How is it even possible to reward them, for that matter? I’m still stuck on that part. Congratulations! You’ve bought the product! As a special gift, you get to… use the product? Pack-ins are kind of a reward, but, in addition to being unheard of these days, have nothing to do with copy protection. Special downloadable content from the developer’s site would be tied to CD keys and not on-disc shenanigans, if they were tied to any protection at all.
I’m no economist, but pricing in this manner would cause them to lose market share incredibly fast.
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.
People pirate $20 DVDs and $12 CDs and ebooks, so why would games be any different? If there is a free alternative that’s easy to obtain, people will go with free.
How do you arrive at that figure? Suprnova’s stats were more along the lines of 25K-30K for each of the distributions-- I saw three and I saw one of them disappear, I guess because it was fake-- and many of those figures had to be cases of people downloading two or three of the distributions just in case. Add in Usenet and eMule and the rest, and I’d estimate 75K max.
Obviously a lot of these people will be burning discs for their friends and whatnot, but I still think this is a pretty low figure, especially considering it’s an international piracy nexus. And how many of these people were just trying to get the game before their pre-order? Hard to say.
I think Doom 3 goes a long way to prove that piracy is a fraction of sales, not spiralling out of control, not explanatory of the decrease in PC game sales, and certainly not worth the support costs and lost future business that shoddy copy protection schemes cause.
Yes, in a subject where there are no hard facts each will believe what they want to believe.
A hundreds thousand DOOM 3 downloaders are certainly interesting, don’t you think?
About as interesting as the number of car thefts is to the car industry I suppose. How many of those 1 million plus incidents a year are lost sales?
About as interesting as the number of car thefts is to the car industry I suppose. How many of those 1 million plus incidents a year are lost sales?
Bad analogy. Each of those cars has already been purchased, unless you’re talking about thefts off the lot. Not to mention the fact that you can’t duplicate an automobile, disseminate it instantly around the world, and do so for virtually nothing.
No the point is that when numbers of thefts are thrown around it’s assumed that each one of those, or some magical % is lost sales. Same with every other form of theft, after all, the thieves would have to buy those products if they really wanted them wouldn’t they? Somehow it’s assumed that some proportion of pirates would be out spending money if they weren’t able to steal software, why is this the only industry swallowing such a belief?
Jason- Piracy is one reason why Windows(and everything else) is so cheap in Asia. The competition from industrial pirates drives down prices. The poorness of the people is more important, but piracy isn’t a non-factor.
competition from industrial pirates drives down prices.
I have been trying poorly I admit to debunk this myth. Pirates simply are not competing in the market…the are what economist would call rentseeking. They don’t invest in R&D. They don’t hire artists, programmers, suits and marketing monkeys. They simply take all of that and sell or provide it free with almost no cost to themselves. Cost is the key word. The price of software is indeed less overall but it’s because the users who pay the lawful price are subsidizing the users who are using the pirate’s price. It’s a subsidy plain and simple. You see this in other industry’s like pharmaceuticals. Drugs are cheaper in Canada because of price controls placed on drugs by the Canadian government. Consumers in the US pay higher prices to subsidize this. The drugs aren’t just magically cheaper. Wish I could explain this better but my training is in national security policy. Like I said I know enough to be dangerous. Surely there is an economist on this board who can do a better job.
Vic- No, that’s not a myth. If someone is selling something for $50 less than you charge, you will need to lower your prices if you want to sell any of that product.
And I do have a degree in economics. Not trying to say I’m automagically right(it’s from a state school), but think it out. In low marginal cost industries, prices are always set to maximize revenue.
Pirates and game publishers do not sell the same thing, though, so that’s not 100% applicable.
If you want a serious discussion, maybe you should avoid claiming that perfectly reasonable economic theories are “myths” simply because you think they’re wrong.
I’d really like to know why it is that people think that the game industry is going to leave money on the table that’s just theirs for the asking. Anyone who is an honest user who wants to buy cheaper is already buying out of the bargain bin. I’ve heard it said often and loudly on this board that bargain-bin software doesn’t make the developers any money. If that’s the case, you can bet your ass they aren’t going to price them that low out of the gate, no matter how many units they’d sell in the first week! Where’s the incentive to lower prices here? I don’t see it at all.
You see this in other industry’s like pharmaceuticals. Drugs are cheaper in Canada because of price controls placed on drugs by the Canadian government. Consumers in the US pay higher prices to subsidize this. The drugs aren’t just magically cheaper.
The pharmaceutical industry is not a free market - in fact it is almost the polar opposite of a free market - so your example is not valid. For one thing, most of the time a consumer needs Drug X, and Drug Xa or Drug Almost-X will not do the job properly. For another, the entire pricing structure is distorted by the insurance layer.
Matt- In industrial piracy situations it’s awfully close. Regardless, a pirated copy of thing X is almost certainly an economic substitute of thing X. You’d generally pay more for the legitimate copy, but it’s not apples and oranges.
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.[/quote]
I think you’re misidentifying the hardcore pirate community. I used to be a vague part of it, so I can tell you that virtually no price point will make these people pay for their games; it’s more like a scavenger hunt than any care for prices.
The casual end users priates - the people who’d buy the game instead - are motivated by how easy they can obtain the game, not how much it costs. Sure, if it was like $5 none of the casual end users would pirate, but in the realistic price ranges we’re discussing I have a really hard time imagining it making a difference.
And I just don’t see where the money is going to come from in China to pay for these copies of XP if piracy suddenly disappeared. It’s just not there.
I’d really like to know why it is that people think that the game industry is going to leave money on the table that’s just theirs for the asking.
Because the available evidence indicates the PC gaming industry is horribly run, nearly as bad as the music industry.
McCullough- The hardcore pirate community of broke college students(of which I was also a member of) won’t buy anything, but the piracy that does actual damage is the industrial foreign stuff. Prices wouldn’t go up to US levels, but I can’t imagine they’d stay exactly the same. Makes no sense.
So the problem is actually foreign third-world piracy? Eh?
That should have said, “A hundred thousand,” not hundreds of thousands. I was exaggerating by maybe 20K. Or not, since it’s probably passed 100,000 by this time.
I think Doom 3 goes a long way to prove that piracy is a fraction of sales, not spiralling out of control, not explanatory of the decrease in PC game sales, and certainly not worth the support costs and lost future business that shoddy copy protection schemes cause.
Assuming it still sells its million or more copies, I suppose you might be right.
Or alternately, piracy only hurts the games that aren’t already guaranteed million sellers, in which case they’re only screwing the non-ids and Blizzards of the game world.
So does this mean that piracy will drive all software companies out of business because they won’t be able to give away their products for free?
How many college students are playing games like Battlefield Vietnam and EverQuest, ones that either require online validation to play or have monthly fees?
(They may only be playing BFV on pirate servers, with other pirates, which sounds like something you’d run across in one of the circles of hell.)
Pirates will buy games, but only if they have to.
I’ve often wondered…
People claim that the folks that pirate games wouldn’t buy them anyway because they’re broke, etc.
If they’re so broke, how can they afford the hardware to run a game like DOOM 3?
–Dave
Yes. Look at the numbers quoted; in fact you can pick the article you want to examine. Any reputable source which discusses domestic (US) and foreign piracy shows that industrial piracy overseas, especially in SE Asia, is dozens of times larger than everything else.
And to piggy back on another subtopic in this thread, that is why MS lowered their prices in Asia. That it doesn’t cost them to do so is ancillary; the reason they did so is because this is the only method they currently have to try to decrease the absolutely insane rate of piracy over there.