Excuses on the High Seas

[Earthmonger]

When HGL came out, I bought into the hype that "it was created by the folks who made Diablo". I went out on release day and bought two copies, one for me and one for my wife, so we could co-op, like the old Diablo days. They were 600NOK each, so 1200NOK, which at today's exchange is 176.164 USD. Yeah, about $90 each. As it turned out the game was so ridiculously full of bugs it became unplayable. The first SP patch took those bastards months and months. We gave up, and I ended up casually playing it online, alone. Wish I'd pirated that PoS and tried it out before wasting the money.

 

[Miral]

The game companies think that the only way to make money is to load up on a killer ap, but they've consistently underestimated the cost of producing a blockbuster. Here's the argument from GTAIV, again from Slate:

Rockstar's Grand Theft Auto IV, released last May, is the prime example of a blockbuster game. GTA IV sold 6 million copies during its first week, bringing in $500 million. True to form, it cost Rockstar $100 million to produce, 1,000 people worked on the project, and it took three-and-a-half years to complete. Six months later, sales began to founder--a major setback to a publisher that bet the farm on the title and predicted sales throughout 2009.

I saw that Slate article last week. The numbers bother me, as they don't seem to support the point they're trying to make.

So a GTA IV-level game costs $100 million to make, and earned $500 million in its first week. Great, so you've just funded the game itself *plus* 4 equivalent-budget dismal failures from your first week of sales. Given your own later statement that GTAIV sold 10 million copies in total, that's ~$800 million gross, or ~$700 million revenue, enough for 6 or 7 equivalent-budget games, even assuming that none of them sell a single copy!

Now, of course, the next title probably will be even bigger-budget, so maybe that's only enough to fund 2 or 3 dismal failures. But what are the chances of their next game selling nothing at all?

So Slate has either misquoted some numbers, or is misrepresenting what they mean.

 

[Anton P. Nym]

So a GTA IV-level game costs $100 million to make, and earned $500 million in its first week. Great, so you've just funded the game itself *plus* 4 equivalent-budget dismal failures from your first week of sales. Given your own later statement that GTAIV sold 10 million copies in total, that's ~$800 million gross, or ~$700 million revenue, enough for 6 or 7 equivalent-budget games, even assuming that none of them sell a single copy!

Now, of course, the next title probably will be even bigger-budget, so maybe that's only enough to fund 2 or 3 dismal failures. But what are the chances of their next game selling nothing at all?

So Slate has either misquoted some numbers, or is misrepresenting what they mean.

Not quite. You're assuming that the whole $800 million gross sales goes to Rockstar; that's far from the case, as retail stores, distributors, and publishers are taking slices of that gross sales figure too. There's also the promotion budget (probably footed by the publisher) that has to be covered as well.

I don't have actual figures, but I'd be surprised if Rockstar saw even a quarter of that gross amount in the end.

-- Steve

 

[Miral]

Not quite. You're assuming that the whole $800 million gross sales goes to Rockstar; that's far from the case, as retail stores, distributors, and publishers are taking slices of that gross sales figure too. There's also the promotion budget (probably footed by the publisher) that has to be covered as well.

Ok, that's a fair point I guess. In which case the Slate article should have included such numbers (or at least best-guesses) to better illustrate their point.

I know, I know, the industry doesn't like to publish those sorts of numbers. But many of them are public, so there has to be *some* level of transparency.

 

[jemborg]

I've seen in-game ads brought up several times while reading this thread. My thoughts?
Good idea! Let's chuck some billboards up with Mountain Dew ads.
Developers can get massive amounts of money, consumers can pay less (or maybe even nothing, depending on the development costs of the game,) and pirating becomes a moot point.

No pop-up ads though, those would be gay.

Just a quick off-topic note Badabinski... I don't see ads on The Escapist at all. In fact, hardly anywhere! I use FireFox with ABP (Adblock Plus) addon and subscribing it to Rick's Easy List [http://easylist.adblockplus.org/]. Also "Adblock Plus: Element Hiding Helper" and "Flashblock". Atm ABP is blocking 6 items on this page. It's worth considering because it doesn't just hide ads- it actually stops them from downloading. A saving in time and bandwidth. Of course, there are those who will argue that we are morally obliged to download the ads, that's their choice. However, my surfing experience has improved out of sight for doing this.

 

[jemborg]

Valve realized that you can, in fact, make more money by selling games for 50-75% less. They'd have dropped prices on just about everything they have if it weren't for being tied to brain-dead retailers who would be just as happy to see the entire industry die as long as digital download doesn't steal their market share.

Valve realized that, in a world of 90% piracy, releasing a game with an engine that runs like crap on everything but 5% of your customer base (see: Crysis) is going to fail utterly. Instead, you convert 10% of your pirates to your game buyers, and you just doubled your sales.

Did I mention that you can apply every point here to Stardock? In the end, this really isn't about changing pirates (customers who will take breaking the law over being fed recently excreted feces), so shredding the ethics of their rationale won't help developers a whit. If you want to sell games, you come to terms with the marketplace as it exists in the real world rather than the fictional creation in your law books, and you respond to it appropriately.

Really well put Feverus. It ties into my points on page two quite happily.

EDIT: However, the DRM on Steam is large unnecessary- I tend to avoid it myself. If it was just service orientated I would avail myself of it much more.

 

[FeverusDreams]

Didn't you realize that Steam is DRM? It's in fact a very intrusive DRM ( locking down your games ). And Steam does not unite. Many people ( me including ) do all they can to not get in touch with this DRM monstrosity if possible ( I even go out to pay games in stores for some upcosts just to avoid having it on steam ). While the idea behind steam is good it is questionable in the implementation. One reason why alternatives are developed ( with moderate success so far though ).

Yes. Steam is a form of DRM which includes more of the aspects customers want and less of those they don't want. In return, the customers will accept certain practices they would not accept from companies like EA. Do I have a problem with someone losing $200 of games because they got trojan'd and VAC detected one hack? Sure. Do I lock down my machine so that doesn't happen? Yes - nothing is perfect, and Steam is good enough for me.

Addendum: Companies which implement one aspect of a useful response to piracy (releasing additional content, not using intrusive DRM) will not necessarily succeed. As usual, you need to use good business sense to build the appropriate package around the game you have. Seeing 500,000 people pirating your game does not mean 500,000 (or even 50,000) people want to buy it.

 

[C. Blackwood]

Question, and this isn't about games but software piracy in general. Actually, piracy I've done for this reason.

What if you need software or a game for college classes, but on your current budget, it's way too expensive and you don't have anyone you could bum the software/game off of? Would you consider those reasons justifiable?

 

[the monopoly guy]

I don't like piracy. I still buy CDs and all my games. If I like a company I will buy their product and give them money. If not I will simply not sue their product. There are some exceptions, specifically with music. If there is a song from a movie made in the 60s that I absolutely love, but can't find it anywhere, how else can I get it? To be more specific, I want a song from "The Good the Bad and the Ugly" a movie that's about 40 years old and made about as much money as it's going to make. I really want a song from it, but can't get it any other way then pirating it. Is it ok to pirate then? Or do I just make do with YouTube videos (which just isn't the same).

 

[jemborg]

Funny you should drop a link to the World of Goo site and yet fail to read what they have to say about Piracy and why they consider DRM is a "waste of time and money"...

http://2dboy.com/2008/11/13/90/

Note that World of Goo is the second best seller at Amazon after WotLK.

Smart man. I suppose you don't know that World of Goo has an 82% piracy rate. [http://www.rockpapershotgun.com/2008/11/15/world-of-goo-piracy-rate-82/]

wall of text

Where's your argument? You wanted to know why the World of Goo picture was posted in a pirate-related article, and I told you why. Your personal attacks and own opinions have nothing to do with any of what I was talking about.

Anyway, yeah, I didn't bother to check the link because I didn't assume you would be linking to an article that says it's been pirated 90% - partially my fault for insulting you (slap on the wrist etc.), but the fact they're still making a lot of money off of it has absolutely nothing to do with the piracy level. Why it was even a question to you is beyond me.

WTF!?! I guess this demonstrates what a stupid arrogant fuck your are! I made my point and felt I needed to clarify it since you you were so blatantly obtuse. A point I believe is pertinent to the discussion regardless of your agenda. My opinion is entirely relevant since you choose to play miss-the-point. There was no question... did you see a question mark in my original post? So no reason to "answer" in the ignorant fashion you did. Besides the link to WoG was there as a reference to a cheap Indie game nothing to do at all with their important attitude towards piracy and consequent DRM measures. If you had followed the link you might have not felt the asinine need to comment and consequently pathetically justify it. I'm not surprised you say it's "beyond me". You admit to "insulting" me and then whinge about "personal attacks" You deserve it, though I never "attacked" you ad hominum. Any self-respecting honest person would not have snidely re-edited my post/quote to "wall of text" they would have just placed it under a spoiler, for example...

Spoiler: jemborg's post- click to see

Funny you should drop a link to the World of Goo site and yet fail to read what they have to say about Piracy and why they consider DRM is a "waste of time and money"...

http://2dboy.com/2008/11/13/90/

Note that World of Goo is the second best seller at Amazon after WotLK.

Smart man. I suppose you don't know that World of Goo has an 82% piracy rate. [http://www.rockpapershotgun.com/2008/11/15/world-of-goo-piracy-rate-82/]

Ah yes, "Rock, Paper, Shotgun", good site. I joined it myself a little while ago.

Ahoy thar matey, I'm not 100% sure of the tone of your post there, but judging from a previous post on this thread I'll assume it was what you think is a brilliant piece of witty sarcasm.

I'm gonna assume a few other things too... 1) You didn't actually follow the link I posted and read it; 2) You didn't bother to read any of the posts following the link you pointed to, including the ones made by other staff members; 3) You might think I am advocating piracy!

If you had read it you might have considered that I believed the piracy rate of WoG was 90%! So thanks for that, it was actually less than I thought lol!

You might have seen that the makers of WoG wrote..."preventing 1000 piracy attempts results in only a single additional sale....people who pirate our game aren't people who would have purchased it had they not been able to get it without paying." The author of the article you link to is not sure what to think... "If piracy figures don't represent lost sales, what do they represent? Is it an indictment of humanity? Are they free advertising? Could 2D BOY have benefited in any way from them? Or are they causing active harm?". Yet significantly, he fails to mention that World of Goo is the second best seller at Amazon after WotLK, and they are very proud of the fact. So it can't be doing them that much harm.

2D BOY goes on to say... "I'm hoping that others will release information about piracy rates so that everyone could see if DRM is the waste of time and money that we think it is." Well, that's what your boys did... and it's 8% less by their estimates! Also what this suggests is that according to 2D BOY's business model having DRM would have cut into their profits!

What I believe is that most media/software distributors are greedy fucking paranoid sociopaths who have had an easy ride for many years and won't adjust to a new environment; that DRM companies have scared them into thinking that they can prevent piracy so that they will buy their stupid product; that they aught to drop litigation lawers and court actions and DRM... pass the savings onto the consumer and drop prices generally; that high prices don't necessarily produce good product, because we wade through tons of shit anyway.

Recently I purchased the lovely Universe Sandbox god simulator, the guy only wanted a donation. I was going to pay only $5 but he begged me (via a couple of popups) for $11.50, amused I took pity and paid him $12. The makers of the very excellent QuickMediaConverter only want a donation and that is listed amongst the top twelve freeware programs at lifehacker.com - I've seen similar programs that do far less and asking for far more. People I know who cheerfully pirate have paid for World of Goo. And even though all my gear is HDCP certified I still have to use AnyDVD HD to play a rented Blu-Ray! Even iTunes have dumped DRM!

Personally, I couldn't really give a toss about piracy. It means fuck all!

You certainly will "Say Anything". How dare I appear to criticise the article you found so "...Extremely well written, and a great message..." you self confessed flamer. All I was doing was providing an interesting adjunct to it- the author doesn't care for DRM. So I have a question... "work for a DRM company by any chance?"

Yes, I am rather smart thanks.

But since my other assumptions were spot on I assume you really did it because of the embarrassingly confronting logic. Above you can't even write a grammatically cogent reply. Also, "Your personal attacks and own opinions have nothing to do with any of what I was talking about." What? the remark "Smart man. I suppose you don't know that World of Goo has an 82% piracy rate." Besides the fact that even rhetorically it should still have included a question mark what else were you "talking about"? Unless you think the whole thread revolves around you and your blinkered opinions Mr Say Anything. Since you didn't answer my question, I guess you do work for a "waste of time and money" DRM company in some fashion. Perhaps a lawyer? Still, you won't be getting any money from these guys (2D BOY... from your link):

"by the way, just in case it's not 100% clear, we're not angry about piracy, we still think that DRM is a waste of time and money, we don't think that we're losing sales due to piracy, and we have no intention of trying to fight it."

 

[bkd69]

Don't know the system in America as I'm from the other end of the world but in economics if a company does not protect their IP/license/patent whatever then they silently agree to give it up altogether. Hence if game companies do not care about their old and abandoned games to be distributed for free this would turn their rights nonexistent. Conflicts somewhat with this "automatic 50 years protected" rule up there. As far as I know though abandonware sites are not shut down as long as they do not host games of publishers in I think EAS or something it's named ( this association thing EA is part of too ).

In the US, IP law has three basic branches, patent, copyright, and trademark. They all have their nuances, loopholes, and pitfalls, but, in brief, they break down like this (bear in mind I'm merely an interested and informed observer, not an attorney, and this should not be taken as legal advice):

Patents have a term of 17 years, and were intended to protect gadgets and hardware. The To get a patent, you have to submit a plan detailed enough that any industry savvy individual would be able to build a prototype of whatever device you were patenting. Pitfalls include business method and software patents, and an overburdened review system that rewards rubber stamping approvals.

Copyrights protect a specific expression of an idea, and have a term of 90 years, at present. And is easily the most complex branch of the field, given that it covers tv, movies, music (both recorded and published), books, software, and a whole bunch of other, ancillary stuff. The fact that it's protection for a specific expression, means that you can publish study guides for various books, or strategy guides for games, without infringing copyrights. Pitfalls include fair use, insane complexity, and excessive protection terms.

Trademarks focus on branding, labeling, and packaging, and is the only branch where 'enforce or lose protection' applies. It's primarily used to deal with counterfeiting, though there have been some bizarre applications of late:
http://arstechnica.com/web/news/2009/02/blockshopper-bullied-into-settling-over-web-links.ars
http://arstechnica.com/software/news/2009/02/prior-fart-legal-stink-up-over-iphone-flatulence-apps.ars
http://arstechnica.com/gadgets/news/2009/02/dell-fights-back-against-psion-netbook-trademark-rampage.ars

 

[Say Anything]

Funny you should drop a link to the World of Goo site and yet fail to read what they have to say about Piracy and why they consider DRM is a "waste of time and money"...

http://2dboy.com/2008/11/13/90/

Note that World of Goo is the second best seller at Amazon after WotLK.

Smart man. I suppose you don't know that World of Goo has an 82% piracy rate. [http://www.rockpapershotgun.com/2008/11/15/world-of-goo-piracy-rate-82/]

wall of text

Where's your argument? You wanted to know why the World of Goo picture was posted in a pirate-related article, and I told you why. Your personal attacks and own opinions have nothing to do with any of what I was talking about.

Anyway, yeah, I didn't bother to check the link because I didn't assume you would be linking to an article that says it's been pirated 90% - partially my fault for insulting you (slap on the wrist etc.), but the fact they're still making a lot of money off of it has absolutely nothing to do with the piracy level. Why it was even a question to you is beyond me.

*useless argument, lol! look, I edited it again!*

You go on with the personal attacks after I told you the logic behind my reasoning. Sorry I hurt your feelings on the internet, big guy. Were you not confused in your original post as to why there was a picture of World of Goo? Were you wanting to know why the writer would post that picture up there when the company who created the game says they believe they're doing better without DRM (which is flat out wrong if they're truly losing 1000 sales for every 1 they make, even if they're the developers, but I guess that's unrelated)? I'll tell you why they're on there, bud: the game, as stated by the company themselves and then analyzed to find the truth, has an 82% piracy rate - if in your mind that doesn't justify why the game is on a piracy related article then I can say you're wrong, but if you want to continue on in fantasy world where I'm trying to kill everything you hold dear to you and thus must continue to cuss me out (and make an ass of yourself in doing so), you go right ahead because, then again, I am a stupid, arrogant fuck..

 

[Odjin]

Didn't you realize that Steam is DRM? It's in fact a very intrusive DRM ( locking down your games ). And Steam does not unite. Many people ( me including ) do all they can to not get in touch with this DRM monstrosity if possible ( I even go out to pay games in stores for some upcosts just to avoid having it on steam ). While the idea behind steam is good it is questionable in the implementation. One reason why alternatives are developed ( with moderate success so far though ).

I'd say that Steam does a pretty good job of being DRM, considering personally I've gone through 4-5 computers in the last few years and been able to re-download all my games every time without any re-inputting CD keys or anything except simply logging in. And considering for several of those games I purchased the CD and have lost almost all of them I'm glad to be able to re-download them all again without any hassle. And if such a system is able to keep the developers happy by being suitably protected and the consumers happy by having easy access to their games online and offline then it's a good system.

This is unfortunately all just nice ideas but the reality ( as experienced by me and others, including devers working with steam ) looks a bit different.

I witnessed more than once that steam corrupted downloads. Games became unplayable or did not even install at all. In one case I had to manually download the demo of a game and install it by hand since steam repeatedly refused to properly download and install it. Furthermore I witnessed more than once how an update killed an entire installed game beyond usable forcing a reinstall... which I had to do manually since steam failed to recognize the game being installed ( so a total lock since it could not get forth not back ).

And what goes for security or DRM, it's a joke. I know more people playing with a hacked steam than without. I also see tons of cheaters ( most easy to spot time-hackers where the players run around at 3 times the speed of all other players ) which VAC does not bother about but if you as a legal player drop out of a match because your steam client crashed yet another time you can't log in for 30 hours since your steam ID is in use. DRM never worked and will never work.

And developing with steam is shit. Most prominent example is the Source SDK. It's rolling dice each time you try to run it. Sometimes it works, sometimes it crashes and sometimes it hangs forever. An SDK should never be linked with the download or update platform. It should always be standalone. Why? For (1) because it prevents all kinds of bad behavior and for (2) you can embed the tools into your production toolchain running timed build scripts. If you need all time to fire up steam client to get the proper env path set it's just annoying.

So from actual usage experience it's crap for both players and developers. Idea is good, it just needs a more solid implementation without DRM and without SDK forced into the client.

 

[Odjin]

Didn't you realize that Steam is DRM? It's in fact a very intrusive DRM ( locking down your games ). And Steam does not unite. Many people ( me including ) do all they can to not get in touch with this DRM monstrosity if possible ( I even go out to pay games in stores for some upcosts just to avoid having it on steam ). While the idea behind steam is good it is questionable in the implementation. One reason why alternatives are developed ( with moderate success so far though ).

Yes. Steam is a form of DRM which includes more of the aspects customers want and less of those they don't want. In return, the customers will accept certain practices they would not accept from companies like EA. Do I have a problem with someone losing $200 of games because they got trojan'd and VAC detected one hack? Sure. Do I lock down my machine so that doesn't happen? Yes - nothing is perfect, and Steam is good enough for me.

Addendum: Companies which implement one aspect of a useful response to piracy (releasing additional content, not using intrusive DRM) will not necessarily succeed. As usual, you need to use good business sense to build the appropriate package around the game you have. Seeing 500,000 people pirating your game does not mean 500,000 (or even 50,000) people want to buy it.

I can't really agree with you on the trojan part. Windows is totally unsecure and unless you put a decent firewall ( Linux machine that means ) in front of it and don't use it for anything else than playing games ( or developing in my case ) then you in for troubles quickly. A user is already punished enough if his system gets jacked and he has to wipe anything and reinstall. Blocking his games is just illegal in my opinion. That's if your garage burns down and the police comes and confiscates all your vehicles because your garage burned down.

 

[Ray Huling]

I know, I know, the industry doesn't like to publish those sorts of numbers. But many of them are public, so there has to be *some* level of transparency.

The industry does give us numbers that indicate how well they're doing: layoffs and studio closings.

But, yes, Slate should have clarified the point. Or I should have! Thanks, Nym.

 

[jemborg]

Funny you should drop a link to the World of Goo site and yet fail to read what they have to say about Piracy and why they consider DRM is a "waste of time and money"...

http://2dboy.com/2008/11/13/90/

Note that World of Goo is the second best seller at Amazon after WotLK.

Smart man. I suppose you don't know that World of Goo has an 82% piracy rate. [http://www.rockpapershotgun.com/2008/11/15/world-of-goo-piracy-rate-82/]

wall of text

*Completely misses the point*

*Goes over Mr Say Anything's head*

...then again, I am a stupid, arrogant fuck..

ROFLMAO I rest my case

(Jesus, I haven't laughed so hard for weeks )

 

[Anton P. Nym]

I've given my version. I'd be interested to see if someone out there can tell me how piracy can actually still support making more games.

1) Pirating games encourages spending on games

You go into a store. You see a bunch of games. You don't have money for all of them. Chances are that you'll like some of them, and you'll dislike others. If you can pirate, you know you're not really taking a chance--if the game sucks and you have no money for other games, you can pirate. If it's awesome, well, you win!

You're assuming that the pirate will then go out and buy the game(s) he/she/it likes. That behaviour is not widely observed in reality. (I will say, though, that this behaviour has been observed in the rental market; people do indeed rent console games, try them, and then buy retail copies afterwards when the long-term gameplay proves appealing.) Sadly, the actually observed behaviour has led to the death of the shareware market which had a very similar methodology.

2) Spending on games is to some extent inelastic

In other words, piracy does not effect the amount of money people spend on games. If they pirate Game A, they won't buy Game A. However, they might buy Game B instead. As there are plenty of people out there, going by the law of large numbers Company A and Company B will probably make out equally well.

Games are not an essential good. People can live without games. So don't expect people to be perfectly rational actors when it comes to luxury goods.

Given the number of people maiming themselves with inappropriately-used garden tools and going broke chasing Collateralised Tulip Bulb Obligations, I don't expect people to be perfectly rational actors, period.

Of course, this point of yours does nothing to actually support the creation of new games. It's merely an attempt to excuse piracy under the "boys will be boys" rationale.

3) Piracy attracts poor customers who grow up to be rich--or at least less poor--customers

Get them hooked on games now so later on, when their time becomes more valuable than their money, they'll be gamers and will spend their entertainment dollar on games and not music or fine wine or Belgian beers.

So, in the long run it'll act as really good brand-building advertising... but, as Keynes said, in the long run we're all dead. Your proposal means that the software creators would have to defer returns on their investments for a decade or two.

Perhaps you wouldn't mind going to the financiers and asking to delay repayment for ten years, but I'd be shaking in my boots if I tried to do that.

4) The person who pirates your game today buys your sequel/next game/"spiritual successor" tomorrow

As long as the piracy doesn't sink your company today, as long as you do the business math and make sure the product you put out today will pay the bills you racked up yesterday making the game, the pirates of today? Some of them will turn into your customers of tomorrow.

That's a retread of point 3, and has the same faults.

-- Steve