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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.
i think that piracy will actually help to sell more. i prefer to have a original boxed game with manuals and stuff than a pirated cd... only if the price is too high.. i'll get the pirated version.
Even if game costs 2$ you can still find release of it on warez sites and p2p networks.
Do the games have some kind of geographic protection? is it possible to import original games from china and sell them cheaper here?
If the Chinese market makes enough money for selling there to be profitable, then you can be sure that the overall margins are being propped up by extremely high margin sales in richer countries.
Isn't this also the same rationale used for region coding with DVDs? They're sold in high piracy markets for much lower prices, which are still profitable for their makers, and the region coding protects their high margin markets from imports.
And the same is true for drugs and a host of other things sold overseas. Have the US/Japan/Europe make the real profit and subsidize low-margin (but not unprofitable) Third World markets. Use legislation to enforce this model. Profit!!
>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?
Ever hear of profiteering? It's easy to compete with pirates if your prices are bloated to begin with. In the bygone era, profiteering was a dirty, ugly word. Today it is heralded because it makes shareholders happy.
Are you sure about that? Console games which are diffucult to copy have always been more expensive then normal pc games. It's been that way as far as I can remember and the only explanation I have found is that they lower prices to combat piracy. And based on the games I have bought it might even work.
Piracy is whats lowering the price of music CDs accross the country. Piracy is what keeps Microsoft from selling Windows for over $500 a copy to college students. Its piracy that controls a monopoly and prevents the company from setting the price. Please support P2P and piracy so that we can force these monopolys to work via supply and demand. I'll never buy another RIAA CD, but I know alot of people would if they were $5 each
People don't exist to serve systems, systems exist to serve people.
I went to see the matrix revolutions which had all those special effects and then some for under $10. Games ARE over priced for sure, because movies cost more to make than games. Music is ridiculously over priced at $20 a CD when they cost less than $1 to make. A good game costs a few million to make and easily makes millions of dollars back if it sells a million copies at $10 a copy. 10x1 million = 10 million dollars, if the game took 3 million to make, thats a nice profit margin.
People don't exist to serve systems, systems exist to serve people.
It's only for products that are correctly priced that prices will rise, because costs will rise enough that the company can't afford not to raise prices. For products which have previously held monopoly-like protection, piracy essentially serves as market competition. I'd tend to think that video games are a competitive enough market that this doesn't apply here -- chances are it's just going to raise the price of games in Western markets, and the revenue from China will just be treated as found money -- but there certainly are cases where we've seen piracy lower prices.
This shows that they CAN afford to make game prices cheaper. I was led to believe that almost every last penny is going into developing and distributing the product where there is very little profit. This shows that they actually have the power to make games cheaper. So the question now is, 'Why don't they?'
And the most obvious answer is they're money grubbing bastards, which is why I'm happily pirating games. Prove me wrong and maybe I'll stop.
I didn't play games for the a bout six years when I was running Linux only. Then, out of a whim, I bought and installed Ghost Recon and was completely blown away by the experience. I just could not believe how immersive a game could be.
If anything, that - and experimenting with user created GR scenarious with abyssmal voice-acting and scenarios - taught me that sometimes it just is worth paying for quality game software.
The owls are not what they seem
It worked for music. Thanks to Napster and other P2P systems, I can legally get virtually all of the music I'm interested in for $.99/song or $9.99/album at iTunes. Beats the old days of Record & Tape Traders, Waxie Maxies, and the incredibly price-bloated Tower Records.
there are no stupid questions, but there are a lot of inquisitive idiots
pirated games (and other software) are widely spread here. even with punishments from fines to 5years of jail, pirates continue to support us in cheap copies. typical prices in poland:
:). dont judge people who live in much poorer parts of the world, ok? maybe at the end of century China will be richest part of the world, and we'll be pirating from them :).
1 cd (game, productivity, OS - no difference): 2-3 euro.
1 cd (movies, mp3) - 1 euro.
licensed copy of windows XP - 100 euro.
licensed, localised, new PC game from upper shelf - 30 euro.
licensed game from bottom shelf - 12-15 euro.
ticket to the new hollywood movie - 3 euro.
new SF book - 8 euro
cost of hiring a room for student - 60 euro.
most people earn here about 250 euro monthly. (like math teacher, policemen, nurse...); best untergraduates can get 80-100 euro.
I suppose reality in China is much closer to ours, than yours
[sorry for my bad english]
Greed is real.
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!
Greed is the problem, has been with us since the beginning of time, and it is not going away, anytime soon, so wishful thinking.
------ Curiosity killed the cat. {satisfaction brought it back | it didn't die ignorant | lack of it is killing mankind
Ever since growing up in the 1980s I have heard the game producers (then for the Amiga) claim that with less piracy they would sell more games and thus be able to sell them at a lower price.
For me this has always been a flawed argument. It is economical theory: If somebody sells more of a product they will just reap the profits, not lower the prices to fix their profits at a certain (low) point. It is not like a company will go: "Damm, we are really selling a lot, lets lower to price so we don't earn too much money".
If more people bought original games it would only mean that game companies would earn more money, not that the prices on games would change. It would probably have the side effect, though, of more games being produced as more companies would be willing to enter an industry where there is profit to be gained.
As a real-world example we can just look at some of the PC top-sellers, like for example Quake 3. This game was relatively cheap to develop and everybody knew that it was gonna sell a shitload of copies. Does that mean it was sold at a lower price? Of course not, it just means that ID Software would earn more money.
Surely the price in China and other places has just as much to do with what people can actually afford to spend? If you're making $10 a week you can't spare more than a couple of dollars a month to buy a game, whereas if you're earning $5,000 a month, $50 isn't all that much.
Farmers have been selling oranges for centuries while at the same time anyone equipped with a single orange could grow their own tree.
Water comes out of the sky for free. When it's bottled it's a $5 billion industry.
Piracy will have very little effect on the market.
Set timelines. (Closed: I can set a deadline and everyone will work towards that goal. Open: Its done when its done.)
IBM are just as capable of setting deadlines for the work their employees do on open code as on closed code.
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)
At a corporate level, Red Hat's whole business is based around open code. To suggest that they have nothing invested in it is insane. Equally for thier employees, if you want to argue that their employees are less committed to their work on open projects than they would be on closed projects then you are going to have to argue it, not juest assert it without any support.
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)
Again, this makes no sense. There are more people who you might be able to convince to work on an open source project but in many cases your first step is going to be to convince your company's management to support the project. And the possibility of others working on it is not necessarily going to be critical.
Not all hobbyist code is open sourced, not by a long way, and not all open source work is hobbyist, again not by a long way. You're confusing the two hopelessly.
We've always been told that pirate games push prices up
A bunch of thieves (pirates) being lied to by a bunch of liars (publishers.) What's this "we" white man? I was never naive enough to believe what I have been "told" on this subject. What is said to discourage theft and what is done to sell products are two distinct matters.
but doesn't this news suggest that piracy in China has in fact pushed prices down?
This so called "news" suggests a lot of things, one of which is that publishers are attempting to establish themselves is a market on the hope that one day in the not too distant future that market will grow up and be worthwhile. It also suggests that, like the drug industry, there is a massive price differential between the US and everyone else. Of course, Chinese street vendors probably do not sell shelf space by the square centimeter, either. Much is suggested by this, and attributing all of it to the minor matter of thwarting piracy is either naive or dishonest.
Maw! Fire up the karma burner!
I live in China. If you go to the electronics market, people practically drag you into their stores to buy DVDs and VCDs. All software you can possibly imagine, and movies usually 3 days out of the theater. Average price: USD$1 for a movie, up to $10 for a really big software set. And the chinese only sell things when they make money on them, of course. Don't give me that "communist" nonsense. Sure, the substructure of the country is commie, but at the street level and more it's free-wheeling capitalism. The reason it's so cheap is they are paying production costs ONLY, obviously. That's what pirates do. And absolutely NO-ONE in China will buy legit games if they are not only marginally more expensive than copies (like 10-15%)
Not sure where I'm going with this, but thought it might be interesting.
Such a practice scheme has been around for a while in Russia. Some publishers are wise enough to sell PC games for as low as 10$ per boxed version and 5-6$ per cd only (compare to 2-3$ for a pirated cd). And the most interesting part is that people do actually buy these licensed products. I guess if Sony gets their prices right, Chinese people will buy their products.
Mod parent up.
Speak to any economist and they will tell you that Microsoft isn't a monopoly because it can only charge about 1/16th of the monopoly price of Windows. Why? Because piracy undermines its monopoly position and therefore acts as competition.
The same applies with games. The greater the extent of piracy, the more price elastic is demand and so consumers are more willing to switch from the legal to illegal alternative. Thus in countries with a high acceptance of piracy, the "legal premium" of paying for the official product is small, and companies can only charge a price a little higher than the blackmarket pirates charge.
Generally I would agree with you on piracy of copies of software and media that is single-source and significantly more expensive than it should be. In a system without viable competition, piracy is a compelling form of competition as a market reality. It can be argued that it's piracy which keeps people from examining alternatives, thereby continuing the monopoly.
But I'd like to point out here that most gaming companies don't make money. Large publishers, who are in the best position to be raking it in, are merely scraping by. Nintendo and Microsoft lost money last quarter. Gaming companies are not greedy monopolists keeping prices high because they want to milk their position. Game companies keep prices high because they are afraid of losing money.
A few gaming realities. %50 or more of a game's total sales will happen during the first two months of a game's release. This demand is relatively inflexible, and will not generally go up if you decrease the price. As they age, price becomes more of an issue for impulse purchases, though not generally for the people who have mentally chosen the game. As impulse purchase games are likely to be the "greatest hits," unless your game has some serious name recognition, it is in your best interest to sell to the choir who will purchase it at full or near full price.
Assuming the retailer takes half, and half of what remains goes to paying the developer, for cheap 2.5 million dollar game to break even it needs to take in 10 million overall, or 5 million in the first two months. 5 million dollars is 100,000 copies during the first two months, assuming $50 per copy. Compared to movie tickets that's somewhat small, but for the pool of gaming that's pretty large.
A given metropolitan area will have one to three game-specific stores where the cash registers ring every few minutes. They will also have music and mega stores where one can purchase games, but sitting down and watching that section for a day is like watching paint dry. On the other hand, there are at least 7 theaters here in boston, and those ticket counters almost always have a line. If you talk to your co-workers, the launch of Return of the King has entered public consciousness, but Metroid Prime barely registeres.
We're in a small pool, in other words. To stay afloat, game companies need to keep prices high. I would like to believe that lower prices would increase demand, but I have seen companies attempt to go down that route with little success. The fact of the matter is that most people don't play games: they feel they are a "waste of time," and "for kids." One could argue the hipocracy of clinging to the puritanical belief in a lack of wasted effort in a society where the average person watches 4 hours of television per day, but it is (I fear) the latter perception is the more insidious and will only be overcome in a herse.
But gaming companies to listen to sales. A few years back the Playstation 1 had a rigid price structure where every game was $50. Crash Bandicoot 2 was just released at $50, and as such SCEA decided to lower the price of the original to $45 as an experiment. The original Crash sold as well as Crash 2 that year, showing that indeed, price was an issue. From that we have our multi-tiered pricing system of today. Just in case you forget that it has been tried, there was (and remains) a rung on the pricing ladder below "greatest hits." Ball Breakers, and many other games were released at the $10 mark for the original Playstation. Yes, some of them were terrible, but some were rather good. Sadly, the increased sales didn't offset the decreased cost, and that experiment was largely abandoned.
If you want to send a message to publishers, buy games on the cheap. They have no way of knowing that someone just pirated a copy of Max Payne 2 in protest, but they could see a thriving market in used games as a sign that they should lower prices. If there is a hot game coming out for $55 dollars, and an older one that you really
The ______ Agenda
I've suspected for a long while that, given pirating and open source, etc., it would make a lot of sense for software companies to diversify, such as getting into hardware and/or other markets and/or of course in this case, taking a bigger slice from their hardware pie.
My worries are when XYZ Corp creates the super ultra neat-o game and puts it out and the overall reputation and respect for gaming softare is so low that nobody will buy it...Will XYZ Corp go out of business?
Perhaps the execs at XYZ should consider an alternative to spending tons of money on the development of "Neat-O" as a sealed product.
Instead, they could:
- Develop a detailed plan-pilot-concept of how "Neat-O" should look and play.
- Sell ten or so "Neat-O" original developer subscriptions to developers for different sections of the game. These developers coordinate the algorythm, plot, and code development of the game.
- The game is released on low-cost CD's ($3-5 each) in its primitive form along with its source code.
- People playing the game develop suggestions and alternatives to the basic game on the CD. These improvements are uploaded to the XYZ website. XYZ charges $1 a year to access uploads received within the last two weeks and allows older uploads to be downloaded freely.
- "Neat-O" develops hundreds of levels and secret rooms. Subscribers to the XYZ Neat-O website reach over 200,000 worldwide. Revenues from the $1 a year subscription are split half to XYZ corp and half to the original ten developers or people who have bought one of the ten original developer subscription registrations.
This is one of many alteratives to business models that encourage 'piracy' by treating intellectual and cultural experiences as a product that can be marketed like a bar of soap.
However, it's OK for U.S. movie and media producers to sell their products overseas at prices that American consumers can only dream of?
I really wish some of you pro-piracy folks would work really hard on something that you care about for a long time and then have it stolen by thousands of people.
Ask any maintainer of a high-profile Free Software package. They "work really hard on something that [they] care about for a long time and then have it stolen [sic] by thousands of people."
Games are a monopoly product, you price them to get the largest profit the market will let you, and differently in each market. Chinese buying power is not yet on parity with US ones (or even UK) so the prices must be lower.
Next you need to prevent grey market imports (region code etc) and then you finally have to find an excuse so that the other customers carry on buying the product and don't feel aggreived
Piracy is IMHO the excuse, nothing more, to explain to US and EU customers why they are paying vastly more for the same games. Just like Americans being ripped off with drug and school text book prices, and EU people with DVD pricing.
Well, maybe someone should :-) (perhaps a mass of a thousand college students? I'm sure that would at least make a splash in the press...).
But I'd be quite happy to get slapped with a tort for violating copyright. I would go to court to fight it, probably lose, then happily pay the fine. Can I look "sympathetic"? Maybe, maybe not: I'm just a college student downloading the music he can't hear over the radio, because I don't have a radio and I can't find a good webcasting radio station I like; downloading to the tune of maybe twenty songs. The way I figure, if I lose I'm out a whole $20 (if that's the cost of downloading those 20 songs off iTunes legitimately) - I believe I could argue (in a civil court) that that's the value of the songs. And it would make for a rather entertaining story: "student sued for listening to music you're listening to on the radio right now". I feel that the potential punishment to me (getting hit with that tort) is worth the statement I'd be making - even if only to a small-time local newspaper.
I'm not saying copyrights are completely wrong, and I won't advocate ignoring them without cause. But I will break the parts of the law I feel are wrong, and I am prepared for the costs of that belief. I ain't Gandhi and I ain't trying to go to jail, but I am not going to roll over and let a monopoly dictate how much I have to pay for music I can hear over the radio for free. That price is for market forces (e.g. iTunes) to determine.
A witty [sig] proves nothing. --Voltaire
Something a lot of people here don't know is that the PS2 has already been on sale in China *ever since it's introduction in Japan*. They've just been illegally imported instead of brought in by Sony. The really ridiculous part is that they're selling right now for less than that price Sony is listing. Can't remember off hand exactly how much but I seem to remember a price of around $200 US. As for games? So friggin what if Sony only "releases" a few games? They *already* have the full catalog available through the pirates! There's even lots of games that have been hacked up by Chinese to use (mostly) Chinese characters instead of English or Japanese.
I think Nintendo's got it much better in China since there are no pirated versions of their games available. They simply don't exist. But Sony? How are they gonna make money when the pirated games cost less than $1 US and the imported systems cost less than they're selling them for!?!
Do not anger the worm.
Inkjet cartridges? Hell, my in-laws just blew about two-thirds of the annual spending power of the average person in East Timor on one printer (HP 2410xi for $220), replacement cartridges (~$70 for 2 tricolor and one black + ~$30 for the photo cartridge with freebie 4"x6" photo paper) and $20 after rebate for 100 sheets of glossy Kodak photo paper (second from top grade).
/. and the figures from ET stuck in my head as my family and I enjoyed thanksgiving.
Total is $220+70+30+20+taxes = ~$360... According to the CIA world fact book ET's per capita spending power is $500.
Ok, I guess that it would make more sense to compare against PRC figures, but hey, this is
Still waiting... :-P
Didn't a lot of people call it the "Internet revolution"? I wonder why they'd do that?
Galileo: "The Earth revolves around the Sun!"
Score: -1 100% Flamebait
Here's one for all of y'all "games are overpriced!" folks.
First of all, a console game has three groups who'd like to have their share of the sale:
1. The developer, obviously. Ironically, the developer does the hardest work and gets the tiniest slice - by far.
2. The publisher. Takes the bulk of the money. I hate to see those greedy tie-wearing dipshits get rich off what developers make, but then again, publishers front the entire development costs. And you guys don't have the slightest idea how many projects do NOT get released. I have spent a total of more than three years working on projects that got scrapped. Just try to calculate how much money went down the drain there. So good projects have to pay for cancelled projects.
3. Sony/Nintendo/Microsoft. For every media produced, Sony (PS2) or Nintendo (GC) want a substantial (!) amount of money. The thing is, they make barely any money through the consoles (just think about how much you'd pay for a PC with that kind of processing power) - the real money lies in the sale of games. So here they are and open up their hands. Naturally, they want money for every CD *produced*, not *sold*. Once again, the publisher is the one sucking it up if a game doesn't sell well.
Yeah, games are expensive, but not overpriced.