Always online DRM. Three words (or two words and an acronym–whatever, youre not my English teacher) that strike fear into the heart of game enthusiasts everywhere. The concept that a game must have a live internet connection at all times is one that gamers hold a special level of contempt for, and for a wide array of reasons: it limits the possible uses of the game, it excludes a portion of the audience, it almost entirely eliminates the option of future resale, it changes what the consumer wants to be a product purchase into a service purchase, it opens the door for all kinds of unwanted backdoor antics like directed advertising and piecemeal DLC, as well as other customer-seller perversions that we probably have not even dreamt up yet.

The scourge of always online DRM tends to surface its head every now and again–obviously the biggest recent offense was with EAs largely botched release of the new Simcity game. Missteps galore will haunt EA and Maxis for years from Simcitys launch, suffering from the magnifying glass scrutiny that can only comes from a game whose fans span generations and bleed over well past the bounds of the average game enthusiasts. Simcity is a franchise that the people in your family who can barely turn on their computer know and love, so if you release a version that is crippled by its own protocols to the point of being nearly totally broken, people are going to notice.

Simcitys fiasco becomes all the more frightening while rumors and fear-mongering abound that the next generation of consoles is looking to impose its own version of online-based DRMs. Forums and Reddit threads abound with rumors and fears of always online consoles, and every time the same year-and-a-half old rumors resurface, the gaming community loses its collective minds, such as the backlash that followed a Kotaku article a couple of weeks ago. The article cites a pair of anonymous sources claiming that the last they heard, the next Xbox will not start games and apps without first pinging Xbox Live, and will default to network troubleshooting if it goes for three minutes without a ping. Essentially, if you want the next Xbox, you need an internet subscription. Whether you are okay with that or not, imagine that if you bought a new television, and you could not watch a DVD on it unless you had a cable subscription.

In the kind of idiocy that only mob mentality can inspire, handles everywhere went cold as gamers collectively flew off them. But just like on the playground, the kid that retaliates gets punished more than the kid who hit first, which is why the internet exploded after this piece of stupidity:

That is a Twitter conversation between Adam Orth, creative director at Microsoft Studios, and Manveer Heir, senior gameplay designer at Bioware. Since this conversation became public knowledge, Heir has come out to say that the conversation was a tongue-in-cheek goof with Orth, and that they badger each other this way often. Orth, for his part, has changed his twitter account to private since the gaming community called down the thunder on him.

The tensions have far from been defused, though. Orth started his sarcastic rant of people against always online consoles long before Heir started playing along, and at the end of the day, these are two representatives of the game industry (whether they want to be a visible face or not) who find something funny in an issue that is an obvious sore spot for the enthusiast community (i.e. their customers). Couple that with Microsofts so-far tight-lipped approach to the next Xbox, and it is not a stretch to see why the gaming community is so worried.

THE BUSINESS OF ONLINE

Look, we get it, or, well, some of us get it. From an industry perspective, there are a lot of advantages to pushing for an always online console. The most obvious advantage is in using game consoles as an in-road to consumer media adoption. The Playstation 2 and 3 were huge boons for DVD and Blu-Ray adoption, respectively, and game consoles as a whole are responsible for half of all Netflix Instant Queue traffic. It has long been an open secret that Microsoft would love nothing better to make the Xbox the lynchpin of the home entertainment system, a fact that sticks in the craw of many a gamer who wants Xbox to stay loyal to the folks who made the console a success in the first place. Dance with who brought you to the ball, right?

The gaming community is not wrong to be wary of always online consoles and DRM. More than 1-in-5 American homes are without an active internet connection, and that ratio is represented almost straight across for console owners who do not hook their systems up online (personally, I prefer to play games for review offline, so I can get a more accurate look at the game as it shipped). To suddenly abandon 20% of your market may seem like a disastrous maneuver from a business perspective, but remember which segment you are abandoning here–the rule of thumb for gaming sales online has long been 10% of the users generating 90% of the business, which means that the 80% of gamers with their consoles online are most likely generating well over 80% of the total business. So essentially we are looking at the top-10% of gaming consumers versus the other 90% (including assumably the vast majority of the 20% offline market), and those top 10% consumers are going to be barely affected by an always online console. In the end, console makers are likely only looking at less than 5% of total business loss (and probably more likely in the 2-3% range) by going with an always online console.

Now loss is loss, but loss becomes acceptable when you expand your market appeal to make up for it. Remember how Xbox wants to be the conduit for all your home entertainment? If Microsoft can bring in non-gamers, making their console an easy and inviting portal for consumers to access television, movies, and music from their couch, that 2-3% loss is going to turn around into an increase in a hurry. Remember, thats an if–Microsofts ability to permeate the consumer electronic markets has seen way more misses than hits in the past, but something (probably the success of the Kinect, sales-wise) seems to have encouraged them to pursue this route.

Viewed through the lens of Microsofts business plans, going to an always online format makes perfect sense. Now, obviously, that will not quench the fiery rage of most always online dissenters, who look at anything non-gaming related in a console as resources that should have been dedicated to gaming. Console developers want constant access, and gamers want to avoid the hassle. So whats to be done?

THE CART BEFORE THE HORSE

Lets take a moment to look at internet itself, since that is the sore spot here. Heims tongue-in-cheek rib during the Orth twitter conversation about developers living in internet heavy cities is not unfounded; tech companies flourish in tech heavy communities, and it gets real easy to take something you are constantly bombarded with for granted. Let me give you an example:

Not long ago, I worked for a manufacturing plant that decided to upgrade their ancient inventory system from pen-and-paper to a computerized database. The vast majority of the production floor workers were middle-aged or older, and worked at this company largely because the did not want to have to bother with computers. The administrative team, who all used computers daily, were responsible for the design of the new inventory system, and tried to make the interface simple, expecting a low-level of computer literacy from the users. But what the regular computer users considered simple was way off-target; the designers were expecting not-familiar-with-Office illiteracy, and what they got was what-is-a-double-click? illiteracy (seriously, I was asked four times in one week how to make the screen bigger). It took way more training than was allotted and redesigning the user interface to make the system remotely usable, pushing back the date for full-speed operation and slowing down production in the process, simply because people in a technology rich environment overestimated the permeation of a less tech rich environment.

I know that Puget Sound and Bay Area and Vancouver and LA and Boston have experts to tell them how behind the tech curve flyover states and rural areas are, but they cannot really understand it without living it. I realize you are probably bored of my personal anecdotes by now, but I grew up in a rural Oregon town, and I had a lot of friends growing up who not only DID NOT have internet, they COULD NOT have internet, and these were people who for their age and the era were extraordinarily tech savvy (some of them are well into development on their first indie game as I type this). They just happened to grow up so far in the boonies that they were out of service range of all local ISPs and cable providers. Interestingly, after I myself moved to the Puget Sound area, where most of my gamer friends considered their Xbox 360 to be their console of choice, I learned that most of my friends back home preferred the PS3′s less internet-centric culture–take that information how you will.

The point here is that there are large gaming and tech savvy portions of the country that will be left out in the cold by an always online console, not for lack of desire, but simple lack of availability, less availability than their market researchers going to really understand. Maybe the console manufacturers consider these people acceptable losses, but the people being passed over are going to have a hard time accepting the loss of these consoles. So what is the solution?

If Sony or Nintendo or Microsoft wants us to have always connected consoles, if EA or Ubisoft wants to verify our games every time we boot them up, if all these companies want to have a digital pipeline with which to shovel content down our throats 24-7, then there is just one thing for them to do: get out there, get vocal, and get Americans better internet.

Frankly it is a little sickening that this is not going on already. Internet service providers have been locking decent connections behind highly unnecessary price barriers for years, with no real incentive to either reduce subscriber fees or improve service, other than Google Fiber creating a genius demand for their own service by releasing it to very few communities. Technology driven companies should be lobbying for the public to have better, cheaper, freer internet than anyone–after all, they are in the greatest risk category if the main lifeline between them and their customers becomes bogged down.

If the technology industry would take a stand and demand better internet infrastructure, it would behoove themselves just as much as their customers, but it is also going to take a hairy set of cojones to march down that path and I doubt many companies are up to the challenge. Suppose Microsoft turns around and says, yes, Comcast and Time-Warner are pricing and data-choking Americans unfairly, and they want it to stop, but in response, Comcast and Time-Warner just block Xbox Live, and most of the country can no longer get their consoles online. Then we would have to see how many of Comcast and Time-Warner’s customers drop their subscriptions and from there the whole scenario turn into a thought exercise nightmare.

But I am an optimist, and at heart a capitalist. I like to think that everyone, ISP’s, tech companies, and customers, could all come together in each other’s best interests and find a happy medium, that internet can be cheap and accessible, and that problems like “always online” DRM and consoles could become moot points. But the ball is totally in the manufacturers’ and publishers’ courts, now–the public has spoken out about what they want in their consumer goods, now it the time for the big guys to spill the beans so we can start to seek out an amiable solution.