Rabid Lion Games

Avast ye!: Piracy

December 22nd, 2012

***Warning: Long opinion post. If you want the tl;dr version, scroll down the bottom for the ‘So what’s the answer?’ section.***

 

Games are in the news again this week because of the tragic events in the US and the NRA pointing the finger at games (among other media) for glorifying violence.

I try and make it a point not to get involved in topical issues because temperatures are generally running high, people will repeat the arguments that they have read in the media for or against, and people quickly become entrenched, knowing in their heart of hearts that its their argument which is correct, and everyone else is an idiot or lying outright.

However, I thought now would be a great time to write up some thoughts on another controversial issue that affects our industry – Piracy.

 

I’ll start with full disclosure: I have never pirated a game. Ever. That’s not to say I’ve never pirated *anything*, but never a game. The reason for that is simple, I will never run an executable from a source I don’t trust on my PC, and you can’t get a much more untrustworthy source than torrents/ cyber-lockers where people are posting cracked executables. It’s that simple. No moral high-ground, no holier-than-though, just being sensible with the security of my machine. So what’s my interest in Piracy? Two reasons – Firstly, as a gamer, I am affected by the steps companies take to keep their games from being pirated (including Ubisoft’s adorable ‘always connected’ DRM). Secondly, as a developer who *will* one day release games for sale, it is inevitable that one day my game will be pirated.

 

What is Piracy?

So, now that’s out of the way, let’s start from the beginning. What is piracy?

Traditionally piracy is no more than armed robbery at sea (with some kidnapping thrown in for good measure). Pirates would hijack ships carrying cargo, steal the cargo, probably kill the crew, and leave.

So how do we get from shenanigans on the high-seas to downloading a dodgy copy of Call of Duty? On this one, the internet comes up blank, but it’s fairly clear that the term ‘piracy’ has been used to describe the act of copyright infringement (an important term we’ll come back to later) for around 400 years (according to the font of all knowledge, Wikipedia). Originally it was applied to people who were illegally copying and printing books.

If I were to guess I’d say that the term piracy was used not in relation to the act of printing the books, but rather the ‘hi-jacking’ of the right to copy the books and using it for financial gain, in the same way that a traditional pirate would hi-jack a ship in order to use it’s cargo for it’s own financial gain.

In the case of games, what we’re really talking about is copyright infringement. This means that legally only certain people have the right to make and distribute copies of specific material, but others copy/ distribute it anyway.

 

Is Piracy theft?

Piracy, or rather copyright infringement, is not theft. And that’s not my opinion, that’s the considered opinion of the US Supreme Court in Dowling v. United States 1985. The following is an extract from the judgement which makes the distinction between copyright infringement and theft :

“The phonorecords in question were not “stolen, converted or taken by fraud” for purposes of [section] 2314. The section’s language clearly contemplates a physical identity between the items unlawfully obtained and those eventually transported, and hence some prior physical taking of the subject goods. Since the statutorily defined property rights of a copyright holder have a character distinct from the possessory interest of the owner of simple “goods, wares, [or] merchandise,” interference with copyright does not easily equate with theft, conversion, or fraud. The infringer of a copyright does not assume physical control over the copyright nor wholly deprive its owner of its use. Infringement implicates a more complex set of property interests than does run-of-the-mill theft, conversion, or fraud.”

The point is here that nothing is taken from the copyright holder. They are not deprived of any property. If you walk into a shop and steal a loaf of bread, that shop will lose the money that they would have made from selling that loaf of bread. If you copy a game and give the copy to your friend, you have not directly taken anything from the copyright owner. 

 

Piracy = lost sales

“But wait!” I hear you cry “If someone downloads an illegal copy of a game they’re depriving the copyright holder of a sale, so they’ve basically stolen that money from the copyright holder!”

It’s an interesting argument, but there’s a big assumption there: that the person would have purchased the material legally had they not illegally downloaded it. The question is, can we legitimately make that assumption? The answer has to be no. Let’s consider a group of people that we can safely say this doesn’t apply to: Students.

I can personally vouch for the fact that there are plenty of students and teenagers who are flat broke and download several new releases a month (films, games, music, everything). These people do not have the means to pay for the material, and so the argument that they would have paid for the material if they couldn’t get it illegally cannot apply. You might argue that they probably would have eventually purchased the material, but that argument can also be dismissed. People who consume material at this rate could never ‘catch-up’ in terms of purchasing all of that material at a later date, as in order to afford to buy it they probably have a job, and so won’t have enough time to get through a game, two movies, and 4 episodes of their favourite TV shows a week. That’s without taking into account the rate at which new material comes out. Whichever way you look at it, the argument that these people would have paid for the material just doesn’t stack up.

So, am I saying that piracy never leads to lost sales? Not at all. There will always be some people who would pay if they had to, but choose to pirate to save money. For some this ‘saved’ money might go on other copyrighted material that they wouldn’t have bought if they had paid for the material they downloaded, but it could equally have been spent on a takeaway, or an extra flutter on the horses.

But even where someone would have bought the material otherwise, is it always a lost sale? No. A good friend of mine has been watching the TV show ‘Fringe’ illegally on-line. Knowing that it was something her father would enjoy as well she bought him the box set of the first 3 seasons for his birthday. Had she bought them for herself she would have still reached the conclusion that her father would enjoy it, but she would have lent him her copy, rather than buy a second box set for him.

 

So what does this mean?

Quite simply, it means that, although copyright holders lose some money through piracy, no one can ever know how much. I dare say research has been done surveying illegal downloaders to ask them whether they would have bought the material they downloaded if they couldn’t get it for free, but there are several factors that would be very difficult to capture accurately, such as the available disposable income to purchase the material, what it was spent on otherwise, loss of ‘secondary’ sales (e.g. word of mouth, gift purchases) as a result of not having downloaded the material etc.

What can be measured, or at least estimated, is the number of times a piece of material has been downloaded illegally. We’ve all read ridiculous figures in the media from publishers/ record labels who claim that piracy has ‘cost’ them some amount which turns out to be the cost of the material multiplied by the number of illegal downloads. That sort of stunt helps no one, because people know it’s not representative, which makes it look like the publisher is trying to pull the wool over the eyes of the public.

 

Are there other ways that piracy can cause harm other than lost sales?

For games, absolutely. If you have any features in your game like dedicated mutli-player servers, centralised high score tables, or if your entire game is run on servers you have to pay for, then piracy has a direct cost, because those players are costing you money in keeping the servers running without giving anything back. You might have to buy or rent extra server space or bandwidth so that people who haven’t paid for your game can play. This is bad for everyone in the long run, because if enough people pirate that game the costs could simply get too high for the developer/ publisher to carry on supporting it.

 

So, what’s the answer? (or tl;dr)

If I knew that, I’d probably have so many job offers that the offer letters wouldn’t fit through my door. At some point soon I hope to write up a survey of the different solutions that have been presented to the world so far, covering technical solutions like DRM, different business models like Free to Play and Freemium, legal solutions such as tougher laws and cracking down on illegal downloaders, and new funding models like Kickstarter. Here though I want to draw the logical conclusion from the discussion above.

There are some people that, if they couldn’t illegally download games, would buy them. Of them some would buy them at full price, some would wait for a sale, and others would buy them but not buy some other game as a result. There are also many people that would simply do without. We have no way of knowing what that split looks like, and we probably never will.

Any solution that is put in place to tackle piracy runs the risk of alienating people who might have bought your game. I know specifically of two PC gamers who stopped playing the Assassin’s Creed franchise because of Ubisoft’s ‘Always connected’ DRM, and I know another who refuses to use Steam. What we, as developers, publishers, copyright holders, need to do is judge how many customers we may lose from trying to tackle Piracy, vs how many of the ‘Would have bought’ pirates will be nudged into paying for our game. Given that we don’t have a clue how many people are in either camp, whatever we do is a gamble. If we don’t have overheads per person playing our game (i.e. servers that we have to pay for etc) then maybe, just maybe, it would be a better business decision to take the bird in the hand, and focus our energies instead on making content that people want to buy.

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