Game piracy

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Games are a form of intellectual property, like books and film, that, once they have been created, can be copied. Copying a game is a lot cheaper than buying it because the copier is making no contribution to the cost of making the game in the first place. But, obviously, if everybody copied there would be no revenue for games makers and there would be no games.

There are two main forms of game piracy. There is piracy by the individual game player, these days usually over the internet but in the past often by copying using physical media, this is what this article is about. And there is commercial counterfeiting where a professional criminal mass manufactures the game, which is a different matter.

The profile of pirating different platforms is always different because of the technology, the demographics of the users, the state of the market at a given time, relative costs and a number of other factors. What is for sure is that when piracy takes hold on a platform many hundreds of thousands (sometimes million) of copies of a game are made. The huge scale of this theft deprives the publisher of vast amounts of legitimate income and quite obviously harms the game development industry. To think otherwise is to be in self denial.

Of course it is very obvious that not every pirated game is a lost sale. This is because simple price elasticity of demand tells you that far more units will be consumed at a lower price than at a higher price. Yet apologists of piracy use this as an excuse for their behaviour. They try and make out that piracy is a victimless crime. But obviously they are wrong because potential sales are being lost. And the lesson of history is that when piracy on a given platform gets out of hand then it causes huge damage to the game market for that platform. This is common sense really.

The Old Days

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The first mass market game machine in the UK was the Sinclair Spectrum. Software was loaded via a tape interface so games were sold on audio compact cassettes. These were very, very easy to copy from a technical point of view. Especially when dual cassette players proliferated and became cheaper. Schoolyard and club copying proliferated on a massive scale and badly hurt the game publishers. Look at a list of games and you can see the many publishers that went out of business or were forced into mergers. A whole range of technical anti piracy solutions were introduced including, for instance, Lenslok. The publishers would not have gone to the huge trouble of these technical solutions if copying had not been a great threat to their businesses. Another solution was budget games, initially at £1.99, then at £2.99, prices at which they were not worth copying. That these budget games proliferated and came to dominate the market is yet another measure of just how bad the piracy was.

I was a director of the game publisher Imagine software, which went bankrupt in 1984, largely because sales came to an abrupt halt when piracy took off. (Imagine had other problems that made it especially vulnerable to a large and sudden drop in revenue.) Another publisher that was badly affected was Ultimate Play The Game (which later morphed into Rare), one of the most highly regarded publishers of games for the 8 bit home computers. Their initial response to the huge rise in piracy and drop off in sales was to raise prices from £5.50 a game to £9.95. The idea being that if customers paid more for a game they would be less inclined to give away copies. However this didn’t work and they laboured on for just one more year after the demise of Imagine before switching their attention to the Nintendo Entertainment System, which did not suffer from piracy. Spectrum and other 8 bit computer owners lost out heavily as publishers put less and less resources into developing for their machine or quit entirely, as Ultimate did.

Then came the Commodore Amiga and Atari ST. Once again copying was technically easy so it was rife. Once again it was up to the publishers to come up with technical solutions. So a technology war broke out between the software publishers and the pirates. Measures would include copying in random pieces of text from the manual. The led to a huge amount of photocopying by the pirates until the publishers started using photocopy proof manuals. Obviously all this piracy made revenue generation difficult so the game publishing industry did not blossom in the way we see now. In fact piracy has often been cited as part of the reason for the downfall of these machines.

Consoles Arrive

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Then came the game consoles. From Sega and from Nintendo. They had their games held on chips inside cartridges so they were technically difficult and expensive to copy. So piracy didn’t happen anywhere near the massive extent that it had on the Spectrum, Amiga and ST. So the game industry blossomed into what we know today. This was the time when many of the great key franchises of our industry were established.

Cartridges were expensive to make so eventually the hardware manufacturers returned to recordable media. This way they could make vastly larger games with far lower production costs. The first to do this was the Sony Playstation (PSX, later PS1) in 1995 in Europe and America, which used a CD-ROM to load games. Sony had a whole pile of technical anti piracy measures which protected it from piracy for several years. However with the introduction of modchips and the development of PC CD-ROM burners that could burn data in the same modes that the PSX used it was game over. Chipping was nearly universal and game sales collapsed. Pirates were selling their copied games door to door in housing estates, at places of work, in car boot sales and anywhere else they could find a customer. This caused huge problems for game publishers. I was working at Codemasters at the time and we were forced to lay off about 60 people. This was terrible as there were no other industry jobs for them to go to, everyone was having the same trouble. The number of games published shrank dramatically. In 1999 there were 100, in 2000 there were 78 and in 2001 there were just 33. Yet the PSX remained in production till 2006, so software publishing for it collapsed just half way through it’s sales life.

The Dreamcast from Sega came out in 1998 and used a special unique disk format called GD-ROM. Once this was circumvented with things like the Utopia bootdisk it was game over. Piracy became rampant and the Dreamcast died after just a couple of years with over 10 million sold. This piracy is sometimes credited with not only seeing off the Dreamcast but also removing Sega from the console hardware market completely (as ever there were other factors that muddy the waters somewhat, what is for sure is that losing so much revenue did not help). It was a huge loss to the industry.

The PC

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The IBM PC has been around since 1981 and was the first home machine to be connected to the internet in massive numbers. So it obviously has a long history of software piracy and has been at the forefront of anti piracy technology. Often this technology had nuisance value as it actually impeded the use of the computer. But the pirates did bring it upon themselves. At Codemasters we published an excellent PC game called Severance, Blade of Darkness which was well received with a Metacritic of 75 and a user score of 9.5. This game was popular, building an active community of mod makers. Yet Codemasters sold very few copies of the game, most people just downloaded it for free from the internet. So the developer, Rebel Act received very little royalties and went bust. Once again piracy damaging the industry.

Nowadays it is virtually impossible to viably publish boxed PC games, most appear on the internet as free bit torrents before they are even in the shops. In fact it is far quicker and easier to pirate a game than it is to buy it. So most publishers, even those with a decades long tradition in PC games, have given up. And the PC gamer suffers. One casual game publisher reported a piracy rate of 92%, which is probably typical. When they tightened up their protection it didn’t help much because people just moved on to some of the many other games that are available for free by bit torrent. Now Electronics arts have started releasing PC games for free, with their development cost supported by in game advertising and micro payments. But the real way to make PC games as a viable business is to make online games (MMOs), these are server based so impossible to pirate. One day virtually all games will be published in this way and piracy will be over.

Today’s Consoles

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The PSP is a very popular mobile gaming machine and media player made by Sony. They have sold 33 million. Yet it is a graveyard for games publishers. It has been hacked since early in it’s life, it is simple to copy games onto and everything an owner can want is very easily available for free online. Here are some download figures for PSP games from just one torrent site:

God of War: Chains of Olympus – 94,154
Patapon – 112,183
Ratchet & Clank – Size Matters – 197,113
Crush – 48,959
LOCO ROCO – 163,904
Wipeout Pulse – 116,965
Castlevania X Chronicles – 102,354
Metal Gear Solid – Portable Ops (Not Including Plus) – 231,054
Burnout Dominator – 269,486

So most developers just don’t invest millions into AAA games for it, they would be wasting their money. This lack of quality games on the PSP (obviously along with some other factors) left the door open for the Nintendo DS to become a massive success with 70 million sold. But even this is being pirated now using flash memory cards in dummy cartridges. This will impact heavily on DS game sales and could lead to publishers becoming reluctant to develop for it, as they are with every heavily pirated platform.

The current generations of home consoles, the Microsoft Xbox 360, the Nintendo Wii and the Sony PS3, are all at that stage in the cycle where there is a phoney war. All three machines have good technical anti piracy. Nintendo went so far as to embed a secret second CPU (an ARM) in the graphics chip to run some of it’s system software (they lost $975 million to piracy in 2007). But all three have been cracked (not fully yet with the PS3), click their names for more details. Owners will be able to bypass the anti piracy and play free games. This hasn’t taken off yet but there are signs that it is just starting to. If previous generations of console are anything to go by then piracy on these three machines could soon snowball. And publishers will move their development resources away.

In the meantime Nintendo are making successive popular game releases that look to see if the machine has been modified before they will play. If it has the Wii becomes a “brick” for that game. Microsoft use Xbox Live to look for modified 360s and cancel the accounts of any that they find. And Sony have the advantage that Blu-ray media is expensive to buy and difficult to copy. All these are just current positions in an ongoing technology war. Very many people are putting so much time and effort into cracking these machines that, ultimately, they will find a way round everything and anything the manufacturers do.

 Conclusions

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There is one thing that beats pirates on any platform. This is when a game is so big that it becomes a mass culture popular event. The current launch of GTA IV is a prime example. Then a far higher percentage of people just have to have the real thing. A pirated copy just isn’t cool enough. And with these sorts of games there is a massive gift market. All this explains how the rare, exceptional title can still sell well on a heavily pirated platform.

There are the excuses that pirates make that games are too expensive (they are), but then Ferraris are too expensive and I don’t go round stealing them. Then there is the game quality argument, that there is a lot of dross around, which is very true, especially on the Wii. Once again we live in the age of the internet and it is very easy to very rapidly find out everything about every game. Metacritic and Game Rankings will quickly tell you most of what you need to know. Perhaps, as an industry, we ought to publicise these two sites more, just to remove that excuse.

And the game industry continues to grow and prosper, despite the piracy. This is because the proliferation of platforms allows publishers to more easily abandon platforms that are pirated to the point of being uneconomic. Instead they concentrate on platforms where there are windows of opportunity to run a viable business. Either because the anti piracy technology is on top or because there is a sufficient number of honest customers to get a return, even sometimes with a heavily pirated platform. Games with an online element can often be made very pirate proof which has been a major incentive for developers to go down this route.

So for 25 years or so game players have been stealing games in truly massive numbers with zero chance of being caught and punished for their crime. Very often far more copies of a game title have been pirated than have been bought. This self evidently causes harm to the games industry, ultimately leading to less money being invested in games for the pirated platform. So, the game player suffers for his theft by having less games and lower quality games. All pretty obvious to anyone but the pirates who make all sorts of feeble excuses to justify their stealing.

Note: This is my blog, with articles I have written that are pertinent to the game industry. It is not a public forum. All comments have to be approved by me before they appear. And I will only be approving comments that add to the subject. Non worthwhile comments will be deleted and browbeating, heckling, pedantic comments  will be consigned to spam.

46 comments ↓

#1 Forensic Gunk on 04.23.08 at 8:23 am

As someone who worked on Burnout Dominator, it’s nice to see we topped the torrent charts!

Oh… :(

I’m always a little dismayed at how prevalent software piracy is within the industry. I know plenty of people in development who own PSP games with hacked firmware or dodgy DS carts.

Shortly after starting my first job in QA, the boss’s son came in during the summer holidays with a massive CD folder of PS1 “silver” disks. This was a kid whose dad was worth millions… I thought that was pretty sad.

So, my own little battle against this is not to nod and smile when people around me talk about playing pirate games, but to let them know I’m distinctly unimpressed.

Until those of us in the business show a united front, how can we expect anyone else to follow?

#2 Jack McSmack on 04.23.08 at 8:52 am

Piracy is not stealing. It is infringement. You can not steal an intangible good because by taking one copy of a game you are not depriving someone else of that copy.

Knowing that intangible goods can be copied for little to no cost developers and publishers need to adapt their practices to conform with the current market situation. They should either focus their attention on pleasing their current customers or give the product an extra value that the pirates can not.

See Stardock for example, they understand that pirates have infinite time and resources to break any copyright protection so instead of forcing their paying consumers to go through the problems copyright protection entails they release their games without protection. To increase the value of purchasing the game they release multiple free updates and expansions for their games.

Another example is Valve with Steam. Valve games can be pirated but legitimate copies have an extra value because of Steam’s community functions and the free updates such as the new Gold Rush map for Team Fortress 2.

Instead of seeing piracy as a lost sale game companies need to see them as potential customers who just need a better reason to spend their money.

#3 Dinger on 04.23.08 at 9:33 am

Okay, I challenge the core argument:

–Quote–
The profile of pirating different platforms is always different because of the technology, the demographics of the users, the state of the market at a given time, relative costs and a number of other factors. What is for sure is that when piracy takes hold on a platform many hundreds of thousands (sometimes million) of copies of a game are made. The huge scale of this theft deprives the publisher of vast amounts of legitimate income and quite obviously harms the game development industry. To think otherwise is to be in self denial.
–Quote–
I agree with everything but the last two sentences. That you called it “theft” has already been brought to attention, so I’ll only make an aside that the quickest way to lose an argument is to make assertions that are neither factual nor shared by your adversary. “Massive copyright infringement,” and “flagrant and illegal violation of our rights” are already pretty good, and more in line with the situation.

“deprives the publisher of vast amounts of legitimate income”. We’re now getting into the realm of counterfactual speculation. It’s like saying “cancer deprives the UK of 200 billion pounds a year income”. Either you’re stating a practical impossibility (a world without cancer) — in which case the argument is banal (sure, and if we discovered a practically free, renewable and environmentally-sustainable energy source tomorrow, the world would be a better place) –, or you’re suggesting that the practically impossible is quite possible, in which case you need to show us how you’ll cure cancer.
So then “harming the game industry” can be taken in two ways: either you mean “it’s a negative force the game industry tries to deal with”, with which most, but not all, people would agree, or “it’s something we can and should stop,” in which case I invite you to outline how you would stop it.

At most what you’ve shown is that piracy, like hardware limitations, is a platform-specific force that game companies need to understand and to work around in order to be successful. If you implement a hardware workaround offers increased performance at the cost of dramatically decreased stability, resulting in a game that crashes all the time, you wouldn’t blame poor sales on the hardware.

Likewise, if you use this argument for your DRM scheme:

Often this technology had nuisance value as it actually impeded the use of the computer. But the pirates did bring it upon themselves.

And the game bombs while pirate copies soar, do not go blaming piracy. Your paying customers do not “bring it upon themselves,” but it is they who are being punished. You’ve just made your product _less valuable_ to a paying customer than a pirate copy.

So am I deceiving myself?

#4 Bruce on 04.23.08 at 10:01 am

The Spectrum market continued after the demise of Imagine, but it was hardly healthy. Schoolyard piracy was rampant and the publishers weren’t successful. They survived, a few of them.

Ultimate got out of Spectrum games one year after the demise of Imagine, selling the rights to the name to US Gold. They switched to the un pirated NES.

Game publishing only really recovered when the consoles came along.

All of this is in the article with links to evidence that proves my points. Obviously the schoolyard pirates of the time thought that they did no harm. They may delude themselves to still think that they did no harm. But they did massive harm.

#5 Bruce on 04.23.08 at 10:19 am

Once again Peter, this is covered in my article.
Occasional products come along that transcend piracy for cultural reasons.
And can you tell me where you get your numbers from?

#6 Gary on 04.23.08 at 10:19 am

The spectrum market WAS healthy, Bruce. It may have been healthIER without the level of piracy that there was, but to claim the market was in poor shape is incorrect. As already stated, a number of companies thrived during that time. In fact, I would go so far as to state that Ocean and Rare built their success upon those very foundations. If the market had been unhealthy then neither of those companies (and others) would have gone on to greater things.

#7 Peter St. John on 04.23.08 at 10:21 am

This came after several years of high-profile coin-op conversions and movie licenses, most of which didn’t seem to cause Ocean much harm.

Sales figures come from Tony Rainbird and the pewter goblet he had engraved with the TMHT figures. :)

#8 Kakkoii on 04.23.08 at 11:21 am

How can Nintendo claim to have lost 975 Million dollars?

How exactly does Nintendo know how much money it “should have made”?

That’s not something you can know.

Did Nintendo not stop to think that maybe poor sales are mostly due to the huge economic crisis in America?

I’m sure many parent’s aren’t buying as many video games for there kids these past few years due to all the economic issues.

Wage loss to piracy is grossly over estimated every time I see a report about it.

Piracy helps promote games a huge amount also. It’s free advertising.

You can’t loose something that’s not there. And the pirates money was definitely never there to be earned.

Ultimately, If a game is actually GREAT, then there will always be enough people who are willing to pay for it.

The quality of games has been declining, which is a major cause in why game industries are making less. As well as a constant rise in what people are expecting from a game.

These days when a new game comes out.. It has to top the game in it’s genre that came before it, if it wants to be successful most of the time.

There’s way to much of the same old crap over and over again with slightly different crappy story lines these days.

Spending to much time improving graphics, causing PC gamers to have to fork out money to upgrade there computers. Instead of spending more time on making an intriguing storyline and game concept/design.

#9 David A. on 04.23.08 at 12:22 pm

Piracy also hurts games (specifically PC games) in other ways.

Many bugs causing poor stability and CTDs are often created by hackers who do a bad job of removing anti-piracy measures before making a game available through bittorrent.

This then plays right into the hands of those who use the excuse “I’m not going to buy a game that might not run on my PC” – and when they find that their pirate copy is full of bugs they complain to the developer!

But worse than that is the flood of comments on the forums and blogs about Brand-New-FPS 7 being full of bugs, based on their experiences with a poorly cracked copy.

But what really makes it sting for the developer is when ‘reputable’ games journalists, doing their ‘research’, see all these complaints about bugs (that are only in cracked copies) and then mention the game’s supposed poor stability in their reviews.

People say that piracy is good for the industry because it gets games into the hands of those who would never have played them otherwise, causing the potential market to grow. But clearly not all publicity is good publicity.

#10 Anshuman on 04.23.08 at 1:16 pm

I have been one of those rare few Indians who buy shrinkwrapped software. Every piece of software on my system is either bought by me or is freeware.
Having said that, I can understand where the alarming prevalence of piracy in India comes from: the high cost of software, coupled with insane taxation and low per capita income levels.

What is encouraging to note, however, is that things are changing rapidly on the ground. Over the last few years in India I’ve noticed far more people buying legal copies of software in malls or over the Internet; this coexists with the vast underground “pirate” shops that sell DVDs of compiled copyrighted material.
I attribute this change to a phenomenal rise in income levels, in line with a desire to reward IP value creators. Being associated with the software industry, one can understand the toil & sweat that is channelled into the creation of software as complex as a game.

I agree with your overall assessment, however, as to the way the gaming industry is evolving. Hosted gaming is on the verge of becoming the revenue creator of choice for most studios and publishers.

Nice article! Cheers…

#11 Steve on 04.23.08 at 1:54 pm

So you would not steal a Ferarri, as a consequence of not being able to afford one? Of course you wouldn’t. None of us would. But what if you could get a Ferarri for nothing? Without depriving the original owner, or losing a sale? Different argument! This article is pretty much a repeat of the previous one. It reminds me of “The Curse of Dad’s Army” that was featured in Viz many years ago. The article implied that a healthy jobbing actor got a job working on the comedy series, and yet, just 30 years later, died in mysterious circumstances. Another actor was only in 1 episode, but died age just 94. Another appeared in every series, but one fateful night, their cat was run over – with no witnesses. Basically, what’s happening here is that information is being presented as cause and effect when there’s no actual link. Could it be that the fry up I had this morning has lead to Beyonce and Jay-Z deciding to marry? Both happened today.

#12 t7d on 04.23.08 at 2:25 pm

Here’s the thing:

You will *never* win the “war” against people who are determined to make copies of your software. It’s simply not going to happen. At the very best, you can make it so that it takes a really determined effort to make a copy, or costs more (either financially or in terms of hardware compatibility with other software) than it’s worth to do it.

I was part of what would probably be best described as a “cracking crew” back in the 16 bit days. We didn’t make money from what we did (although it’s quite possible that somebody else did), but we had fun breaking other people’s copy protection. That was why we did it. It was fun, an intellectual challenge. 2 guys, one ST, one piece of software, and a stack of beers. It never took longer than a single sitting. Protection schemes that had been sweated over for days, weeks, rendered useless in a few hours.

You wanna know the best bit? I had access to pretty much every piece of software released on the ST. And yet every piece of software I used, I owned legitimate, paid for, boxed copies of.

Unfortunately, people still seem to think that “IP” must be “protected”, but this is a fallacy. Look at DVDs. I go buy a DVD (and I do), slap it in my player, and I get a bunch of non-skippable crap telling me I shouldn’t copy DVDs, that pirate DVDs fund terrorism, etc. But I’m one of the good guys. I bought my DVD. I shouldn’t have to sit through shit like this, to be treated like a criminal, to be lectured at. Meanwhile, the guy who’s downloaded a copy, or bought a hookey DVD at a boot sale, doesn’t even see it. In goes the DVD, the film starts.

Music. I buy a CD, and it refuses to play in my PC, because I might make a copy. Or do I torrent it, and get a lossless copy that I can do what I want with? Trent Reznor got it right with “Ghosts”. A bloody good album, pay the correct price, download a lossless, non DRMed copy to do with as you wish. Pay a bit more, get a real physical copy as well. Pay a lot more, get copies on vinyl, ect. The music itself – released under a Creative Commons license – “do what you want with it” means almost exactly that – if you feel like sticking up a bit-perfect torrent, making copies for your mates, etc, you’re completely within your rights to do so.

Piracy is here to stay. It’s been here since the first piece of equipment that made it possible to copy from one piece of media to another, and that happened a long time before the ’80s.

Anti-piracy measures, of necessity, make life harder for the legitimate user, and don’t affect the pirate in the slightest. It’s a much better idea to spend time developing a compelling product than to spend it on futile measures. If Imagine had done this, they might have stayed around for a while longer.

#13 yg on 04.23.08 at 2:38 pm

Kotaku says GTAIV pirated before release. ( read here
http://kotaku.com/383017/pirated-gta-iv-leaked-early-online )

Not that it will stop GTAIV becoming the top seller of all time…

#14 Evan on 04.23.08 at 3:21 pm

Let’s face it, the pirates need some new material — the old excuses have simply lost all their entertainment value. For the convenience of all the pirates and aspiring pirates out there, here is a list of the justifications that just do not cut it any more:

1. The game was too expensive, so I stole it.
2. I stole the game because I did not like its quality.
3. If the distributor did not really want me to steal the game, he would have provided more value-added features.
4. I am poor, so it acceptable for me to steal games.
5. Even if I had not stole it, I would not have bought it.
6. Hey, it is not stealing, it is only “infringement”.
7. All software should be free anyway.
8. Gee, all my friends do it!

#15 Scott on 04.23.08 at 4:15 pm

“Piracy is not stealing. It is infringement. You can not steal an intangible good because by taking one copy of a game you are not depriving someone else of that copy.”

If you make a copy, then by the laws of supply and demand, you reduce the value of the original. (If something is scarce, it is valuable. If it becomes commonplace, it’s value diminishes.) If you’re taking away the value of something when you take away a copy, then you are stealing.

Just because the legal language that has built up in the centuries since copyright was first formulated hasn’t kept pace with the technological innovations of the last few decades, doesn’t change the moral argument.

To me, the moral argument is more significant, and the question of whether it’s theft, copyright infringement or breaking the DMCA should follow that one- not lead it.

I’m not arguing that the marketplace hasn’t been massively changed- I used to copy Spectrum games by swapping tapes and so on the playground. Today, the same thing is happening, but the “playground” is the internet, and the scale of what’s available to me to copy isn’t just what a few hundred people I know have access to, but to everything that’s available in the world. I completely agree that industries that rely on a product that can be copied with perfect digital accuracy *need* to adapt their business models to rely on selling something that can’t be copied. Whether that’s an ephemeral quality like Trust, Immediacy or Accessibility, or a physical product like a Guitar Hero controller.

But the “defence” of software piracy always sounds to me more like trying to slip through a legal loophole than actually defending one’s actions. “It’s because the publishers are greedy.” “It’s because so many games are bad, I don’t know which ones I want.” “It’s because I’m a downtrodden member of society who can’t afford the games that I should be entitled to in a free country.” And so on…

#16 Whiner on 04.23.08 at 5:45 pm

“But the “defence” of software piracy always sounds to me more like trying to slip through a legal loophole than actually defending one’s actions.”

Yes, but it can also be interpreted as a paradigm problem – one in which they ‘know’ intuitively that they ‘should’ be able to get things for free but can’t work out how to explain it. Why do they feel this way?

Perhaps because in most of society, paying for ‘culture’ is a bit optional?

Many art museums take donations rather than fixed ticket prices. Street performers busk for money, but it’s not illegal to listen to one without paying. Theater productions often do a pay-what-you-can performance to encourage the sort of people who don’t normally do theater to come in, even if they only pay a dollar for it. Libraries loan you books and movies for free. Television and radio pour content onto people who aren’t paying for them directly.

Is it any wonder people don’t feel like they should *have* to pay for games? They know instinctively what the critics are still debating – that games are art. :)

I’m not arguing pro-piracy here, I’m trying to make a living in this business too. But I think one might make more headway by encouraging players to put dollars in the hats of artists they enjoy rather than yelling ‘THIEVES! JAIL FOR YOU!’

#17 Adam on 04.23.08 at 8:13 pm

Piracy is theft, albeit in an indirect fashion. Yes, you don’t deprive a legitimate user of his copy, but you do deprive the publishers and creators of a rightful due for the work they did.

I’ve noticed that piracy is most common among the young. When I was a kid, we didn’t think anything wrong of getting copies of software on disk or cassette from friends… we had no money to buy it, no cars to drive to stores to buy it, no money for long-distance calling to BBS’es… you get the idea. Things haven’t changed much, the playground (as said above) just got a lot bigger and more accessible.

The problem is when this culture of software copying becomes so ingrained that you fail to see anything wrong with it. I was lucky; I had an orphaned computer system in my teenage years, and so I saw first-hand the effect that piracy had, as small publishers folded one after another. My eyes were opened early, and my mantra is “If you like it, give the creator his due, if you want more of it.”

Most, but not all, people who pirate software are not bad people. If you confront them about it, they’re usually uncomfortable, or offer the weak rationalizations covered in the above comments. A lot of the time, a little confrontation will help them realize they need to stop doing it.

It’s not easy, though. I remember going to LAN parties and having to refuse ‘copies’ of software because I didn’t own it, and had no intention of pirating a copy even for a night. It can be hard on friendships too, but my feeling is, if a friend willingly and knowingly “steals” software, then that’s not a good friend to have.

#18 Sebastian on 04.23.08 at 9:02 pm

Bruce, you work in the gaming industry (even worse – you work in [i]marketing[/i] ;-) ), so I can totally understand your argument and where you’re coming from.
But yet, I also believe you are oversimplifying the matter here. You list, for example, the Dreamcast as a system that was “killed by piracy” – which, in my most humble opinion, couldn’t be farther from the truth. Instead, the DC’s demise can more plausably be blamed on Sega’s disastrous marketing, advertisment and sale policy. The DC was, after all, the most advanced system of its day (some even argue that it was superior to the PS2), but it failed because of lacking hardware sales and not because of piracy.

But enough picking nits. I see piracy as something very…. ambiguous. I understand (and, to an extent, even [i]share[/i]) many of the complaints and justifications the “occasional pirates” cite. Yet I also agree that piracy in its current scale is absolutely disastrous – and the Internet is to blame for that.

I’ve got to admit that I used to copy games myself, when I was a young kid and could only afford like 2 games a year. But those were the early 90s, and there was no internet, let alone p2p sharing. I had to rely on what my friends or schoolmates got for the PC, and we, well, “shared” or games amongst each other. So even with piracy, there was a limited supply of games I could play. This led to the fact – and yes, I know that’s very hypocritical in retrospect – that I [i]vallued[/i] every game I played, even if it was pirated.
Nowadays, however, virtualy everything is available at the click of a button, at least for the PC (which still is my prefered gaming plattform). I think that this has led to some degree of – how to put it – “oversaturation” among those who pirate games. When you can play everything, the games you actually [i]do[/i] play are not as much of a value to you as they would have been if you could only play them (sorry for my bad english here, but I hope you get my meaning :D ). So maybe this is a point that the industry could work on. Provide something of “value”, that gives gamers the feel they really own something.

But then again, maybe it’s not piracy that’s to blame for the demise of PC gaming, but “World of Warcraft”. Piracy’s been rampant since the mid- to late 90s, yet the PC as a gaming platform only started to diminish since 2004 or so.

#19 Justin Fleming on 04.24.08 at 12:41 am

Ah Lenslok – what a nightmare. Apache Gunship was so tricky to get past the protection!

(has there yet been a decent helicopter game to rival the Spectrum ones?)

Piracy – hmmm. Does it REALLY affect sales? If piracy didn’t exist (or wasn’t possible) would sales REALLY go up? I’m not sure. I just think that most people only pirate out of lazy habit. If it stopped, I think they would do something else and not just start buying.

As for buying stuff – people always was the satisfaction of ownership. Piracy escalates because there is no achievement in gaining a new product – no shiny newness. No satisfaction that working all week was worth it because you can spend those wages.

So people pirate more to try and get satisfied. But that, I think, has nothing to do with actual sales. iTunes try hard to bridge the gap by having the artwork gallery to make you feel like you OWN something when you download it legally. Not sure it works, but it’s a start.
People still don’t really like downloading, but just make do. It’s nowhere near as meaningful as going and buying a physical cd and booklet.

I think the pirates will always charge through a million games constantly but everyone else just can’t be bothered as it doesn’t lead to satisfaction – looking for cracks, trying to burn it, finding serials, can’t play online, no updates, no box, no point in working all week because you don’t need money to buy games…

#20 Dinger on 04.24.08 at 5:08 am

Look, there’s a strong reason why piracy is not “IP Theft.” Anyone who’s spent any time, even remotely, in this industry knows cases of IP Theft. It usually involves getting ahold of someone’s source code and passing it off as one’s own. This theft differs from infringement in that the thief asserts copyright. It’s like if I have a ferrari, and you take it from me. I don’t have it, and you do.
Copyright infringement is simply different. Deny that and you lose the argument.

Now, the ‘moral argument’ doesn’t work. Removing the mechanism of duplication, all you get is:

If you’re taking away the value of something when you do X (without the owner of said thing’s permission), then you are stealing.

If you’re selling 19″ CRTs for $400 and I sell a 19″ LCD for $200? I am taking away the value of those CRTs by doing something against the owner’s wishes. So I am stealing?

Here’s the fundamental problem:

Property is an agreement between people about things. There’s nothing inherent in my car that makes it my car: it is my car because we agree it is, and we document and support our agreement with a whole mess of prescriptive documents and documents of record.

For some things — not coincidentally the same classes of things that many warm-blooded animals seem to resolve within the same species fairly well — this agreement is practically unanimous and well regulated: territory, food, objects: the vast majority of humans will agree on a distinction between “mine” and “yours” in these things, even if they don’t agree to respect those distinctions.

For other classes of things, the “agreement” is not always there, even if there is plenty of legal support and documentation. When an Italian city declares that the right to wear certain types of clothing belongs only to people of noble birth, rich merchants might disagree that they “own” such a right and infringe upon it. When the king decides that any object that killed somebody belongs to him, a peasant family might disagree and lie to the coroner in order to keep a valuable haycart.

So, intellectual property: humans are social animals. One of the things the brain does very well is take ideas and recombine them. Written texts have been copied freely and distributed for millennia. Before the modern period, we paid for written works largely by paying someone to produce something, whether commissioning an author to compose something or a scribe to copy it. We generally agreed that certain ideas, especially their expression in words, belonged to specific people, even if at times those expressions were identical. But this ownership didn’t incur a right to be paid for the duplication of those ideas.
Only in the last couple centuries, when mass distribution (and serialized novels) made it possible for the royalty model to work, do we see copyright being asserted: the notion that someone can “own” not just a string of concepts, but the right to determine who can receive those concepts and how they can be expressed. This notion is neither obvious nor how things have been done for most of human history (even just the written parts). Copyright comes about largely to prevent mass duplication by competitors: the capital and resources required to duplicate a novel in quantities sufficient to compete are so high that very few can compete.
Now, enter computers. Just as humans excel at processing ideas, computers excel at duplicating them. So you get a notion of a distribution right that few understand (if you doubt this, try asking ten people what they can and cannot do according to copyright law in their country), some agree to, and that computers can negate quickly and with relative impunity. Replacing ownership with “Licensing Agreements” only makes things worse, since the content producer suddenly now unilaterally asserts something that the person who receives the content does not agree to: that not even the copy is “owned” in any sense.
I ain’t justifyin’ piracy; I’m just saying that there’s a fundamental problem with enforcing copyrights in a digital age: humans are wired to share ideas, not restrict them, and computers are designed to duplicate them, not prevent them from being copied. And to sell a product, you need to make people aware of its existence, and the best way to do that is through an instantiation of the product.

If you want a ‘moral’ argument against piracy, try this:
The work people do has value, and for the sake of those who voluntarily benefit from it, they should be compensated. The users of software are by common agreement the willful beneficiaries of a service constituted by the work put into to developing that software, and, moreover, it is the expectation of those who make the software that the users compensate them. Therefore, those users should compensate the workers.

#21 John on 04.24.08 at 12:57 pm

One very important fact that isn’t getting mentioned is the astonishing damage Imagine did to new developers.

Because of their outlandish displays with their vast amounts of borrowed money and tech, and their getting away with failing to repay any of it, banks declined to support other young dev teams needing loans to get off the ground. The high-profile nature of Imagine’s financial ineptitude – the company receiving front-page appearances on national newspapers promoting them as the great white hope for the future, before they peed it all away – meant their collapse scared off investors.

The impact of this is impossible to calculate. It seems grotesque to revise history such that Imagine are the victims, rather than the greedy, inept and downright fraudulent company that ruined the potential of a generation of bedroom start-ups. Were I to have worked for that company at that time, I’d still be floating on the relief that I didn’t go to prison for my involvement.

#22 cliffski on 04.24.08 at 3:32 pm

Wow, it doesn’t take long for the deluge of pro-piracy people to come out and trot out excuses for taking someone else’s work for free does it?
If you want to enjoy free games, download freeware or code your own, do not try and kid anyone that you are automatically entitled to MY hard work, because neither I, nor the law agrees.

#23 cl on 04.24.08 at 4:53 pm

Mr. Tunney, loved your “customers are the floor that the rest of you and your industry walk upon”. Great analogy. Makes me feel really respected and appreciated.

I think that is the bulk of your problems, as an Industry, and as a coordinated entity (developer -> publisher -> retailer). You view it as your right to make money off of people. Instead of being thankful that you have jobs, that you get to create and share your art and your visions, and that you get to help people find the entertainment and the products that they enjoy…instead you insult us with your trivial crap, your DRM, treating us like criminals, and milking us for every dollar we have.

We are not sheep. Sheep that not only need to be sheered, but force fed crap over and over again, and penned in to protect your interest. What about our interest. Wow me. Take a chance, put your money down on the table. Make a good product. Treat your customers with respect. Give them a chance to make a decisions about what THEY want. And then get out of their way.

It is just silly that you put so many obstacles in our paths. We shouldn’t have to work so hard to spend our money on things.

You want to stop piracy? That is your problem. You are spending all your resources (mental, physical, as well as financial) on protecting yourselves and your product from people.

There are three kinds of customers. Those that are going to buy your product no matter what. Those that are going to try your product and maybe buy it. And those that will never purchase it.

News flash, category 3, never were sales. Never were gonna be sales. You didn’t lose anything. Let me put it in turns that you will understand. Cat3 != income. Never gonna happen. Cat2 is simple, they will buy if they like it. So, once again, you (as an industry) are in control of your destiny. Make a game that is fun and works out the box, and doesn’t make me jump through hoops to play, and I will buy it if I like it. Piss me off, treat me like a criminal, make the same game you did last year with a different title, make it easy to finish, quick, and lame…and you get nothing from me. I will just move on.

Category 1, well, they are always gonna buy games. No matter how crappy they are. They just like games. Like some people like movies. They will watch them no matter what. My friend is like that. He buys games. He plays them no matter how much they suck. No matter how like the last one he bought and played it is. He buys it…plays it to completion and goes and buys another one.

In the end, you hold your own future. Not the pirates. And just for the record Copying != Stealing. The reason you don’t steal the car is because it is the only one. You can’t copy it. It has a controlled distribution. You have to order it a year in advance. Farrari has have a close system. Games != Cars. Bad analogy.

Sadly Bruce seems all over the map on this one. So, I find it hard to take his opinion on anything. I will say this, he is a bitter dude. I probably would be too…but we live and die by our own decisions.

In the end you are never going to stop piracy. People will pirate. And they will legitimize it. I have some friendly advice from the floor: Stop worrying about the pirates and start worrying about your customers. End of story.

Here are your problems and not a single one has anything to do with pirates:

1. Games are shit. By and far they are boring. The same story just different title and different graphics. WRITE BETTER GAMES. Make something I may be inclined to spend my hard (and shrinking budget) money on.

2. Stop making it so damn hard to play the things. Get the code right. Ship it finished, not half done. Stop patching it. Make it right the first time. Make it so I can put it in my platform (PC, Console, what ever) and play the damn thing.

3. Stop writing them for nextgen equipment. Take a play out of the Blizzard play book…write for the common denominator. Stop trying to push the stupid graphical envelope. I want to play a game…not “experience” advanced hard ware. I just want to play a game for awhile.

4. Make it so I can get the game easily. Stop making me go through hoops to buy it. Deliver it on my terms. Internet, on the shelf, from a friend…what ever. Just get the damn game on to my platform. If I can’t get it…I can’t play it.

5. Stop fighting your market. You make games. Make freaking games. Don’t make art. Don’t try to take some one else’s freaking cookie. Stop making that “big-budget” blockbuster to take from TV or Hollywood’s pie. Just freaking make a good game.

6. And for Christ-sake stop treating me like I should be grateful that you exist. Get over yourself. You make a product or a service. You need me…I do not need you. Us that you call the “floor” have been entertaining ourselves for millenia. In the big scheme of things you are new. Make something I want to buy and spend my time on because you are working for me, not the other way around.

Stop freaking worrying about pirates and start worrying about me…your customer. And may I suggest a little change to your analogy. I am the sky. Not the floor. Your developer is the floor. He is where your industry rest on. Without his work, you make no money. He is reaching for the sky…me. Help him get there and we will all get what we want.

You can not change culture, society, or pirating. Stop trying. Focus on me and you will be fine.

CL

#24 ClockCat on 04.25.08 at 8:34 am

Okay. I believe in pirating. Why?

1. Most games that people I know download, they would not have bought. They download it to try something they would not spend money on. In fact, I have played many emulated old games that I never touched, and are not even available for purchase now.

2. You claim MMORPGs are not pirate-able. This is a lie. Many famous MMORPGs are hosted on private servers, and many sites are available to tell you how to start your own server, and let other users connect if you wish. Many of THESE private servers, exist even after the original ones have ceased to exist. In addition, user added content frequently expands above and beyond what the original developers created, making something new from an old shell.

3. Trying to annoy, aggrivate, or otherwise insult your customer will get you…nothing. Making it hard to pirate, only makes a short delay before someone cracks it. You are just playing games with the public if you think it won’t happen. What should you do then? Make a game that people want to play, and make it affordable enough or have content that makes people want to buy it. SAM AND MAX for example, is episodic at around $9 each. It is greatly enjoyable, and buying the game just to play it when it comes out is worth it over waiting a few weeks for someone else to make a crack.

I beat the first episode cracked, and found myself loving the game. I then proceeded to buy them all, and wait for each release to follow the story and witty gameplay.

Would I have bought the first game? Probably not. The demo was fun, but did not give me enough of an idea of the game to decide if I want to buy it or not. It’s like using a blender on the first three settings, and being unsure if turning it to a higher one will be faster, make it break, or decapitate you. A cracked version on the other hand, lets you use it completely.

They understood this concept, and now the 4th episode of the first season is free to download, at a cost of $0.00. Why? Because companies lie to customers to get them to buy something, which ends up a bait-and-switch. Paying $50 for a game that entertains you for 5 hours, and angers you for 10 because of horrible “fetch this back where you were before” time lengtheners, or “play back where you were before” ones make a lot of new games NOT WORTH BUYING.

If I like it, I buy it. If I don’t, I probably will delete it before finishing it and forget it ever existed. A lot of people do this, just like they do with music.

I buy my games, music, and everything else online. Why? Because I can usually actually get what I want, and find out if it is what I want beforehand. It’s bonus points for places that give you extras, like Sam and Max will send you a comic, art, and cd collection for the games you bought online if you get the whole season.

But hey, god forbid people actually get what they pay for. Lets just put horribly crappy games in fancy boxes, and overmarket it so everyone pays money for something that doesn’t fulfill the need they have for some kind of comparable entertainment that is appropriate to the investment spent.

Like E.T. for the Atari 2600.

#25 .alphamonkey. on 04.26.08 at 1:28 am

I have to echo the argument that a pirated copy equals a lost sale. By what stretch of the imagination can anyone assume that person X would have bought product Z were it not for an available pirated copy? Plain and simple: You cannot.

That’s not to say there are those would gleefully pirate something they would otherwise buy, but I’m willing to bet they’re the minority. Fans (of any genre/medium) have an emotional investment in their passions, and as noted in many other comments, they’re going to buy it no matter what.

You won’t get an argument from me that piracy is morally neutral or that it’s somehow a consumer’s right. It’s wrong, plain and simple… but the music, film, and gaming industries made what should have been a small problem worse by their complete and utter negligence of their own fan base.

Staggered release dates for different regions. Bam! You’ve just created a pirate market where there wasn’t one before.

Releasing different content for the same product in the same or different markets. Same thing, but now you’ve added the indignation of double dipping your customers.

Treating the market as a whole as degenerate pirates, and therefore making it more difficult for legitimate customers to enjoy their media in the manner of their own choosing: Wow….that’s just a no-brainer. Does the casual listener buy a CD that they can’t rip, an iTunes file that won’t let them use it on every media player they own, or a DRM’d mp3 that might stop working if the company decides to switch formats? Or do they just say ‘screw it’ and download a copy that’ll work in any format they desire? Not really a tough choice there, now is it?

#26 Farwell Rob on 04.26.08 at 7:43 am

The neat thing about the piracy argument, as far as marketing managers go, is that you can blame any woe on it.
It really doesn’t matter if you have screwed up your job, a boss can never argue with, “There is theft out there somewhere.”
It happens, but it is far from killing a 20 billion dollar a year industry.

Piracy doesn’t kill game companies, bad games kill game companies.
(And bad marketing managers who don’t know how to sell product.)

#27 Bruce on 04.26.08 at 9:32 am

Rob.
This is more typical pirates excuses.
Pirates steal because there is no chance of getting caught. It is the pirates who are to blame, they are the thieves. Trying to blame the publishers is perverse, they are the people risking all their money and doing all the work.

And piracy does kill game companies. I was at Codemasters when PSX piracy nearly killed us, we just scraped through. And we were making good games.

#28 Emanem on 04.26.08 at 10:29 am

Hi. Actually I think game prices are too high. In Italy a game costs around 45 Eur and for PS3 even 60 Eur.
Is too much for a thing that usually lasts 24 hrs of play.
And most of all think what have been the major selling success: World of Warcraft, all Warcraft III series etc etc, Q3A, …
You know why those can’t be pirated?
Because:
1) They require unique key to (fully) experience the game (read: ONLINE gaming)
2) They provide new content, new fixs, balance (read: fresh content)
3) They don’t last only 24 hrs, but as seen as main focus is online gaming they last otentially for years.

Single player is dead. Honestly is better to read a book than play a 60 Eur videogame. Book at least costs less and lasts more.
Multiplayer is key for success and anti-piracy model is embedded. No chips, no bullshits are required. Just a sort of unique key.
And a couple of servers for verification.

The games are changing….

#29 Rich on 04.26.08 at 11:12 am

Right or wrong you aren’t going to stop piracy. Fact: Bits are only going to get easier and easier to copy and share in future.

Now faced with this you can either write long articles moaning about how piracy is taking your bread and butter, or you can accept the facts and start using a business model that is based in reality. Luckily for current game authors there are several such business models:

(1) The online subscription model. Allow people to pirate the game, in fact, encourage it. Think of it as advertising. Make the single-player version free if you like. However, design the game to revolve around online play and charge the real players a monthly subscription to connect to your servers.

(2) The vinyl record model. Fill your boxed versions with gorgeous artwork, posters and trinkets that make it very compelling to buy them, or for people who have pirated the content to upgrade to a pay version.

(3) The support model. Subscribers get frequent early releases of new content (expansion packs, new player skins, etc). Pirates don’t get these benefits, or gets them later and more piecemeal than your loyal paying fans.

(4) The market-to-mum model. Market your games as ideal, family-friendly birthday presents. Mums don’t give their darling teenagers/twenty-somethings silver CD-Rs, and they’re not price-sensitive either.

(5) The Linux/Red Hat model. Massively reduce your outgoings by outsourcing development to people who’ll work for you for nothing. You need to do this by designing clever game-building tools which (a) have a community around them, (b) are really simple to pick up, (c) allow people to make both tiny and large contributions. You work essentially in a pure packaging role, editing, polishing and packaging the games and selling them to people who don’t want to assemble the games from pieces themselves.

#30 matt on 04.26.08 at 11:56 am

There are too many good games, even more bad ones and not enough exceptional ones.

#31 George Gardiner on 04.26.08 at 3:32 pm

How many years before the whole game runs server side, keystrokes are sent from the client to the server, and video streamed back (ie. the game).

That would be a nightmare to crack but you’d kill the console market as the consumer would never need to upgrade their hardware (other than maybe controllers / other extensiions that always fail to sell)

#32 Farwell Rob on 04.26.08 at 6:27 pm

Sorry Bruce,
I have never stolen a game, modified any of my gaming systems, or downloaded anything that can be thought of as a crime. By anyone.

But:
1)when I’ve finished a game, I’ve traded it to a friend for a game he has finished. This isn’t piracy. This is just a fact of life.
2) I’ve rented games. This is perfectly legal.
3) I’ve passed on buying games that I wasn’t sure about. That doesn’t mean the games might not have been ‘The Greatest Game Ever’ but if it doesn’t catch my attention (marketing manager) I just don’t care.

Ads in magazines, and on TV, etc. can only get me so far. Too many times have there been great ads, only to find out that the scenes are just the best parts of the best cut scenes… but the rest of the game sucks eggs.

I can easily blame the publishers just the same as I can blame any company for putting out bad product. Every gaming company makes mistakes.

The fact that the gaming companies are “putting out their money” is irrelevant. Any entity looking to make money will put money out there in the hopes of cashing in. As for them “Doing all the work” don’t forget that the consumer has to work his butt off trying not to get stuck with a $40 pile of crap game. And there are plenty of those out there… even on the new release racks.

If your company can’t compete… it might be time to try marketing something a little easier.

#33 Farwell Rob on 04.26.08 at 8:56 pm

Now, lets take this in a different direction. All of us agree that piracy is out there. It is out there, and will be as long as consoles and computers exist.

The people who buy games to break the security do it because that is sometimes more fun than the game itself. They are smarter than I am, and they are probably smarter than whom ever you have designing security for the games. It isn’t going to change.

What can be done about it? How can you get people to buy games that might be thinking about downloading/copying/renting/borrowing/etc.?

The marketing study that I’d be most interested in is the large amount of people in Japan that buy new music. Music is probably the easiest thing to copy, why are they spending money on new releases?

From what I’ve seen, in Japan, when you buy a new release, you don’t just get a CD with some cover art. You get an experience. Generally they come with booklets that have lots of background info on the band, private interviews, and other things that you can not get outside of the new release.

Can that be done with games? Can the marketing department come up with something that would be worth having even if the game is boring/easy to beat/etc.?

Think along the lines of books. True books that are written in the same universe of the game. Back story. A story on a side character. Artwork on levels that didn’t make it… and why they were canned. Story lines that were left alone. Hints of things to come.

Make it worth the money to buy a game… and don’t do it on a CD/DVD that would be easy to copy or send electronically. Do it in print. Market the experience… not just the game.

I’m bored with video game marketing. If it wasn’t for word-of-mouth I probably wouldn’t by any games.

I know that most games come with a booklet. For the most part, there are two pages of back ground, and the rest is ‘how to play’ stuff that you can figure out.

Make it interesting. Make it worth the price of admission and make it known that you will do it every time and people might start looking for your games.

#34 t7d on 04.28.08 at 10:33 am

Well, I guess Bruce doesn’t agree with me as to the quality of the Codemasters output at the time he’s talking about, so I’ll try and put it a different way.

If you have a compelling product, people will buy it. People will prefer to buy your product *instead* of finding an illicit copy. You will make money, despite the existence of piracy.

As a for example, take, again, the Nine Inch Nails album “Ghosts”; released with multiple price points depending on packaging, from $5 for a downloaded copy to $300 for a full-on limited-edition package including high-quality vinyl pressing and so on. The electronic download version was distributed, as well as via the “official” site, via publically available bittorrents, and the licensing explicitly allows for copying. Surely, if people can get the product *legally* for *nothing*, sales would approximate to *nil*? Oddly, no. The official download servers were almost instantly swamped (to the point of not being accessible) by people who had bought at the $5 and $10 price points, and the $300 package sold out within hours. Yep, that’s people paying $300 for an album that they could get *for free*. I personally bought at the $5 price point, again despite the fact that I could have had a bit-for-bit identical copy for free.

If you have a compelling product, market it properly, and, to a certain extent, get lucky with regards to other near-simultaneous releases, your product will sell, and you will make money.

If you have a product that is not compelling, either due to its intrinsic “value”, or with regards to other contemporaneous releases, your product will not sell, and you will lose money.

Let’s look at TOCA 2, ’cause that’s the one Bruce has previously mentioned.

It was a reasonable title, and had some nifty features (not least of which was 4 way play). Still, it was just another racing game, despite its “backstory”, a market that was largely flooded on the PSX. Its main competition was probably Gran Turismo, which, by the time TOCA2 came out in late ’98/early ’99, was nearly a year old. TOCA2 was arguably a better game, but GT was massive, and has sold around 11 million copies IIRC. And, around the time TOCA2 came out, screenshots of GT2 were already in circulation, GT2 was certainly “coming”. So an initial surge of sales to those who had the game preordered, followed by relatively poor sales might well be attributed to the market for that type of game at the time, as much as to pirates (who had access to copies *before* TOCA2 even hit the shelves). GT2 was massive. TOCA2 wasn’t. Sometimes you just get unlucky.

#35 Gamer Logan on 04.28.08 at 6:23 pm

As a gamer and a college student with hopes in working in the gaming industry, I find your blog very interesting and especially this post on piracy.

I have classes with several students who I know pirate computer games, and several times I have heard them complaining about the lack online or some other feature that their copy lacks, but apparently the inconvenience is not enough to drive them to buy the actual game. (Interpret that as you will.)

As a budding video game collector (primarily old console games), I will often hear about how such and such is a great game, but not having played it myself, I will look for a ROM of it. Usually after having played the ROM for a bit, I can tell if the game is worth buying. If it is, then I will try to find the real game, preferably with the box.

My previous paragraph brings up two important points. First, if a game is worth playing, a respectable person will pay for it, even if it is offered free, simply because he or she wants the developer to continue making great games. A poorly made game is not going to make much profit regardless of the presence of piracy. Second, including unique tangible bonuses with the boxed copy encourages people to go out and buy it instead of downloading a pirated version. Imagine if a company said, “Buy and download the game from our website and we’ll mail you a figurine!” I think that such a marketing campaign would be very well received by gamers.

In closing, I think that unfortunately, piracy is largely unstoppable, and that gaming companies are going to have to find ways to encourage customers to pay for their products despite being able to get them for free. (That doesn’t mean that it should be made any easier for pirates to do what they do though).

#36 Timewarrior2001 on 04.30.08 at 1:28 pm

Many games are copied/cracked these days because they are released with the latest copy protection.
The game could be diabollical, unplayable even because the development time and funds were not available. However the fact that the latest copy protection is used on the released version makes it a target.

One such game I can name that this happened to was B.R.E.E.D.
OK the game was not diabolical, but it certainly did not live up to the hype it had. It was a shame as I knew the developers personally and I even assisted them testing it. There were other reasons that were documented at the time for the game not being reliable though.

Years ago when I was a kid, I had a commodore 64 and my mates all had spectrums, yes copying was done, but to me the scale was not on par with the piracy these days.
I do buy games now, same as then, I remember paying the huge sum of £12.99 for the last ninja 2. I still have a C64 and I STILL play that original game (I did have to purchase it again as the original tape snapped :( )

#37 Rikaitch on 05.02.08 at 5:21 pm

I’d like to chuck in my tuppenny’s worth if I may.

As someone who’s worked in the computer industry all of his working life (most of it within the game sector), and followed it from right back at the very beginning, I feel more experienced then most to comment.

I have seen pirates and their methods come and go. Be it tape to tape, CD copying or Bit torrent, there will always be a hardcore copying sector. It doesn’t matter if it’s games, music or the latest hollywood blockbuster, the fact is some people are too tight to pay for it. So as you correctly pointed out, perhaps lowering the price is one way to correct this. The other way would be to make a product realistically priced for what you’re buying. Microsoft are a case and point that really highlights this. You can go out today, and spend £300 on the most reliable version of Vista, or you can buy a version of Home Basic for £30, and the reality is you are tearing your hair out because the £30 version doesn’t work. £30 down the drain, and so you either begrudgingly pay for the better version, kissing goodbye to the £30, or you get the better version from an illegal source. If you do this too often, you’ll eventually miss out the middle man and go straight for the dodgy source. So piracy is a problem, I agree, but until we get something that’s 100% reliable, 100% value, and 100% what we want, piracy will carry on at epidemic levels, and manufacturers will not ever get their losses back. Chicken and egg…

#38 Matt Kemp on 05.02.08 at 5:31 pm

Would you prefer if everyone bought games, and then took them back if they were awful? If shops still think they can push these titles, surely they will sell them on as pre-owned copies – where’s your revenue stream from that? It is impossible to extrapolate out the figures you have, they are pure speculation.

The fact is, piracy is a long-used backup excuse for any product selling well. You’re a PR man Bruce – it sounds better from a company perspective to say “Our games were pirated!” than “We wasted all our money and made awful games”. I personally don’t priate games, but I understand the thought processes behind it.

Games in most forms are homogeneous products – there’s no obvious difference between a copy of, say, Mass Effect, a pirated copy of Mass Effect and a counterfeiter’s version of Mass Effect. Now given the price of a proper version, the pirated version and and a counterfeiter’s version, which do you feel people will buy? They will go for the free one, and then the counterfeiter’s version, seeing as it is probably a third of the price of the original. This also applies to the preowned market – there is no difference between a second-hand copy of Mass Effect and the original, and you still get no money from their perfectly legitimate purchase.

I’m getting sidetracked, however. Back to Mass Effect: What if Bioware were to mae say, a limited edition copy of Mass Effect, with extra juicy bits in the form of little booklets and a nice tin case instead of a plastic DVD jewel case? I’ll go ask my housemate, he has one upstairs.

Like people have mentioned with the NIN album (and to an extent, Radiohead’s) discriminatory pricing is the way to go. Give your users something extra along with their game. Encourage them to actually buy it for some added bonus.

The car analogy was awful as well. A better example would be a Rolex watch – you can get a cheap knockoff and pretend it’s a Rolex. Still, though – you’ll know deep down that it’s just a cheap version, rather than the full thing.

#39 Anthony on 11.16.08 at 2:05 am

You basically blame piracy for everything.

For one, nearly every platform you mentioned died at the end of its lifetime. The PSX was not defeated by piracy. It was defeated by the PS2. The PSP was not defeated by piracy. It was massively outflanked by the DS, which is, if anything, easier to hack than the PSX, due to the R4, which has been around through its entire lifetime.

You’ve basically blamed everything that’s every gone wrong in the game industry on piracy, and it’s ridiculous.

#40 chris on 01.09.09 at 10:55 am

i did like the high school econ supply demand concept of decreasing value of a game by making a copy, increasing the q, but if the copy you make never makes it to stores, did the q really go up? and if so, ok so 1million games becomes 1million and 1, that would decrease the price like what… 0.000001%? one pirate alone (not redistributing) makes a completely insignificant change. i like being a drop in the ocean.

i remember my econ professor also proving using the utility theory model why voting is useless. the actual REAL WORLD ODDS of being the deciding vote in even a high school election is ASTRONOMICALLY low. you get more utility using the time spent voting doing some volunteer work in your community, making real change.

1 end user pirate thinks to himself ” im just one person”
1 end user pirate has negligible effect on anything.
redistributor pirate is the real criminal.

oh and the day my vote counts 144 times is the day i feel my vote will really make a difference. i dont need to say how i arrived at that number.

sometimes i think each person should get as many votes as IQ points they have. stupid ppl should not be in power. and voting is power of a real weak sort. they should have less, smart ppl should have more.

off topic i know. but end user pirates are next to nothing.

piracy is not stealing also- by definition. no object is deprived. IP can only be infringed upon, not taken.

and i hardly think the end user pirate deserves jail. they can still be productive healthy members of society. i dont see the crime.

#41 SirRipAlot on 06.21.09 at 1:43 pm

If anyone IMPORTANT (Publisher/Distributor) is reading this.

1) Support your developers (ie Sony for GOW team, I bought BOTH of these titles instead of ripping them)

2) Allow your developers creativity to stream into your money hungry ways. Meaning: Publish the entire game minus the ENDING, but make sure the game throughout has bits and pieces that TIE INTO the ENDING.

3) If the game is good, it will sell itself. No need for DRM and other stuff.

4) Follow the Nine Inch Nails model. I am going to buy the whole set. Why? Because Reznor did get it right.

I don’t support Software Piracy in general terms. But when Micro$haft, $Phony, PeeAway Arts decide to make it tough on the regular consumer, people get pissed.

I have played many games, but only a few are worth buying. It’s RARE I say “Hey now that is worth buying!”

5) DEVELOPERS: Make something original. Stop focusing on the GRAPHICS and latest hardware. NO
I do not want to buy the latest Core 10,000,000 Quadruple Processor with the 50K PC just to be able to play CRAP like Crysis. Make an ORIGINAL FPS. I don’t care how fancy you make things look, its still the same old shite. So I refuse to spend more and more money on newer hardware. Mainstream computers are VERY powerful machines, USE the existing tech instead of making me purchase a new Video card everytime you release and ‘update’.

6) If you want to stop Piracy, don’t give people a reason to ‘Steal’ your stuff. Help your developers who work VERY HARD and usually have good ideas, until Deadlines, and other beauroeconomicalpolitical BULLSHyTe gets in their way. I would rather pay your Programmers/Developers/Artist on PayPal than pay your Greedy manipulating Corporate Lawyers.

I can Ramble on, but the truth is, people will copy your games as long as you use bullying tactics against the consumer. Last year alone I spent close to $5000 in games and movies. That coupled with the amount of money I pay for my High Speed Internet. Fight for Net Neutrality. Encourage online play. You will find that the more you offer, the more you will be offered in return.

As someone stated earlier. Type 1 will buy no matter what. Type 2 will be careful what they buy. Type 3 will just Pirate no matter what. Thats the nature of any industry. Look at the fundamental reason why Piracy and other ‘Crimes’ exist in the first place. If people felt FREE to make a choice, chances are, they as your consumer would turn around and help you. I just love when you Publishers/Distributors find a Cash Cow then order your developers to come out with Version 5 millionth of the same bejebus Game. Get your head out of your @rsus and I bet you will fare better with the average consumer.

#42 John Phoenix on 09.15.09 at 5:36 pm

GAME PIRACY DOES NOT HURT SALES AND GAME COMPANIES KNOW IT!

This is closely related to the DRM issue.

I look at the piracy issue this way and I believe companies do too but they won’t admit this to you:

Piracy doesn’t hurt companies one bit and they know it. If they make 1 million copies of a game at a set price and they send to market all 1 million, they figure how much cash they stand to make on those games. If they reach their target number of sales, the company considers that game a success for them.

Now lets say another 1 million copies were pirated. This is great for the game company because they get more exposure and chances are better than not that sometime in the future some of those folks will purchase a game from that company. It’s free advertisement. None of those pirated games will cause the game company to lose one penny of those targeted 1 million sales because for every kid who has a pirated game there will always be one willing to buy the game off the shelf. Thus they get all the money they were after. The game companies know this. Only if a semi truck with 50,000 copies ran off a cliff and the games were destroyed on the way to market, would they lose any money.

This to me is very logical. Even in America we are surrounded by media propaganda every day and we just fail to see it. The game industry had yelled for so long now that piracy hurts their sales that we have come to believe it like sheep. They are then able to use this and other means to justify things like a heavy DRM.

You show me any study that proves 100% beyond any doubt that because a game is so heavily pirated it kept people from walking into a store and buying a game off the shelf and for that reason alone a company could not reach their targeted sales, I will kiss your feet in public on National TV. Come on, that’s laughable. It can’t be done. For a company to expect me to swallow that bull, means they haven’t really thought it through.

Bottom line, the Piracy issue is a fallacy made up to force us to accept a companies right to control the use of their product anyway they see fit. Of course they have the right to do that anyway with their product, but this way they will have the mainstream popular consensus on their side, and that means less hassle for the company.

#43 chrono on 01.06.10 at 7:55 pm

In relation to your latest diatribe on http://www.istockanalyst.com, I noticed you were once again using the logic that copyright infringement=stealing, and wanted to comment.

Nothing was “stolen” from Activision. If someone pirates a game, they have not stolen it, they have not committed theft. They have committed infringement.

Activision still has their property, which they would not if someone had stolen it. Instead, pirates *infringe* on their copyrighted works.

That $304 million most certainly was NOT stolen from Activision, as there is no possible way that every illegal download represents a lost sale.

Publishers need to stop worrying about piracy, and instead worry about creating value that pirated copies of games do not have. Extra features via online accounts such as Valve’s Steam platform, and physical extras such as maps, strategy guides, and game-related books are all ways for publishers to increase value and turn potential pirates into customers.

#44 Mike on 01.11.10 at 6:52 pm

I’m sure the drop in PSX titles had nothing to do with the arrival of the PS2 and publishers focusing on games for the new system.

#45 ErdTirdMans on 01.26.10 at 8:50 am

The Gamasutra article you posted highlights the one question yours and most every article about piracy fails to answer: Is a pirated copy a lost sale?

In that very article, which I’ll assume you’ve read since you posted it, it was indicated that for every 1,000 pirated copies eliminated, only 1 sale was made. Quite simply: the people who are pirating your game were never going to pay for it in the first place.

Take the money you’d invest in anti-piracy and spend it on better marketing or development. Don’t blame the non-customers you didn’t lose for your company’s insolvency. You brushed this point aside with the dense statement that those people simply moved on to another game that they COULD pirate… which proves my point.

How are the pirates destroying the industry again?

#46 spiked on 06.22.10 at 7:46 pm

I’d like to pop-in and say a few things here. First of all I found this blog post because I wrote a smart-ass reply to a member of my community directing him to http://tinyurl.com/25tfa7g. You see, he started asking questions about why the cracked version of a game he downloaded wasn’t working, but he’s rediculously out of touch on anything techy and can’t even figure out that he’s got an iso file on his desktop b/c he has “hide known file extensions” turned on. You see, the average gamer doesn’t even know how to use a pirated copy of a game. He’s ultimately faced with spending hours learning how to mount an iso and install a crack or find a cdkey or spending that same amount of time delivering pizzas to afford the real game. In the end he chose to rent the game on the xbox360 to decide if he likes it enough to buy. Good choice.

On the other hand, I am quite tech-savvy and run mulitple game servers off of a private box based on donations from a decent sized community. I recently went out and purchased a bran new game, it looks awesome and I can’t wait to get my hands on it. It’s a racing game, and my platform of choice is the PC so I went so far as to order a new controller. Well, I have my game but I can’t play it. You see I buy most of my games thru steam and this is the first game I have purchased a hard copy for in about 3 years. I popped the game into a dvdrom on my media server and shared the drive across the network and got the game installed with no issue. When it came time to actually run the game, it wanted the dvd. I had just installed it via shared rom drive, but could not play it? You see, activision published the game and included the latest copy of secureROM. Try as I might, I could not play the game that I had bought. I made backup copies, mounted them, nothing worked (not even the virtual cd hiding software). So fine, I pulled my rom drive from my other computer and slapped it into my gaming machine, I WAS going to play my game. It refused to play. Why? Honestly, no one really knows. At best guess, I had tried too many ways of not playing with the cdrom physically attached that securerom added some registry keys that I was unable to remove (literally windows told me … the admin acct … that I did not have permission… even on super user win7). I frantically deleted every file with a creation stamp for the day. No dice. I had to reinstall windows entirely to play the game that I had just purchased. I lost 6 hours of my time overall and I had yet to enter the cdkey. Meanwhile, I have 6 friends on steam that have been playing a cracked version of the very same game for the past few weeks. They don’t care that they can’t play the game online, even though it’s a game based on multiplayer, because they never intended to play it. They would have never bought it to begin with. It fell into their laps while bored at a lan event and decided to kill some time.

The pirates do infact win, but they aren’t at odds with the real consumer nor the publisher, nor the developers. The pirates win b/c they had nothing better going on, found something to kill an hour of time (that was the extent of their focus for most games) and were unbothered by DRM tactics. However, the real consumers face annoying DRM, pita procedures to validate cdkeys when they are in-hand, and overall poor quality software (there are still major bugs in some of my 3 year old games that have not been patched). Due to the hardships that real consumers face, they buy less and less. This doesn’t mean they pirate more, but they certainly avoid certain hassles and buy less. This is where the developers/publishers suffer.

Now I’d like to make a distinction between the developers and the publishers. You see the game I bought is also available on steam, but I was suckered in by a coupon to purchase in store. A good game, created by skilled and creative developers will still do well in electronic sales despite the DRM added by the publisher. Activision may have got my 20$, but the developer is going to get close to 40$ when I re-purchase the same game on steam.

I am a gamer. I play over 40 hours a week every week. I have bought one game this year, and one game last year. You see, the truly fun and rewarding games, get played for long spans of time beyond the attention span of the pirate. I play valve games, run valve servers, and avidly support good developers. I am a software developer, and a gamer.

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