You know the sort of thing – executive comes up with a harebrained idea that looks like it’ll save money in the short term, but only by pissing off (if it doesn’t involve sacking them outright) staff and customers in a way that will, ultimately, cost the company money. Executive gets a bonus, moves on to the next company. Original company loses money, has to undo the whole thing (for which replacement executive gets their own bonus).
Take this utter stupidity from the games arm of Sony, this week:
going forward, all Sony PS3 titles that have a multiplayer component will also contain a PSN Online pass code that you’ll have to input in order to play online. Basically if you buy a PS3 title used you’d better factor in an additional $10 if you want to play multiplayer…
Let’s recap. In competition with a much better online service for which their competitor, Microsoft, charges a $50/year premium, where Sony’s customers have trouble finding other players to play with – Sony’s brilliant idea is to leave their service as second-rate as it already is and lock people out of it.
Thereby further reducing the number of people with whom paying customers can compete online. Thereby making their product even less attractive to the people who are choosing between the two competing console systems
Oh, whilst also cutting the value of games for purchasers who then can’t onsell them. And who can’t play their copy online with their own family without buying another “pass code”.
End result: more customers going to the competition, a loss that will far outweigh the small number of people who’ll actually pay the ridiculous $10 charge. Shareholders lose money, wish they hadn’t paid that executive the undeserved bonus.
And the cycle continues.
ELSEWHERE: EA has had the brilliant idea, whilst trying to grow its competitor to Valve’s far-superior Steam online digital distribution service, of banning customers’ accounts if they play on a non-official server. This isn’t just stopping them playing that game online – it’s stopping them playing any game they’ve purchased digitally from EA using EA’s digital store.
That’s right – if you do something EA doesn’t like, it thinks it can block you from all the games you’ve paid for.
That’s DRM. You buy something, and they can take it away at their whim.
And they wonder why they lose customers to piracy.
Jeremy, I think you’d like Cambridge economist Ha Joon Chang’s ’23 Things They Don’t Tell You About Capitalism’. Shareholders are the least committed stakeholders in any corporation. He does a lovely incisive demolition of the quite historically recent idea that shareholders are the right people to be guiding or expecting to be guiding the course and actions of corporations.