Report of the European Commission: Game piracy actually leads to an increase of sales

Games: EU says 100 pirated copies will lead to 24 additional legal copies:

"For games, the estimated effect of illegal online transactions on sales is positive – implying that illegal consumption leads to increased legal consumption. This positive effect of illegal downloads and streams on the sales of games may be explained by the industry being successful in converting illegal users to paying users. Tactics used by the industry include, for example, offering gameplay with extra bonuses or extra levels if consumers pay.“

It is totally different for Film/TV series:
"For films or TV-series, every 100 illegal streams or downloads are estimated to displace 27 legal transactions."


(Page 14)
https://cdn.netzpolitik.org/wp-upload/2017/09/displacement_study.pdf

I can’t believe that. Maybe the effect is something like 2.4% – 24% is ridiculous.

 

No matter what way it's put, 100 illegal copies is still down 76 purchases + the 24 legit (100 total).
But it's a fight I'm not even gonna try to fight anymore, it takes too much time away from a single man business, maybe if I had 500 man studios and millions of dollars it might be worth investing into trying to prevent it without harming the legit users.

This will continue to be an ongoing battle with AAA Studios, let them spend their wasted resources why we collect the profits from just building games lol.

 

The thing people needs to realize is that someoene who pirates your game wouldn't have bought it.They're not customers.They wouldn't pay for your game if it couldn't be pirated.

They may upgrade to a customer, though.

 

@neginfinity : Oh I know this, I'm just saying that from a monetary standpoint you didn't technically gain anything out of it. Whether they are or aren't gonna buy your game still doesn't change you lost out on 100 copies either way.

But I'm not even gonna try to prevent it, no sense in trying unless it's something that can be obviously correctly within reason.

 

I have no problem believing those numbers. The question is, how can this statistical average be improved to a higher per-game conversion-rate? Iirc Gamedev Tycoon seeded a modified version of their game into the piracy world, and in that version of the game your gamestudio would go bankrupt after a while due to piracy simulated within the game. Most people didn't get the message though, they just thought it's a bad and unfair game. They got a bit of a PR boost out of it, but I have my doubts it was a good idea.

 

You can’t lose something that you never owned and never could earn in any scenario.

 

No, that's wrong.

If your game can be pirated, your profit from them is zero. If the game can't be pirated, your profit from them is still zero. Zero minus zero is still zero. So you lose nothing. And THAT'S the part people need to understand.

Pirate is someone who doesn't see enough value in your game to buy it. If they can get it for free, they might check your game out. If they can't get it for free, they won't pay for it either way.

 

I always wondered about this and it does in a way make sense. I guess piracy works as a form of advertising to people who were never planning to buy your game. 100 people weren't ever gonna buy it but will steal it is 100 sales you would never see even if they couldn't steal it but if 20 percent of em decide they need the paid version for some features because they really like it then you gained 20 sales you never would have seen. On a side note I have always said that I hope someone hacks or pirates any game I ever make. If they do that means enough people care to own it I am definately coming out ahead.

 

Those folks were never going to buy the game anyway. My guess is that those 24 copies sold were folks who pirated to try the game and liked it enough to buy it.

 

I can see the numbers as being legitimate. As a teenager I had no money and only played games I could pirate. Not being able to pirate a game meant I didn't play it at all.

However it still translated to occasional sales. I would ask for legitimate copies games I liked for birthdays so I could get access to online features.

As I've gotten older and started making my own income I've replaced any of the pirated versions I still play with legitimate ones.

 

Yes you did, you gained 24 sales. You're only "down" by anything if you believe that "pirated copies" = "lost sales" which, as @neginfinity points out, is not the case.

Counting pirated copies is a distraction. Sold copies is the number that counts. And what this information is suggesting is that some amount of piracy leads to some amount of sales that you wouldn't otherwise have got. If the numbers are to be believed, every 3 or 4 pirated copies potentially earns you a sale. If you compare that to, say, paid advertising... that's a gobsmackingly amazing conversion rate!

(That makes sense to me. People playing dodgy copies of games still talk about them, and talk sells things quite well.)

That said, I take those figures with a grain of salt. Even assuming they're accurate and backed by solid, repeatable research, there's a lot of factors in there which we can't control.

 

I remember people who use Game Center in their games reporting that the ratio of legal to pirated copies is 1:90 (when looking at number of players in Game Center). But this was something like 5 years ago.

 

Sounds suspiciously like the broken window fallacy. Does anything make common sense anymore..[not a question]

 

These are dangerous stats. What kind of game was measured? Indie? AAA? Multiplayer? It matters, because not all games are born equal or are consumed equally.

11k sample size is laughable, and horrifically biased, I'm disregarding these findings from 2015.

 

"PC / console / online Excluding apps and tablets"

Well, at the very least it's excluding mobile games, because otherwise I could call bullshit... with data to back it up.

Also I have a fever, so it's possible my cognitive abilities are impaired. but the language is super weird at places:

In any case, skimming it, it feels like they wanted to do a study more for movies and music and while they were doing that, they found studies about games as well and shoehorned them in as well.

 

Any statistician would tell you that 11k is perfect to get statistically relevant data. It makes no sense to ask more people.

The commission never made it public until they were forced to by a request of Julia Reda (greens / pirate party) a member of the European Parliament. https://www.asktheeu.org/en/request/estimating_displacement_rates_of#incoming-14307

Instead they have used parts of the data for a paper in 2016. But the paper is about blockbuster movies only and is the usual condemnation of piracy.
https://papers.ssrn.com/sol3/Papers.cfm?abstract_id=2844167

"That Eurocrats are changing English to suit themselves is not unusual. When people with different mother tongues get together to co-operate, they frequently develop a common language."

https://www.ft.com/content/9c896238-3a0e-11e6-9a05-82a9b15a8ee7

 

I think it does because 11k is divided up among console owners who aren't even running pirated software (the console is chipped) and various games of different markets and sizes. If I knew what kind of games were being pirated, it would make sense. As it is, there's no real decent data here.

It's not uncommon for findings like this be worthless. I don't disagree with the movie findings but the game findings weren't really thought through from the skim I gave the doc, plus they were all lumped together. Not just games, but hardware too.

In an age of let's play, I'm pretty sure piracy doesn't help you. It doesn't give you any valid exposure. Also how is it that there's different findings by other people? Seems like there's a fresh take on it from various corners of the interwebs.

 

The data may be statistically relevant on the whole, but it's statistically relevant on pretty vague findings. Knowing a fact that only applies to "games" isn't very useful, because any niche within that could fall very far from the mean. I don't care about average stats for a vague game, I need actionable intel specifically for my RTS aimed at PC gamers focusing on online multiplayer, or my single player puzzle game, or my point and click adventure for teenage girls, or whatever specifically it is I'm doing right now.

And when you need to drill down that far you'll find that only a fraction of the results are useful to you, and that it may be a small enough fraction that it's no longer statistically relevant.

 

Is the morality of a RTS player different to the average?

I would guess it is almost impossible to consider the details you want in such a general statistic. But of course tables like this looks a bit wishy-washy:

 

At least this is useful information (for games in general)

The Willingness To Pay (WTP) prices:

 

Their buying habits are far more interesting to me than their morality.

 

Morality is such a nebulous concept when it comes to IP. On the one hand making IP freely available to all is in the public interest. On the other hand allowing the creator of IP to control its distribution is in the interest of the creators.

IP law has always tried to straddle the line between public good and private good. Philosophers, religions and politician alike are still divided on which one is the most important. This is reflected in the wide range of attitudes, legal structures and enforcement policies around the world.

Its very hard to label piracy with absolute good and bad terms.

 

It's maybe in the short term public interest. Long term, if money can't be made from IP then people will invest less into it, and many popular things cost a lot to make.

 

Regarding piracy: so I'm not trying to judge, but I don't think it is useful at least. Doesn't seem like these people would pay anyway. One thing everyone misses is the killer app. That game everyone has to buy, here, piracy does not help. And here, copy protection helps limit free sharing among individuals, family and friends.

There are 2 kinds of piracy, one which we sadly don't have much choice but to try and combat:

- piracy from the entitled
- casual unwitting piracy (giving a friend or family member a copy)

I think it's the latter which can significantly add up in lost sales, and they do not consider themselves pirates. It's like loaning a friend a disc or something to them. So they would not even show up on these stats, yet represent the most harmful piracy there is.

It's for these (reasonably innocent well meaning) people you need anti piracy measures.

So these findings failed to ever recognise that there vastly different kinds of pirates for vastly different reasons. They can't mix these results because one result is knowingly criminal and the other result is not wilfully breaking the law.

Steam works well with the second kind. You can actually loan the title to a friend in a difficult to manage, roundabout way.

 

This is certainly true in places that have the infrastructure to support making new IP. In these places the debate is typically over how long the IP protection should last, rather then should it exist at all.

 

There are more than two kinds.

Piracy also can be caused by the game developer. Common screwups that increase number of pirated copies are:

1. "Let's make this game unavailable in this particular region".
2. "Let's make original language unavailable in this particular region".
3. "Let's not adjust for regional prices".

Those push the game into territory where people will only check it out if they can get it for free. I.e. pirate it.

 

That's still entitled piracy. You aren't owed something because it's not translated or available. That's simply blatant entitled theft. But yes they should've accounted for that.

The entire document is garbage tier. Possibly, well-meaning bureaucrats decided they needed it, asked people to make, it and people making it simply didn't consult anyone and figured they could just apply another entertainment model to games with a little fudging. Certainly, I see a lot of blanket statements and silly assumptions being made.

 

Yeah, my kids friends give them games all the time. However, is this really different than selling your game to Gamestop and the someone buying it? I would guess the company/developer gets no money from that resale.

Good thing is, I read Hippo's response to my kids and they are having a nice discussion on piracy and sharing with friends. Maybe that is what is really needed. An honest discussion on how not buying games from the studios or developers can actually hurt the game industry and result in less games or higher prices.

 

I think that when you want to read a book and every single store in the world refuses to sell it to you specifically, this isn't right.

That's how it works in situations I described.

 

Equation piracy to theft is a little extreme. The law currently doesn't make such an equivalency in most of the world. The only ones that do are the Hollywood types trying to protect their own revenue streams.

The entitlement argument is an interesting one. Here in Australia it's been largely impossible to obtain the latest TV and movies legally for years. This has been as a result of comercial decisions by foreign companies attempting to maximise revenue. That's lead to a large scale piracy culture here. If a company feels entitled to screw with us, we are entitled to screw with them in return.

On the other hand history has shown that companies that genuinely do the right thing with content distribution are rewarded for it. But it's a hard sell to tell my countrymen they should care about maximising profits for foreign interests who aren't providing any value in return.

 

As far as I can tell, piracy is still illegal and the courts will still throw the book at you and you'll pay cash if anyone decides to persecute and it can be proven. If you took my game without my consent in your current country and I could prove it, I could take you to court and you would be fined. It would not be something you could get out of.

Of course nobody would bother.

 

I believe it for multiplayer games. Often pirated multiplayer games cannot play online with the rest of the paying folks either due to not being able to connect to whatever match maker they use, or not having the latest required patches available. So you're stuck with only local network play, if even that. If you like the game enough you may end up buying it just to play with everyone else online.

For single player games though I would think hardly anyone converts to a paying customer after they steal your game.

 

I couldn't find any cases of this actually happening. The cases that do exist are against the major facilitators of piracy. The websites, servers and so on that make piracy possible. But there is nobody coming down on the little There isn't much practical difference between something being legal and something being illegal but not enforced.

I'm not advocating piracy by any means. But I am saying that in many places the legal, distribution and cultural structures needed to prevent piracy do not exist. And the political will to put those structures in place does not exist.

Given that nobody outside of the creators is seriously trying to combat piracy, its worth investigating ways to live with piracy.

 

Oh don't get me wrong - I don't actually care about piracy at all. As a kid, it was on my list of illegal activities
But what I am saying is that it is still illegal. So they have to make it non illegal. I mean, I can probably go out and 420 blaze and get a harsh look from a policeman at a festival, but that's illegal.

Thing is, if this stops being illegal, it becomes open season, and even stores don't have any inclination to protect you. Currently they do some effort. In fact it'll probably kill the industry stone dead. Why would anyone invest serious money into making anything that anyone can legally take?

Simply because nobody actually has to act if it isn't illegal.

Edit: If it became totally legit, it'd probably all become subscription-driven, so it becomes impossible to effectively use it if you did take it. You would also need internet access.

Probably going that way anyway. Just all kinds of inconvenience will arise from it...

 

I'm making the effort of buying whatever I have pirated before, my library of games have exploded in size because of this.

My country used to thrive with pirates, sold all over the place. They were cheap, usually $1, maybe $2 per disc. These were back before Steam became popular, dating back to 20++ years ago. People converted from pirates to customers because of Steam and its regional pricing. And also high speed internet, which also replaces pirated disc to downloads. At least my friends are willing to buy from Steam once I nagged them into it.

 

Yeah, these stats seem believable for games with parts to them that can't be pirated. You can pirate COD and play through the single player, but if you want to play with others, gotta buy it. 20% of these pirates wanting to do that seems reasonable.

 

That's a nice example that supports my theory that piracy can turn people into "collectors", and some collectors eventually turn into avid buyers.

Iirc in the advent of p2p filesharing there were reports of increased CD sales in areas close to universities, which back then where some of the only places where larger numbers of people had broadband internet access. Though that was in a time where we didn't have the many ways to "discover" music, that we have today.

 

Could you take them to court in the countries where it is most heavily practiced though without being in that country?

 

No idea it's all hypothetical. I would never bother attacking a pirate. I do know it's been done with piratebay, and they weren't even pirating. Merely providing easier access to piracy.

If anyone's wondering, no, I'm not the magical cracker of asset store apps implied by a certain persia website

 

I don't completely agree with him, but...

http://www.gamesradar.com/gabe-newell-piracy-issue-service-not-price/

 

I'm not a Gabe Newell fan, but he got it exactly right. Pirating stuff is actually inconvenient. Provide a good platform with sane pricing, and people will use that instead.

 

This. People in general want to do what's right. Piracy does come with a bunch of security risks. So if you provide a decent legitimate option, many people will take it.

On the other hand if people continue to make content unavailable in most of the world, there will remain a massive market for piracy.

 

Piracy is only a pricing issue for kids with budget restrictions, or people who really don't have any cash but got some pc bits put together, which can be done free, I guess.

But, and this is a kinky little thing to think about: if piracy could be 100% eliminated, price would matter a lot more. Suddenly there are no 'evaluation' copies to be had. Suddenly there's limits on the number games the average quasi-pirate can have.

Does that mean someone's cheeky indie game of 10 bucks begins to look enticing?

 

Are indie games really worth pirating? I pirated games as a kid. I tended to go for the best AAA games. Why bother pirating an inferior indie game?

Adults have budget restrictions too. Especially if you live in a country where the AAAs deliberately price adjust up or incomes are low.

 

If this is true then I wonder why there would be such a huge difference between software and other digital goods?

People who can afford to buy music, ebooks and movies and have easy access to music, ebooks and movies at retail stores and places like Amazon seem to pirate it almost habitually.

Every mp3 I have I bought on Amazon and I have a couple of hundred songs. I know of people who have thousands they downloaded from file sharing services. And in those cases they did it simply because they think it is stupid, people like me are stupid, to pay for something when you can get it for free.

If the mindset for games and other software is truly different it would be interesting to find out why.

 

Oh forgot... the other thing that seems odd is if these people being able to try out a game for free encourages some of them to buy it that seems to contradict what all of the big companies have said in recent years that releasing free demos actually causes a huge drop in sales.

I don't know I am not saying it is all bogus just saying there seem to be some strange things at play if it is true and it certainly contradicts the try before you buy belief the big companies have for this greatly decreasing sales not increasing them.

 

Not really. For a long time access via piracy was simpler then access via the stores. Stores historically have had painful drm systems that mean you can't download once and use across all devices. Media was painfully expensive. And let's not forget that all of this was frequently region locked, keeping out customers from various markets around the world. Piracy is still the only decent way for me to access a lot of TV shows and movies in my geography.

All of this set up a situation were piracy could thrive. Pirates offered a better service with decent access for everybody. It became a habit for people to pirate because it was an objectively better experience all round.

These days subscription services like Netflix or Spotify are starting to turn the tide. But there is a lot of work to be done to break people out of their current habits. And the general entertainment industry has a lot of work to do before people will fully trust them to run fair and effective content distribution systems.

 

I don't actually believe this. Just look at how prevalent the free to play model is these days.

 

This isn't a hypothetical... I am talking people right here in the USA who have access to movies and music right at their local walmart and other stores. And they have access to these products via sites such as Amazon.

They download "for free" because they can and because it makes no sense to spend money on something they can get for free. They can afford to buy it and they have plenty of options where to buy. Well I say they can afford... can they afford the thousands and thousands in some people's collection probably not. But the point is if they just take it there is no limit to how many they can have.

I'm not sure why they would have this behavior and belief about music and not about games.

 

Nah. Let's put it this way. Would you buy a computer game for $600? Just the usual run of the mill game mid-budget title, with nothing special about it. Thats' the price of unadjusted computer game in some regions, mapped back to USD.

No. It means the industry would either die or suffer a massive losses. No evaluation copies + high price means that developer and publisher should both go to hell and stay there. Meanwhile people will shift interest to something else.