If I owned a bazillian shares in Electronic Arts, the first thing I would ask about any form of copy protection is “am I spending more on the protection than I’m likely to make back in profits from sales lost without that protection.”
The thing you seem to not understand about copy protection is that the more intrusive it becomes, the more it costs to support. Support calls for customers who can’t play the game due to system instability or performance degredation cost you money. Your profits are small enough on every copy you sell that you can lose any money you would have made on that copy if someone ties up your support lines for any length of time.
If I owned a software publishing company, sure, I’d use copy protection of some sort. But I would also be sure to pay attention to the development costs of that protection prior to release, and the support costs that stem from that protection after release, so that they would be acceptable when compared to the profit I hope to make.
When I look at the PC Gaming market now a days I see three things that are killing it:
Absurd prices on games. Paying $80 per game in my books is just insane, and substantially limits what I am going to purchase. I have a good paying job and can afford it, but for 15 to 20 hours of play time, I don’t feel it’s worth it, and I’m sure I’m not the only one. Generally (for example NWN) I wait well over a year after the game is out before buying it, and even then I sometimes wince at the price.
Insanely stupid system specs. Needing to upgrade your PC every 6 months to keep up with decent framerates in the latest and greatest games is inane. Hence why console gaming has become so popular, it’s a minimal cost for a system that will play all of the games developed for it, at the same rates as everyone else.
Cookie cutter games. It’s the same rehashed crap year in and year out. Game in and game out. EA relies on putting out a new NHL, Madden etc every year. Now for example NHL the improvements I saw for about 8 years were just not where it should have been for a game which they had the basics down pat to start with. I eventually gave up on purchasing that franchise because the improvements in AI never materialized, and at times the AI was worse than the year before.
I won’t deny that piracy has an impact on sales, however I do think those 3 reasons need to be addressed first and foremost, and doing so would have a positive reduction on piracy. Now personally I don’t experience the problems most people talk about on here regarding safe disc etc etc. My discs have always read fine, though I do download NO-CD cracks simply because I hate putting in CD’s all the time. Now hearing what starforce does, and the fact that I use quite a few USB devices in my life (Axim, EOS300D, MP3 Player etc) I will honestly steer clear of any game using that sort of copy protection.
Actually the whole point is that you will. I’ve got enough formal education in economics to be dangerous I’ll admit but the basic idea is that piracy distorts the demand curve for a product. How much is debateable. But saying that the guy who pirates wouldn’t have bought it anyway is simply not true. If a guy pirate’s it then he’s expressing potential demand. He either paid somebody else less at an illegal vendor or got it for the cost of an ISP subscription i.e. “Free.” But if neither of those options were available who is to say that he wouldn’t have paid something to the IP holder. At anyrate his demand is factored into what the company sees on its bottom line. It depends on the shape of the supply curve and other factors but increased demand can actually mean a reduction in the unit price of the product or commodity. Another way to think of it is that the people who pay for the product are subsidizing those who do not…this type of interaction is common in what are called equilibrium systems.
True, but on the other side there’s the “users pissed off by invasive copy protection.” We also have absolutely no reliable measurements of how it works in either direction.
On point one I can’t agree. Here in Australia PC games prices have actually dropped slightly and they certainly haven’t increased from inflation. I was paying an avg of AUD$89 10 years ago and I am still paying AUD$89 for a typical AAA game now. Most games cost me AUD$70-$85.
Maybe Canada is different ? (shrug)
What is killing PC gaming is distributors unrealistic expectations of selling 500,000+ copies of a PC game in a market that is heading towards consoles.
A. Removing piracy will increase demand. Piracy is not merely distorting the demand curve; its distortion is explicitly to depress it. When demand goes up, prices follow. From the business point of view, it’s better to sell the consumer two $60 games than three $40 games, as long as they’re willing to pay $60 a game. Which brings me to…
B. Right now, publishers are charging the prices that they think the market will bear. If they really thought that a $30 price point for a relatively hardcore game would triple sales then they would have done it years ago. Instead $30 games are built and targetted at the mass market from the get-go. As long as the group of people who are willing to pay for “hardcore” games is also the group of people who value them at $40 or $50 apiece, the price of said games will not fall below $40 or $50.
C. We have past examples of systems where piracy was virtually impossible: the old cartridge-based consoles. And what were prices like there? I seem to remember popular Super Nintendo games being in the $60 to $70 range. IIRC the cost of Final Fantasy 6 when it was newly released was around $70. Why was this? Because that’s the price that the market would bear at the time.
Even if piracy were eradicated, prices would not fall. They would probably rise. Publishers would know that, if they start a game out at $70 and it drops by $20 a season, they’re still going to hit up every single part of that demand curve for the most it’s willing to pay. And you know what? If Doom 3 were at $70, demand would hardly drop. If Doom 3 were unpiratable, they’d still get lots of sales now even at a $70 price point. And people like us, with a little patience and a lot of sense, would wait for the “bargain bin” of $40 or $50 pricing.
Yes, it’s true that someone is paying. That someone is investors, not gamers, and they pay whenever a development house or a publisher goes in the toilet. Gamers only pay in the long run with a lack of games; they certainly aren’t paying financially.
Yuh, me too, because game companies make the games.[/quote]
Yeah, and I’m sure that if a game company wanted to give you spyware with your game so they could make an extra $1.50 a copy, you’d bend over and take it.
Dave is behaving as an advocate for game companies. Other people are behaving as advocates for game consumers. The interests of the devs, the publishers, and the consumers are not identical, so don’t pretend they are.
Whoever runs that website should expand on the whole “why boycott starforce” thing. Personally, I’m not real clear on the problems it causes.[/quote]
That would be me, and rest assured, the site will be expanded. Right now, I have rediculously little free time, thanks to work. I should have time to update and expand it starting next week.
Actually, it was largely because of the cost of producing a cartridge full of chips, and chips at the time weren’t that cheap. There was a time when a $70 game cartridge cost something like $30 to produce, which made developing for those systems really risky.
Even if piracy were eradicated, prices would not fall. They would probably rise.
There’s almost no data, history, or logic, to support this.
Game price have dropped in the last 10 years when you consider inflation. Look at ESPN Football going out at $20, or others debuting at $39 instead of $49.
There will be “blockbuster” games that ship for $60 or $70, and that’s fine. They’re perceived as having more value for their price. But the mainstream games are more likely to drop in price than inrease.
It’s incredibly amusing to see a lot of the same people that dismiss piracy as a source of any decline in PC game sales proposing that copy protection issues is a reason. So where’s that evidence? Where’s the data to support that “significant” numbers of people have problems? Where’s the data that shows people can’t get games working and are giving up on PC gaming?
I believe that while piracy obviously results in loses of potential profits, there is no solid proof that they are the primary reason behind declining PC sales.
Instead, I believe that fewer PC games are being played, legally purchased or not, overall.
I believe that the biggest contributor to the decline in PC sales are the number of PC gamers who have simply given up on the platform for a number of reasons, many of which have moved on to consoles to supply their gaming fix. It really doesn’t surprise me to see numbers from the ESA showing that PC game sales were down $200 million in 2003 compared to the previous year, with console game sales being up by $300 million.
No, you’re correct, I have no hard numbers here to the conversion of PC gamers to console gamers, but really, neither do most people making the arguments about exactly how many people are playing pirated games.
It’s like the arguments from the RIAA that the decrease in music sales are the sole result of piracy, without taking into account the bad economy at the time and the number of uninspiring cookie cutter releases.
However, from purely anecdotal evidence of what I’ve seen through friends, family, people who’s computers I’ve serviced and expriences in numerous gaming forums, average people are tired of the troubles they face with PC gaming and are retreating to the relative simplicity of console gaming. Problems with copy protection do not account for every one of these problems, but to say that they don’t contribute to any of them is silly, especially in light of the numebr of troubleshooting threads in mainstream forums that result in fixed gameplay upon the removal of the copy protection.
There’s almost no data, history, or logic, to support this.
Game price have dropped in the last 10 years when you consider inflation. Look at ESPN Football going out at $20, or others debuting at $39 instead of $49.
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If piracy causes price increases, and the end of piracy would produce price falls, then why have games dropped in price? Would that mean that game companies think piracy is no longer a problem? Or is it maybe that they’re responding to the market pressure of lowered demand?
Lowered retail demand means lowering of prices to try and keep product moving. Removing piracy would increase demand. There would be no reason - no reason at all - for a company to lower prices in response to greater sales.
If you think about it, you’ll see that it’s perfectly logical. No company is going to respond to increased sales by lowering prices unless they’re trying to undercut a competitor, which isn’t the case here. You can claim it’s not logical, but you haven’t explained why. If you think I’m wrong, explain why instead of dismissing people out of hand.
Change the context to piracy, and these question all apply to your own arguements.
There is nothing but conjecture for either assumption, looking at console sales doesn’t do anything either, they’re both non-pirated (for the most part) and don’t have the same problems as PC games, so where is the evidence?
Aside from anecdotal asides, and firmly held belief, where is the evidence that anything other than a poorly run industry is responsible for PC game sale problems?
Regarding economics: Silverlight is right, everyone else is wrong. Piracy lowers the price software companies can charge, ergo software is cheaper in the presence of piracy.
This is not just explained by economic theory, it’s also supported by evidence that Steve can’t seem to find: Microsoft offering a super-cheap version of Windows XP in SE Asia specifically to combat piracy in that region; the higher price point and price stability of harder-to-pirate console games vs PC games; also the higher price of games in general, not just cartridges, back when we didn’t have broadband.
Blaming the $70 price point on cartridge technology is silly because GBA cartridges somehow manage to sell at $50 or less and still make a huge profit for Nintendo.
That said, piracy does have the other effect of reducing potential profits, so Dave Long is also right when he says that less piracy should mean more games. But those games will be more expensive, not less so – at least until the higher profits draw in enough competition to lower the prices again. Console game pricing suggests that this won’t happen anytime soon, however.
MS is charging less for the OS in asia for the same reason they have different price points in Germany, France, Russia, Argentina, the US, and so on - software has zero marginal cost, so you can set the sale price to literally anything you want and still bring in revenue.
I rather doubt that Windows would be any more expensive in China if piracy wasn’t widespread; they simply don’t have the money to shell out $80 or whatever.
Sure, but we’re talking about the specific price point they’re choosing, and why.
I rather doubt that Windows would be any more expensive in China if piracy wasn’t widespread; they simply don’t have the money to shell out $80 or whatever.
That’s certainly another reason but I recall Microsoft Watch reports about a cheap XP Lite version that MS offers in SE Asia for the express purpose of combating piracy. The articles already scrolled off my blog roll, unfortunately.
MS would charge more. They wouldn’t charge $80, but it would be more than they’re charging now, because without piracy anyone who wanted to get in on this whole “computer” thing would have to pay them off or learn Linux.
In a market with no piracy at all, all Microsoft really has to do is keep their price below the typical perceived cost of the alternatives. Once piracy is introduced, prices need to come down in order to reduce the incentive to pirate to the point where people actually still buy the software. China is such a bad market that everyone pirates rampantly, up to and including the government. The government may be willing to pay MS off for their software, but you can bet your ass they’re not going to pay the price Microsoft wants, and it’s just as easy to see that they’ll pay less than they would if Microsoft wasn’t trying to sell to pirates.
Imagine what would happen with piracy if game prices suddenly doubled to the $80-100 range. NOBODY would buy games anymore; they would ALL pirate. Now imagine what would happen if prices halved to the $20-25 range. Now instances of piracy would probably drop significantly; pirates would be better able to afford a $20 trip to the store than four hours of download time, and borderline pirates who only pirate what they can’t afford would spread their entertainment dollars more towards software and less towards items that are less cost-effective.
That was my point. Where everyone dismisses any discussion of piracy, they’re more than happy to offer up other anecdotes that match their own view of the issue as fact.
Aside from anecdotal asides, and firmly held belief, where is the evidence that anything other than a poorly run industry is responsible for PC game sale problems?
A hundreds thousand DOOM 3 downloaders are certainly interesting, don’t you think?
You’re talking about the difference between the N64 or SNES days and today, when memory chips are considerably cheaper. And in those days, the games were huge, relatively speaking.
I’m not pulling this number out of my ass. I’ve been told by multiple people over the years that it could cost over $30 to produce an N64 cartridge (remember, Nintendo got to set the pricing because they were its only producer), which is why a lot of companies were so quick to move over to the CD-based PS1. That was a huge upfront cost, and a huge risk.
