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> Video game companies still remember when they owned the arcade machines and players were required to constantly insert money into the machines to keep playing.

I know Sega and Namco operated some arcades, but mostly companies sold arcade machines and operators ran them. Coin boxes didn't connect to the developer except that games with good earnings sold well.

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A per-play revenue share is not uncommon in some markets, especially for games with frequent updates or more complicated network features.
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This is why so many machines now have accounts and global saved progress. It provides actual value for the player, to be able to pick up their saved progress (e.g. on a rhythm game with thousands of songs on it), but it also means the arcade is beholden to the game manufacturer for an expected feature, and pays for that on an ongoing basis.
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Even private servers doesn't quite solve the issue. Minecraft is an example where you can run the server but it requires clients to login to the microsoft account. I think you can still bypass the check on the server but clients have to be cracked or previously authorised for offline play which only lasts for a certain timeframe. So Microsoft can take away the ability to play minecraft despite the game server binary being available.

Whereas a game like Arma 3 has its own dedicated servers and has no such login requirement so theoretically you could still play that in 50 years time, but that might still depend on Steam DRM.

We have a lot of client side controls right now on DRM and logins which make the dedicated server only part of the problem.

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With Minecraft, there isn't even a need for Microsoft to do anything. The authentication servers experience regular periods of downtime/inaccessibility, making you unable to join any server, even if you have already launched the game and have joined a server in that session before. It's extremely frustrating.
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It's not just the arcade machine implementation. The owners of these companies want to go all the way and move everything to data centers so they can rent compute time, similar to the idea of the time-sharing days of the 60s.
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The model for DLC that's present, carried as patch updates, but unlocked for an additional fee annoys me.

However, allow me to ignore my opinion for a moment and play the Devils Advocate for a thought experiment.

What if, cosmetics and other unlockables (which should be part of the base gameplay) were instead evaluated on other people's computers. That is, rendering client side, authentication for use also server side.

Hats / Skins / Other -- Render some 'humiliating' cosmetic if authentication fails. Circumvention would require compromise on all client devices.

Core game assets -- Levels / 'mods' that require auth a similar path, except client/server verification mismatch. Do note the license server as a possible cause.

At end of life all of those checks should be patched in a final release to fail enabled. No more auth server, archive mode releases all use.

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