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A Piratical Interlude

May 8, 2010

I’ve been threatening to do a post about piracy for a while now, so here it is.  I’ve compiled a list of all the misinformed, fallacious, or just plain stupid things people love to say about piracy, and I’ll spend the next 2,000 words explaining why they’re all wrong.  Or fallacious.  Or just plain stupid.

Starting with…

1. Piracy is stealing!

“You wouldn’t steal an apple, you wouldn’t steal a car, and you wouldn’t beat up an elderly nun to steal her social security money.  But isn’t piracy just as bad?”

*Deep sigh*

No.  No it isn’t.  When you steal an apple, some fruit vendor is suddenly missing one apple.  When you steal a car, someone is about to start getting a whole lot more exercise.  When you “steal” a videogame, the publisher still has exactly the same inventory as before—nothing on their end has changed at all.  You know perfectly well this is true, so stop making stuff up to support your argument.

2. Piracy isn’t stealing!

Actually, that’s not right either. In addition to being illegal (duh), piracy shrinks the pool of potential customers for a game.  The likelihood of someone paying for a game drops significantly if they already have a copy, so every download represents some finite probability that the company just lost a sale.  Developers are losing money over this; don’t think it’s not hurting anybody.

3. Piracy is destroying the economy!

Fig. 1: The economy.

“Every year the American entertainment industry loses $250 billion to piracy.  These losses are enough to cost 750,000 American workers their jobs annually.”

These are the statistics that antipiracy advocates love to throw around, because they’re so deliciously damning.  They’re also complete and utter bullshit, but I think even the people who made them up have forgotten that by now.  For perspective, 750,000 jobs makes up roughly 8% of all unemployment in the United States, and $250 billion is more than the annual incomes of the movie, music, software, and videogames industries combined.

Julian Sanchez did an excellent investigation into the origins of these numbers for Ars Technica, so I’ll just summarize briefly here:  The figure of $250 billion dates back to at least 1993, when a writer for Forbes magazine apparently pulled it out of his ass (there was no citation).  And the 750,000 jobs?  That’s from nineteen eighty-six.  The commerce secretary under Ronald freaking Reagan said that “counterfeiting” costs “anywhere from 130,000 to 750,000 jobs,” and people are still quoting him today as though he’s an expert on bittorrent.

4. Piracy isn’t a problem at all.

Are you starting to see a theme of point/counterpoint here?  Do you see how I like to take both sides of every argument and tell everyone they are categorically wrong about everything?  And do you ever wonder why bloggers like me don’t have any friends?  Will you be my friend?

Ahem.  Anyway.  Piracy is a problem, even if it’s not nearly as large as the doomsayers like to pretend.  If nothing else, the sheer number of times some games get pirated is enough to scare publishers like Ubisoft into including inconvenient DRM schemes with their games.  Stupid, moronic, draconian, DRM schemes that cripple gameplay, ruin immersion, and are practically designed to antagonize the only people who are actually paying for the game.  Do you hear me, Ubisoft?  You’re treating legitimate customers like criminals, and not one of your megalomaniacal machinations has made even the slightest dent in the piracy rate!  How much longer do you think gamers will continue to swallow your bullshit, huh?  Do you think we’re all just stupid sheep, willing to accept any DRM “features” as we suckle pathetically for nourishment at the teats of capitalist industry?  I DEFY YOU, UBISOFT!  YOU AND YOUR WRETCHED ILK SHALL BE CAST DOWN BY OUR VENGEFUL RETRIBUTION, YEA, AND THE DAY OF JUDGEMENT SHALL COME WHEN—

Sorry about that.  But as I was saying, certain unnamed publishers will tend to employ certain misguided tactics when they perceive so many sales being lost to piracy.  And even if it is entirely their fault—even if not one person has ever pirated a game they would otherwise have paid for—the fact remains that we didn’t have to deal with this sort of thing ten years ago.  Piracy existed, of course, and so did DRM, but none of it was as prevalent.

You’ll notice I’ve been dancing around the issue of how much the videogames industry actually loses to piracy, which is kind of the most important question in this whole point.  The truth is, I have no idea.  And neither does anyone else.  We have numbers for how many times a game has been sold, and for how many times it’s been pirated, but there is no one in the world who can give even a ballpark estimate as to how many illegal downloads would have been sales if piracy didn’t exist.

If I had to guess—and I do—I would say that developers are losing more money to piracy today than they did before p2p sharing became popular.  But they’re also making more money now, since videogames are starting to see a much larger audience than they ever did in the early years.  Sales records and piracy records continue to be broken, and it looks like neither the industry nor the pirates are in any danger of dying out.

5. DRM will save the videogames industry.

Every once in a while some corporate moneyman will come out and say something like this to reassure investors, and I don’t know whether to laugh or cry.  On the one hand, I do greatly enjoy laughing at the stupidity of others.  On the other hand, these particular idiots are in the driver’s seat right now, and I’d rather not see the whole gaming industry driven over a cliff.

Here is the important thing; the simple truth that gamers already know and publishers refuse to admit: No matter what DRM you use, it will be cracked.  Most of the time it will be cracked within a matter of days, and sometimes it won’t even last until launch day.  After that point, the only people who have to suffer through your CD-check-limited-online-activations-must-have-a-constant-internet-connection-to-play series of DRM hoops are the ones who already paid for the game.  The people who pirated, meanwhile, are rewarded with a much more functional, DRM-free version of the game that they did not pay for.  DRM is incentivizing piracy, not preventing it.  Please note that I like to use italics when I get angry about something.

Now, just about everyone who knows what DRM is has probably heard that point at least once before (no, not the italics.  The other one).  Even the profoundly short-sighted executives at Ubisoft knew their ultimate weapon of always-online DRM wasn’t going to last forever (for those not keeping up with events, it was actually semi-cracked on day one and fully taken apart a month later).  But they’re willing to make their customers suffer just to buy a few extra days of non-piracy, because the first couple of weeks after launch day is when they make the lion’s share of their profits anyway.

But since everyone already knows there will be a cracked version available for free within a few days, this doesn’t actually do much for profits.  Anyone who was willing to pirate the game will just wait for the crack, and a few people who were planning to pay for the game might even balk at the thought of paying $60 for an unholy mess of DRM.  If publishers could instead just accept that pirates are never going to be forced into paying for a product, they could focus instead on making quality games.  Valve gets this: A representative of the company once famously said that “Pirates are just underserved customers.”  It should come as no surprise that Valve now has an almost universally good reputation among gamers, a catalog full of excellent games, and a headquarters in Washington that has been constructed entirely out of solid gold bricks and $100 bills.

6. Piracy is a protest against DRM.

(Click on the picture for full-size idiocy)

…So said the Reverend Dr. Martin Luther King Jr. in his famous “fuck Ubisoft” speech in 1963.  Or perhaps it was Mohandas “Skidrow” Gandhi, as he protested the British DRM on Indian sovereignty?  Grr, I just suck at history today.

No wait, I remember now.  It was some idiot on the internet who thought he was a visionary for knowing how to use bittorrent.  People, if you want to protest something a company is doing, don’t buy their products.  That’s it.  By denying them access to your wallet, you have used the most powerful weapon in your consumer arsenal; nothing else will be as effective.  Don’t go sign an online petition, and don’t join a boycott group.  No one listens to these people, because companies know that they generally end up buying the stuff anyway.

A lot of people like to think piracy is a form of protest because it tends to involve not buying anything.  But what they’re actually doing is a two-step process: 1) Don’t buy the game, and 2) play the game for free.  Remember what I said about the not-buying part being the only thing that’s effective?  Step two up there doesn’t protest anything, it just gives you free stuff.  And hey, I’m not about to blame you for that—everybody likes free stuff.  But when you act like you are a revolutionary, wresting from greedy corporate hands the very essence of freedom itself…don’t do that.  You’re implying that the developer owed you that game in the first place, and they were unreasonable to charge you for it.  Think about the sense of entitlement that entails, and then please consider very carefully whether that is the sort of person you want to be.

7. Pirates are all spoiled suburbanites.

You’re probably tired of hearing me yell about my opinions by now, so I’ll bring some actual data to the table for this one.  There’s a perception among people who hate pirates that people only download games because they just want everything handed to them.  The phrase “sense of entitlement” gets thrown around a lot, as does “cheap bastards” (and yes, I’m aware I just used one of these phrases in my last point).  And while I’m sure such people exist, they are definitely not in the majority.

Most pirates are actually not American/Western European, nor do they really fit the common stereotype of a spoiled brat.  A study by the Business Software Alliance in 2007 ranked 107 nations in order of their piracy rates, and the United States came in…(drum roll)…dead last.  The five highest piracy rates belong to (in descending order): Armenia, Moldova, Azerbaijan, Bangladesh, and Zimbabwe.  Man, those Zimbabweans are just spoiled rotten, aren’t they?

If you prefer, the BSA also did a regional breakdown:

Fig. 2:  A graph.

Whichever set of data you want to look at, there’s a very obvious correlation between a country’s disposable income and its piracy rate.  Even worse, countries with less prosperous citizens will see astronomically higher videogame prices due to localization costs and the economics of scale.  A new game in Russia can run upwards of $100 (USD equivalent), which for some people is about a month’s food—and I doubt most publishers even sell games at all in sub-Saharan Africa.  The option to pay for entertainment just isn’t feasible, so the only decision is whether to pirate games or simply do without them.

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7 Comments leave one →
  1. Ren permalink
    May 9, 2010 12:37 am

    I’ll be your friend if you keep using captions like the one for Fig. 2. Also because you make good points, and know how to debate effectively. Well done sir.

  2. May 11, 2010 12:45 pm

    Excellent points on both sides. I’m highly entertained by how well you manage to go off on tangents without actually getting off-topic.

    Also, I love how the BSA study brought up the same point you did about losses and value of pirated software being completely different, but their choice in graph title here suggests they’re more than a little bit confused: http://ow.ly/1JFYN .

    Oh, and I suppose I can’t comment on a piracy post without sharing this classic xkcd comic: http://xkcd.com/488/

  3. May 11, 2010 4:29 pm

    I’m glad you guys like my rhetorical style! Frequent tangents and unhelpful captions are my specialty, so expect to see more of them in the future.

    I’m impressed that someone actually read the original BSA study; not many people have the patience for corroborating sources. The graph you linked to actually makes a valid point: North America has more internet users than other parts of the world, so their low piracy rate still results in higher losses (and vice versa for Africa and the like). The reason I used the other graph is because it shows the actual root cause of most piracy: People are stealing because they have to, not because they can.

    Also, the BSA tends to lean heavily on the side of business in these debates, for obvious reasons. I believe they make a passing reference to the extremely important fact that one pirated copy of a $50 program does not equal $50 in lost revenue, because the pirate probably wouldn’t have bought the product anyway–but then they go on with their calculations as though nothing happened. This leads to openly ludicrous statistics like $225 billion in annual “losses” due to piracy. Thanks guys, I’ll crunch the numbers myself next time.

    In conclusion, I leave you with the most unpronounceable seven-letter sentence in history: xkcd ftw.

  4. The Machination permalink
    May 12, 2010 7:57 am

    It would be really interesting to delve into the mentality of the pirate. In reflection of the Valve quote, I believe that was addressing piracy in Russian, surrounding the whole problem of games being released considerbly later, and at a ludicrous premium. So what do they do? They want to enjoy the creations of their favourite developers with the rest of the world, and pirate. I’m not advocating it, but I can certainly sympathise. Living in Australia means that we get a similarly cold shoulder with release dates and prices, a problem that is starting to find its way onto steam of all places.

    DRM. DRM that affects the loyal paying customer in an obstructive way is attrocious. DRM that affects the pirate in an obstructive way is hilarious. I can remember a while back when Batman Arkham Asylum came out, a user posted on the developer’s forum that they were experiencing a “bug”. Turns out that the game became broken at a point with a pirated edition. The developer then followed up with cutting sarcasm that left the poster with one hell of a red face.

    When you say that statistically, developers are losing less yet making more, this really accounts for a certain part of the industry. Last year I did some work experience as a QA tester at Brisbane studio Halfbrick, and they showed us some piracy statistics. In one day of release, one of their new handheld games clocked 1000 torrent downloads, and I could hear the disappointment in their voices. Halfbrick are a small indie studio that rely on the support of a lot of sales (since their games are cheap). This kind of piracy really damages the potential of the developer when their offering their games at such a low price, and lack the backing of a publisher.

    Anyway, sorry to go on, I needed to get a bit of a piracy thing off my chest as well.

  5. May 12, 2010 11:29 am

    Ahh, so many good points. I wanted to bring up a couple of these in the post itself, but I was already having trouble keeping it focused.

    First off, let me say how grateful I am to not be a gamer in Australia. My sympathies to you on that one (although the country itself is otherwise pretty cool). Australia is the one major outlier in that trend of low GNP and high game prices: You guys have good internet penetration and disposable income, and yet the industry still treats you like a third-world country with pricing and release dates. With digital distribution and the benevolence of Good King Newell, though, does this mean Australians get to play new games at the same time as the rest of the world?

    I got a big kick out of reading the fallout from that Arkham Asylum stunt. It’s one thing to pirate a game you were never going to buy, but it’s quite another to ask the developer for tech support on your stolen copy. Seamus Young actually took the idea further, suggesting several ways to make piracy difficult without inconveniencing legitimate customers–it’s an interesting read. But I do see two problems with this approach: First, it’s still only a temporary barrier. Rocksteady Studios managed to get a few pirates by leaking a broken copy of their own game, one in which Batman couldn’t jump. But once the word was out, somebody else just took a retail copy, cracked that, and stuck it on bittorrent. The second problem involves the people who like to use pirated games as demos before buying the real thing (yes, these people exist). By giving pirates an inferior copy, they may deprive themselves of a few extra sales down the line.

    I’m sorry to hear about Halfbrick; at least Fruit Ninja seems to be selling well now (was this the game you were testing for them?). I have a completely unsubstantiated theory that the videogame industry’s treatment of Australia is partly to blame, since people could just be in the habit of not paying for games. Alternatively, Halfbrick’s status as an indie developer might be working against them: Consumers are hesitant to put money into something unproven, and indie devs are notoriously oddball and (gasp!) creative. I have no proof that either theory is accurate at all, but I like them better than the “people are assholes” option.

  6. The Machination permalink
    May 12, 2010 5:56 pm

    I’d be quite interested to see a study in the motivation of piracy. Sure cost is often cited as an issue, but for a company like Halfbrick who sells games (Like Rocket Racing, the game I tested) at around the $8 mark, there is really no rational cause for ignoring what is essentially pocket change. The truly bitter irony is that the consumer has already shelled out $250+ for a console, why refuse this meagre pricetag, and in turn refuse support of a small developer. And what do you know, Halfbrick make incredibly fun little games. At the time, they were actually considering flooding the torrent servers with broken copies of their game, but I don’t actually know what came of that.

  7. July 1, 2010 2:16 am

    There is very little I can actually add to what was said previously…so, to keep it short: excellent article, puts my work to shame, will be reading more.

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