message board postings heralded the change as a triumph of David over Goliath. They had taken on EA and won. But the change actually concealed the fact that only one portion of the DRM solution had been modified. Criticism was damped down only to reappear closer to Spore's release, when Amazon review bombs, internet postings, and fan boycotts led to Spore becoming the most quickly – and widely – pirated game in history.

Let me suggest that EA tried to fix the wrong problem. It looked at the Mass Effect uprising in narrow terms: gamers didn't like the DRM, 10-day validation probably wasn't critical, so let's kill off that aspect of SecuROM. A better approach would probably have been to step back and figure out what the real concern was: gamers didn't like being treated like criminals, and they definitely didn't like games that they had paid for making themselves difficult to use as they saw fit. Looking at DRM from this perspective might have allowed EA to do two things: first, figure out in the months from May to September just how deep these feelings ran, and second, proactively reach out to gamers during that time to relieve their concerns.

Learning from the Problem

It's too early still to see what lessons were learning during this crisis, but let me suggest that there are three big ones. First, you need to clearly understand the issues that may bother consumers and how vulnerable you are to their discontent. EA knew there was a concern here but it doesn't seem to have identified the correct root problem in time. Second, it usually makes more sense to agree with your consumers and "cave in" to their demands than to try to persuade them that you're right – they don't really care about your financial performance when they feel personally affronted by your behavior. I don't know whether or not it made more financial sense for EA to leave the DRM in place and risk irritating as many users as it did. But I suspect that it didn't – pirates are never going to be stopped by any form of DRM, and legitimate customers may very well stop purchasing your product if you bother them enough. And finally, don't repeat the same mistakes again. This was definitely a footnote in the list of potential corporate crises: it impacted Spore, certainly, but I'm not sure it really hurt EA in the long term. But a pattern of this type of issue definitely could, and there's no reason to make the same mistakes again.

As co-editors of A Link To The Future, Geoff and Jeff like to discuss, among many other topics, the business aspects of gaming. Game companies often make decisions that on their face appear baffling, or even infuriating, to many gamers. Yet when you think hard about them from the company's perspective, many other decisions are eminently sensible, or at least appeared to be so based on the conditions at the time those choices were made. Our goal with this column is to start a conversation about just those topics. While neither Geoff nor Jeff are employed in the game industry, they do have professional backgrounds that are relevant to the discussion. More to the point, they don't claim to have all the answers -- but this is a conversation worth having. You can reach them at