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I assumed (apparently wrongly) that all games on GOG were DRM free? I started the game up and I got a notification stating the my "key" was invalid and I had to purchase the title. Seems that the game is calling home to authorize a key, something I thought GOG would have been against.

I have already submitted a request for a refund, this title should not be on GOG until the need to authorize the title online is removed.
GOG generally seems willing to make an exception for multiplayer access keys. The problem with DEFCON is that it is primarily multiplayer. Some other games like STALKER or Neverwinter Nights require the key for multiplayer server access but function without it. This list may be of interest to you.
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Noxinecrotic: I have already submitted a request for a refund, this title should not be on GOG until the need to authorize the title online is removed.
Good, because you're right, the current situation isn't acceptable. It's slightly more complicated than you realise, but still needs fixing.

Explanation here: http://www.gog.com/forum/general/defcon_key_revoked/post37

In summary, GOG actually installs the game 'pre-activated' and the game works fine without any internet access. The problem arises because the developer revoked the key GOG used, so as soon as the game gets access to the internet it de-activates itself. GOG and the dev urgently need to sort this out between themselves, either the dev giving the GOG key special privileges or giving GOG a version that doesn't need a key.
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ZaineH: GOG generally seems willing to make an exception for multiplayer access keys. The problem with DEFCON is that it is primarily multiplayer. Some other games like STALKER or Neverwinter Nights require the key for multiplayer server access but function without it. This list may be of interest to you.
Actually, you're missing the point. When GOG games require keys, they always install pre-activated with a generic key and should run in single player without it. The multiplayer key should only be required for multiplayer, but in this case it's required to play anything other than a demo. That is DRM and needs fixing.
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Noxinecrotic: I assumed (apparently wrongly) that all games on GOG were DRM free? I started the game up and I got a notification stating the my "key" was invalid and I had to purchase the title. Seems that the game is calling home to authorize a key, something I thought GOG would have been against.

I have already submitted a request for a refund, this title should not be on GOG until the need to authorize the title online is removed.
Yes I agree with you. I believe it is now sorted in the fact you can be totally offline, install it and use the key they give you to play SP offline.

But yes, it is an issue. It all stated when introversion revoked their key. I used to be a big fan of them.
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styggron: But yes, it is an issue. It all stated when introversion revoked their key. I used to be a big fan of them.
Actually, the problem was there the whole time, we only realised it when Introversion revoked the key.
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styggron: But yes, it is an issue. It all stated when introversion revoked their key. I used to be a big fan of them.
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SirPrimalform: Actually, the problem was there the whole time, we only realised it when Introversion revoked the key.
True. Sorry yes I stand corrected. Like I said, I used to be a fan of introversion.
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styggron: True. Sorry yes I stand corrected. Like I said, I used to be a fan of introversion.
Sorry, I was just being a pedant.
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styggron: True. Sorry yes I stand corrected. Like I said, I used to be a fan of introversion.
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SirPrimalform: Sorry, I was just being a pedant.
Not at all. I would say you were being accurate. :)