Valve: No, Our Gaming Anti-Cheat System Isn't Tracking Your Voracious Porn Habits

from the honesty-is-the-best-policy dept

Valve Software this week found themselves at the center of an Internet hissy fit after reports emerged claiming that the company was using their Valve Anti-Cheat System (VAC) to monitor the browsing activity of the company's user base. A Reddit post specifically claimed that Valve's VAC was digging through your DNS cache entries and sending the lot of them back to Valve servers hashed with md5. The post quickly escalated, with Reddit users suddenly jumping to the conclusion that Valve was just as bad as EA, and the company was covertly trying to monetize user browsing data using DNS records.

The entire kerfuffle forced Valve CEO Gabe Newell out of his fantastic nerd fortress to provide what was an interesting bit of insight posted to Reddit on how the normally very hush-hush system works. Newell noted that the company normally doesn't talk much about VAC because it simply provides cheaters with more ammo to hack the system, but he explained VAC wasn't perusing and storing DNS records wholesale, it was looking for very specific "calls home" made by cheat software:

"VAC checked for the presence of (kernel-level paid cheats). If they were detected VAC then checked to see which cheat DRM server was being contacted. This second check was done by looking for a partial match to those (non-web) cheat DRM servers in the DNS cache. If found, then hashes of the matching DNS entries were sent to the VAC servers. The match was double checked on our servers and then that client was marked for a future ban. Less than a tenth of one percent of clients triggered the second check. 570 cheaters are being banned as a result."

According to Newell, this particular effort lasted all of thirteen days before cheat developers found a way around it. The CEO proceeded to note that highlighting how sneaky VAC is in a somewhat sinister light is a form of "social engineering" that's cheaper than trying to develop better cheats:

"Kernel-level cheats are expensive to create, and they are expensive to detect. Our goal is to make them more expensive for cheaters and cheat creators than the economic benefits they can reasonably expect to gain. There is also a social engineering side to cheating, which is to attack people's trust in the system. If "Valve is evil - look they are tracking all of the websites you visit" is an idea that gets traction, then that is to the benefit of cheaters and cheat creators. VAC is inherently a scary looking piece of software, because it is trying to be obscure, it is going after code that is trying to attack it, and it is sneaky. For most cheat developers, social engineering might be a cheaper way to attack the system than continuing the code arms race, which means that there will be more Reddit posts trying to cast VAC in a sinister light."

The CEO insists that the Half-Life developer is entirely uninterested in tracking your interest in busty vixens. While the cat and mouse aspect of the story was pretty fascinating to watch, it's also a nice, all-too-rare example of how quickly issuing a clean, honest statement without assuming your customers are stupid can completely defuse a public-relations minefield.

Filed Under: anti-cheat, gabe newell, steam, vac, video games
Companies: valve

Game Developers Concerned About A Potentially Closed Windows 8

from the the-gates-are-closing dept

A couple of years ago, we highlighted a story that asked the question, "What if Microsoft Had To Approve Every App On Windows?" At the time, this was a purely hypothetical experiment to highlight some of the weaknesses inherent in a closed platform such as the iPhone. Little did we know at the time, such a scenario might be coming to pass. Microsoft has been talking up its latest operating system, Windows 8, for a while now trying to drum up excitement for its bold new look and direction. Yet, some game developers are taking a step back and looking at the broader direction Windows seems to be going here.

Gabe Newell is one of those developers. In an interview at the Casual Connect conference, he questioned the move to a more closed ecosystem for Windows 8.

In order for innovation to happen, a bunch of things that aren’t happening on closed platforms need to occur. Valve wouldn’t exist today without the PC, or Epic, or Zynga, or Google. They all wouldn’t have existed without the openness of the platform. There’s a strong tempation to close the platform, because they look at what they can accomplish when they limit the competitors’ access to the platform, and they say ‘That’s really exciting.’

We are looking at the platform and saying, ‘We’ve been a free rider, and we’ve been able to benefit from everything that went into PCs and the Internet, and we have to continue to figure out how there will be open platforms.’

Here Gabe states that many game companies, not just Valve, would not be in existence were it not for the openness of Windows in the past. Now that this openness is threatened, his company is looking at alternative operating systems. This is one of the drivers behind Valve's recent push toward Linux compatibility.

The big problem that is holding back Linux is games. People don’t realize how critical games are in driving consumer purchasing behavior.

We want to make it as easy as possible for the 2,500 games on Steam to run on Linux as well. It’s a hedging strategy. I think Windows 8 is a catastrophe for everyone in the PC space. I think we’ll lose some of the top-tier PC/OEMs, who will exit the market. I think margins will be destroyed for a bunch of people. If that’s true, then it will be good to have alternatives to hedge against that eventuality.

If you think about it, he is right. Take a look at the original marketplace for iPhone applications. When the iPhone App Store was released, it was a closed platform. If you weren't approved by Apple you couldn't release your app or game on it. Even with the presence of web apps and alternative app distribution through jailbreaking, the system remains essentially closed for the majority of iPhone users who are not aware of or don't want to go through the trouble of using these alternative distribution channels. Can you imagine what the overall impact would be for something as widely adopted as Windows? Going back to that hypothetical question posted above, would Microsoft have approved Steam for release knowing it would compete directly with its own Games For Windows Live service?

Since Gabe raised this point, a couple of other developers have echoed his sentiment. In a tweet responding to Gabe's "catastrophe" comment, Blizzard's Rob Pardo stated, "not awesome for Blizzard either." Rob later clarified the statement by tweeting, "Yeah... more trying to say that if everything comes to pass that Gabe said it wouldn't be very good for us either."

Next during a Reddit AMA, Notch responded to a question about the future of indie game development with the following:

I hope we can keep a lot of open and free platforms around. If Microsoft decides to lock down Windows 8, it would be very very bad for Indie games and competition in general.

If we can keep open platforms around, there's going to be a lot of very interesting games in ten years, mixed in with the huge AAA games that we all love.

So not only is having a viable open platform ideal for large game companies such as Valve, but also the budding developers such as what Notch once was. If Windows were to close off in the same way that Apple has closed off the iPhone, many developers of not just games but other software may not be able to survive on the platform. Just as Valve is looking at moving to other platforms, those developers will follow suit. As more developers of games and software shift from Windows to other platforms, their users will potentially shift was well.

It will certainly be interesting to see where Microsoft takes Windows 8 in this regard. Is it willing to take a path so diametrically opposed to its own history and the growing desire of the public for more open platforms? As independent artists and developers continue producing and distributing their work outside gated pathways, can such a change be a viable business option?

Filed Under: closed, gabe newell, game developers, open, windows 8

Valve Tries To Charge People Based On How Likable They Are: Trolls Pay Full Price

from the perhaps-we-should-try-that dept

We've talked plenty of times about unique business models and experiments by Valve Software. it's latest experiment sounds particularly interesting, if perhaps difficult to pull off well. It appears that the company wants to try to charge jerks more -- but let likable people play free (story found via Slashdot). The specifics are a bit vague, but the plan is for the game DOTA 2. Valve's Gabe Newell has hinted at this:

"The issue that we're struggling with quite a bit is something I've kind of talked about before, which is how do you properly value people's contributions to a community?” he said, reflecting on a discussion he had with Develop last year.

Last year Newell told Develop that “the games industry has this broken model, which is one price for everyone. That’s actually a bug, and it’s something that we want to solve through our philosophy of how we create entertainment products".

[....]

“An example is – and this is something as an industry we should be doing better – is charging customers based on how much fun they are to play with.

“So, in practice, a really likable person in our community should get Dota 2 for free, because of past behaviour in Team Fortress 2. Now, a real jerk that annoys everyone, they can still play, but a game is full price and they have to pay an extra hundred dollars if they want voice.”

And the latest news is that they are going beyond this crazy idea into seeing what's actually possible:

“We're trying to figure out ways so that people who are more valuable to everybody else [are] recognized and accommodated. We all know people where if they're playing we want to play, and there are other people where if they're playing we would [rather] be on the other side of the planet.

"It's just a question of coming up with mechanisms that recognize and reward people who are doing things that are valuable to other groups of people."

I'm curious as to how exactly this would work. I think there are lots of community-based properties would love to be able to charge trolls more. However, this could be really, really difficult to work in practice, and create some problems, depending on what the overall goals are. It would be nice, of course, if you could come up with a perfect system to get rid of trolls, but distinguishing true trolls can often be much more difficult in practice than in theory.

Filed Under: dota 2, experiments, gabe newell, pricing, trolls
Companies: valve

Just As Valve Shows That You Can Compete With Piracy In Russia, Russia Starts Cracking Down On Piracy

from the so-that's-how-it-works dept

Bill Bliss was the first of a whole bunch of you to write in with a version on the story of how Valve has continued to show how to compete with free. This alone, isn't new. We've been covering these kinds of stories concerning Valve and its CEO, Gabe Newell, for years. There's a lot in this latest talk by Newell that repeats what he's said for years, but there are also some new experiments in there as well. Such as the following:

Newell: The easiest way to stop piracy is not by putting antipiracy technology to work. It’s by giving those people a service that’s better than what they’re receiving from the pirates. For example, Russia. You say, oh, we’re going to enter Russia, people say, you’re doomed, they’ll pirate everything in Russia. Russia now outside of Germany is our largest continental European market.

Ed Fries: That’s incredible. That’s in dollars?

Newell: That’s in dollars, yes. Whenever I talk about how much money we make it’s always dollar-denominated. All of our products are sold in local currency. But the point was, the people who are telling you that Russians pirate everything are the people who wait six months to localize their product into Russia. … So that, as far as we’re concerned, is asked and answered. It doesn’t take much in terms of providing a better service to make pirates a non-issue.

Now that's doubly interesting, because at the same time as we got this story, we also got another submission (anonymously) about how Russia has finally started cracking down on infringement by arresting a Russian couple who was caught distributing movies online. Assuming they're guilty, they certainly don't deserve any sympathy, but it does seem intriguing to see these two stories juxtaposed.

The entertainment industry has been pushing hard for Russia to crack down on infringement, insisting that there's no way they can make money in the Russian market. And yet, Valve is proving that's false. It's just that these other companies are incompetent, don't know how to adapt, and don't know how to provide a good service. If you do that, you can make a ton of money even if the products are available in unauthorized ways.

Filed Under: competition, gabe newell, piracy, russia, steam
Companies: valve

Valve Exec Explains How To Compete With Piracy

from the service,-value,-pricing dept

Last month, an exec at Valve Software noted that "Pirates are underserved customers" and said when someone realizes that, they also discover: "I can do some interesting things and make some interesting money off of it." It looks like the company is sharing some data to back that up now as well. A whole bunch of you have been sending in reports from Gabe Newell's keynote speech at DICE. Newell is the founder and managing director of Valve, and he provided plenty of reasons that show that "piracy" is not the issue at all: service, value and pricing can easily trump piracy.

He started out by pointing out something that we've discussed in the past: digital content is best viewed as a service, not a product. As a service, you focus on providing continual value -- and people are paying for that future value (which is a scarce good prior to delivery), rather than an infinite good already created. There's value in paying for that future (scarce) service, and it trumps paying for an abundantly available good.

From there, he noted that the reason "piracy" is doing so well is that the "pirates are ahead not just on price, but on service." In fact, he noted that since DRM decreases the service value for customers, it also tends to increase piracy, rather than decrease it.

Then, he showed how that combination of service and smarter pricing allowed the company to run experiments and make a lot more money -- competing quite successfully against piracy. The most stunning example: last weekend, the company ran an experiment with the game Left 4 Dead. It heavily discounted the price, and sales shot up 3,000%. And this wasn't just a case of building off a small base. The sales over the weekend were more than when the game launched.

In fact, it looks like a big part of the problem facing the industry is that they charge way too much for their products. Here are the numbers Newell shared from Valve's experiments with "sale" pricing:

• 10% off = 35% increase in sales (real dollars, not units shipped)
• 25% off = 245% increase in sales
• 50% off = 320% increase in sales
• 75% off = 1470% increase in sales

Newell then says when they decrease the price by 75%, they are making 15% more than when they were charging at full price -- though, I'm not sure how that math works out from what's stated above (I've been playing around with the numbers, and something is missing...).

Between all of this, it's pretty clear, yet again, that "piracy" is hardly the issue. If you provide a valuable ongoing service at a much more reasonable price, there's no problem at all. Once again proving that the issue is a business model issue, rather than a legal issue. It's too bad so few old school content providers are willing to recognize this, and quite troubling that some folks in our government are still missing this as well. It's going to lead to bad laws and even worse enforcement of the law.

Filed Under: gabe newell, games, left 4 dead, pc games, piracy, pricing, service, software, video games
Companies: valve