On Piracy in Gaming

[Ddrak]

http://draginol.joeuser.com/article/303 ... _PC_Gaming

Piracy & PC Gaming
Published on March 10, 2008 By Draginol In GalCiv Dev Journals

Recently there has been a lot of talk about how piracy affects PC gaming. And if you listen to game developers, it apparently is a foregone conclusion - if a high quality PC game doesn't sell as many copies as it should, it must be because of piracy.

Now, I don't like piracy at all. It really bugs me when I see my game up on some torrent site just on the principle of the matter. And piracy certainly does cost sales. But arguing that piracy is the primary factor in lower sales of well made games? I don't think so. People who never buy software aren't lost sales.

Is it about business or glory?
Most people who know of Stardock in the gaming world think of it as a tiny indie shop. And we certainly are tiny in terms of game development. But in the desktop enhancement market, Stardock owns that market and it's a market with many millions of users. According to CNET, 6 of the top 10 most popular desktop enhancements are developed by Stardock. Our most popular desktop enhancement, WindowBlinds, has almost 14 million downloads just on Download.com. We have over a million registered users.

If you want to talk about piracy, talk about desktop enhancements. The piracy on that is huge. But the question isn't about piracy. It's about sales.

So here is the deal: When you develop for a market, you don't go by the user base. You go by the potential customer base. That's what most software companies do. They base what they want to create on the size of the market they're developing for. But not PC game developers.

PC game developers seem to focus more on the "cool" factor. What game can they make that will get them glory with the game magazines and gaming websites and hard core gamers? These days, it seems like game developers want to be like rock stars more than businessmen. I've never considered myself a real game developer. I'm a gamer who happens to know how to code and also happens to be reasonably good at business.

So when I make a game, I focus on making games that I think will be the most profitable. As a gamer, I like most games. I love Bioshock. I think the Orange Box is one of the best gaming deals ever. I love Company of Heroes and Oblivion was captivating. My two favorite games of all time are Civilization (I, II, III, and IV) and Total Annihilation. And I won't even get into the hours lost in WoW. Heck, I even like The Sims.

So when it comes time to make a game, I don't have a hard time thinking of a game I'd like to play. The hard part is coming up with a game that we can actually make that will be profitable. And that means looking at the market as a business not about trying to be "cool".

Making games for customers versus making games for users
So even though Galactic Civilizations II sold 300,000 copies making 8 digits in revenue on a budget of less than $1 million, it's still largely off the radar. I practically have to agree to mow editors lawns to get coverage. And you should see Jeff Green's (Games for Windows) yard. I still can't find my hedge trimmers.

Another game that has been off the radar until recently was Sins of a Solar Empire. With a small budget, it has already sold about 200,000 copies in the first month of release. It's the highest rated PC game of 2008 and probably the best selling 2008 PC title. Neither of these titles have CD copy protection.

And yet we don't get nearly the attention of other PC games. Lack of marketing on our part? We bang on the doors for coverage as next as the next shop. Lack of advertising? Open up your favorite PC game publication for the past few months and take note of all the 2 page spreads for Sins of a Solar Empire. So we certainly try.

But we still don't get the editorial buzz that some of the big name titles do because our genre isn't considered as "cool" as other genres. Imagine what our sales would be if our games had gotten game magazine covers and just massive editorial coverage like some of the big name games get. I don't want to suggest we get treated poorly by game magazine and web sites (not just because I fear them -- which I do), we got good preview coverage on Sins, just not the same level as one of the "mega" titles would get. Hard core gamers have different tastes in games than the mainstream PC gaming market of game buyers. Remember Roller Coaster Tycoon? Heck, how much buzz does The Sims get in terms of editorial when compared to its popularity. Those things just aren't that cool to the hard core gaming crowd that everything seems geared toward despite the fact that they're not the ones buying most of the games.

I won't even mention some of the big name PC titles that GalCiv and Sins have outsold. There's plenty of PC games that have gotten dedicated covers that haven't sold as well. So why is that?

Our games sell well for three reasons. First, they're good games which is a pre-requisite. But there's lots of great games that don't sell well.

The other two reasons are:

Our games work on a very wide variety of hardware configurations.
Our games target genres with the largest customer bases per cost to produce for.


We also don't make games targeting the Chinese market
When you make a game for a target market, you have to look at how many people will actually buy your game combined with how much it will cost to make a game for that target market. What good is a large number of users if they're not going to buy your game? And what good is a market where the minimal commitment to make a game for it is $10 million if the target audience isn't likely to pay for the game?

If the target demographic for your game is full of pirates who won't buy your game, then why support them? That's one of the things I have a hard time understanding. It's irrelevant how many people will play your game (if you're in the business of selling games that is). It's only relevant how many people are likely to buy your game.

Stardock doesn't make games targeting the Chinese market. If we spent $10 million on a PC game explicitly for the Chinese market and we lost our shirts, would you really feel that much sympathy for us? Or would you think "Duh."


You need a machine how fast?
Anyone who keeps track of how many PCs the "Gamer PC" vendors sell each year could tell you that it's insane to develop a game explicitly for hard core gamers. Insane. I think people would be shocked to find out how few hard core gamers there really are out there. This data is available. The number of high end graphics cards sold each year isn't a trade secret (in some cases you may have to get an NDA but if you're a partner you can find out). So why are companies making games that require them to sell to 15% of a given market to be profitable? In what other market do companies do that? In other software markets, getting 1% of the target market is considered good. If you need to sell 500,000 of your game to break even and your game requires Pixel Shader 3 to not look like crap or play like crap, do you you really think that there are 50 MILLION PC users with Pixel Shader 3 capable machines who a) play games and b) will actually buy your game if a pirated version is available?

In our case, we make games that target the widest possible audience as long as as we can still deliver the gaming experience we set out to. Anyone who's looked at the graphics in Sins of a Solar Empire would, I think, agree that the graphics are pretty phenomenal (particularly space battles). But could they be even fancier? Sure. But only if we degraded the gaming experience for the largest chunk of people who buy games.



The problem with blaming piracy
I don't want anyone to walk away from this article thinking I am poo-pooing the effect of piracy. I'm not. I definitely feel for game developers who want to make kick ass PC games who see their efforts diminished by a bunch of greedy pirates. I just don't count pirates in the first place. If you're a pirate, you don't get a vote on what gets made -- or you shouldn't if the company in question is trying to make a profit.

The reason why we don't put CD copy protection on our games isn't because we're nice guys. We do it because the people who actually buy games don't like to mess with it. Our customers make the rules, not the pirates. Pirates don't count. We know our customers could pirate our games if they want but choose to support our efforts. So we return the favor - we make the games they want and deliver them how they want it. This is also known as operating like every other industry outside the PC game industry.

One of the jokes I've seen in the desktop enhancement market is how "ugly" WindowBlinds skins are (though there are plenty of awesome ones too). But the thing is, the people who buy WindowBlinds tend to like a different style of skin than the people who would never buy it in the first place. Natural selection, so to speak, over many years has created a number of styles that seem to be unique to people who actually buy WindowBlinds. That's the problem with piracy. What gets made targets people who buy it, not the people who would never buy it in the first place. When someone complains about "fat borders" on some popular WindowBlinds skin my question is always "Would you buy WindowBlinds even if there was a perfect skin for you?" and the answer is inevitably "Probably not". That's how it works in every market -- the people who buy stuff call the shots. Only in the PC game market are the people who pirate stuff still getting the overwhelming percentage of development resources and editorial support.

When you blame piracy for disappointing sales, you tend to tar the entire market with a broad brush. Piracy isn't evenly distributed in the PC gaming market. And there are far more effective ways of getting people who might buy your product to buy it without inconveniencing them.

Blaming piracy is easy. But it hides other underlying causes. When Sins popped up as the #1 best selling game at retail a couple weeks ago, a game that has no copy protect whatsoever, that should tell you that piracy is not the primary issue.

In the end, the pirates hurt themselves. PC game developers will either slowly migrate to making games that cater to the people who buy PC games or they'll move to platforms where people are more inclined to buy games.

In the meantime, if you want to make profitable PC games, I'd recommend focusing more effort on satisfying the people willing to spend money on your product and less effort on making what others perceive as hot. But then again, I don't romanticize PC game development. I just want to play cool games and make a profit on games that I work on.

[Klast Brell]

Cool article. Too bad the people who need to read it are the same ones who are east likely to do so.

[Partha]

The biggest problem with piracy and PC games is the lack of imagination. It's all 'YARR' and 'ARR' and damn little 'AVAST'.

[Freecare Spiritwise]

The RIAA has a similar tactic. The decline in music sales couldn't have anything to do with the fact that most music is total crap. Naw, must be the pirates.

[Minute]

Awesome article & I love Stardock. I hope some of the "money" in the business takes notice (though the hopes aren't high).

[Bahd Zoolander]

Many large retailers will not stock your game or will order limited quantities if there is no copy protection on the disk. This isn't so much of an issue in the US, but overseas it's a killer.

We didn't start copy protecting our disks until stores made us.

[Ddrak]

I wonder what those retailers are doing with Sins then?

Dd

[Klast Brell]

I work for a hardware manufacturer. Stores have silly requirements for us too. Has to be in a clam shell (that plastic blister pact that is impossible to open without a chain saw) or they won't stock it. Product has to be updated and refreshed to a new version every year (so the store can retain their cutting edge image) or they won't stock it.

[Bahd Zoolander]

I wonder what those retailers are doing with Sins then?

It's not impossible to get a non copy protected game onto the shelves, it's just harder, especially in Europe and Asia.

[Ddrak]

I wonder what those retailers are doing with Sins then?

It's not impossible to get a non copy protected game onto the shelves, it's just harder, especially in Europe and Asia.

Well, I feel a lot better now about returning games that have obnoxious copy protection.

Dd

[Taxious]

Nice article.

I don't know about the rest of you, but when I can't copy something directly, my first response isn't: "well, I guess I'll have to go to the store and buy it now." If anything, it's the opposite. I'll make a point to do everything in my power to find the media elsewhere, doing everything in my power to not pay a dime for it.

Instead of dividing the market with an "us vs them" mentality, Stardock realizes that piracy is inevitable and has learned to mediate a truce while focusing on what really matters to them; their customers.

And just because I'm addicted to lolcats:

[Partha]

Okay, but those of us who believe in rewarding the people who made it still think you're a shitheel.

[Rsak]

*cough* Pardon me as I choke on the words... Partha is right.

Stardock never settled or made a truce with piracy. They simply know the reality that if you make a great game people will buy it and pay the people who spent years of time making it.

[Kulaf]

I don't pirate anything.......anymore. I was a big pirate when I was a kid, reasoning that I couldn't afford it anyway so I really wasn't hurting their profits. I always told myself that once I had a job I wouln't copy software anymore......so I don't. I won't get into the whole ethics of the thing......if you can sleep at night more power to ya. However since software, music and movies are one of our biggest money makers in our economy I support any and all efforts to protect said industries while not unduely affecting consumers.

[Taxious]

I love how anytime an institution loses money, they label it 'stealing.' When email started becoming big, I remember the post office using the argument that email users were essentially stealing postage. Now in 2008, that accusation sounds absolutely absurd.

The piracy debate has the same form as the abortion debate. Some people are for it, others aren't, but either way the main conflict is where to draw the line. Is having copyrighted music in youtube videos alright? Viewers aren't paying for it but still get to listen to it, omg stealing! Do you believe that opening a microsoft word document with Open Office is stealing? What about playing EQemu? What about listening to music on songza? Watching shows on alluc.org? Downloading movies on bit torrent? ....where should the line be drawn?

However since software, music and movies are one of our biggest money makers in our economy I support any and all efforts to protect said industries while not unduely affecting consumers.

Arguing that piracy hurts our economy doesn't make sense to me. Amenities lost in one area will be gained in another. Jobs lost at the post office = jobs gained developing email servers/clients. Money lost due to downloading movies = money gained by companies that sell servers, portable media players, internet connections, etc...

Paying for digital media is so... 1990s.

[Rsak]

You are improperly conflating a large number of issues.

Mail delivery is a service. It gets paid for one way or another whether it is done by a postal office, company email server, or a free email account provided by a company.

Text editors are tools. The document you open is not created by Microsoft or Sun so neither should profit on labor they did not do.

The line is not gray like you think it should be. Rather the line is very clear. If you create the content then you have say in how it is to be used. That includes making it publicly available in an open license or charging for it. If you make a game and give it away then that is what shareware and freeware is for as well as General Public Licenses.

The point is if you are taking something against the wishes of the creator or owner then you are stealing.

I am not going to say you an evil person person and bane of our economy for stealing digital media. As with Kulaf if can sleep with yourself then so be it, but do not delude yourself and think that you are not stealing. You are a thief.

However to be fair, so am I. I download Television that is either available online or not. And I will download some soundtracks to movies, games, etc for things that I already own. I do not however download movies or games. That is the line that I draw to let me sleep at night, but I will admit that what I am doing is stealing.

[Taxious]

The point is if you are taking something against the wishes of the creator or owner then you are stealing.

I guess this is where I get confused.

Taking is wrong, but using is not? In your opinion, it would be wrong of me to download a song on my computer, but not to simply listen to that song over and over again on youtube or songza? Is it stealing to play an emulated version of the original Tetris on my desktop?

Mail delivery is a service. It gets paid for one way or another whether it is done by a postal office, company email server, or a free email account provided by a company.

This is the point I'm trying to make with regard to the service of entertainment...

[Select]

Entertainment doesn't really get paid for one way or another. It's fairly straightforward - how much is made in sales.

[Partha]

My personal line is that I will get media you cannot obtain in stores or online for a fee, and I don't mean the GameTap rental style agreement. If I can't own it because the company won't sell it because it's too 'old' or too 'niche', I have no problems going out and finding it. Companies have new ways of distributing old works, and if they're too lazy to offer them to people, that's when I go and get it. Otherwise, I pay, because that's likely the only way the artist sees any money from me.

[Bahd Zoolander]

Making games is a business. People expect to be paid for doing it just like people flipping burgers at McDonalds expect to be paid for doing their job.

If a business does not have the revenue to pay it's employees then they will leave and the company will fail. Nobody works for free.

If nobody buys games there won't be anyone left making them.

I believe that piracy hurts the industry but not to the extent that the industry claims. I realize that many people that casually pirate games would never buy them so claiming that is a lost sale is foolish. Stealing yes, but lost revenue, no.

The big problem, and the problem that copy protection is used to try and fix is organized piracy that mass produces copies of games and sells them. This is a big problem in parts of Europe and Asia. They don't just copy the disc, they copy the manual and make a box and sell these games in stores. That takes real money away from the developer because people ARE buying these games but the developer doesn't get any money.

Another problem is stores selling used games. Whether you feel this is wrong or not it does hurt the developer because another customer is spending money for a game that the developer won't see a dime of.

My only hope, as a person who's salary is paid by people that buy games, is that if you do pirate a game and like it tell your friends, cause maybe they aren't cheap bastages like you.