Piracy ratio is about 20:1 ?!?

In some cases the developer can make a guess about the lost sales due to piracy by checking the key codes used for online play. If they see that 10 people are actively playing with the same code, maybe multiple times, they can say 9 of these people are interested enough in the game to spend a lot of time with it. Which makes them potential customers who decided against a purchase.
 
Joined
Aug 30, 2006
Messages
7,830
In some cases the developer can make a guess about the lost sales due to piracy by checking the key codes used for online play. If they see that 10 people are actively playing with the same code, maybe multiple times, they can say 9 of these people are interested enough in the game to spend a lot of time with it. Which makes them potential customers who decided against a purchase.

Well you know how it is with guesses... they are tricky. When exactly does a pirate become a potential customer. If he logs in one time, or twice... maybe three time? That's just not exact science and simply not very credible. Don't get me wrong, I'm not saying the ratio is not 20:1... I just don't know. It could be even much higher, but that's not what counts. The content industry in general has this crazy idea that every single pirated copy is a lost sale, and that's simply not true. Even if we ignore all the empirical data that exists proving this point, we just have to use our own common sense to realize that it cannot be like that. I'll give you a good example of what I mean... it's not coming from me, but from Lessing, one of the most brilliant heads of our time. In 2001 the music industry claimed that cd sales had fallen by 8.9 percent, from 882 million units sold to 803 million units, and that the revenues fell by 6.7 percent. The RIAA said that at the time they sold 803 million CDs, 2.1 BILLION CDs were illegaly downloaded from the internet. So people downloaded 2.6 times more CDs than they bought. But during that time we only saw a 7 percent drop in sales and not a 100 percent drop like it should be the case if really every pirated copy equals one lost sale.

So the main question is not how many people pirated the game, the question is how many pirates can you turn into customers. In the second case the ratio is probably much, much higher. Look at the typology of pirates and you'll see that in general we're talking about young people, often students, who have a very limited amount of money. So even if they wanted to, they could probably only buy like one or two games a month... if they could afford that at all, after all they are also supposed to spend their money on music and on movies, not to forget costly software for their education. Now, have a look at how many new music tracks, games, movies, and you name it are released each month... does anyone here really believe that people could actually buy all that if they could not pirate it?
It's not only a question of evaluation, it's not only about people liking something or not, it's also about cash. Even if pirate likes something, that doesn't mean he would actually buy it.
 
Joined
Dec 21, 2006
Messages
758
That´s the well known "incomplete information" argument. They will never have 100% precise infos. Which means they have make their best effort to get as reliable data as possible and then make decisions based upon it. That´s everyday business, waiting for universities to come up with hard facts is not an option. Publishers & developers can´t avoid to decide between "Do something (and then the "what")" and "Do nothing". You cannot stop time. Decisions must be made every day.
So the games business is like every other business: A fast game with decisions based on incomplete information.

edit:
The statements issued to the public, especially by lobbyists, and the data used by companies in their decision making process don´t necessarily have to be compatible.
Of course the industry as a whole wants to make the problem look bigger than it actually is, to increase the political pressure. I doubt many publishers are stupid enough to believe every DL is a lost sale. They will use additional data before they draw conclusions for their next game.
 
Last edited:
Joined
Aug 30, 2006
Messages
7,830
That´s the well known "incomplete information" argument. They will never have 100% precise infos. Which means they have make their best effort to get as reliable data as possible and then make decisions based upon it. That´s everyday business, waiting for universities to come up with hard facts is not an option. Publishers & developers can´t avoid to decide between "Do something (and then the "what")" and "Do nothing". You cannot stop time. Decisions must be made every day.
So the games business is like every other business: A fast game with decisions based on incomplete information.

edit:
The statements issued to the public, especially by lobbyists, and the data used by companies in their decision making process don´t necessarily have to be compatible.
Of course the industry as a whole wants to make the problem look bigger than it actually is, to increase the political pressure. I doubt many publishers are stupid enough to believe every DL is a lost sale. They will use additional data before they draw conclusions for their next game.

Well, if you listen to the content industry you cannot help to think they are really that stupid. But no, I don't think they are, nonethless it's not quite fair to blame everything on piracy if you don't even know how high exactly the losses are. When it comes to the "decision must be made now" argument one should be very careful, cause that's what the music industry did and many people think they very often did the wrong thing which only led them deeper into a crisis. I mean, Crytek is the best example... They sell less copies of a game than expected. Their conclusion it must be piracy! Have they even considered other aspects? I don't know, but I hope for them that they did. Because going multi-platform does not automatically mean more sales... especially not, if it turns out that the reason why your first game did not sell wasn't piracy.
And you know, this isn't 1999, if game developers would read a bit more than just the usual ESA and BSA anti-piracy propaganda they might actually learn a thing or two.
 
Joined
Dec 21, 2006
Messages
758
Well, if you listen to the content industry you cannot help to think they are really that stupid.
That´s politics. Why should their representatives look more intelligent than most other politicians? ;)
Politics caters to the mass market and to generalists who simply don´t have time to become experts on everything. Both groups demand simple solutions.

When it comes to the "decision must be made now" argument one should be very careful, cause that's what the music industry did and many people think they very often did the wrong thing which only led them deeper into a crisis.
Absolutely correct. That´s why the production side is generally always interested to get more precise data. What they can do is observe and collect data, for example track the number of downloaded torrents, know when a noCD-patch came out, how the number of support calls behaves relative to this, how the daily retail sales react to relevant incidents. If they do all this, and more, for 20 games a year they find out certain trends and can draw conclusions, albeit based upon rather soft data. Correct or incorrect ones? Who knows, from an outside perspective many decisions look silly.

I mean, Crytek is the best example... They sell less copies of a game than expected. Their conclusion it must be piracy! Have they even considered other aspects? I don't know, but I hope for them that they did.
They certainly did. But if Crysis sold slower than expected while it was no.1 on just about every torrent list worldwide for weeks, the conclusion is quite logical.

Because going multi-platform does not automatically mean more sales... especially not, if it turns out that the reason why your first game did not sell wasn't piracy.
I disagree. For AAA titles going multi-platform indeed automatically means more sales, or at least more revenue. It´s also much more efficient to spent another 10% of the development budget for each conversion and then use the marketing fireworks for all platforms. Another logical consequence they didn´t explicitly say: It makes sense to ship on a platform first which (a) is big, (b) has relatively low piracy (c) has a high average sales price for software and (d) high price stability. Today this means XBox360, tomorrow it might be the PS3. Example: Oblivion, Mass Effect.
The days of AAA games as PC-exclusives are over. They are the exception.

And you know, this isn't 1999, if game developers would read a bit more than just the usual ESA and BSA anti-piracy propaganda they might actually learn a thing or two.
They certainly do, but it´s a complex topic. A lot of politics is involved. The dev might know it better but his publisher decides. The publisher does due diligance and their lawyers, who know nothing about games, come up with recommendations. The publisher might also be part of a big media company. The deciders there typically are close to 60, have learned their stuff in the analog age and are still retail driven, and thus reluctant to embrace digital distribution with its neglectable costs for manufacturing, packaging and distribution.
 
Joined
Aug 30, 2006
Messages
7,830
They certainly did. But if Crysis sold slower than expected while it was no.1 on just about every torrent list worldwide for weeks, the conclusion is quite logical.
I can only repeat my old argumentation: Pirated copies don't equal sales. The action genre, especially ego shooters draw quite some attention, people obviously like them, so it's only natural that they will be pirated more than other games, just as they usually sell more often than other games. Every developer, as well as publisher faces the piracy problem nowadays, so why do some games sell quite well and others don't? In this particular case the question is especially tricky. Because, as you said, Crysis sold slower than "expected". But were Crytek's expectations realistic? I don't think so. It's their first game, and before Crysis no one really knew Crytek. The requirements to play the game were fairly high which limits the customer base as well. So, I really don't think 1 million copies is thaaaaat bad. I'm pretty sure that over time a few more sales will follow. Of course there are ego shooters out there that sold more copies, but then these are big names, usually the second or third part of a game series. The times when games like Half-Life 1 sold "I don't know how many million copies" are long gone. The influence of piracy however is limited. It's obvious that it has an effect on sales, filesharing is growing since years, so yes - the industry is losing money - but I seriously doubt it is the only variable that influences sales. We have a growing console market and it is no secret that at least partly the customer base is the same. We have games like WoW and AoC that might further reduce the initial sales of singleplayer games, etc. There are so many factors, it's hard to say which one does or does not play a role.

I disagree. For AAA titles going multi-platform indeed automatically means more sales, or at least more revenue. It´s also much more efficient to spent another 10% of the development budget for each conversion and then use the marketing fireworks for all platforms. Another logical consequence they didn´t explicitly say: It makes sense to ship on a platform first which (a) is big, (b) has relatively low piracy (c) has a high average sales price for software and (d) high price stability. Today this means XBox360, tomorrow it might be the PS3. Example: Oblivion, Mass Effect.
The days of AAA games as PC-exclusives are over. They are the exception.
I'm sorry, you're totally right there. I was arguing from a purely theoretical perspective. Practically you'll probably always sell more games if you're going multi platform. But what I was aiming at was that a game which might not appeal to all too many people on the pc won't suddenly become a more attractive game just because you go multi platform. If you develop for the PC as well as for consoles your expectations in terms of sales will simple go up, because you know you can sell more. So the problem stays the same. Someone who expects to sell 3 million copies of a game for just the PC will probably hope that he can sell 6 millions if he goes multi platform. Fact is however that if you're selling just 1 million copies of the PC version, the real sales on consoles might also stay below your expectations. So can you sell more? Yes you can - but that doesn't mean that sales will automatically match your expectations.
Btw, I'm not opposed to multi platform development since I firmly believe that as console and PC technology come closer together, game mechanics will do so as well. I have to admit that I'm often sceptical towards console ports, but in the last few years I saw several examples of multi platform games that were actually quite good.

They certainly do, but it´s a complex topic. A lot of politics is involved. The dev might know it better but his publisher decides. The publisher does due diligance and their lawyers, who know nothing about games, come up with recommendations. The publisher might also be part of a big media company. The deciders there typically are close to 60, have learned their stuff in the analog age and are still retail driven, and thus reluctant to embrace digital distribution with its neglectable costs for manufacturing, packaging and distribution.

I agree, at least partly. I'm not sure if all developers have a profound knowledge of the piracy problem, to be honest, I seriously doubt it. They too just seem to pick out the aspects that are interesting for them or do concern them directly, and neglect everything else. Once in a while you hear some developer discuss the whole topic in a reasonable way, but that's really the exception (Valve, and some indies are good examples here).
I kinda reject this black and white dichotomy which says developers are the cool guys and the publishers are the bad guys. When most gamers think of publishers they seem to imagine the Kingpin from the Batman comics or something. Crytek is again the best example, if they know better, then why do they repeatedly say stupid things concerning piracy in their interviews? They could simply shut up or talk about something else. It's a bit of a tradition to blame everything on the publisher (we can see that in the music or movie industry as well). Most people think that publishers rip off artists, etc. and yes, in some cases that might be true... I don't think the structures in the content industry are particularily favorable for artists... but then again it's the artists' job to change something - who else should do it?
I very much agree with you that the industry doesn't think much ahead. They cling to much too traditional patterns of copy protection and copyright law. But it's not like they exist in a vacuum... everyone that wants to can read up on the topic. As I said, most material concerning the topic is available online, you just have to search a bit for it.

My personal opinion, after having read most of the stuff that's out there (and I really tried to stay neutral and read stuff from both sides) is that you cannot eliminate piracy. We live in a culture of copying. The content industry itself is based on the fundament of copyright infringement. Sharing is an absolutely natural thing and we won't get rid of it in the near future. If students live together in a college dorm the question is not why they don't respect copyright law, the question is how they could not share music, movies, software and games. But there is light at the end of the tunnel. Recently the warner Music Group has hired Jim Griffin, one of the first persons who came up with the idea of a flatrate to compensate artists and copyright holders, to create a plan for a so called music tax (everyone has to pay 5$ a month, you can download as much music as you want, you can keep it, share it, spread it, whatever...). What suprised me was how little understanding and support that idea has in parts of the population. The most grotesque thing I read was something that a music fan wrote in a forum. If this music tax will really come, he wrote, he would pirate the shit out of the music industry. Very obviously he has yet to understand that what he would be doing then, will be no piracy anymore. If such solutions would work for the software industry as well? I don't know... but I think it's worth thinking in non-traditional ways. A variable tax might be an idea - who downloads a lot has to pay a lot. There are organizations who speak quite favourably of such a solution. In any case I think that we need a reformation of copyright law - fast.
 
Joined
Dec 21, 2006
Messages
758
But were Crytek's expectations realistic? I don't think so. It's their first game, and before Crysis no one really knew Crytek. The requirements to play the game were fairly high which limits the customer base as well.


Huh? Sorry to butt in, but you seem to be slightly misinformed. Crytek's first game was Far Cry, which sold over a Million copies back in 2004. I do agree that the system requirements may have hurt them a little, though not to the point of impacting sales significantly.
 
Joined
Oct 21, 2006
Messages
39,443
Location
Florida, US
Well, the constant cliché about Crysis is that "no-one can run it", because of the high tech specs.

I do believe that this "bad-mouthing" had an impact on the sales, but I don't know how much at all.
 
Joined
Nov 5, 2006
Messages
21,979
Location
Old Europe
Huh? Sorry to butt in, but you seem to be slightly misinformed. Crytek's first game was Far Cry, which sold over a Million copies back in 2004. I do agree that the system requirements may have hurt them a little, though not to the point of impacting sales significantly.

Really? Ah well, you're right. Well anyway, my point is that their expectations were simply a bit high. Look at the list of best-selling video games and you'll find quite a few shooters in the 1 million range. I do not quite agree on the systems requirement part - in my personal opinion the equasion that awsome graphics mean huge sales simply does not work anymore. Crisis was one of the first games that made use of the dx10 technology and you need in fact a pretty nice system to play the game. When I asked a friend of mine if he had bought Crisis, he told me that he would not pay for a game he could not enjoy in its full glory because he doesn't own a dx10 gfx adapater. I think that over the last few years it became pretty clear that very often less means more in terms of gfx. While people certainly enjoy great graphics they also like good framerates and a certain artistic beauty and you really have to find a balance there. If people can't be sure that a game will run on their system they might be more prone to download it from the internet, and very few of them will afterwards go to a shop and buy it. As a developer you should avoid such pitfalls.
But as I said, there are so many variables that it's very hard to evaluate which one hurt the sales most. The scores the game got were ok, but it wasn't praised as a great hit like for example Bioshock. Great gfx alone won't do it nowadays. More or less every game has great gfx today. Crisis certainly suffered from piracy, no doubt about it, but no more or less than every other popular game does.
 
Joined
Dec 21, 2006
Messages
758
I´m busy the next couple of days, so just a few short unsorted remarks:

- I´m arguing from a strictly pragmatic perspective. In everyday business theory is only relevant if it´s available and also "understood". Furthermore it´s a waste of time to convince a pragmatic person with still incomplete theory. He will simply say "It´s my money, I set the rules."
- The wrong expectations argument only has a peripheral connection to the piracy issue. They need a sales expectation before they can greenlight a project. It´s almost always incorrect, the question is only to what extend.
- The reluctance to accept new business models has two reasons, I think:
1. conservatism. People are so afraid of changes that they make it their life purpose to maintain the status quo and throw sticks between innovators´ legs. You can even see this in our forum. Just mention the word "Fallout 3" and "Bethesda" and observe what happens. ;)
2. Educational background of (a) the people in charge and (b) the organisation as a whole. I already explained this in another post. If they grew up thinking retail they are used to thinking retail and will apply retail thinking to future business. Don´t underestimate how hard it is to change course if your company has 5000 people used to a certain type of work and a certain mindset.

They will have to change or the new business models will roll over them.
You can lots of interesting thoughts on these topics, from a marketing perspective, in Seth Grodin´s blog. Seth is a marketing genius who is extremely progressive.
 
Last edited:
Joined
Aug 30, 2006
Messages
7,830
Music industry is looking for new ways to fight off piracy:

According to Jupiter Research, a fifth of Europeans use file sharing networks. Paid-for digital music services such as iTunes are used by just 10% and make up just 8% of overall music revenue.

The BPI admitted that the current mechanisms for selling music were "broken".

The new strategy will see it negotiating licensed content deals with ISPs who have pursued file sharers.

"Charging a tenner a month hasn't worked. Ideally it needs to be incredibly cheap or free, with a massive catalogue that can be tranferrable," he said.

Mr Taylor admitted that the BPI's current campaign was unlikely to stop file sharing completely but he did think the idea that the web was home to free stuff needs to be challenged.

"There is a phenomenal amount of piracy out there and we believe that the idea that 95% of content on the net is free is not sustainable. We don't believe that society can allow the free consumption of content to persist," he said.

http://news.bbc.co.uk/1/hi/technology/7486743.stm
 
Joined
Dec 28, 2006
Messages
3,160
Location
Europa Universalis
- The wrong expectations argument only has a peripheral connection to the piracy issue. They need a sales expectation before they can greenlight a project. It´s almost always incorrect, the question is only to what extend.
Well, you don't have to tell me... I mean, that's what I was trying to express the whole time. But that's exactely how Crytek presents the situation. I read several interviews by now in which they claim that the only reason why their expectations were not met was online-piracy. Anyway, I'm agreeing with pretty much all you're saying there.
 
Joined
Dec 21, 2006
Messages
758
Music industry is looking for new ways to fight off piracy:

and we believe that the idea that 95% of content on the net is free is not sustainable

This is a direct outspeak of a parasitic thought-pattern that draws its money/income from selling other people's goods - in this article, composed or taped music.

Companies & organizations thinking like that would trey to prevent musicians trying to sell their music directly to the end-customer, because this "shortened chain" would leave the "middle-ware", the publishers, completely out. With no money for them as *the* result.


The whole "content industry" has imho reachen an fully parasitic stage. It's like advertisement : Millennia ago, advertisement was for information.
Now, advertisement is for manipulating people into buying something they don't want.

That's a total shift of meaning, of the whole business model at all.
Where once publishers were rather companies helping gifted people in reaching an audience, publishers now have become a sort of business that sucks the creativity of others out of them and try to sell this as their own "product".

Or, in other words from an very, very early Genesis song : "For them, you're just a product, for me, you're the one I love."
 
Joined
Nov 5, 2006
Messages
21,979
Location
Old Europe
Music and movie industry is not in such a big trouble over piracy because they have alternative ways to make money like concerts and threaters/tv-channels. Also the cost of making music is kinda cheap if you compare it to AAA movie or game.

Game companies though have no other sources of revenue. If customers d/l their games for free they are fracked so to speak. They can only hope that customers buy their games for charity-reasons but charity is somthing done for endangered wild animals or starving people - not game companies, so its not exactly an easy thing to relay on when you are expected to pay back the millions spent on the development of the game.
 
Last edited:
Joined
Dec 28, 2006
Messages
3,160
Location
Europa Universalis
I had told you guys this several times in another thread. In the future single player games will also be online. What does it mean? It means you are connected to the internet while you play. Your save games are saved on the server. But it is still a single player game. Part of the content will be feed to your computer from the server. It is only a matter of time. Yes it does suck since the moment the server is down you can't play the single player anymore. But I guess decent developers would make a complete download availiable in case of server close down.

It would also have a lot of benefits, you'd need less hard-drive space, you could not cheat etc etc etc.
 
Joined
Oct 25, 2006
Messages
6,292
I had told you guys this several times in another thread. In the future single player games will also be online. What does it mean? It means you are connected to the internet while you play. Your save games are saved on the server.

Thats how diablo2 works - the characters are saved to the battle.net server. Diablo2 sold 4 million by 2001 (sales from 01-08 unknown) and expansion atleast 3 million and the game topped salescharts in amazon this week even (after the d3 announcement) - so it still sales like hot rolls.

Diablo-clones like Titan quest went bankcrupt though - they didnt have such protections.

Diablo isnt alone though - guild wars with 5 million sold is another good example (the game can practically be played solo).
 
Joined
Dec 28, 2006
Messages
3,160
Location
Europa Universalis
I had told you guys this several times in another thread. In the future single player games will also be online. What does it mean? It means you are connected to the internet while you play. Your save games are saved on the server. But it is still a single player game. Part of the content will be feed to your computer from the server. It is only a matter of time. Yes it does suck since the moment the server is down you can't play the single player anymore. But I guess decent developers would make a complete download availiable in case of server close down.

It would also have a lot of benefits, you'd need less hard-drive space, you could not cheat etc etc etc.

And it would have one BIG problem which would kill the concept for smaller publishers: They would have to leave a large chunk of the market behind. Everybody without a flat rate and everybody without a fast internet connection would only buy such a product once and then be more careful. In many countries area-wide broadband availability is decades away. (Many cities in Germany have a projected DSL availability date of "not planned".)
 
Joined
Aug 30, 2006
Messages
7,830
I had no idea broadband accsess in germany was that poor. I guess I am spoiled since I am swedish where more than 90% of the people can get broadband accsess, and the remiaing 9.999999 % can get mobile broadband accsess. I do not think a large chunk would be left out. Ironically I do think a large amount of the people who buy single player games these days are the ones who live in rural areas and cannot download!!!

I do not believe about this not planned though. In everyday life, internet is becoming more and more necesarry whatever you want to do, I do only think it is a matter of time, just like with the single player games going online. The faster the "almost everyone got broadband internet", the faster the online single player games.
 
Joined
Oct 25, 2006
Messages
6,292
The ISPs really have no intention to connect them. Putting cables into the earth is not worth it to connect 50 houses and 10 farms in a small village. They would never make their money back.
Central areas get fast lines, the rest has to live with what´s there. I have DSL 3000, a friend only DSL 1000 and 3 km into the farmland they have ISDN. 10 km in the other direction you can get DSL2 16000, the fastest currently available for the private sector.
 
Joined
Aug 30, 2006
Messages
7,830
How about mobile internet. Here the price is 30 euro / month included traffick. And the speeds are around 4mbit up, 1 mbit down, more than enough for online single player gaming, or are you telling me these people in the farms does not have cellphone either?? do they have electricity ? hehe. ?? feels like stone age for me.
 
Joined
Oct 25, 2006
Messages
6,292
Back
Top Bottom