Nvidia’s GeForce Now is becoming an important test for the future of cloud gaming

• March 2, 2020

Nvidia’s GeForce Now took yet another hit this weekend with a new publisher pulling its software from the cloud gaming service. That’s because GeForce Now, unlike competing services like Google Stadia, lets anyone who purchases a digital game on Valve’s Steam marketplace reinstall it on a virtual machine and play it using its cloud platform.

That doesn’t sit well with some game publishers and developers, including Raphael van Lierop, the game director and writer of indie hit The Long Dark from his company Hinterland Studio. Lierop pulled his game over the weekend, displeased that it was included in the paid version of GeForce Now without his explicit permission.

We’ve seen this before; Activision Blizzard and Bethesda have pulled their games from GeForce Now, presumably for similar reasons. I say presumably because neither of those giant publishers has explicitly stated why they did so, and just what about GeForce Now they find dissatisfying. In Activision Blizzard’s case, there was a licensing dispute we are aware of, and there’s the matter of Nvidia not re-acquiring permission to use its titles once it began charging $5 a month for the public trial of GeForce Now early last month.

The publishers have given vague statements, leading many to surmise that it may be due to the lack of a revenue split or the fact that big game publishers would rather charge customers a second time for a separate license to play a game on a cloud gaming service, regardless of how it’s structured. Stadia, for instance, charges customers for games even if you own them on Steam already, and a lot of big publishers have signed up under those terms. But again, these are assumptions. The developers haven’t spoken at length about the disputes, and Nvidia has politely obliged when it comes to removing games because its service appears to depend on the goodwill of participating developers.

But van Lierop, on the other hand, is the first self-publishing indie developer to jump publicly into the GeForce Now controversy, and he stated plainly what his issues are. “Sorry to those who are disappointed you can no longer play #thelongdark on GeForce Now. Nvidia didn’t ask for our permission to put the game on the platform so we asked them to remove it,” he wrote on Twitter over the weekend. “Please take your complaints to them, not us. Devs should control where their games exist.”

Later on, van Lierop wrote, “Today’s world is getting complex for devs, with lots of platform changes and shifts to streaming, so devs have to be able to plan a strategy for how their games will appear and where, as a means of running a business. All the platforms acknowledge this.” He said Hinterland would reconsider putting The Long Dark on GeForce Now in the future, but right now, he doesn’t like the current situation.

This argument confused many onlookers, especially those who currently use or are considering using GeForce Now. Why would a game developer get to dictate the hardware its games are played on, and why would Nvidia need permission to make games a customer has already purchased on Steam available on a virtual machine? These are not dumb questions. In fact, the answers are critical to understanding the ongoing controversy with GeForce Now and how important it will be the future of the cloud gaming sector. The thread Lierop inadvertently kicked off by stating his plain thoughts on the matter is actually quite insightful, and I recommend everyone read it to get an even better understanding of what’s going on here.

Effectively, there are two sides to the controversy — one in favor of the game maker and one in favor of the customer — and both have merits. For game developers and publishers, a digital game is not the same as a physical good you can do what you want with, including resell it. A digital game is a license to use a virtual good in a way stipulated by licensing agreements, both from the maker of the game and from the marketplace that sells it, in this case Steam. (This, of course, is ignoring the fact that physical games also have these license agreements so you can’t, say, burn one to a Blu-ray and sell it on eBay. You can, however, sell a physical game back to GameStop and that is legal.)

A license to play a game does not mean another company can redistribute it, even if you personally bought the license. That’s what happening with GeForce Now, and it’s important to understand that. Nvidia isn’t just renting you a virtual machine. It’s renting you a virtual machine and then redistributing a video game sold by Steam under agreements that do not include Nvidia, at least not yet. It is not just a hardware rental service, and pretending it is one is disingenuous.

Nvidia is effectively injecting itself into the sale and distribution of a piece of software. We’ve seen this time and again with companies that have hoped to similarly disrupt distribution, from failed over-the-air broadcast TV streamer Aereo to theater subscription plan MoviePass. It rarely works, because the companies either face steep fees out of fear of getting sued, their business plan is unsustainable, or because they go ahead without permission and get litigated into the ground. Strong-arming a new distribution model into reality is expensive and adversarial, and only a few companies, like Apple with iTunes, can successfully say they pulled it off.

So even if it doesn’t seem Nvidia is doing something similar here, legally it is. This is precisely why Steam runs its PC Café Program, a bulk licensing service so gaming cafes can acquire the rights to host software that its customers may have already paid for. This is also why many developers choose to use their own PC launchers; doing so affords them freedom to control how the game is distributed even more tightly. That’s important for things like piracy, copyright infringement, and cheating, but also for protecting the intellectual property from being redistributed in ways the company doesn’t like.

One good example of a downside of GeForce Now is mobile ports. What developer would put resources toward developing a competent mobile port of their game, with hopes to resell it to a new audience to recoup investment on the port and make some profit, if GeForce Now is available on mobile (it’s already on Android) and completely obviates the need to pay for the mobile version? A service like GeForce Now complicates that for developers, and as van Lierop points out, “the most customer-friendly thing you can do as a dev, is run a sustainable business so that you can support your game and your customers into the future.” He goes on to say, “Controlling your own content is key to that.”

Another big issue is that GeForce Now complicates exclusivity agreements. How can you ensure an exclusivity agreement on, say, console or through Epic Game Store if the game can be easily reproduced through GeForce Now on any screen? Cloud gaming with absolutely no restrictions would start dictating an important aspect of developers’ financial future.

Nvidia doesn’t dispute its role here. It published a blog post last month tackling the issues head on, writing, “As we approach a paid service, some publishers may choose to remove games before the trial period ends. Ultimately, they maintain control over their content and decide whether the game you purchase includes streaming on GeForce Now.” Nvidia said it expects these game removals to be “few and far between,” but it acknowledges the developers’ right to choose whether to participate.

Now, here’s the counter argument, from the consumer perspective. Why would any company take issue with GeForce Now? What developer wouldn’t want to support this? It seems like a no-brainer, right. If the customer has already purchased the game, let them play it wherever they want. And if they don’t like it, well, Nvidia shouldn’t need their permission anyway. As one commenter on Twitter put it, “I would ask why should a studio be allowed to dictate where I am allowed to install and play a game I have purchased.” That’s a sound argument.

This argument is also not as complicated as the other side. It is undoubtedly much more consumer-friendly to let someone play a game they’ve already purchased on whatever screen they choose. In an ideal world, Nvidia wouldn’t need permission and developers wouldn’t take issue with it in the first place. Cloud gaming would just be a new way to enjoy the games we already paid for.

But this ideal world also stipulates that things like piracy don’t exist, or that companies never take advantage of one another or try to drive their competitors out of big business. It is also a world that ignores how complicated and potentially fraught gaming distribution is about to get, when cloud gaming and subscription services combine (hello xCloud) into what very well may be the future of how all video games are played, regardless of the hardware they run on.

In this world, if developers don’t keep tight control over their intellectual property and how it is distributed, they will lose the ability to control their destiny. That’s scary for creators whose financial well-being is determined by how many copies they sell. It’s unfair to assume that opening the floodgates for third-party companies to do whatever they want with your software would magically work out well for all parties involved. It is well within van Lierop’s right not to be a guinea pig in that experiment.

That’s not to say that this is the cloud gaming future we want. It’s not. Having to buy games twice would be a real shame. Having to rely on subscription services to be as well-funded and robust as Xbox Game Pass, which is financed by one of the world’s most successful software companies, to ensure developers can get paid in the future isn’t a great situation, either. A world where a developer goes out of business because they can only sell a limited number of copies on Steam — due to cloud gaming making it available everywhere else for free — is not what anyone should want.

Cloud gaming promises to make any piece of gaming software available at all times on any screen, and that remains a very exciting prospect. But it has a lot of economic complexity, and the only way that gets ironed out is through negotiation and by both consumers and platform providers understanding what’s at stake. Right now, Nvidia’s “ask for forgiveness, but not permission” strategy is irking game developers, and for good reason. Until this is no longer an experiment, permission should be required.

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Nvidia’s GeForce Now took yet another hit this weekend with a new publisher pulling its software from the cloud gaming service. That’s because GeForce Now, unlike competing services like Google Stadia, lets anyone who purchases a digital game on Valve’s Steam marketplace reinstall it on a virtual machine and play…