Craigd

EA Sued Twice More over Use of DRM Technology

Hi Seth,

not to quibble but the gamepolitics site was not only late in reporting the additional lawsuits...they also missed one. There are actually Four lawsuits aimed at Electronic Arts right now and potentially more to come. Full details of the lawsuits, including links to filings etc, can be found at

www.reclaimyourgame.co...

And last I checked, Spore was at rank 104 on Amazon.com in videogames. Also, you neglected to mention that the vast majority of those 2 million sales were on console versions that do not include the DRM. The DRM affected PC sales figures represent less than a quarter of the total according to NPD sales data. Some estimates showed over 500,000 illegal torrent downloads showing that not only does the DRM negatively impact sales, it also has no impact on curbing piracy at all. In fact, if you were yto visit those torrent sites and read the comments, many of them people illegally downloading Spore actually chose to do so as a direct consequence of wanting to avoid infecting their computers with SecuROM.

Many gamers believe that this DRM software is not designed to do anything about piracy, but is instead aimed squarely at preventing second-hand sales. The legality of this restriction has yet to be determined for Electronic Arts, but it is one of the causes of action in one of the lawsuits because the lawyers believe that EA is infringing the US copyright act by circumventing the doctrine of first sale which guarantees the right of resale for all products. The federal ruling in Autodesk vs Vernor showed that merely claiming that they are selling software 'as a licence' does not obviate the first sale doctrine right for consumers.

Shareholders ought to be alarmed that EA's CEO not only chose to implement a DRM technology that is a lightning-rod for legal action, and for customer revulsion and boycotts, which has no impact on piracy (except perhaps to encourage it), but also decided to respond to customer complaints by calling half of them criminals and the other half ignorant. John Riccitiello has done some good things for EA's product quality, but his publicly stated disdain for EA's customers is killing EA in the market of public opinion. And when a company becomes openly hostile to its customers what does history teach you about the earnings potential of its stocks?