Piracy Helping Larger Game Developers?

Carlos Camacho writes "Piracy has been in the news recently within the game developer, and game player communities. You've seen all arguments against piracy in the past... Or have you? GBA and Mac game developer Aaron Fothergill of Strange Flavour Software wrote iDevGames a guest-editorial that will hopefully lead more users who copy games to re-think exactly it is that they are hurting. 'One of tenets of the software thief, is that "software is too expensive." They will then usually go on to bemoan how the 'giants' of the industry treat users unfairly and how stealing their software is their way of getting at 'the man.' Unfortunately, little do they realise, that the opposite is happening! Instead, rampant software theft benefits the 100 stone gorillas at the expense of new products that would otherwise be able to compete on price and features, resulting in only the big monopolistic companies keeping their products in the market and being able to control it'."

Comments

Thank you, Captain Obvious!

[orkysoft]

I guess it still had to be said for the clue-impaired.

How do you think Microsoft got so big? People used to copy DOS and Windows, and when their companies were getting computers, guess what software their employees were familiar with, and which was thus bought?

Same thing with Photoshop. It's really expensive, and gets pirated a lot. Instead, people could have bought Paint Shop Pro or downloaded The Gimp.

Software piracy makes you serve as free advertising for the "victim" company, and when it feels like it, it can sue you for megabucks. Do the math, people (preferably not using a pirated copy of Mathematica. Get GNU Octave instead)!

Re:Thank you, Captain Obvious!

[Pluvius]

Same thing with Photoshop. It's really expensive, and gets pirated a lot. Instead, people could have bought Paint Shop Pro or downloaded The Gimp.

That's the way it works with applications (though I don't agree with your DOS/Windows example). Games are slightly different, because they don't directly compete with each other (except in scattered cases, like HL2 versus Doom 3). In this case, we assume that people pirate games from both small publishers and large ones (not exactly a stretch). The large ones can take the hit in profits, but the small ones can't, so they go out of business.

As far as the argument itself goes, it's something I haven't heard before, but it still seems to rely on the idea that all piracy translates into lost profits (which is almost certainly not true). I do agree that if you're going to pirate, you're better off pirating the big games and buying the small ones (assuming that the small ones are worth buying, obviously).

Rob (There's also the fact that just because pirates allow publishers to charge $50 a game doesn't mean that the publishers have to)

Re:Thank you, Captain Obvious!

[robson]

There's also the fact that just because pirates allow publishers to charge $50 a game doesn't mean that the publishers have to

You know, this diverges from your main point, but I'd like to point out that games have a fundamental economic problem moving forward: The cost to make games is rising, but the price of games isn't.

Atari 2600 cartridges, the first mass-market home video games, cost about $30 each. Fast forward 25 years. Last week I bought "The Suffering" for the PS2 for $45.

Now, I don't have precise numbers for the cost of development of 2600 games, but I know most were created by a single person who did all the programming, art, music, etc. Compare that with development today, which involves massive teams with dedicated departments for engineering, design, art, animation, and music. However, because of market forces, developers/publishers can't charge more for games today. The effect is that only the big, big hits make their money back. There's massive risk involved in simply developing and publishing a video game.

Thus, you see publishers trying to reduce risk wherever possible, and what could be more risky than innovation? If you complain about clone after clone, look carefully at your own buying habits. (Obviously, I'm not talking to you, Pluvius -- I'm just speaking generally.)

Re:Thank you, Captain Obvious!

[Echnin]

Also consider that games today are selling way, way more copies than they ever did back in the Atari 2600 days. Really makes it a bit easier to earn back revenues.

Re:Thank you, Captain Obvious!

[danila]

Guess what, I'd rather use a pirated version of Photoshop or PhotoImpact and live with the fact that I am not stimulating competition, than part with a few hundred dollars. I happily buy pirated games, simply because I don't care that much about the market. Let the big market players, or small players, or medium-sized players win, I don't care. And I don't care if game players lose. I personally win.

You need to realise that the consumers can be divided into two groups - those who pay for software and those who don't. Those who pay for it, vote with their dollars. Those who don't, have no influence on the result, but they are happy with that. It's the same as with the presidential elections, some people will come to the voting booths and case their vote, others will spend the time the way they want it, but will have no influence on the outcome. You can't blame the second group, because it's their right to make such decision. And if they don't care, it's the correct decision.

How will DRM change this?

[polyp2000]

DRM ... Is supposed change this,making piracy so difficult though, but will this have the opposite effect? I doubt it, The fat cats are just going to get fatter and the skinny kittens are just going to get skinnier.

The article seems to be an anti-piracy article in some sort of disguise.

In the end the consumer will decide and with the advent the choice will be a lot clearer. Let the Fat-Cats extort your money because you wont be able to use illegal software you obtained for free; or Take up on Open Source and discover that quality software is available free, and best of all its legal.

See, as far as I'm concerned

[Snowspinner]

The main person piracy helps is me. It's effect on the developers was never really a factor for me - if anything, their insistance on the validity of intellectual property made me actively unsympathetic to their desires in the whole process.

Re:See, as far as I'm concerned

[2nd Post!]

As long as someone else pays for the development, of course.

As soon as a company goes out of business (have you been keeping track? Thief, for example? Origin? others?), then you lose too.

Re:See, as far as I'm concerned

[TheLink]

I see software patents, 90+ year copyrights and stupid stuff like DMCA as a bigger threat and greater evil to the future.

When the time comes when you can have artificial auxiliary memories (and interfaces), stuff like copyright laws etc will really get in the way.

In the RIAA/MPAA dream future you might be paying for each memory you share with your friends (virtual telepathy - wireless + aux mem), or heck you might even have to pay just to recall a movie you watched.

And you'd have to pay someone each time you mentally turn on your airconditioner or get your autokitchen to cook spaghetti just the way you like it (macro). Someone will patent that equiv of one-click if they can.

Copying isn't stealing/theft because the original owners still have free access their owned works. They just don't have free access to your money, but I don't think copyright laws should guarantee them other people's money.

In contrast extending copyright terms is closer to stealing because the public loses free access to stuff that would have ended up in the public domain when the terms expired.

So who are the real thieves?

Lobbyists are asking for tight monopolies. Tight monopolies don't scale very well - if 6 billion people have original ideas and all refuse to let others use them it would be hard to move forward.

It scales worse if there are 60 billion or more people spread across star systems.

Re:That's an interesting argument.

[leviramsey]

However, OSS won't become dominant unless and until piracy is eradicated. Freedom doesn't matter to most users (for all the pontificating about the draconian EULAs that you read on Slashdot, Microsoft et al are smart enough to know not to be too draconian on the common man). The only valid arguments for OSS that remain are quality and price (which are combined into value).

The quality argument is difficult to assess, and it varies from program to program. GIMP is still fairly far from Photoshop. OSS GUIs are playing leapfrog with Windows (KDE/GNOME have the lead on XP at the moment, but the next revision of Windows will likely see Windows retake the lead in that competition) and are probably somewhat behind OS X. And even quality won't necessarily beat an entrenched base, due to market inertia.

That leaves price. If OSS costs nothing, but so does pirated software, then it's a push, so the value judgement is deferred to quality, with inertia playing a role.

Now, if all of a sudden, everybody was forced to buy Office at full-price, OpenOffice would gain so much traction in the marketplace, it would likely be at parity with Office in a year and have hegemony in the market thereafter.

Not a good argument..

[CashCarSTAR]

Although this does make a lot of sense when it comes to business software, and it's very true. Copied software creates more educated users of that product, making business take-up that much easier.

But when it comes to games? Frankly, it's barking up the wrong tree. I don't see how piracy would help the big guy over the small guy. I mean, it's not like there's not millions of keygens floating around for all those small download games..right?

In any case, I don't think it's piracy that hurts creative industries at all. I really don't. People who tend to do that obsessivly (meaning they don't buy anything..there are quite a few like that), wouldn't have a preference over one thing or the other. You're not going to get them to buy anyway.

Not so much for the PC market, but especially for the console market, what is really hurting them is the presence of the used/pre-owned game. The same thing that is really hurting the movie industry. This creates a new sub-market for such goods that the producers don't see a penny out of. Every person that buys, for example, Metroid Prime for $20..

#1. Doesn't have that $20 to spend on another shrinkwrapped budget game..you know, one someone actually gets paid for?

#2. Considering that the shrinkwrapped price is near 20, it actually denies the producers rewards for their production. This is exactly the argument they make against piracy. But they can't do anything about this because it's above the law.

So I think complaining about piracy frankly, is half-assed until they start cracking down on used/pre-owned copies. Of course, legally, they're not on firm ground here. However, a widespread advertising campaign and pickiting campaign may convince people that going into that used-media shop is ethically wrong.

Re:Not a good argument..

[Swanktastic]

Not so much for the PC market, but especially for the console market, what is really hurting them is the presence of the used/pre-owned game.

I don't think you're correct here from an economic standpoint-- which makes the ethical question irrelevant.

I've studied a lot of pricing theory, and one of the tenets is that resale value is factored into the value the consumer is willing to pay for a new product. Say you intend to buy a car and get $10,000 value out of it over 5 years. Say the car will have a resale value of $10,000 in 5 years. The rational buyer will pay $20,000 for that car. The manufacturer of the car should price the car at $20,000. The fact that market exists really doesn't damage the manafacturer's bottom line-- they're still selling cars at the higher price.

You may say, "Well that's killing the manufacturer's opportunity for sales at the $10,000 price point." This is not the case. They made that sale already when you paid $20,000 for the car. You can almost think of it as though they sold 2 products then... A new car to you, and a used car to the person you resell to.

Unless there's something I'm missing, console games sales should work similarly... Add to this the fact that most stores give you store credit for games that you trade in. People have only so much disposable income to dump into video games, and used games doesn't change the amount flowing into industry coffers.

Not So Obvious

[MiceHead]

How do you think Microsoft got so big? People used to copy DOS and Windows, and when their companies were getting computers, guess what software their employees were familiar with, and which was thus bought?

This seems more anecdotal than anything else; CP/M and DR-DOS were pirated, but that didn't do much for them in the long run. You could argue that MS-DOS was pirated more, and therefore became more popular. I think the more "obvious" explanation is that MS-DOS was popular, and therefore more widely pirated.

As a profitable third-party games developer, I don't think that piracy has hurt us in terms of pricing versus first-party developers; people assign some value to software based on price, and if anything, The big-name, $50-$60 games are pushing our prices higher rather than lower. Most people, upon seeing a $9.95 game, think, "crappy puzzle game."

Software piracy makes you serve as free advertising for the "victim" company

Dollar-for-dollar, I'd prefer to have the money, and put it towards development or media.

Re: Picketing campaign? Ethically wrong?

[MajikMan]

So I guess it was just as ethically wrong the last time I bought books at the local Salvation Aarmy? That kind of used-goods market just takes money out of the hands of the publishers who made the books to start with? By holding a yard sale, would I be subverting the capitalist system as we know it? ...my god, what about all the pawn shops? Gun and jewelry manufactures could be bringing in thousands of additional dollars if we just forced everyone to buy their products retail.

The fact is that, while game makers can choose to whine and complain about used game sales, that's where their action will end. They can't do anything about used game sales, and quite frankly, I think it's silly to consider something like second-hand marketing ethically wrong. Whenever a game ends up in the used bin, that mean's that someone else paid retail for the same. At some point, the company got their money for that unit. People spending $20 or less on two-year-old used games are people who most likely would never have paid for the game if it weren't sitting in the cheap bin.

Re:The motivation of a software pirate

[GlasWolf]

I agree, the author is barking up the wrong tree in terms of the pirates' motivation. Most people will naturally try to justify their decisions with some sort of argument, and in the case of piracy it's do deflect the blame onto something else. In this case, the obvious target is the big, bad publishers who are already raking in more money than they know what to do with (until they go bust, of course).

I doubt anyone REALLY pirates applications for any other reason than to avoid paying. Anything else is just a self-satisfying cover story.

Wrong: "piracy doesn't do jack"

[AHumbleOpinion]

Quite frankly piracy doesn't do jack to the gaming industry, other than to cause game developers to whine and moan. Had the concept/practice not come about, we'd still be in the same situation.

That is an amazingly ignorant statement. Piracy has had a huge effect on the industry. It raises the barrier to entry quite high. The "big" developers can survive it, but the small companies and the startups who already have enough problems can easily be taken down by piracy. Piracy helps keep the big guys big, and helps force the small to give up their independence and become a "studio" of the big in an attempt to survive. This sort of crap has been going on for decades. And pirates have been making the same lame excuses and denying their negative contribution for decades.

Re:*SIGH*

[CycoChuck]

You don't sound like you're trying to take a position for or against piracy. It sounds like to me that you're attacking Linux and claim that Linux users are pirates.

We also know that warez trading is prevalent among Linux-run IRC servers

I know several people who warez trade using Kazaa runnining on Windows.

Quit stealing source code: SCO, Windows 2000.

Correct me if I'm wrong, but as far as I know there is not one line of SCO or Windows (9x, NT, 2000, or XP) code in Linux.

Quit trading in illegal MP3s and Divx movies.

Mp3 and Divx trading happens on almost every OS. I've seen users from Windows, Linux, and MacOS all trade mp3s and movies.

I do agree with your last statement though. And definitely start paying money for your games! People should get paid for their product. But I can admit that there has been a few times that I downloaded a warez copy of software to try it out or because I was strapped for cash at the time. But I did buy a valid copy if I liked it and saved the money for it.

Problem with the "I Pirate Quality!" argument

[inkless1]

People have to understand how voting from the wallet works (and you should after reading this article).

The problem with the "I only pirate good games" argument is that you're missing the core point of the article. If you didn't pirate anything you would have to weigh the merits of software in terms of their real cost.

Most small dev shops may not be capable of the quality of the big ones, but their stuff usually doesn't cost as much either. So Paint Shop Pro might not be as powerful as PhotoShop, but it also costs 1/10.

When pirate software, that fact just becomes irrelevant. Worse, you aggravate the situation by widening the gap between the developers - in effect degrading the quality of small software devs by siphening their revenue.

This is doubly painful for games - where smaller shops might need to try something innovative or different, which is harder to market when people are more like to try and pirate UT2004.

You can justify it any way you want - but the reality is: piracy sticks it to nobody but the little guy. So when every year games become more and more mainstream, less innovative and EA buys another license - just look to you hard drive and you might know why.

Re:Meh

[MMaestro]

That is unless Joe is an average gamer who doesn't know squat about gaming news, doesn't read reviews, and doesn't even bother to ask the sales associate for his opinion on the game (assuming the sales associate plays video games). It'd be like walking into a candy shop and deciding on what to buy.

Do you reach for the classic tried-and-true Hershey chocolate bar at $1, or do you go for the no-name store made brand which no one seems to buy at $0.25? In cases like these, most people are willing to reach for the tried and true brand names of things rather than try things new in some cases.

And on top of that, there are advertising factors, appearance of box art, and the popularity of the type of game genre you're talking about. (We all expected Quake 2 to blow away Half-Life since it was id Software. Boy, were we wrong!)