I just want to point out again that I'm not saying piracy isn't an issue. Crime is always an issue, and there is no logical argument against that. I'm a firm believer in 'An honests days pay for an honests days work' and I find the acts of pirates disgusting, and I personally take great delight in crushing their piss poor excuses for piracy into the dirt. There is no justification for piracy. Period.
Today, however, companies - usually big companies - are hiding behind piracy as an all purpose excuse for their secondary motives and are throwing big numbers around to convince everyone that they're the real victims in the industry, while they post record profits and release the same games year after year after year while restricting the use of those games beyond what the law recognises as legal through forced user agreements and then nickle and dime their paying customers through over-priced content extensions.
Piracy is an issue, I agree with that 100%. I'm not saying it's a small problem. It's a burden on the industry. However the issue isn't as big as we're told it is, and there are numerous reasons why that is the case. I've covered many so far, such as the market shift towards console gaming masking some of the profit reduction on PC titles. Before I continue with my walls of text, I'd just like to say I'm happy that, for the most part, we've managed to remain civil. Many of these discussions can blow up into name calling and wild accusations regarding people's sexual orientation. Can we please keep things nice?
So then, explain to me how 180000 pirates for a game that sold 18000 copies at launch is 1) not a problem or 2) incorrect.
I believe the numbers Brad posted in his Journal (which I can't seem to find) were 10,000 registered users and 100,000 pirate users on the first day, however the ratio is still the same as your numbers: 10 pirates for every 1 legit user. At face value, this looks like a
massive problem - Gas Powered Games just lost
1000% of their profits! Holy buckled swashes Batman, how the hell can they still be in business! Let's take a look.
Firstly, and I hate to admit this, the pirates themselves have made one logical point; the 100,000 pirated copies are not technically
lost profits. It sounds like double speak, but they're merely profits that weren't made rather than profits that were lost. Gas Powered Games profits would've remained the same if 100,000 copies
weren't pirated and 10,000 were still sold. This is not justification, however, for piracy because the people at Gas Powered Games worked very hard on Demigod and they deserved to be paid for their work by the people who want to play their game.
The reason I mention this is because companies like EA Games (and Epic) treat a pirated copy as money that they've lost; profits they made that were then taken from them. This is not the case. Now, I know that my reasoning seems like backwards thinking, however it's quite logical - and it's also the reason why companies can still make a profit on PC releases. Profits are
not A - B = C, where A is copies sold, B is copies pirated and C is profits. A*D = C (where D is the price of A) regardless of the value of B is more acurate. This may seem like I might be actually arguing for the pirates, however this argument is one I've countered numerous times. A*D = C - (B*D) where C is actually
potential profits. Now we can see the real financial impact of piracy.
So, if Demigod costs AU$100.00, then the potential profits lost are are around AU$9,000,000.00 on the first day alone, compared to a profit of around AU$1,000,000.00. That still looks like a
massive loss of potential, however we also know that Demigod has sold quite well (over 150,000 copies at least) for a first time franchise that wasn't heavily marketed. We also know the budget for Demigod was around the $7,000,000.00 dollar mark, meaning Demigod has posted at least $2,000,000.00 pure profit, most likely more. Now, if we add back in the potential sales, the profits sit around $11,000,000.00. Wow, that's a big difference! Is it?
This would mean Demigod would've sold over 250,000 copies at least, making it an incredibly popullar title in a market where only the biggest, heavily backed and pushed franchises break 1,000,000 sales total - even on consoles. 1/4 the sales of the biggest names in the industry for a multiplayer only, first time, little known PC exclusive title from an independant Developer that wasn't heavily marketed and suffered from a broken multiplayer component for the first month of its self-life? Not to be rude, but I don't think so. Gamers, especially PC gamers - especially multiplayer PC gamers - are not forgiving. So, after all that, my second point: a pirated copy doesn't equate to a lost potential sale. The lost profits for Demigod are not AU$9,000,000.00 on the first day because only a portion of the 100,000 who pirated the game would've bought the game if they couldn't have pirated it. The figures are skewed. By what, and how? Read on.
In an ideal world, the 100,000 people who pirated Demigod should've purchased it. In that world Demigod would've also gone on to be a massive success because it worked at launch, received lots of additional content, the game would've hit eSport worthy and exploded into the gaming culture, the war in the middle east would've ended and the mystery behind JFK's murder would've been solved. However, we don't live in an ideal world filled with honest people. Its a sad fact.
In the real world, particuarly a world that revolves around money - like the games industry - most companies are out to make as much profit as is legally possibly while customers are out to get as much as they can for as little money as possible. This is the world we live in. Bargain hunters, second hand sales, coupons and discounts; these things exist because people love to get something for as little as possible.
When you make something free in this world, strange patterns emerge in the people who take up the offer. Portal was released free on Steam not to long ago. How many people who wouldn't have otherwised noticed, such as Mac users (see what they did there?) or people who weren't interested in Portal sat up and thought 'Well, it is
free' and downloaded Steam and then Portal? I'd wager it could be measued in metric a 'fucking shitload'.
Apply the same thinking to
every game ever made. Suddenly people who wouldn't pay for it are grabbing it because it's free. Using this logic, we can see why pirated numbers are so high. The numbers are not made up entirely of people who are skipping out on the bill, so to speak, but also people who simply thought 'why not?'. I can't speculate as to portions or percentages, I can only use my own, personal experiences and extrapolate from there. I downloaded Portal for free during Valve's offer. I also own Portal on the Xbox 360. Why do I have the same game twice, considering I paid for it already?
Because it was free.
I'm not saying the 100,000 people who pirated Demigod are justified in their theft - they're not.
Ever - I'm saying that if Demigod wasn't able to be pirated at all for whatever reasons, Demigod's sales wouldn't have increased by the same amount. Would it have increased? Sure, I think we can all agree on that. The portion of that 100,000 who would've purchased the game are the problem. It's not 10 users out of 11 that are the issue as Epic would claim, because you could never convince all of these people to purchase your game. Ever. I'd wager the issue is around 2.5 users in 10 (based on the Cracked.com's article that was linked). This equates to around $2,250,000.00 in actual lost potential profits for Demigod. Adjust that for the pirates who purchased the game after pirating it and liking it (there were a few forum posts of this kind of behaviour after Demigod's launch) and the figure drops again, albeit probably not by much. Then adjust it for the pirates who purchased the game after seeing how Stardock operated (there were a few forum posts about this kind of behaviour after Demigod's launch). Whatever that figure is, let's say $2,200,000.00 to be fair, it is a
significant difference from the $9,000,000.00 that the figures provided at face value. That's my point. Piracy is
an issue. It's not as big an issue as people think it is.
