I have thought about this too. The problem is though, nobody really knows how many people who pirated a game would have otherwise paid for it - I doubt the number would be seriously crippling but it would still result in loss of sales, and the developers do deserve those sales.

The thing that gets me is when PC releases are scrapped because the publisher believes it will hurt their all-important consoles sales. But look at games like the witcher, it sold very well as a PC exclusive. And super meat boy sold more on PC than it did on XBLA.

If you treat your PC customers right, they will be more willing to hand out the cash for a good game. With all the console ports coming out now at full price (despite the distribution costs and lack of paying for licensing on the device) PC gamers are losing confidence.

The other side of the story is people who go out of their way to tweak their console so they can play pirated games, that probably results in much larger income losses than PC pirates tend to, PC pirates are oppertunists whereas somebody who chooses to modify their console has made a bigger commitment to piracy.

Also, the majority of piracy is probably towards old games, the profits of a legitimate sales would probably not go to the original developers anyway - in a creative industry like this, the customers want to feel they are helping the studios they like; not the shareholders of a twice bought over, twice merged publisher who passed the IP around a few times.

"You Wouldn't Steal a Car" as the anti-piracy ad goes.

If I could download a car, I sure as hell would!

Guru Larry (2):
¦If I could download a car, I sure
¦ as hell would!"

Well technically with downloadable content you can happily illegally download a car - you dirty thieving pirate!!!

On a serious note, I'm 100% behind what he has said. I not only expect my games to be pirated, but I also expect these pirates to grow an attachment to my games and perform a great deal of word of mouth advertising to people who will pay for the game.

If I've learned anything from the fremium model, it's that unpaying customers are still worth a great deal of money.

Phil:
¦ have thought about this too.
¦ The problem is though, nobody
¦ really knows how many people
¦ who pirated a game would have
¦ otherwise paid for it

That's the most important thing to keep in mind. The number of pirates only gives you an idea of how many people were willing to play your game, not purchase it.

So initially it appears there is a definite loss (maybe negligible, but a loss nonetheless). But if word of mouth and brand loyalty are anything to go by, then the word of mouth works to increase sales, and the consumer being introduced to the game can also secure a future paying customer.

Main thing though, like Persson's says, how can we capitalize on these customers?

This guy is a moron if he thinks piracy isn't theft. Of course it's theft. Someone better keep him away from these shows if this is what he thinks.

I think it's important that developers who complain about piracy also acknowledge that not everyone that pirates their game plays it enough to warrant purchasing it.

There are so many mediocre games coming out these days, all the bells and whistles but essentially a boring, simplified repetitive clone of whatever sold well 2 years ago when the concept first came about.

I used to be a fanatical gamer, these days I buy 2-3 PC games and find it frustrating that some of the biggest hyped games no longer have demo releases.

So developers complain on the one hand, but encourage on the other by not releasing a demo.

Only games I'm definitely going to buy this year whether they have a demo or not are the new Deus X and The Witcher 2.

Brian: No, he is in fact correct. Nothing is stolen, but the copyright has been infringed by illegal duplication and distribution. If you download any software/music/films etc... by bypassing the purchase phase, you are using the software without the permission of the software creator.

It's like using some elses broadband, you don't steal anything, but you get access to something without that person's permission.

Much of this conversation is silly, as is the original premise. If you work in the games industry and don't think that piracy is theft, it's time you left to look for another job. Piracy takes money out of your pocket, regardless of whether that money ends up in another individual's pocket. How daft do you have to be to condone someone stealing the source of your wages? Don't answer that one, btw, because my tolerance of village idiots is well down at the moment.

And piracy and even the use of someone else's broadband connection are theft. In the Theft (Amendment) Act 1996 definition is given as:

1.--

(1) A person is guilty of theft if he dishonestly appropriates property belonging to another with the intention of permanently depriving the other of it; and 'thief' and 'steal' shall be construed accordingly.

(2) It is immaterial whether the appropriation is made with a view to gain, or is made for the thief's own benefit.

Piracy does intend to deprive others of the fruit of their labour, whether it is then palmed off as a dodgy knock-off or bit torrented.

And stealing someone else's broadband stops them using it. Simple.

Bah.

Ah the old piracy argument. Been around for such a long time, looks to be around for a while longer. @Cynic, I too am tired of this constant bickering, a never ending circle of pointless arguments. @Everyone, but here's a piece of useful advice that I think we can all agree on (and if you don't, well thats your problem). In this age of digital media, so long as media exists, pirates will exist. It's a fact of life, much like how the games market is headed toward social games.

Guess what? You'll never stomp out pirates, and what's more, the ones who find a way to capitalize on this phenomenon will be the ones who spear ahead. It's time we dropped the debate about what piracy is, stop "kicking the dog" as it were. The debate is long dead, accept the facts, look toward the future, and try to put those fantastically creative skulls of yours towards creating a solution to what could possibly be the greatest market the gaming community could possibly have, they've been around long enough.

Then maybe, just maybe, the balance between developer and customer will come back.

Dabookman
¦ I too am tired of this constant
¦ bickering, a never ending circle
¦ of pointless arguments.
Very true, I'm almost ashamed I respond in these - although in my defence I joined the discussion when it was a discussion. The funny thing is that whenever I query people on their views they tend to shy away or answer a completely different question I never asked.

On a positive note, I believe I've just done a wonderful reCAPTCHA on what appears to be a some ugly code ("RNext"). Is RNext a class type? Maybe in context R is a (poor) library prefix in a language without namespaces, like Objective-C or maybe it's a variable name with capitalized first letters. Yuck! I almost feel to request a "new challenge", right, back to work!

Cornered Cynic
¦ How daft do you have to be to
¦ condone someone stealing the
¦ source of your wages?
Very daft I imagine.

Cornered Cynic may I ask you a simple question? If the theft of a packaged good costing £10 loses the store £8, what exactly do you say is lost when a pirate downloads a game?

And secondly, if the ratio of pirated games to purchased games is 2:1, then would you say that the games industry is making exactly 1/3 of what it would if nobody could pirate?

Cornered Cynic
¦ If you work in the games industry
¦ and don't think that piracy is
¦ theft, it's time you left to
¦ look for another job
How does one's perspective on the material effect of piracy reflect on his or her applicability for a role in the gaming industry? How aware are you of the economic aspect of piracy and the difficulty in attempting to attach any variable to the true effect of piracy . And not just whether it had an effect on the money made, but whether that is positive or negative. For example, do traded games lose the industry money by allowing consumers to pay less for their game, or does it fuel the market by making the purchase of future games more cost effective?

Yeah. Tell that to everyone who used to work in the music industry.

Someone who isn't willing to pay for your game doesn't deserve to play it. The car analogy does actually work. If someone steals your car, would you just think, "Oh well, he wants to drive my car but isn't willing to pay for it. At least now he's driving it. Maybe he'll tell his friends how nice it is, and how easy it was to steal, and they'll steal it, too."

Come on. Honestly.

And yet, the government frowns on people photocopying money and using it ... which is simply more units of money in the world and ultimately doesn't harm anyone by existing. Under Persson's terms, that would be completely legit.

Course, anyone who lived through the Weimar Republic might disagree with that sentiment. Piracy IS theft; it's not as simple as saying that there are more units in the world to be sold.

Does counterfeiting directly affect the economy by devaluing the currency? yes. Very different economic system mate.

Phillip Athans
¦ Yeah. Tell that to everyone who used
¦ to work in the music industry.
Been there, done that, got the T-Shirt. How does working in the industry qualify anyone to understand economics, business and marketing? How does their perspective improve their insight (beyond the mere emotion attached to negative outcomes that one might 'blame' on piracy)? How does it improve one's scope and understanding of the macro mechanics?

Philip Athans
¦ Someone who isn't willing to pay
¦ for your game doesn't deserve to play it
I hear you. Patience is a virtue, a virtue that enables one to endure suffering (according to dictionary definitions).

However there are things in business that are so hard to see that they become impossible to grasp. I've seen my games in pirate download bundles and when I see my game amongst 3000 games, of which 100 of them are all time classic greats, the only thing going through my mind is, "I hope someone plays my game, please, it's good"!

If you think the absence of piracy will increase profits, you are gravely mistaken. The key factor here is 'opportunity cost', even without piracy there is still scarcity, which means the former pirates still have limited funds and will have to decide between games, food, music, clothes and holidays. You have to remember that, removing piracy isn't suddenly going to increase their wage or make them suddenly value your game more than the other aspects of their life.

In fact, just look at what the iOS app store has done to casual gaming. People who didn't play games are suddenly playing games because they are free or inexpensive. Piracy today is very different to what it was yesterday, yesterday pirates would be copying games on tapes to share with their friends who just bought their Commodore or Amstrad (bringing back memories here). They were pirates. People recording off the radio are actually pirates, that's actually copyright infringement, as is recording films and TV shows onto videos.

Also, how does the filesharing we call piracy differ from sharing a legitimate copy with your friend? Should lending games to friends also be banned because that loses exactly the same amount of money as piracy? Should book lending also be banned as that too loses exactly the same amount of money as a counterfeit copy?

How many people read any of the comments before responding and literally repeating previous comments?

Yes, a pirated item removes potential earnings from the creator - /em on 'potential' there.
At the same time, it also has an effect of raising potential earnings too. I know of many people who became loyal (and paying) fans of studios out of their exposure to a pirated game.

The focus should move away from blithely complaining about the situation while doing nothing or actively promoting piracy by inconveniencing paying customers with horrific anti-piracy measures (SecuROM, I'm looking at you buddy) and actively address it in a positive manner.

@K I'd also add to that list the second hand market - how much money is lost to the games industry by shops reselling titles? That's just as much a denied sale as a pirated copy, the only reason this is often overlooked is due to it representing at least one legit sale at some point. Yet, having worked on a games counter that dealt with buying and selling used games I can say it also promotes secondary crimes (actual theft of games and consoles from previous owners) in addition to reducing the overall revenue of a game.

The whole piracy issue should change its focus from the cat and mouse battle with pirates to converting them into revenue streams, otherwise the games industry runs the risk of treading the same muddy path as the music and movie industries.

@K You sir (or madam), are my hero. I was about to say some reasonably intelligent things...but then you done said them all.

Ultimately it does matter if piracy is theft. What matters is whether games are profitable to make. There are many many games (read: all FtP games) where piracy is not a issues as there is no point-of-sale interaction. As the majority of the growth in this industry is in such area (something like 40% y/y for the past 3 years) I imagine that our friend from Minecraft will turn out to be correct. Games development will increasinly be a service model-and a profitable one.

When these 'Sales lost due to piracy' statistics are generated... Do they exclude a large percentage for people who wouldn't have paid regardless?

I used to be an avid gamer, often
Blowing my money on a stack of games.
But now that money might get me one game, with half the content (but comes in a nicer box!)
These games I simply don't buy any more. So that's a lost sale. Putting me in the same boat as people who pirate.

I've always considered the 'piracy is bad' approach to be ineffective. If people are refusing to pay for something, perhaps it's time to look at WHY it's happening, rather than blaming groups.
Perhaps people aren't buying your game because they feel it isn't worth the price the publisher has justified? Or they feel that the content itself just isn't worth buying.
There's been more than a games I've bought in the past which failed to deliver. Leaving me wishing I'd ... Perhaps used better judgement... And demoed the game before buying. Sadly decent demos of games don't seem to exist these days either... It's all betas and bare-bone 15 minute tasters

@Cornered Cynic: The village idiot's game has seven-figure sales. Perhaps you could learn something from him.

Cortney's counterfeiting analogy is a good one, and deserves further consideration. People often fail to grasp the duplication concept, as in Philip's car example. (They're not driving your car -- they're driving a copy of your car. As you're trying to sell that car, however, this can still have a direct impact upon you).

I fully agree with Cypher.

The whole piracy ruins game developers is just an urban myth (in 98% of all cases, it's the huge multi million developers who whine mostly cause their share holders only get 5% rate of return instead of 7%).

Piracy was there 30 years ago too, and I've rarely heard developers back then whining. Most developers were quite successful with games who sold a few 100.000 times. With todays capitalistic companies (back then there wasn't many game corporation, more of small self financed studios), share holders have the attitude: If a game has a development costs of 2 million USD, it HAS TO generate a revenue which is at least 20 Million to be "called" successful.

This is is plain bullshit and the main thing that's wrong with todays big game publishers and games in general. Back in the 90s, a small team would create a good game game for a few 100.000 USD budget and if they sell 20.000 copies of it at 20 USD each, it was very successful as it generated revenue 4 times as high as the development costs. Even with 10.000 copies they'd still be in the profit zone and enough to finance the making of another game or two.

This can be mainly seen on the greed of shareholders and todays big publishers, who are only interested into making biggest profit instead of delivering a good game. Today many company just make a game, hype it to death to have max. sales + production costs on release day and then don't care what happens with the game anymore.

That being said, back to piracy issue: Most people (I'd say >85%) would never buy a game they pirated. If there wouldn't be a pirated version, they wouldn't get it at all. They would buy the game no matter what. So there is no financial difference in most cases.

Out of the other 15% some maybe would buy it, but not for the hilarious prices most people are asking for. It's quite hilarious to pay 60 EUR for a game, which is mediocre at best. Most games are overpriced by at least factor two, especially the ones sold for consoles like Xbox 360 or PS3.

But also some Mobile games to tend to overestimate the value of their games and Apps. I've seen games in the App Store and Android Market who charge more than 3 EUR per game. While this isn't that much, it's quite much compared to the quality of most of that mobile games and the efforts of making them, especially considering that your data plan for your phone is usually below 10 EUR, having to pay 6 EUR for a single game which you occasionally play on your smartphone is quite much in comparison. 1-2$/EUR is the establish and mostly accepted price for games on Smartphones. But that's not bad neither. It's fair/high enough to make enough money from it.

There are many games in the Android Market, who cost 1-1.5$ and are downloaded more than 250.000 times. That's around 170.000-200.000$ gross revenue and most of that game have less than 4 developers working on it. So 200.000$ is a yearly income of >=50.000$ per developer, which is pretty much nowadays. That's about 2-3 years income with my current job, considering most of this devs do it part-time.

That all being said: The pirate ruins game developers urban myth is the main excuse of bad developers and greedy shareholders/corporation for their low-quality, bad-selling and overpriced software. Developers who create great games with great content rarely cry about piracy. Only developers with games selling bad, who are buggy or simply suck gameplay-wise

So if you steal a car, the original is lost? No it's not. The original is the prototype or the first one off the factory floor.

The others are copies.

I disagree with his logic immensely. Piracy is theft. If you're supposed to pay for it, and you don't, but you still take it, it's theft. Good grief. How long is this debate going on for?

What about drugs? They only take a fraction of a penny to create new pills however the cost of creating the actual drug is enormous.

If he applied this logic to the drug industry we would have no new medicines.

The debate of if piracy is detrimental to any media industry has been resolved. The theory that piracy creates new paying customers or whatever their theory is has been proven wrong as it's now just accepted that music no longer sells and has become effectively no more than promotional tool to entice people to attend live gigs.

I'm not saying that the games industry won't go a similar way however I fear any forms of monetization beyond the traditional means will ultimately be negative for the industry and the games that are made. See the App Store.