Game Piracy Results in Lower Prices?

meejahor writes "The BBC reports that Sony will soon launch the PlayStation 2 in China, following Nintendo's lead with the GameCube. Most interesting about the story is the news that, because of widespread piracy in China, PS2 games 'will cost far less than they do in the US or the UK, but still be slightly more than pirated discs.' We've always been told that pirate games push prices up, but doesn't this news suggest that piracy in China has in fact pushed prices down? The story also notes that 'only two or three games will be available at launch' which seems crazy considering the likelihood that people will pirate imported games instead of waiting for them to be released officially." While the Chinese launch of PS2 has been known for a while, the pricing of Chinese games is pretty interesting, given their long history of piracy. I imagine this sort of thing would be considered in the U.S. and other countries were pirated games as widespread as they are in China.

Comments

Lower prices

[Pingular]

come from competition, not piracy.

Re:Lower prices

[Lemmy Caution]

Piracy is competition.

Re:Lower prices

[saden1]

maybe, just maybe, the games are way overpriced to begin with?

Re:Lower prices

[trompete]

Hopefully, we will break the circle of piracy. By this, I am speaking of the battle between consumers not being able to afford software and creators jacking up the prices to make up for the piracy rate.

Re:lower prices

[Sexy Bern]

I think a lot of people think this way. The gap between a legitimate product and a pirate copy is too wide.

It's a bit of a smack in the face to the rest of the world though. Play by the rules, stay legitmate, get shafted (price-wise). Pirate to your heart's content, get discounts. Nice.

Re:Lower prices

[Raindance]

Other than the obvious answer,

"No, lower prices do come from rampant copyright-infringement, RTFU",

It seems you're trying to apply canned economic theory to this situation. Is that a good idea? I'd assert that:

1. What people call 'intellectual property' breaks canned or conventional economic theory, and that
2. China, in particular, is hardly the playground of Western Economic Theory.

RD

Re:Lower prices

[Troed]

Not really. The problem is gamers expecting motion capture animations, life-life textures, life-like physics etc - without wanting to pay for the amount of person-time that has to be put into such a project.

It's easy to do the math. The only way out if you want cheaper games is to accept simpler games. Look at toonshading on the Gamecube - or games as simple and fun as ZooCube, Super Monkey Ball etc.

If you want a life-like Star Wars : KotOR - expect to pay a _lot_ for that pleasure. Development takes time, and costs a lot of money.

Re:Lower prices

[Tim C]

Open Source isn't more efficient, it's just cheaper, because (almost) no one is being paid.

Re:Lower prices

[Junior J. Junior III]

Obviously, using the law to combat piracy hasn't worked. So now we're on to economic solutions.

The idea behind economic solutions to piracy is to make the technical challenge of pirating the games so difficult that it is both easier/cheaper to buy the game from the legitimate manufacturer. This can be done via copy protection and product activation, but these anti-piracy measures have technical countermeasures which, once discovered, return the advantage to the pirates once more.

However, if the cost of the pirated game is not a great deal cheaper than the cost of the legit copy, then it makes sense to just buy the game and forget about pirating it. This kills piracy as a business model.

Of course, if the anti-piracy technologies hamper the legitimate purchaser's ability to, for example, play the game or make backup copies of the media, then from a consumer standpoint it may still make sense to make use of piracy.

So the pirate's tools may yet have some legitimate uses even for players who bought legit copies. Ironically, it's for the very techniques the manufacturers use to deter piracy!

Re:Lower prices

[GoofyBoy]

>Is there any way openness could be less efficient than closed?

Set timelines. (Closed: I can set a deadline and everyone will work towards that goal. Open: Its done when its done.)

Definite commitment to the project. (Closed: people have alot invested to make sure that the project is a sucess. Open: I can leave the project at a drop of a hat and have very little repercussions)

Startup (closed: I just have to convince upper management that people should be working on my project. Open: I have to convince everyone that they should work on it)

Re:Lower prices

[Anonymous Coward]

So suppose you have a store which sells TV's. On the nearest street corner, a guy sells stolen TV's from the back of his car for half the price of yours. He's committing a crime, does that mean he's not competition?

What the original poster meant was that piracy is competition, not that the competition commits piracy (there's a difference). Just the basic fact games in china will sell for less is proof that piracy IS competition.

Re:Lower prices

[Lemmy Caution]

Dead on. Also, consider that the prices of goods like games are not determined strictly by the cost to produce them, but by a complex network of considerations, including the size and wealth of the target market (costs are substantially lower in China, which puts them in the odd situation of having electronics hardware made locally which are far, far cheaper than the imported software and media products that get played on them) and the effect that a price-point has in communicating market expectations (if people get - legally, even - a great game for $3.00, it will be harder to sell them another one for $40.00).

After all, the SRP for a game in US is higher than the average monthly salary in most of China - or in much of Latin America, for that matter. You might think that would mean the game companies would simply give up on those areas, but insofar as the marginal costs of a game are virtually negligible, there's real reasons why they might not want to.

It's a tricky situation for game developers, who want to access the economy of scale on those other markets while still protecting the high mark-ups in cash-rich countries like the US and Japan.

Re:Lower prices

[Raindance]

To respond to each of your attacks,

1. "Economic theory is very happy with property rights... property in the abstract including IP, your house, the local park or the outback."

You missed my point, friend. I'm saying that the existence of non-material, non-intrinsically-scarce, copyrighted works challenges the very idea of property.

2. "This is the same 'Western Economic theory' that came up with Marxism (err, Marx was the economist in question) which led to consumism [I believe you meant communism- RD] etc... and that China in its communist heydey, the USSR etc employed orthodox economic theory just as the FED or EU does today."

Perhaps my point is that Classical Economics, as the above poster appeared to be using, has difficulty during periods of transition- doubly applicable to China, as both China itself and the items we're talking about, copyrighted works, are undergoing significant change. If this was a long-established, unchanging-in-nature market item in an economy and system not undergoing rapid evolutionary change, I'd give you your point. As is, I withhold it.

I appreciated your comment on the nature of economics. For your first and last snide comments, however, STFU Troll.

RD

Re:Lower prices

[Coryoth]

The creators are greedy for profit, their excuse of jacking up prices because of piracy is bull! If they can sell a $5 item for $500, and people will pay, why not?

The consumers likewise are greedy, afterall the best things in life are free, their excuse of stealing because of high cost is bull! If It is worth $50 and you sell it for $25, and they can get it for free with little effort and without getting in trouble with the law, they will do it guilty free!

Yes, both sides a greedy for their own gain. The principle is, however, tht there is some agreeable middle ground where supply and demand meet nicely.

Currently either side is busy pushing the extremes. The publishers keep pushing prices up, and the consumers keep balking and pirating. Someone needs to take a step back, realise this is a self perpetuating cycle, and agree to step into the middle ground. It looks like this is what is happening in China. Sony may make a loss having to sell their games a little below cost, but the people might decide it's worth spending the few dollars extra to get a proper version of the game. Eventually, hopefully a balance can then be struck.

Jedidiah

what an idot

[bobbagum]

They are pusing down the price to combat the pirated games that's available cheaply, thus puttinng on the cost elsewhere ie. the western world, buy yourself some clue

China is communist

[BillsPetMonkey]

and only capitalism details that IP and copyright are capital goods. Sure, they might make some concessions to attract investment but ultimately if it suits China they'll tear up any agreement to recognise Western-derived copyright. This is how it's always been.

Piracy effectively becomes "exercise of the People's right to pool and share resources".

Re:China is communist

[tehanu]

China is effectively a capitalist country now. Granted a very very very corrupt capitalist country but the Communist (as in party) in China has always been extremely corrupt from its earliest days (as my grandmother likes to put it, it was basically "Pay us, or we'll beat you to death."). Copyright and IP and capitalism are not necessarily tied together you know. Neither is democracy and capitalism.

The reason why China doesn't really recognise copyright and IP laws right now is because it doesn't suit their developing economy. Just like why they don't float their currency. If you look at the past history of Europe and America, when those economies were developing, they had very loose IP laws (or loose enforcement). For example British authors used to be totally pissed off with the very widespread and blatant piracy of their books in America. It was only when their economies were developed enough to actually make them think they have something worth protecting from new upstarts that they started getting concerned with copyright. Stealing IP from smuggling plants out of a country to pirating entertainment seems to be the common way for developing nations to get a step forwards...

Golden Times of 8-bit Atari

[SharpFang]

...or story of authors and pirates coexisting peacefully.

Shortly after capitalism was introduced in Poland, many software companies emerged, producing games for most common computers - primarily 8-bit Atari. I was a lucky owner of one at that time, and I recall that times with some nostalgy.
Multitude of games was written. Some of them really exceptional. Spy Master, platform game with built-in 'DOS' in which you could launch mini-games from floppies you found thorough the game. Viki, a game with over 1000 rooms (on 64K RAM!), Barahir, really exceptional graphics, 'Dwie Wieze', gfx imported from Amiga, many, many more.
And the companies were pretty successful, despite the fact piracy was widespread and legal. How?
The games always did have some copy-protection scheme, but not uncrackable one. More skilled pirates did circumvent it. BUT the games were released at prices very comparable to the pirates. Usually one game costed the same as one disk (with 5 or so games) from a pirate. And people were buying them, because they were very available at affordable prices, and every Atari user held it as a point of honour to support the authors... Well, with exception: games that sucked ;)

Time passed, Atari died and even best Atari games couldn't compete with Amigas and PCs. No local 'scene' for games for such appeared - all was either import or pirates.

Once originals prices suddenly rose from like, 3 zl (our prices) to 100 zl (western prices), sales suddenly died. Despite introduced anti-piracy law, piracy was more widespread than ever before. It just wasn't legal, small firms that made profit on it, just mafia sindicates. Hardly anybody buys originals nowadays. "We suffer from low sales because of piracy" claim the releasers and increase the prices more to increase profit from the few games they sell even more. And users, just pissed off, "How DARE they to demand such money for that", just buy pirated games instead.
And almost nobody remembers that selling and buying original games in Poland at one time was not only very comon, but quite profitable - and the key was LOW PRICES.

Old Games

[Apreche]

The game Sony is probably releasing over there are really old games. Games where the developer has already made back their development costs and profited. Games where the publisher has already made back their marketing cost and profited. The only costs of selling these old hits will be manufacturing and distribution. All revenue greater than that cost will be pure profit because the US, Japan and Europe have already paid for all of those other 1 time costs. Because of this they can afford to drop the prices like a rock.

Charging more

[imnoteddy]

Of course it is obvious that no one RTFA (or at least was paying attention) because the article says:

The console will go on sale on 20 December at a price of 1,988 yuan ($240), compared to $179 in the US.

So Sony is raising the price of PlayStation 2 in China and lowering the price of the games.

I'll restate this for the reasoning impaired: They're taking their money upfront on the console, rather than later on the games.

Not applied to the right market

[ThisIsFred]

Okay, doesn't look like this is being applied to the right entertainment market. I don't have a problem with game prices at all. There is generally a lot of creativity and work that goes into them, and the prices do fall after the item has been on the market for a while, even if it's still popular. That doesn't seem to happen with music or movies (or Microsoft software).

Still, it's backwards. High prices encourage "piracy". And lowering the prices enough will make casual users of illegally copied material say, "hey, it's more convenient to just buy it." Of course, there still has to be some enforcement of copyright for this to work. I see hints of this happening in the music biz, but I've yet to see real price competition between labels. Thank heavens we are seeing a real-world example of this, and hopefully it will give the anti-entertainment-cartel crowd some ammunition.

Re:Piracy is GOOD

[drinkypoo]

You don't have to be moral or legal to be correct. While he is oversimplifying the case to further his own agenda, he is essentially correct. If there is no piracy then people will simply gouge for as much as they can get. Most people will pirate pushed hard enough, especially if they can get something cheap enough. Also, the used market would be much more significant; Used games, music, and all other copyright-protected media would have a higher value, so people would take better care of them, and there would be more used sales. Then, they really lose, because so many people will wait until they can get something used before they use it. Pushing out tons of cheap trash dilutes the value of media and keeps the system under their control, to some degree. A strong degree, while they own (All your playlists are belong to us) 75% of the nation's radio stations, for example.

The best way to make money has always been to make a whole lot of something. The somethings get cheaper over time, if for no reasons other than that technology marches along, and that the research costs will eventually taper off to virtual nothingness alongside the cost (and benefit) of production. Only a few people will save up their pennies and buy one thing that will last them a long time. They're distracted by loud noises and flashing lights, and they'll buy the cheap crap. Besides, if you're poor you probably live somewhere where nice shit is in serious danger of being jacked when you're gone for the weekend. I don't even have anything particularly nice (Just a bunch of medium-nice things) and a whole bunch of not worth stealing items that a junkie would probably run off with anyway, and I'm concerned about my belongings. Don't give me that look when I say Junkie, this is a town that both makes and takes an awful lot of speed.

Oh and stop bringing up Hitler. No one's getting out the Zyklon B. Commercial copyright violation surely deprives people of money and devalues their product, but the only reason they're upset about the latter is that it typically has little intrinsic value to begin with. They simply hype it up until it has spin value. Then they spin up the next thing and send it our way. They're treating us like pigs out for slop, and that's what we get, because we'll eat it... certainly this relationship works both ways.

There are basically two ways you can go to fight them. You can go both ways at once, too. One way is to produce or promote (either with effort or money) independent media. You can buy shareware games, you can buy indie CDs, etc etc. And you can be a "pirate". One way is legal, one way isn't. One way is clearly moral, one way is murkier, but there's really no proof that anyone's getting hurt. It seems to usually be a good thing for artists; there are exceptions I'm sure but they seem to be in the minority.

I think we can all agree that the saying about how people wouldn't buy the software anyway is about fifty percent bullshit. It's just easier to download music and not pay for it than it is to go to the store and find out your chosen music is out of fashion this week and they'd have to order it for you. The music industry has been promising us custom CDs for ages but they never have been able to agree on how to cooperate. Piracy has simply forced them to start selling music online, or be left behind. In this case it has driven progress; the technology has been there for some time, in fact it's a cheaper way to distribute music than making CDs in some central location and shipping them.

Assorted businesses are now having to come up with new things to charge for, new items to market. Technology does that. People want information to be free, and conciously or subconsciously, they work toward that end. There are notable exceptions who have discovered ways to make money off making it not free.