"The common industry assumption is that developers are losing 90% of their revenue. That is, pirates would have bought every single game that they downloaded."
As a long time game industry veteran, allow me to tell you that this is simply not true. In fact, that is actually the internet's straw man counter argument, which is fueled by a couple poor PR incidents where a few people have made it seem that way.
But the reality is that there are a lot of lost sales, and if you can prevent someone from pirating it, there is a nonzero chance that they will go out and buy it instead of waiting.
What is that number? Who knows! But it's certainly greater than zero, and there's certainly enough impact of piracy to make it worth it to explore methods of minimizing that impact.
I have other issues with the article, such as the assertion that most pirates can't afford the games. Well, my counter anecdote is that I have a bunch of friends who pirate, who make plenty of money and could easily afford the games. They pirate them because they can.
I would expect that everyone knows pirates, and I would expect that everyone knows pirates who make enough money to pay for (most of) the games they play.
(These are my own personal opinions and not necessarily those of my employer)
As a long time game industry veteran, allow me to tell you that this is simply not true. In fact, that is actually the internet's straw man counter argument, which is fueled by a couple poor PR incidents where a few people have made it seem that way.
I thought that was fueled by industry produced reports that blamed losses on piracy and assumed a 100% conversation rate between piracy and sales. (That may be more the music industry than the game industry, though)
What is that number? Who knows! But it's certainly greater than zero, and there's certainly enough impact of piracy to make it worth it to explore methods of minimizing that impact.
Yes, that number is greater than zero, but just how much greater than zero it is, is not insignificant. All methods used to reduce/eliminate piracy inflicts a cost of some sort. DRM annoys customers and is mostly ineffective in discouraging piracy.
For instance, Blizzard removed LAN from Starcraft 2. How many fans did that annoy enough to cause lost sales? How much piracy will that prevent? Especially since it seems there are BNet server emulators on the internet already.
I'm not arguing pro- or con-drm. I'm just stating that the article makes a few invalid assumptions.
Sales are lost to piracy, and it is always beneficial to find ways of turning pirates in to buyers, be it DRM or some kind of added value. I'd prefer it be the latter, but that's a much longer, harder, and more expensive route, as it requires added development.
Really, the only thing this affects (in terms of the entrenched game industry) is the PC. Piracy on consoles is low enough as to be nearly insignificant, due to the hoops required to pirate on console, coupled with the potential downsides.
I wish for a magic non-intrusive drm for PC so we could use it as a primary platform again. Sure, shoddy ports aren't helping, but at the end of the day, even non-ports have serious issues if they don't ship with a major online component.
I am completely anti-drm on most medias, but with games, there's a catch: They have no other means of income. When a TV show is pirated, well, they still get money from TV ads and dvd sales. When a movie is pirated, they still have the box office sales. When a cd is pirated, the artist still makes money at concerts.
When a game gets pirated, well, too bad so sad I guess. It's a difficult situation for everyone.
"it is always beneficial to find ways of turning pirates in to buyers"
You keep making that claim without giving any rationale to it whatsoever? If your way of turning pirates into buyers turns off other honest buyers, it could be a net loss.
Presumably your DRM system (or whatever other approach you use) will cost money to develop (or buy in). So you need to make enough extra sales from the converted pirates to cover that cost. And there will be extra support costs from legitimate customers who encounter problems with the DRM system. And there might be running costs for the DRM system if it requires running a server somewhere.
Probably all small costs on their own, but they add up.
It could be but only IF the amount of people turned off by DRM is greater than the amount of sales gained by it. People turned off a purchase by DRM are very vocal but are they numerous?
I think some people who do know are big games publishers. They have a large number of data points, they're the only ones with total daily retail and online sales figures and they also track downloads.
Where are the numbers? Well, why should they release them to someone who isn't part of their own company?
That's precisely why games have to stop using DRM and focus on creating additional revenue. For example, if your DRM blocks a pirated copy of your game for which you sell additional DLC, you won't get money for either the copy or the DLC. I know it's an oversimplified and exaggerated example, but I just want to illustrate the point.
I know people who pay regularly to go to the movie theater and see a new movie. A lot of those will later rent that same movie from BlockBuster because they liked it so much. And then they will make an illegal copy, because they liked it so much and also because it's the cheapest alternative to get a good quality copy. My point is that those pirates still contributed something to the revenue. One of the reasons why game pirates don't contribute anything is because there's nothing else to contribute.
Right, but creating additional revenue is difficult when costs are so high.
I don't know what the solution is. I guess the best one is to just make a multiplayer game on the basis of continuing to sell and support it for years at a stretch, like Valve. But that limits what kind of games you make, and would also put you in direct competition with Valve. Which... is probably just as bad as not doing it in the first place.
When Reflexive games performed a series of experiments with anti-piracy measures, they found that they only made one extra sale for every 1000 pirated copies they blocked
Besides if you successfully lock away pirates you loose all the good publicity that they give you on forums (provided that your game is any good of course).
And you also lose the bad publicity they give you on forums. See Titan Quest, which was maligned on forums (and even some reviews) due to crashing problems which were entirely related to the pirated version, and weren't seen at all on the release version.
That article is very focussed on reducing piracy rates instead of increasing sales. It seems they consider the system a failure because they don't make a significant reduction in downloads, but...
> Fix 1 – Existing Exploits & Keygens made obsolete – Sales up 70%, Downloads down 33%
> Fix 2 – Existing Keygens made obsolete – Sales down slightly, Downloads flat
> Fix 4 – Keygens made game-specific – Sales up 13%, Downloads down 16% (note: fix made after the release of Ricochet Infinity)
...the first time they fix their DRM they get a 70% sales boost. Another time they see a 13% sales boost.
Now there are probably some other factors involved that they don't mention in the article (plus they don't say how long the increased period of sales lasts), but surely a 70% spike in sales is worth chasing?
> What is that number? Who knows! But it's certainly greater than zero, and there's certainly enough impact of piracy to make it worth it to explore methods of minimizing that impact.
Why should it be greater than zero? There may be cases where people use a pirated copy as a `demo' and decide to properly buy the game later on. I concede that this effect is probably minor--but its existence suffices to justify the need of data before you can assume that the number is non-negative.
As a long time game industry veteran, allow me to tell you that this is simply not true. In fact, that is actually the internet's straw man counter argument, which is fueled by a couple poor PR incidents where a few people have made it seem that way.
But the reality is that there are a lot of lost sales, and if you can prevent someone from pirating it, there is a nonzero chance that they will go out and buy it instead of waiting.
What is that number? Who knows! But it's certainly greater than zero, and there's certainly enough impact of piracy to make it worth it to explore methods of minimizing that impact.
I have other issues with the article, such as the assertion that most pirates can't afford the games. Well, my counter anecdote is that I have a bunch of friends who pirate, who make plenty of money and could easily afford the games. They pirate them because they can.
I would expect that everyone knows pirates, and I would expect that everyone knows pirates who make enough money to pay for (most of) the games they play.
(These are my own personal opinions and not necessarily those of my employer)