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GOG.com: Where Do We Go from Here?

This post will be split into three sections, so you can jump straight to the one you’re most interested in if you’d rather not go through it all at once. Since reading all of this, as well as the previous post, will provide more background and explanations, I don’t recommend that, but the option’s there for those who want it.

I. Speculation: Why this new change of plans?

Other companies would have required far more before agreeing to change their course yet again in such a manner, and some probably wouldn’t have done so except under the most extreme circumstances, holding firm largely out of stubbornness and spite, to prove the power remains in their hands and they make the rules their customers must follow. As such, by the recent announcement, GOG.com proved yet again that they’re different, that they truly care about us, their customers and community. However, while we’d like to believe that these changes are solely a result of that fact, of their genuine desire to avoid disappointing us and losing our respect, I highly doubt that this was the only reason behind their recent decision, and I’m not even sure it was the main one.

All of this is mere speculation and I sincerely apologize if I’m wrong, but I do believe that those of us who vehemently protested against their previous plans forced them to back down, or at least forced them to do so far sooner and to a greater extent than they would have done if the reaction would have been even slightly more moderate. In addition, I believe this wasn’t necessarily due to the fact that we were strong enough, but because GOG.com were already finding themselves in a weakened position, since otherwise I can’t explain why they even considered abandoning one of their two clear, specific core values, and attempted to make the most of it by taking a big risk with a deadline.
I’m referring to the fact that, with Game Developers Conference just around the corner, GOG.com needed a big enough success story to counter the defeat that needing to once again accept any sort of regional pricing obviously represents. They needed a way to justify such a retreat without making it obvious for everyone that they were pressed into waving the white flag, and three games that they should be selling anyway, released independently by developers whose other games are already in their catalog, were definitely not enough. As plenty of others pointed out as well, if they’d have built their presentation around that, they’d have been a laughing stock, so they needed something else and they needed it quickly.

The obvious conclusion is that they were looking to obtain the rights to sell some major titles, from major publishers, which are not available DRM free anywhere else, and they needed to obtain those rights before GDC, in order to be able to announce the deal there. However, this required both an understanding community, proving that GOG.com users would be willing to accept regional pricing, and strong sales for Age of Wonders III, yet instead the result was outrage, users complaining and announcing that they will boycott them from now on, probably terrible sales for that game and likely a drop in sales for the site as a whole. Perhaps worst of all, word got out that the companies behind the games in question, and perhaps the one behind Age of Wonders III in particular, were receiving complaints and being boycotted as well.
The actual effects of the protests and the boycott didn’t have to be that significant. Their proposal would have needed to be based on hard data proving an increase in sales, and likely also on the improved image the publisher will benefit from thanks to GOG.com’s community. However, any major publisher they’d approach was likely to look at the situation as being asked to to give up on something they firmly believe in, namely DRM, on very short notice, for a distributor obviously in the middle of a war with its own customers, and knowing that their image will be tarnished and their sales may actually drop as a result. The extent of the potential damage wasn’t relevant, what mattered was simply that significant immediate benefits were unlikely.

As such, their risk hadn’t paid off and the deadline was quickly approaching, so they needed another story, something else to cling on to, and what better way to find it than by returning to the community and enforcing its strength? By backing down in front of us so quickly, they send the message that we, the customers, may be stronger than the publishers when enough of us stand united, and the support we’ll once again offer them thanks to this new change of plans will make it clear that we’re once again marching together.
So they finally got their story, and likely a better, more relevant and possibly more accurate one than what they were initially aiming for: They’re still spearheading a revolution, still battling to make a rotten industry accept fair practices, and they truly have a strong “army” behind them, an “army” which has just proven itself to be even more powerful than they are alone. Those who scoffed at them so far will need to think again.

II. Analysis: What actually changed and what does it imply?

To get this out of the way first, their plans to introduce “local pricing” have been turned into an actual improvement by adding choice. The way the announcement was worded meant that there was a significant amount of doubt about this at first, but the matter was later clarified and we now know that the users who’d have had different fixed prices forced upon them for all games under the old plans will be given the option of paying either those new fixed prices or the standard ones, in US dollars. Of course, this still makes it likely that only a relatively small number of users will actually benefit from the change, the best option having been for GOG to accurately convert the USD prices into all the currencies they’ll be able to accept at least daily and allow all users to choose the one they want to pay in, but at least it now seems certain that nobody will end up paying more.
It should be noted that many of those who reacted vehemently likely perceived these “local pricing” plans as a far worse slap in the face than allowing regional pricing for a certain number of games, this being a good part of the reason why the letter meant to clarify matters only made things worse. It was a situation that absolutely needed to be addressed, because otherwise it’d have triggered renewed reactions the moment people would have seen the initial plan become reality, so GOG didn’t exactly have the option to simply try to wait out the storm. Based on some messages posted during this time, it’s also possible that they never even meant to, the fact that they didn’t intend to allow this choice from the beginning being perhaps no more than an error of judgment, albeit a major one.

What’s interesting to realize is that making “local pricing” optional may have defused the situation enough to allow them to wait it out, if they wanted and could afford to do so. The most determined protesters, such as myself, would have taken this and thrown it right in their faces as another attempt to take us for fools, and each new release that would have been regionally priced, so each success according to the strategy they had set for themselves at the time of the initial announcement, would have carried a risk of renewed complaints and protests, yet I think enough would have fallen for this old and frequently used trick of announcing something terrible before taking a step back in order to make people believe that something still clearly worse than the previous situation is actually an improvement to allow the situation to become manageable for GOG. However, and thankfully, they did not stop here.

To explain what will happen regarding regional pricing, in case somebody somehow ended up here without reading or without understanding the recent announcement and the clarifications posted after it, GOG.com will not actually return to enforcing their flat price principle, but they will cover the entire difference for the users who will end up paying more than the standard price due to their location. At the moment, they will do this by offering said users $5.99 and $9.99 gift codes to roughly make up for the difference, even exceeding it slightly, but later this year, as soon as they will implement the system, they will offer the exact amount back as store credit, which will obviously be far more useful and valuable than the codes. This ensures that users will not actually pay more for such a game, as the additional amount will count as being paid for the other games they will redeem or buy with the codes or credit, but at the same time it leaves the door open for publishers who so far refused to sign digital distribution deals with GOG because they rejected regional pricing.
Of course, precisely why they chose this route is up for debate and I have speculated about this issue above, but what’s obvious is that they picked the option that will cause them the most financial losses in order to appease both the publishers and the users as much as possible. Unfortunately, this means that publishers will have no reason to try to move away from the rotten regional pricing model, because GOG is not currently forcing them to cover any of the loss, and I would have definitely felt much better if they’d have promised to never accept any other game that uses this model after these three that they had already signed contracts for. At the same time, at least if the promised store credit will be usable to purchase any other games, including during sales, I do believe that users will no longer have a real reason to boycott or protest against GOG, as they make me feel that they took it upon themselves to continuously apologize, through deeds instead of mere words, for their ongoing betrayal of the flat price principle. If we’re to ever get rid of this rotten practice, however, the games that will be regionally priced, as well as their publishers, ought to be boycotted individually.

Before moving on to my suggestions, I’d like to also address some frequent concerns some users have expressed after this new change of plans, starting with those referring to the games we won’t see on GOG.com solely because of this. My one clear answer whenever that issue is brought up is that the only games we won’t see as a result of this are those that shouldn’t be purchased legally, which also goes for those we’re not getting due to GOG rejecting DRM. In fact, since they did not even shut that door by completely rejecting regional pricing once again, some of the games we will see will be in that category as well, so there is absolutely no reason for concern about what GOG.com won’t be able to obtain because of this. There are ways to obtain DRM free digital copies of games without paying for them and those methods should be used if you are simply interested in playing such a game, because the publishers and developers that enforce unfair practices shouldn’t be encouraged.
As for the fact that GOG.com may actually end up losing money for each sale of a regionally priced game to customers living in regions where the price is higher, possibly to the point of endangering their very survival, it should be noted that they wouldn’t have made it this far if their business sense would have been that poor. Yes, Trevor Longino initially calculated that they currently lose $2 for each copy of Age of Wonders III sold to a client living in the European Union even without considering transaction fees, but he later admitted that his numbers were wrong and they’re in fact very close to breaking even. That more or less matches my own calculations, which I don’t claim to be perfectly accurate but are definitely more so than his, and which result in something between a $1 profit and a $2 loss in that scenario, depending on the exact taxes and fees that apply, since that result does take transaction fees into account as well. However, even if they do take the worst loss, $2 per copy sold in the EU, they still earn far more than that per copy sold elsewhere, so they still make a profit out of having such games in their catalog and nobody should worry about them going bankrupt as a result. Though, of course, if such worries help convince some to avoid buying such a game, that’s even better.

III. Suggestions: How do we make the best of this?

Of course, I personally continue to firmly believe that games with regional pricing should not be on GOG, regardless of the compensation offered to those who’ll need to pay more, and maintain my initial proposal of at least creating a separate site for them instead, in case CD Projekt is so desperate to distribute them anyway. However, since the decision has been made to accept them under terms that for the moment I find tolerable, the first suggestions I want to make deal with choosing which such games ought to be selected and under what terms and conditions. After all, the offer they’re making, despite any calls to boycott such games, is likely to ensure a greater number of units sold without lowering the publisher’s profit per unit, so GOG.com will likely be in a position to refuse distribution deals offered to them by publishers who advocate this pricing model instead of needing to seek them out.
First, it’s probably safe to say that, as an exception to any other rules, games with at least ten thousand votes on the wishlist may be added as soon as possible if the stumbling block has somehow been regional pricing so far. Considering the titles on that list, I find this prospect unlikely, but I’m adding this here just in case there are any in this situation, because it’s clear that enough people want to purchase them legally and then it’ll be up to them to decide whether the terms are acceptable or they’ll choose to boycott them and wait for the publishers to give up on this pricing model instead. Once again, I strongly advocate the latter choice, however, because otherwise the situation will never change.
Otherwise, I think adding any game that uses regional pricing and has less than ten thousand votes on the wishlist should be subject to a community vote. These polls may run for a significant length of time or they may be very brief, even running for a single day, depending on the circumstances, but there shouldn’t be more than one running at any one moment. In addition, and regardless of the number of votes it has on the wishlist, whenever the contract for such a game comes up for renegotiation and the publisher refuses to eliminate regional pricing, the community should be able to vote yet again, deciding whether the new deal, whether or not it is in any way different from the old one, is acceptable or they’d rather see the game removed until the publisher will make a better offer, at which point there should be another vote, though these repeated votes probably shouldn’t count against the limit for simultaneous polls.
Games more than two years old which will have to use regional pricing if added should only be considered if they have at least one thousand votes on the wishlist, while for newer games I’m suggesting implementing a variation of the terms mentioned in my original proposal, referring to creating another site for games with regional pricing: If those games will be allowed on GOG instead and they’ll still use regional pricing two years after they were added to the catalog or three years after they were originally launched, whichever comes first, there should be a vote deciding whether the community finds it acceptable or they should be removed instead, regardless of how much time passed since the last poll caused by a renegotiation. Any game removed as a result of a poll but which would otherwise meet the requirements can of course be added again as a result of another, if the publisher will make an offer that’ll be better than the previous one.
Of course, there is a risk that all polls will have a positive outcome due to all the people who aren’t affected by regional pricing and simply don’t care about the principle itself, so I would also suggest a higher threshold for new additions, such as two thirds being in favor, with a simple majority being sufficient only to keep existing games. Some restriction as to who’ll be able to vote should most probably be implemented as well, such as only giving this right to users who have an account for at least three months, have posted at least one message on the general forum and have a positive reputation, though the time requirement may be reduced to a single month if they have made at least one purchase. In addition, it’s clear that votes should be weighed according to how the users will be affected by the pricing model, and I’d suggest a weight of one for those who’d end up paying less, two for those who’d be paying the base price, and three or four for those who’d be paying more, possibly having these two values as separate tiers reflecting the actual prices, in case there would be significant differences between the regions that would need to pay more.
All of this should obviously allow GOG to add any games they are willing and able to add, regardless of pricing model, as long as the community will actually desire said games. However, the polls and the limits ensure that such games will not be added too quickly, but instead perhaps trickle into the catalog, and also that adding them will not necessarily cater to publishers’ demands indefinitely, but only offer them a gradual path towards fairer pricing practices.

Moving on, I also have some suggestions aimed at using public image to put some more pressure on publishers to move away from the regional pricing model. The voting and the other conditions may also help, but they’ll be far from enough, both because each publisher will only be affected by them every so often and because, as I have stated above, the number of people who simply don’t care may make it too easy for nearly anything to be approved without this necessarily implying genuine interest or a true acceptance of the terms of the deal. As such, I think a system of badges should be implemented for games that use regional pricing, and this system should probably also reward the publishers who have found ways to allow GOG.com to sell their games without this pricing model despite the fact that existing contracts would have forced them into it otherwise.
I’m sure this could be done in many different ways, but the simple idea that came to me would be to use some sort of “medals” to display the publisher’s efforts. It could perhaps start with various models of bronze medals for those who would cover a part, but not all, of the compensation offered to those who’d end up paying more than the base price, different designs and/or varying amounts of visible “silver plating” providing a rough visible representation of the percentage covered. In this case, a silver medal would indicate that the publisher is covering the compensation in full, but still insists on regional pricing, regardless of the reason why this is the case, while a gold medal with a certain special design would indicate the fact that the publisher made great efforts to exempt GOG from existing contracts that’d otherwise impose regional pricing. A game that is available on GOG.com at a flat price without this having required special efforts on the part of the publisher may optionally be indicated by a plain gold medal, though this should be the norm and not necessary. Last but most definitely not least, a gold medal of a different design, perhaps enhanced with some other visual elements, such as laurels, would indicate games that are actually fairly priced, no users being charged more than the base price but those from poor countries being charged less, possibly with additional variations indicating the number of countries that benefit from such lower prices.
This would serve to offer a permanent visual representation of the efforts made by publishers towards adopting a fair pricing model, ensuring that all potential customers are aware of this whenever they look at a game’s page, or perhaps even whenever they see the title anywhere on the site, since smaller versions of the images could be displayed in most, if not all, places. As such, it would offer users far more options to “vote with their wallet”, showing them how much each publisher is willing to compromise, which is information that’d be extremely difficult, if not impossible, to obtain otherwise. In effect, this would reward publishers who are willing to make an effort, offering them an incentive to even take gradual steps if they are currently unwilling or unable to go all the way, knowing that even those steps will be noticed and may translate into a better public image and possibly better sales.

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