Piracy Steals 95% of Microsoft's Revenue in China

[razer17]

Oh china, you are your people who lack any adhernce to western morals. Oh ho ho ho.

Seriously though, the Chinese government is fucked up and the country reflects this in many ways. I wish they could straighten out the country at some point and actually get things working.

Morals are very a loose and arbitrary thing as it is, so why should they believe what the west believe?

 

[Nurb]

Cry me a river, microsoft, consider that your fine for dealing with a dictatorship that oppresses it's people and workers so you have cheap employees and children making your products while you help their government track down and imprison democracy advocates. I hope your whole chinese opperation collapses.

 

[gyroscopeboy]

Isn't 95% of everything in China pirated/fake?

My favourite brand in the Rolexx.

The extra 'X' is intentional.

One more X and you have yourself some watch porn

 

[JMeganSnow]

Okay, I'm really opposed to piracy, but those statistics are just STUPID, not to mention TOTALLY MISLEADING.

HELLO, MICROSOFT?! ARE YOU LISTENING TO ME?! A PIRATED COPY (or a PC sold without sending you a check) != A LOST SALE. HECK IT DOESN'T EVEN NECESSARILY = A LOST SALE IN STANDARD RETAIL, WHERE THE PRODUCT MAY VERY WELL SIT ON THE SHELF UNTIL IT HAS TO BE CLEARANCED OR THROWN OUT.

Thank you. This has been a public service message.

 

[Belated]

Cry me a river, microsoft, consider that your fine for dealing with a dictatorship that oppresses it's people and workers so you have cheap employees and children making your products while you help their government track down and imprison democracy advocates. I hope your whole chinese opperation collapses.

I actually kinda want to side with this guy. ^

And another thing. Maybe this is karma for all the bad business practices. Banning tons of xbox live members who MAY have been using their consoles for piracy, just because they made a modification to it. Implementing this "license transfer" system and coding our DLC to only work on the console we bought it with, instead of just letting us use our DLC that we paid for and rightfully own on whatever system we damn well please because it's none of their damn business which Xbox we want to use it on and linking DLC to the Live account that bought it was already effective enough at deterring piracy as it was without forcing us to be online if we want to use it on a different console. (Wow, that was a long second one.) Outsourcing their tech support. (And a short third one by contrast.) Raising the cost of Xbox Live multiplayer accounts (when they didn't need to charge for it in the first place). Not allowing Live accounts to transfer DLC ownership to a different Live account. (If you don't get why I think this is a vital function they need to implement, message me and I'll explain it to you.)

The point is, they've made a lot of bad decisions that are either unfair to, or negatively impact the consumer. So all I'm saying is, karma might be involved here. (Or science. If you're going to get on my case about believing in the possibility of a supernatural moral balancing system.)

 

[Neferius]

I think the problem with piracy in China as well as everywhere else for that matter can be neatly summed-up in two points.
#1- Most people who own a PC in China as well as other countries that don't happen to have English as their official language, do not also own a credit-card.
Indeed, China is one of the few countries where people still save-up in cash to buy stuff.
Add to that the fact that a Genuine Microsoft license can cost as much as, and in some cases more than an entry-level PC, and you can see where things are going with this...

And #2- The Chinese in general don't give a rats ass about Copyright, Trademarks and Brand-Names of any kind. Indeed, most of their consumer-industry is built around making cheap knock-offs of everything you can possibly think of. From Rolex watches to whole cars!
So if they can pull that off, really what's there to stop them from ripping off a piece of code :-|

 

[Lancer873]

It's not just the big software companies getting pirated there either. There's tons of Chinese websites dedicated to stealing flash games made in other countries. They'll crack the site-locks on tons of flash games and then upload them without sharing any ad-revenue or anything. China's seriously got some problems with that. In an age where we're moving towards a more technology-oriented business, China's seriously getting a lot of free imports.

 

[cocoadog]

I still can't comprehend that no one has found a way to stop piracy yet...

 

[RevRaptor]

Piracy in china, Really? Wow I never would have expected that.
Not that I support piracy but I have no sympathy for Microsoft.
Here in NZ windows 7 pro cost $500 - $600 dollars for a copy, that is just retarded.
You can actually buy a new pc for less than that, it's no wonder people pirate it.
I imagine the situation in china is much the same.
If the operating system costs more than the hardware then its an easy choice to look for 'other' options.
Kinda makes sense really.

 

[Weaver]

Why the hell does Balmer think PC's cost the same in china as they do here?
He's proven time and time again to be a raving madman, why listen to him now?

 

[Svenparty]

I'm sure it's no secret that in many countries Pirating is the only way to get DVDs and Games for reasonable prices. Who can blame them? Also this article gives a sense of how it's "The Norm" in China:

http://www.chinadaily.com.cn/metro/2010-04/29/content_9790639.htm

Luckily I'm having trouble finding any way that companies could stop these businesses and I hope they continue to thrive.

 

[Low Key]

Microsoft's stock has been nosediving since Ballmer took over and he's blaming the pirates.

lol

That is all.

 

[gring]

Microsoft: "we need more money"

*looks at the enormous wealth they drag in every day and notices they are one of, if not, THE richest company in the world*

Thought-process: WHATTHEFUCK?!

Seriously Microsoft, shut the fuck up.

 

[searanox]

So Escapist, is it 95% of Chinese revenue lost due to piracy, or Chinese revenue being only 5% of the United States' revenue?

Reading the original article, it isn't any clearer, but at least that one doesn't mince words and give two different potential interpretations as The Escapist's reporting does.

 

[Baresark]

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Ten yuan to spend on Hershey bars or 1000 yuan to spend on Hershey bars, it doesn't matter if the relative value of yuan-to-dollar is fixed. If Hershey bars are trading today at one dollar per bar or 10 yuan per bar and the value of a dollar plummets 50% overnight on the open currency market, then tomorrow Hershey bars will trade at two dollars per bar or 5 yuan per bar with the result that despite a decrease in the value of the US dollar on the open market, the yuan buys exactly as much Hershey bar as it did before the value of the dollar plummeted. Doesn't matter if you're buying 10 yuan worth of Hershey or 1000 yuan worth of Hershey. Relative to the dollar, you're still getting the same amount of Hershey-to-yuan after the dollar's value fell as you were before it fell. The inverse is also true. If the dollar rises 50% in value, then Hershey bars trade at 50 cents a bar or 20 yuan per bar and the yuan buys the same amount of Hershey after the open market rise in a dollar's value as it did before the open market rise of a dollar's value.

This is why the Big Boxes so love what China's done by fixing the relative value of the yuan. Regardless of where the dollar heads on the open market, they still get to buy the same amount of cheap Chinese shit with their dollars. And don't have to bother monitoring the open currency market, waiting for the best open market value to buy from the Chinese. There is no "best" time to buy from the Chinese. It's always a good time.

You are a sneaky bastard, my friend. The topic of discussion very much started out how the amount MS charges for Windows 7 is too much, at least from my perspective. The fact is, exchange rates are completely immaterial because the price MS charges for Windows has nothing at all to do with exchange rates. To keep the conversation simple, I pointed out that on release they charged $59 for basic edition, as far as exchange rates were concerned. Then I pointed out, using empirical data taken from the CIA World Factbook to back up my point, that a great many people don't make enough money to spend that much on an OS. I also mentioned the expansion of individual wealth in China, and backed that up with empirical facts, specifically drawn from the works of the Economist Johan Norberg. Then you changed the discussion, haha. Sneaky sneaky.

Yes, I am a sneaky bastard, but that may be beside the point in this case. You said that the yuan competes with and is rising against the US dollar. I corrected what I saw as your misstatement of the situation. You opened the door. All I did was walk through it.

And that China fixes the yuan-dollar rate at a point way above that which the free market would is, I think, entirely relevant to what it cost the Chinese to purchase an American product. In the same way that the artificially fixed rate makes it attractive for Americans to buy Chinese goods is the way in which that rate makes it unattractive for the Chinese to buy American goods. If the yuan-dollar rate wasn't fixed, the free market forces would almost certainly cause that rate to fall. If the rate falls, then it would be less expensive for the Chinese to buy an American product with their yuan.

Here's the perfect example of what I'm talking about: if Barcelona has just scored its third goal to Manchester United's one goal, can Manchester United come back from that kind of deficit with only 20 minutes to go before the final whistle blows? Probably not.

You are actually sighting the work of Ronald McKinnon, though i doubt you realize it. That is an occurrence with all currencies on the global market, but it's not due to price controls or fixing exchange rates. When America inflates it's currency, all other countries we trade with do the same so their currency does not appreciate compared to the worlds reserve currency. That would change the import/export ratio, creating or enhancing any trade deficits.

That being said, that does not mean currencies do not compete. They want to keep America buying and borrowing. Everytime we borrow from Chinese central banks, their global position and currency strengthens relative to our own, though the relative value stays the same. Strength is determined by confidence and almost nothing else.

Other things also strengthen their currency relative to our own. As a few examples there is industrialization and economy. Both things they are trumping us on. They have fewer personal rights, but a freer and friendlier business environment.

So yes, our currencies do compete. And I sight once again, China's attempt to get the US Dollar removed as the worlds reserve currency. They would not even try that if our currencies were not in competition.

 

[JDKJ]

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Ten yuan to spend on Hershey bars or 1000 yuan to spend on Hershey bars, it doesn't matter if the relative value of yuan-to-dollar is fixed. If Hershey bars are trading today at one dollar per bar or 10 yuan per bar and the value of a dollar plummets 50% overnight on the open currency market, then tomorrow Hershey bars will trade at two dollars per bar or 5 yuan per bar with the result that despite a decrease in the value of the US dollar on the open market, the yuan buys exactly as much Hershey bar as it did before the value of the dollar plummeted. Doesn't matter if you're buying 10 yuan worth of Hershey or 1000 yuan worth of Hershey. Relative to the dollar, you're still getting the same amount of Hershey-to-yuan after the dollar's value fell as you were before it fell. The inverse is also true. If the dollar rises 50% in value, then Hershey bars trade at 50 cents a bar or 20 yuan per bar and the yuan buys the same amount of Hershey after the open market rise in a dollar's value as it did before the open market rise of a dollar's value.

This is why the Big Boxes so love what China's done by fixing the relative value of the yuan. Regardless of where the dollar heads on the open market, they still get to buy the same amount of cheap Chinese shit with their dollars. And don't have to bother monitoring the open currency market, waiting for the best open market value to buy from the Chinese. There is no "best" time to buy from the Chinese. It's always a good time.

You are a sneaky bastard, my friend. The topic of discussion very much started out how the amount MS charges for Windows 7 is too much, at least from my perspective. The fact is, exchange rates are completely immaterial because the price MS charges for Windows has nothing at all to do with exchange rates. To keep the conversation simple, I pointed out that on release they charged $59 for basic edition, as far as exchange rates were concerned. Then I pointed out, using empirical data taken from the CIA World Factbook to back up my point, that a great many people don't make enough money to spend that much on an OS. I also mentioned the expansion of individual wealth in China, and backed that up with empirical facts, specifically drawn from the works of the Economist Johan Norberg. Then you changed the discussion, haha. Sneaky sneaky.

Yes, I am a sneaky bastard, but that may be beside the point in this case. You said that the yuan competes with and is rising against the US dollar. I corrected what I saw as your misstatement of the situation. You opened the door. All I did was walk through it.

And that China fixes the yuan-dollar rate at a point way above that which the free market would is, I think, entirely relevant to what it cost the Chinese to purchase an American product. In the same way that the artificially fixed rate makes it attractive for Americans to buy Chinese goods is the way in which that rate makes it unattractive for the Chinese to buy American goods. If the yuan-dollar rate wasn't fixed, the free market forces would almost certainly cause that rate to fall. If the rate falls, then it would be less expensive for the Chinese to buy an American product with their yuan.

Here's the perfect example of what I'm talking about: if Barcelona has just scored its third goal to Manchester United's one goal, can Manchester United come back from that kind of deficit with only 20 minutes to go before the final whistle blows? Probably not.

You are actually sighting the work of Ronald McKinnon, though i doubt you realize it. That is an occurrence with all currencies on the global market, but it's not due to price controls or fixing exchange rates. When America inflates it's currency, all other countries we trade with do the same so their currency does not appreciate compared to the worlds reserve currency. That would change the import/export ratio, creating or enhancing any trade deficits.

That being said, that does not mean currencies do not compete. They want to keep America buying and borrowing. Everytime we borrow from Chinese central banks, their global position and currency strengthens relative to our own, though the relative value stays the same. Strength is determined by confidence and almost nothing else.

Other things also strengthen their currency relative to our own. As a few examples there is industrialization and economy. Both things they are trumping us on. They have fewer personal rights, but a freer and friendlier business environment.

So yes, our currencies do compete. And I sight once again, China's attempt to get the US Dollar removed as the worlds reserve currency. They would not even try that if our currencies were not in competition.

I'd be "citing" if I was, not "sighting." Anyways . . .

You've completely lost me. If a currency isn't subject to the natural forces of the market in which all other major currencies are traded and therefore the value of that currency isn't set by that market but, rather, its value is artificially pegged to the US dollar, I can't see how that currency can be said to "compete" with any other currency, especially the currency to which it's been pegged. That's precisely what it isn't doing by removing itself from the competitive market: it isn't competing in that market.

To use your own example, despite all the debt China has issued to the United States, that debt issuance has no effect on the value of their currency vis-à-vis the US dollar. If you wanted to trade on the fact of that debt and buy yuans in hopes that they'll appreciate in value, you can't because there's no speculative market for yuans.

 

[Baresark]

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I'd be "citing" if I was, not "sighting." Anyways . . .

You've completely lost me. If a currency isn't subject to the natural forces of the market in which all other major currencies are traded and therefore the value of that currency isn't set by that market but, rather, its value is artificially pegged to the US dollar, I can't see how that currency can be said to "compete" with any other currency, especially the currency to which it's been pegged. That's precisely what it isn't doing by removing itself from the competitive market: it isn't competing in that market.

To use your own example, despite all the debt China has issued to the United States, that debt issuance has no effect on the value of their currency vis-à-vis the US dollar. If you wanted to trade on the fact of that debt and buy yuans in hopes that they'll appreciate in value, you can't because there's no speculative market for yuans.

In all fairness, I wrote that post on my phone, which is not the most enjoyable for proof reading. But, you are correct, I meant "citing". If you bother looking back, I had actually used the word "cite" and it's many variations, quite a few times.

Back to our discussion though: You are making the mistake of assuming strength is a derivative of value, when if fact the reverse is true. People do not invest in something because it is expensive, they invest in it because it's strong and therefore has great value, and if it is strong, it will most likely go up in value. So, the Yuan is a strong currency, whose controller has decided to peg to the US Dollar. The relative value is not what makes it competitive, but the strength of the currency itself that makes it competitive. The currency is strong, but it holds it's own relative value down in order to keep the goods cheap for the US. The strength can be openly seen by the fact that as of 2011, China is the second largest economy in the world, passing Japan in 2010. It's the largest exporter, and second largest importer (after the US). Some experts predict that by 2020, it could be largest economy in the world. They also own 20.8% of all US Foreign Treasure Debt. This is a strong nation with a strong currency.

You are not correct in assuming people do not invest in the Yuan. Same Financial experts such as Marc Faber (a large investor and business owner) and Gerald Celente (a financial trends forecaster) suggest that the Yuan is the chief currency to invest in, if you want to invest in a foreign currency. Investment in any currency is only for the long term though. It's also important if you plan on moving your assets to a place like Beijing (as in Marc Faber's situation).

Also, the market is, as always, restricted by regulations. But, the Market cannot be kept at bay. Despite the relative value being pegged to another currency of relative value, it's still competing in the fact that it's a strong currency.

 

[Lancer873]

Microsoft already makes billions, they're just the big evil bad guys trying to get more money! And China can't stop the piracy much anyways!

It's not just the big softwares getting pirated in China, there's tons of other things. For example, there are thousands of Chinese flash websites that crack the site-locks on flash games made elsewhere in the world, then upload them and earn money off of the ad revenue. If China's already censoring the internet for opinions, they should easily be able to censor the internet for sites that deliberately and blatantly pirate software.