Reselling Steam Games

In the light of the recent news that Valve Software was recently sued in Germany over rights to resell used games, I'd like to address some ramblings I've had lingering in my head for a while.

First of all, let's make it clear that I Am Not A Lawyer. So, for what it's worth, here's why I think lawsuits like that don't have substantial grounds. Basically, they are referring to the Oracle vs UsedSoft case from last summer, where the European Court of Justice ruled that software licenses can be resold, even if they are for digital downloads. The ruling is widely claimed to be a precedent that EULAs claiming the software is "licensed, not sold", don't guard the publishers against the first-sale doctrine. There is hardly much to say about it. It does make sense.

However, does this really apply in the case of the Steam platform? What the court said there was this: The principle of exhaustion of the distribution right applies not only where the copyright holder markets copies of his software on a material medium (CD-ROM or DVD) but also where he distributes them by means of downloads from his website. But Valve doesn't just sell users digital copies of the software. They sell access to a service whose one part is that it provides unlimited digital copies to the buyer. It also happens, for most games, to provide services that are required for the game to work.

Granted, if you buy a totally DRM-free game from Steam (the examples are rather rare, but even some Serious Sam games were made available on Steam completely DRM free), then yeah, according to the ruling, you can resell that to someone else. Note that according to the ruling, you are then legally obliged to "destroy" all copies of the game in your possession. However, for most Steam games, if you resell to a second-hand buyer the "digital copy" of the game (by giving them the files on the disk, and destroying them on your side) - it's worthless. The game won't work without access to Steam services, and from an account that "owns" (i.e. has a license to) that game.

For me, the case here is clear: unlike when buying a game from a pure online distributor(so called e-tailers, like e.g. GoG) , when buying a game on Steam, you are not buying a product. You are buying a license to use Steam services for that game. So, unlike the attempt to turn a software into a license, as normal EULAs try to do (with largely controversial and still unclear legal ramifications), this really is a license to a service.

Ok, but let's say the District Court of Berlin doesn't agree with my conclusions and they rule that Valve has to provide facilities to allow users to resell their games, with no cut of that transaction going to the original publisher. Would that be beneficial to the customers in the end?

First of all, there is no set limit on the lowest price for first-sale doctrine resales. It could in fact be zero. Oh, but that means... you can give a game to your friend's account for free when you are done playing it. And he can then give it to another friend of yours. Any of them can give it back to you. In fact all your friends, family and relatives, neighbors, etc... can share the one game you paid once.

It is just like with physical objects - you can lend and borrow them. Sounds great, doesn't it? Just that it isn't. Both of that. Such "borrowing" is not same as with physical objects, and it is not nearly as great as it sounds.

Would you lend me your favorite ______, please? (Fill in the blank with something like book or bicycle, pen, DVD movie... or a boxed version of a game - for that matter!)

There are some true altruists in the world, and there are people who don't care about stuff, but if you are like 95% of people, chances are you would be a bit reluctant. Not (only) because you would fear that I will not return it - but because it might break, wear, tear, I might lose it, etc... None of that can happen to a digital good - especially one that a "cloud" provider keeps online for you, and will deliver a fresh copy on demand.

As you can imagine, such an ability would quickly lead into a total chaos of "sharing", not that different than the piracy scene: One person bought the thing, and all others are using it. Granted, only one person can use it at a time, so one copy cannot "seed" the entire Internet of "leachers". But it can multiply at least 10x or more. And what's worse, for each such "borrowing", Valve would have to provide a download for the new user. For free, as that is the term of the license - owner can download the game as many times as he wants. Most people don't exercise that, especially not with all games.

So, with lower income per actual user, what will Valve (and publishers on Steam) do? You can bet the first next thing would be raising the prices, and probably ditching the steep discounts that Steam is famous for. See, one fallacy about software pricing, and for games especially, is that it is not about how much one copy "should cost". It is about what is the total earning of a project. This is especially important with smaller and Indie developers (like Croteam, the company I work for). If the total sum of money earned by a project is not greater than the sum of money spent developing it, there will not be a "next game" from that developer. Plain and simple. So, allowing resales absolutely guarantees that either the prices will go up (since the first buyer now has to pay for all the second, third...), or developers won't cover their expenses and games don't get made.

Even worse than pricing is that, when presented with the fact that this would mean Valve would have to allow each second-hand, third-hand, ... n-hand user to download the game from their servers; some people suggested that Valve imposes a limit on the number of downloads. Can you believe that? This is against the very idea of Steam.

All in all, you can't have your cake and eat it. [*] Steam is a great distribution platform, providing unmatched support and excellent prices. The fact one has to accept about it is that it is based on you not "owning" the game in the physical way. The case in point seems to be yet another one of those where so called "consumer protection" organizations are actually working against the best interest of the consumer.

[*] The cake is a lie, anyway. Or was it pie?

Disclaimer: I work for Croteam, and we sell games on Steam. But this article does not represent opinions of either Croteam or Valve.