DRM and Always-Online Video Games: Future of the Industry or Fatal Mistake?

With the recent debacle surrounding the launch of Simcity and the consistent rumors about the next generation Xbox requiring an Internet connection, DRM and forced Internet connections have become one of the hot-button issues of the year. While some gamers are opposed to the idea, developers claim it is necessarily for improved performance and to prevent piracy - it's too bad that the insiders don't seem to see it that way.

The most common way companies use DRM is through restrictive user agreements and encryptions that will prevent pirated copies of games to be used. By having a game connect to the Internet and a developer's servers, those companies are better able to keep track of potentially pirated copies of games and restrict users' access to the game's internet functions, such as multiplayer. The next-gen Xbox would take this a step further, and have games allegedly be downloaded directly onto the consoles hard drive, and the disks will supposedly be watermarked so they will only work on one Xbox. That, combined with the always-online requirement that will shut down a game in three minutes without an Internet connection, should, in theory, make games harder to pirate.

When I asked a source familiar with the world of piracy (who spoke under the condition of being anonymous), he believed that no matter what, this type of DRM will not help prevent piracy, and will only hurt regular gamers.

"I personally think that always-on DRM for consoles is stupid. It's not going to work like it does on PC and even then both Steam and Origin have offline options. If they gave the option to just activate the game online once then you can play it when you want to then fine. But to have it cut off when your net goes out just doesn't work. I live next to a major city and my Internet goes out at times and if my game gets locked out because of something random I'll be pissed. Plus it's not going to stop piracy at all. People will find a way around it in a week. Ubisoft finally learned after failing for a few years."

DRM and always-online games have made headlines after EA forced Simcity players to connect to the Internet even for the single-player mode for the game. This caused the game's servers to crash spectacularly, and it took weeks for the game to be able to implement all the features that were suppose to be available on day one. Blizzard faced a similar problem when they released Diablo 3, but it seems EA didn't take a lesson.  When I asked industry veteran Manny Asencio, from Marvel Heroes developer Gazillion Entertainment, about DRM, he had this to say on the subject:

"Well, why don't we ask EA how that worked out for them and their spiffy new release of SimCity? It might very well have cost them both a Technical Director and a CEO. My personal opinion is that a required connection is a step in the exact opposite direction the market wants to go. And a good marketer is always someone pointing and waving in the direction that the people WANT to go, not against the tide."

It appears that requiring gamers to go online as a form of DRM is a hotly-contested issue among both gamers and those in the industry. It is doubtful that Microsoft would change the next-gen Xbox so soon to its release (if the rumors are to be believed), so gamers will find out soon if the first ever console to require an Internet connection will be a success or not very soon. 

Is the looming threat of piracy too dark for developers to be able to see straight? Or is this another board-meeting pushover manuever? We'll let the market decide, but you can leave your thoughts in the comments below.