Analyzing Piracy: The Industry's Scapegoat

by Nick Pantazis, posted on 23 February 2011 / 5,820 Views

It seems every year the piracy issue pops up again. Some publisher blames their losses on piracy, or some writer claims it’s destroying the industry. Pirates are characterized as anything from super villains actively seeking the destruction of publishers to champions of the DRM-oppressed masses. So what is the reality of piracy? What’s its effect on profitability in gaming and is PC gaming really dying a painful death due to its prevalence in the industry? 

First, let me get the disclaimer out of the way: I have, many years ago, pirated games. I was a stupid kid and didn't care. I don't do that anymore, but I didn’t have any malicious intentions at the time. I was just young and silly and broke. In my adulthood, I legally bought the handful of games I pirated as a child, generally on Steam. This is not a defense of piracy as a practice, just the perspective of a former pirate and their motivations. 


What is Piracy?

 

Piracy is not actually the proper term for downloading software without permission. In the United States, it is considered copyright infringement of software. Because that’s cumbersome to write, I will continue to call it piracy through most of this article. Copyright infringement in the United States is punishable by both fine and prison time, based on the degree of the crime, although to this point I have been unable to find anyone sentenced to prison time without also selling the pirated software on a large scale. Like any crime, there are varying degrees of severity. While it is not defined as theft by law, it is a morally objectionable practice, and an illegal one.

So why do people pirate games? A couple of years ago, a man named Cliff Harris, the creator of the one-man-company Positech Games, asked pirates to tell him why they pirated his games. He received hundreds of responses. There were a few crazy responses about how intellectually property isn’t a valid concept, and about 1/20 people who said they did it just cause they liked taking things and they wouldn’t get caught, but the but the majority of responses came down to four things: money, quality, DRM, and the games not being on Steam. Yes, even in 2008 people were complaining about PC games that aren’t on Steam.

So how about money? A lot of people who pirate games seem to be just kids who have no money but plenty of time. They pirate games which they couldn’t otherwise afford because they want to play them and have nothing else to do. Others were just down on their luck at the time and planned to buy the games later when they could afford them. Others simply considered games too expensive in general and didn’t agree with paying the prices which were being charged. Cliff found that even people who didn’t site cost as the main reason listed it as a factor. The quality issue was also related to money. People felt that games weren’t meeting their expectations and demos either weren’t provided, or were too short and unrepresentative. It’s very likely that the majority of people who pirate games couldn’t afford to purchase them even if piracy wasn’t an available option at all. It’s also possible that a good demo is important to sales of any game.

The DRM issue comes up in a lot in these discussions. Many pirates will steal games simply because the pirated game experience is better than the legitimately purchased one. DRM can be intrusive, frustrating, and seem incredibly unfair to legitimate buyers. 2D Boy’s Ron Carmel, creator if indie hit World of Goo, stated that DRM is a waste of time and not only doesn’t prevent piracy, but wastes money and causes a worse final experience for legitimate buyers. Cliff agreed with this after the results of his survey. This issue is related to convenience; some people pirate games because purchasing can be a pain and the pirated versions often offer better experiences because of the lack of intrusive DRM. This part also ties to digital distribution. Steam is an extremely user-friendly and convenient service which allows companies to avoid more intrusive DRM. Most gamers also prefer to not have to change discs when switching games.


Is Piracy Destroying Publisher Profits?

 

Piracy is often considered a major factor in gaming profitability. When either a specific piece of software or software on a platform as a whole fails to meet expectations, it’s common for a publisher to cite estimated figures on the amount of times the software was pirated and shift responsibility for the failure to the prevalence of piracy. PC generally takes the brunt of this criticism since piracy has been an issue on PC for longer and the PC landscape is much more difficult to understand, thus profits are often lower. Of course, PC is hardly the only place where piracy is a major issue. With Sony’s PSP, Sony themselves have stated that the primary cause for the less-than-stellar software sales on the system is piracy and with the DS flash cards have yielded some of the most rampant piracy on any platform in history. The Xbox 360 and Wii have had their firmware hacked for years, and even the PS3 has fallen to custom firmware which allows piracy. 

So why shouldn’t piracy be blamed for loss of profits? Well for one, there’s no data to support that any significant portion of illegal downloads would actually be legal purchases if the games weren’t available for download in the first place. I'm not suggesting that piracy has no effect on sales, just that the effect it does have is impossible to determine. In addition, it’s impossible to get rid of piracy completely. While removing DRM and releasing on Steam may benefit PC releases, every platform, including consoles and handhelds, will eventually be opened to piracy in one way or another. Because piracy is an inevitability and cannot be prevented, it is something that has to be worked around and not attacked directly. Clearly pushing against piracy often results in the pirates pushing back even harder, as with DRM. 

There are quite a few examples of heavily pirated games that have still been very successful. Dissidia was pirated over 5 million times but was still a big financial success for Square Enix and sold well enough to make a sequel. Starcraft II was pirated 2.3 million times by November of last year but was a huge success for Blizzard with more than 4.5 million copies sold to date. World of Goo was reported to be pirated five times for every one legal download, but 2D Boy was so successful they actually gave a presentation on making a profit as an indie developer. They also are vocal opponents of DRM and accept piracy as an inevitable occurrence. So what makes these games different? There’s nothing different about them. These games all come from very different publishers and were released under very different circumstances. This shows that even the most heavily pirated games can be very profitable, and heavy piracy and large profits can (and often do) coexist. 

All games will be pirated to one extent or another. What makes a game successful or not is not determined by the presence of piracy. It has to do with a publisher creating a game with a realistic budget and reasonable expectations. This might sound like common sense, but it is becoming a problem this generation. Many major publishers are clearly failing at this very basic premise of operating a business. Maybe people haven’t noticed because of all the big sales numbers, but gaming has shrunk considerably in production this generation. Numerous talented studios have closed (RedOctane, Free Radical, Factor-5, Neversoft, Pandemic, Propoganda, 7 Studios, Bizzarre Creations, and way too many to name in this article). 

In October of 2008 EA laid off 600 employees. In December of the same year they laid off another 1,000 employees and a year after that another 1,500 employees. Yes, EA has laid off more than 3,000 people in the last two and a half years due to poor decisions, and it’s no secret why. EA’s combined profits by GAAP earnings since 2007 are $2.65 billion in loss, although the software giant is having a profitable quarter. Ubisoft’s net gains over the same time frame are a mere $53 million in profit. Take 2 has lost $159 million in the same time frame. Midway closed and Eidos had to be bought out to survive. This is not something to be blamed on PC or piracy. These are console focused developers who have been primarily making games on platforms with low piracy ratios. Only Activision, among the console-focused western giants, has been particularly profitable in the current generation and even more-so now that they are Activision-Blizzard.

So what is causing this problem? Publishers are bloated. They’re stretching themselves thin, putting millions of dollars behind blockbusters which cost them a fortune if they fail, and completely failing to budget and manage their teams with smaller, more reasonable quality projects. Western publishers have turned the console development landscape into an oligarchy of the powerful. It is a place where you have to have millions of dollars at risk with most projects and job security is nonexistent. Smaller developers are cut out completely and the successful are almost exclusively Japanese. Independent studios on home consoles are almost completely dead (with a few obvious exceptions like Playdead). This isn’t solely a property of HD development costs. Not at all. Many smaller companies such as Atlus manage to stay profitable while publishing HD games. It is entirely a matter of managing costs and managing sales expectations. When a company fails to do that, what’s the easy target? Piracy. 


Is PC Gaming Dying Because of Piracy?

 

PC gaming has become the target of many attacks this generation from developers, publishers, and gamers. It’s frequently accused of shrinking and even dying, often with piracy cited as the cause. In many ways the market is the hardest to understand of all gaming markets. It is a market now heavily reliant on digital distribution and in that way is several years ahead of the console market. Piracy is absolutely rampant on it, probably more-so than any platform aside from the handhelds, but as I’ve already pointed out it’s impossible to determine what the effect is on total potential software sales, but it’s also clear that piracy and success are not mutually exclusive. In fact, piracy is always present, even when games are very successful. It is not something which can be eliminated entirely. 

The 800 lb gorilla of the PC industry is Steam. The massively successful service was recently estimated by Forbes to control 50%-70% of the $4 billion digital distribution PC market. This is an impressive accomplishment considering it’s competing with dozens of other providers including Blizzard who refuses to put their games on the service. Add to that Valve’s own cut of the software sold on the service, plus advertising revenue generated by it, and the company is enormously profitable. Forbes estimates their worth at $2-$4 billion, placing them among the largest of third party publishers by value, although as a privately owned company this is impossible to confirm. Valve themselves have reportedly sold more than 12 million copies of Half Life 2 since its release in 2004, and it continues to find new buyers steadily on Steam through sales. Of course there are plenty of other huge PC publishers including Blizzard, owners of the 4.6 million sold and counting Starcraft II, and World of Warcraft, which is undoubtedly the most profitable piece of entertainment media in human history. 

So if the PC market is so profitable, why do big publishers attack it? Well, piracy is part of the problem. Publishers still aren’t ready to stop attacking it head on with DRM and until they are it will be difficult for them to maximize profits on the platform. Another reason is the platform is simply much more open to smaller developers. This is not what large publishers want. Consoles are a market that can be controlled. You need a publisher to make a game on PS3 and 360. Even smaller games have to get through the barriers of PSN, Xbox Live, or WiiWare. 2D Boy claimed it took them one day to handle the legal stuff to be approved for Steam and four months to do the same for Windows Live. Magicka, made by a handful of college kids, can sell 30,000 copies in a day on Steam, knocking out major publishers from the top 10, and making a profit in 24 hours. The game has gone on to sell 200,000 copies in two weeks, funding the small developers for years to come. 

Not all games make it on Steam, though. It’s true that even Valve severely limits the amount of games added to the service, but this is PC. A game doesn’t need to be on Steam to be successful. Even without Steam, Minecraft, created by a single guy, has sold 1 million units even in alpha and beta. This is a platform where indie developers can congregate to make things like the two pay what you want Indie Bundles, which grossed $1.3 and $1.8 million. PC is a smaller and more astute core gaming market which relies less on advertising for purchase decisions. The market is much more dependent on word of mouth, which allows more variety in successful software and severely limits the control these large publishers are able to exert on it when there are a number of quality, self-published independent games readily available.

So what's the point of all this information? Well, hopefully this wil clarify the issue of piracy for some of you. The point of this topic is to add some perspective to the discussion. This is a big issue in the gaming industry and it deserves legitimate discussion rather than just wild accusations. I'd love to hear your opinions and feedback in the comments. How do you view the issue of piracy? Do you think the industry can ever evolve to a point in which DRM is no longer used? Would that even help?

 

Note: All GAAP earnings reported in the above article are public knowledge and publicly available on the investor sites of the companies listed. 

Disclaimer: This article is the work of one writer, and does not necessarily reflect the views or opinions of gamrFeed, its staff, or management.


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40 Comments

Mihoku (on 24 February 2011)

At the end of the day the point is, as mentioned in the article, that the effects cant be told nor predicted. However it is surely part of society. Scoobes made a good point, I also know of people damning a game so much that they had to get a "crack" for their original bought game to be able to play it without frustration. That is a pretty clear signal that something is just wrong. (So it is not only a waste of money but adds to their problems, with other words they shovel their own graves). The publishers who fail to understand business will not only fail but actually it is better for all of us they do. It is an easy excuse. The only other option would be to do some real work, R&D, try to understand the market and release some quality... sounds annoying, doesn't it ;-) I remember how I got told by a friend to try Portal, so I looked it up and their were tons of great impressions on the internet, I almost had no choice but to buy and be pleased with it. Now this year I cant wait for Portal 2. I believe the social network is a huge part of this (see CoD mutliplayer, if your friends have you will want it to).


CharmedontheWB (on 24 February 2011)

@ jumpin, I did not compare you to a nazi apologist--what I said is that blaming piracy on declining sales record sales is just about as asinine as saying that the Treaty of Versailles caused WWII. Just because the Treaty had an impact on Germans on a whole does not mean that it directly caused the War. Regardless of the Treaty, it is safe to say that the war would have broken out either way. Record sales had been on a decline since the late 80's. Piracy is not what hurt the the music industry, it is their lack of foresight and their reluctance to change that inevitably hurt them. Piracy gave people another option--an option that should have been provided by the industry. If piracy hurt the industry like you claim, there would be no way that iTunes and the Apple store would be as successful as they are.


Scoobes (on 24 February 2011)

@ Jumpin I have no doubt in my mind that Starcraft 2 will manage to surpass the original in sales, especially over the same time period. 4.6 million in less than a year for a PC only game is very impressive. PC games are typically not as front loaded and the big titles can sell for multiple console generations (Half-Life 2 for instance has now reached 12 million sales from 2004, you can still find Starcraft 1 in the shops new and Counterstrike is still selling even today). As more people upgrade their PCs, the potential userbase increases. And comparing it to a front-loaded and annual title/event like Call of Duty is just plain silly.


Rainbird (on 24 February 2011)

Great article, and I definitely agree that bloated publishers that lack the ability to create games with proper budgets and expectations is a big problem for the industry. @ People who say piracy hurts gaming There is noone here who isn't agreeing with you, but that's not what the article is about. It's about piracy being blamed for a lack of success for games, when the truth is that many more sensible reasons for the lack of success could probably be found.


GooseGaws (on 24 February 2011)

@naznatips: Fair enough, but my point is that publishers need to be more active in finding ways to make their products continuously available as sources of long-term revenue. High eBay prices on second-hand software are of no benefit to the owners of the IP. We've certainly come a long way with the the advent of the Virtual Console, XBLA and the PSN "Classics" service, along with various ports, updates and remakes, so there has been successful progress in this direction. I still think it deserves attention. If I want to purchase Raging Bull, a film that was released before I was born, it is relatively trouble-free for me to do so. If I want to purchase Radiant Silvergun, a title that was released several years before I could have possessed the purchasing power to obtain it, and never in North America? Two hundred dollars on eBay, minimum, for a second-hand copy which in no way benefits Treasure. Until it comes out on XBLA this year! (That's more like it.)


Boberman (on 24 February 2011)

Piracy on the PSP killed that system.


llewdebkram (on 24 February 2011)

I'm not sure why I should care that game developers and the music industry are not making as much money as they did. Boo hoo to them and tough!


Jumpin (on 24 February 2011)

@CharmedontheWB You didn't disprove my argument that piracy in the music industry hurt its sales; you just suggested a justification for the reason people pirate. Comparing me to a Nazi apologist is a extremely low blow, and is not at all analogous to this argument. @Scoobes, I am not sure if it took 10 years to sell 10 million; but I am not sure, I don't know the data on that game. Do you think Starcraft II, with the much higher initial exposure and a pre-existing fanbase will have similar legs, and eventually sell 10 million? It seemed to underperform given the high amount of buzz it had - which seemed to me that it was close to Call of Duty level buzz.


naznatips (on 24 February 2011)

@GooseGaws Unless the game is no longer under copyright, pirating a game that's out of print and no longer locatable is still copyright infringement (piracy). So my stance on it is that it's still morally objectionable, and you're still downloading and installing someone else's product without permission. If you don't buy a game within its release window, that's a risk you take. Now, I'm not saying it's necessarily as bad as pirating a brand new game instead of purchasing it (as I point out in the article, there are varying degrees of severity to copyright infringement), but alternatives would still be preferable.


Tridrakious (on 24 February 2011)

It's very hard to find anyone that will admit doing something is wrong, especially if they know there is a slim to none chance of them getting caught. "price is an issue", think about how much money is being spent to make a game like Killzone 3. It isn't free, the quality of KillZone 3 outclasses countless other games on the market, but i'm pretty sure people are still going to pirate it. If I have something, it was either got it as a gift or I bought it.


GooseGaws (on 24 February 2011)

@yonizaf: I'm fully aware of all the services you mentioned. I'm talking about games that are not available to purchase from any source that would provide revenue to the publisher, especially in the case of out-of-print console games. For example, if someone wants to play Suikoden 2 or Panzer Dragoon Saga, should they be forced to pay outrageous prices on eBay to do so? When not a penny of that money goes to the people who actually made the game in the first place? This is just a discussion point, and a suggestion that publishers should also take more advantage of their back catalog games where possible. Nonetheless, to compare downloading Crysis 2, a brand-new title that hasn't even been released, to downloading a title that hasn't been commercially available for 10+ years is downright foolish.


Vueguy (on 24 February 2011)

piracy does hurt a bit too. right or wrong, nothing is perfect, but it could destroy the developer mind a bit and they could make worser games. thought all the games this gen are in HD and many have online multiplayer, they can compare to the past games. in teh past, developers tend to put their mind into making games with great story and atmosphere. now a day, most developer just tend to make quick buck and put on some good graphic to sell. this is why piracy is getting bigger because gamers don't want to waste money on a crap game.


CharmedontheWB (on 24 February 2011)

Jumpin, your argument is as fallacious as blaming World War II on the Treaty of Versailles. Piracy is not what caused the decline of record sales for the music industry. For a very long time, people have gotten tired of having to pay $20 for a song or two--not to mention $20 for a CD was way overpriced when you see the cost of making the CD along with the pithy royalties paid to the artist. What occurred in '97 is something called Winamp that made MP3s even more popular and widespread. People could actually download the song they wanted and since there was no legitimate source for downloading music, people had to pursue illegal means. Had the music industry taken digital music seriously and not seen it as a passing fad--perhaps the decline you speak of would never have been so significant. Of course the next point that people are going to make is that the movie industry is also shrinking; eventhough raw revenue has increased, the number of people going to see movies has decreased and of course the first scapegoat used will be piracy. Let me give you a brief history lesson, when radio reached its peak, nearly the entire US was tuned into evening radio shows. When televisions became affordable and you could find one in just about every household, radio lost a large majority of its listeners--now does that have anything to do with piracy? No it has everything to do with having another option other than radio being available and that is the same thing that has happened with movies. If you have a family of two or more, going to the movies can easily cost you $80-$100. Nowadays, there are many other distractions other than going to the movies, like video games which are far more prevalent now than any other time in history, the internet, the fifty million gadgets we have available to play with, the rise in social networking sites and video sites such as youtube, HD and home theater systems that give a theateresque experience, etc. There are way too many factors out there to strictly blame piracy for shrinking the industry.


Scoobes (on 24 February 2011)

Great article. Hopefully people will read it fully and take it all in. @ Jumpin Starcraft took 10 years to reach 10 million. Starcraft 2 has reached 46% of Starcraft's 10 year sales in less than a year. PC games tend to have long legs. Also, the music industry is actually an example of the larger record labels not being able to control the environment (much like the big publishers on PC). It wasn't just piracy; the internet meant smaller artists were able to distribute their music to a greater audience meaning greater competition for the larger record labels and their chosen artists. @ Izkn The DRM has been so bad at times that even legitimite customers have downloaded the "cracked" version. Not every download is a sale lost. This is only from my own experiences though so make of it what you will.


Jumpin (on 24 February 2011)

I wouldn't call Starcraft 2's 4.5 million a very large success. The original sold over 10 million, and was not hyped nearly as much. It is doubtful that Starcraft 2 will reach 10 million; even though it should be much more popular. The bottom line is that piracy does undermine the value of a game. People are acquiring something they should be paying for. There also is data available when looking at how piracy has effected the music industry: http://4.bp.blogspot.com/-IUpnp-rc-Kk/TWHSMttvJWI/AAAAAAAAIuE/3SQy7rO09vw/s1600/music-industry+%25282%2529.jpg By 2009 the music industry has declined to half of what it was making when it peaked 1997. The music industry was sharply increasing, and then when 97 hits, about the time CD burners and the Internet began to take off, it sharply downturned. Without piracy, with the rise of exposure from the Internet and such, you would think the music industry would be much bigger than it was in 1997.


lzkn (on 24 February 2011)

I disagree with this article. First of all, steam games get pirated a lot as well, 'not on steam' is definitely no reason to pirate a game. In fact, Steam adds more restrictions and restricts payment too so... what's the point? I haven't seen Steam numbers, but you can make a good estimate if you look at a similar system, the iPhone. iPhone game developers have seen a 90% piracy rate after the device got jailbroken. If only 5% would've bought such a game... But the most generic point: DRM and pricing/milking - that's all annoying, but how does that exactly 'make people steal these games'? If you don't want to support that, don't buy it. If you think the game is bad, don't play it. Yet somehow these reasons warrant stealing the game and play it for free? That I do not understand. Sure, there have been cases where DRM destroyed a game, but they're not common. Same goes for money. Take the people in my living area complaining about how they can't pay the rent on welfare - yet they show off their Galaxy S phone or <insert latest mobile phone/console/other totally out of budget gadget here>. It's not a matter of not having money, it's a matter of spending. Back in the 90s you bought perhaps 5 to 10 games in a year, that was it. And you didn't have the latest $200 video card to play them. You didn't buy a new computer every 4 years. No, you'd wait for games to go on sale, or into the bargain bin if you couldn't afford or play them on your current hardware. Nowadays you see these $700+ PCs which are carefully upgraded to be able to the latest and greatests and dozens of pirated games. It's just a matter of spending differently - after all, why not buy this super PC and ask for this DS or console for your birthday? Why settle for only a mediocre PC if you can have the PC, the console and even the handheld? After all, you don't have to buy/ask for *games* to play on them, they're free to pirate anyway. And in the rare occasion that a game is spent on, it's on a game with a working DRM (all online games, GTAIV which took a full, multimillion selling month to be cracked, etc). The others are just out of luck. The lack of shareware now that you can just google every known serial number is to me a definite proof of what piracy has done already. We used to have thousands of high quality shareware programs and games. Now we have virtually none or they are ridiculously protected. Shareware devs that went out of business around that time can tell you exactly what piracy did to them. The pirates did not show any shame while demanding support for their 'omg i've paid for this' software either. So who stayed in business? Indeed, mainstream games and huge publishers that could take the hit and invest in DRM while still selling enough. Having followed the entire process from the 90s I believe software piracy is one of the main causes for that to happen.


yonizaf (on 24 February 2011)

@GooseGaws Much of this "legacy software" is available for digital distribution, through PSN, XBL, VirtualConsole, Steam, gog.com and the likes. e.g Commander Keen (released in 1990) is available through Steam. so before assuming a game is no longer available because it's old, it's best to check first. and even the games that aren't available could be offered someday through the same channels, so you can't say there's "no way" for the publisher to get revenue, and saying it's okay because they're not selling it now is like saying it's okay to pirate crysis 2 because they're not selling it right now.


Freyt (on 24 February 2011)

I hope everybody who reads this actually takes it to heart.


GooseGaws (on 24 February 2011)

@naznatips: Your article makes some good, relevant points regarding the bloated development structures that so many current developers seem to have built themselves into. I have a side question on the topic of piracy: What is your opinion on the piracy of legacy software that is no longer available for purchase? If there is no legitimate way to purchase new copies of software, or more specifically, no way that the publisher can gain revenue from such a transaction, is it acceptable to pirate said software?


Carl2291 (on 23 February 2011)

@ Naz It wasn't really used as an example for affecting sales, just to show the scale mainly. Dante's Inferno or Red Steel 2 along with Alan Wake would have been better used to show how it goes against sales but as we both agree, it can't be proven how many of the people who downloaded them would have actually bought them. I wish we could get figures for say, the top 100 games for each of the platforms. It would give us a much better view at if it is affecting things. It doesn't help when we only get a top 5, as the top 5 will generally be popular games. Without those figures though, I guess me trying to argue that it does affect things is kinda pointless :-P


naznatips (on 23 February 2011)

@ enrageorange That's what's called anecodtal evidence. In a statistics class, for example, your data would be considered completely inconsequential. Consider this: The second best selling game on Amazon right now is Nerf N-Strike on Wii. Now, this is Amazon, quite a large retailer, but they are just a small chunk of the sales in the entire world. While it's true that they are a sample, they are just an anecdote. A very small portion of the overall market, and not indicative of the market as a whole. Now, let's take your sample size. You're now talking about you, and your friends, in a single school. You're also generalizing "everyone in your school," which, unless it has a population of 100 people, I doubt is really a claim you can make. You also don't know for a fact that the games your friends are claiming they would otherwise buy, they would REALLY otherwise buy. There is no way to prove this. There's also no way to prove they really have plenty of money for the games. This is why the article (which, btw, is an opinion piece and does encourage discussion like this) uses large-scale examples. Games like World of Goo which were pirated many times more than they were bought legally, but still extremely successful. The purpose isn't to show that piracy has zero effect on sales, but rather that piracy's effects are, and forever will be, impossible to determine, and thus using it as a scapegoat for poor performance (when clearly many EXTREMELY heavily pirated games are very very successful), is simply a poor way to avoid taking responsibility for development mistakes.


enrageorange (on 23 February 2011)

From experience in my school, I can say piracy has quite a huge affect. Everyone in my school who's main gaming system is a PC pirates any and all games they want that cost over $10. Yes including games they would have definitely bought if they couldn't pirate. About half the people I know with ds's and everyone with psps exclusively hack all their games no matter how excited they are. They haven't bought a game for their system in years. I somewhat doubt that this is just a random coincidence. I feel like most people in college and high school do this because they either think o i wouldn't be making a difference anyway if I buy it, or mostly they just don't care.


Mat6393 (on 23 February 2011)

Wonderful Article! Loved it all :) This clarified the whole "i don't have the money" alot for me and i see how people may need this. Companies should control themselves, as new trends come along they blow up then fizzle away like COD is starting to become. Its amazing that indie games have grown as much as they have and great companies are declaring bankruptcy left and right. Hopefully the trend gives lead to indie companies taking a stand and growing. This has been the best read i've had while registered to this site thank you for it :)


naznatips (on 23 February 2011)

@ Carl How can you use Black Ops as an example of piracy affecting sales? It's outselling Modern Warfare 2, and will be the best selling shooter of all time. If anything it's more evidence to the contrary. Obviously piracy does effect sales to some extent, but to what extent is unknown. The larger point is that piracy and financial success are not mutually exclusive, and even the most heavily pirated games (like Dissida, World of Goo, and Black Ops) are often extremely successful. If piracy was a major cause in declining profits, why WOULD these games that are pirated more than anything else end up incredibly successful? @AwesomeElmo The R4 was released, functional, and popular by 2006, which is actually when the DS started picking up in software sales. In fact, the DS's sales were on a constant increase all the way until 2010, at which time the decline is far more realistically attributed to the end of the handheld's natural 6 year lifecycle, and the upcoming 3DS. Your information is simply wrong, whereas I have a plethora of evidence of games which were not signifficantly damaged by piracy. Actually, DS software sales support the article pretty well. Also, this article is absolutely open to discussion and debate (that's the point of it), but civility is required. You won't be warned again.


Nereid (on 23 February 2011)

As long as the act is wrong, I wouldn't encourage anyone to do it. That said, the act that is worse than downloading games off the internet is to BUY them from pirates. Why support the leeches of the game industry that are engaging in an illegal act?


Nereid (on 23 February 2011)

As long as the act is wrong, I wouldn't encourage anyone to do it. That said, the act that is worse than downloading games off the internet is to BUY them from pirates. Why support the leeches of the game industry that are engaging in an illegal act?


Carl2291 (on 23 February 2011)

By the way Naz, this is an excellent read. (y)


Carl2291 (on 23 February 2011)

I have to argue against people who say Piracy doesn't affect sales (And in that, profits). Looking at the Top 5 games from last Year alone that were pirated, games like Alan Wake were actually downloaded MORE than the game sold at retail. That's... Astounding. Black Ops was downloaded over 5 Million times. 5 MILLION! That's more than most games sell lifetime, and it was done in a Month and half. http://torrentfreak.com/call-of-duty-black-ops-most-pirated-game-of-2010-101228/ It's fairly obvious IMO that Piracy really does cause problems in the industry. Even if there is no proof that they would have bought the game anyway, they are still potential customers for the game. There is interest there if they downloaded it in the first place.


AwesomeElmo (on 23 February 2011)

"@mizzou_guy "Pirates using DRM as a reason to pirate games is them just making excuses. Sure, it can be annoying, but so can going to a movie theater to watch a movie. That doesn't make it okay for me to download a bootleg of that movie off of the Internet. Everybody knows this, even the people who do it." ....That's just your opinion, don't state it as fact. You aren't "EVERYBODY!!!!"" ...That's just YOUR opinion don't state it as fact.


AwesomeElmo (on 23 February 2011)

Actually you're wrong there "is" strong evidence that piracy affects sales. Just correlate the rise of the R4 cart on the ds to the drop of software sales and you can see that in fact you are completely and utterly wrong. If you're going to write such a ridiculous article how about doing some research first instead of just reeling of a list of your own personal ignorant opinions.


hagelt18 (on 23 February 2011)

If everyone pirated games, the industry would dwindle down to hobbiest developers or games that rely on advertising for income...plain and simple. Yes, the industry lives on because piracy is not rampant enough to overwhelm legitimate purchases. But if people go around thinking "Well it won't make a difference if I pirate a game, I'm just one person" Yeah...now lets all adopt that mindset and see what happens. Sure, there may be bigger issues plaguing the industry, but that doesn't mean piracy isn't a problem.


naznatips (on 23 February 2011)

@ elmerion And that's where you're wrong. Don't make this about HD vs Wii. It's not. Numerous publishers are more than profitable on HD platforms (Square Enix, Atlus, NISA, and of course Activision). It's absolutely possible to properly budget and develop on HD, and the Wii has had plenty of issues with profitability in the past itself. This has nothing to do with the platform you make games on, just how you make your games.


Zkuq (on 23 February 2011)

Wow, some people are actually waking up to reality, and some of those people are actually in a position to affect people's opinions and thought on the matter. Anyway, a great read. I also suggest reading what one of Rock, Paper, Shotgun's writers had to say on DRM: http://www.rockpapershotgun.com/2011/02/23/opinion-ubisoft-drm/ .


SuperAdrianK (on 23 February 2011)

Great article, just a few typos. This is bound to get a lot of people with the ps3 hack and what not.


elmerion (on 23 February 2011)

This article got it half right the problem is.. most of this stuff was pointed out by Malstrom aeons ago. Gaming is dying because developers dont know shit what they are doing they go to extreme lenghts to blame customers instead of admiting they are not developing the right games Bottom line, play Nintendo,Blizzard and Mojang Production games and smile :) (free MMO's are welcome to the party as well, at least they admit they are not WORTH PAYING FOR)


buglebum (on 23 February 2011)

@mizzou_guy "Pirates using DRM as a reason to pirate games is them just making excuses. Sure, it can be annoying, but so can going to a movie theater to watch a movie. That doesn't make it okay for me to download a bootleg of that movie off of the Internet. Everybody knows this, even the people who do it." ....That's just your opinion, don't state it as fact. You aren't "EVERYBODY!!!!"


astrosmash (on 23 February 2011)

@mizzou_guy There is a real irony in you trying to prove your point by linking to the wiki article on the GPGP. From the article: "Although many media and advocacy reports have suggested the patch extends over an area larger than the continental U.S, recent research sponsored by the National Science Foundation suggests the affected area may be twice the size of Texas, while a recent study concluded that the patch might be even smaller."


naznatips (on 23 February 2011)

I didn't say piracy has no effects on profits, I said there is no proof of what effect it has on profits, and that heavy piracy and profitability are not mutually exclusive. Also, that's EXACTLY what we should do with religion! Imagine how much safer this world would be if people did that.


mizzou_guy (on 23 February 2011)

Pirates using DRM as a reason to pirate games is them just making excuses. Sure, it can be annoying, but so can going to a movie theater to watch a movie. That doesn't make it okay for me to download a bootleg of that movie off of the Internet. Everybody knows this, even the people who do it. Also, just because there's no way to prove that piracy has harmed the industry doesn't mean that it hasn't. That's like saying there's no way to prove God exists, so we just have to be okay with everyone having their own beliefs about it and not try to say one belief is definitely wrong. However, my argument against piracy not harming the industry would be littering. Throwing a gum wrapper on the ground isn't going to kill the earth. However, that one gum wrapper could kill a small animal that likes the taste of the wrapper and chokes on it when they swallow it thinking it's food. This can easily be translated into saying that a little bit of pirating isn't going to kill the gaming industry, but if one game from a small developer gets pirated enough, it could very well kill off that developer since they only had the resources to put out one product at a time. Not every developer is big enough to handle multiple projects to have backup plans. Also, throwing a bottle into the ocean may seem harmless, but that bottle will likely make its way into the Pacific Trash Vortex (http://en.wikipedia.org/wiki/Great_Pacific_Garbage_Patch) and make the problem with the environment that much worse. Pirating a little at a time may not seem like a big deal, but put it all together, and it does equal a big chunk of profitability that the industry has lost, and if we just let it grow, it's just going to become a bigger and bigger problem. And while Steam is doing a fantastic job, not every other developer is in a profitable position in the industry like them. This doesn't mean these developers should be struggling so much, either. Even quality developers have struggled due to their games not selling well. And no, we can't directly blame pirating, just cause there's no way to actually tie evidence A and B together, but from what I've heard, the sales of Max Payne 2 (which is a spectacular game) struggled due to the sheer amount of pirating that went on with that title.


TheWon (on 23 February 2011)

Great games well always sell! Average games and bad games were already going to be in trouble anyway.