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Piracy: The Latest Competitor in Online Distribution
Posted on Wednesday, January 12 2011 @ 02:32:32 Eastern

Video Game publishers have been competing for a long time with many different forms of entertainment for their customers’ time and money. Video Games from rival Publishers, Movies, TV. But recently a new form of competition has emerged: Piracy. Just like all other forms of competition, this new competitor threatens to keep Publishers from making the most amount of money they can on a given product and new ways to win back their customers are going to be required in the years to come. For our purposes, we will be discussing Piracy as it pertains to the PC, as it is the platform that the most Piracy takes place on, as well as being the platform it is easiest to pirate on.

The initial reaction of Publishers to this new Competitor is predictable: “This is not competition, it is theft! This is not business, it is a wilful breaking of the law, and through the use of the law should be stopped!” While Piracy is indeed against many laws, many publishers fail to realize that in the Digital Age, the internet itself is a lawless place. It is international, borderless, and without police. Certainly specific servers are under the jurisdiction of the country they reside in, but when the same content exists simultaneously on 40 servers in 40 countries, it would take an elite police force operating under international laws upheld by ever one of those countries to attempt to even curb digital piracy. Even this would in all likelihood only lead to different servers in different places cropping up to replace those that were taken down. Publishers that have not already realized this are going to have to wise up pretty quickly if they don’t want to get swallowed by the digital age.

The next train of thought Publishers seem to have is this: “If I cannot use the law to prevent this theft of my property, I shall do it myself with security.” People have been using security in various forms for thousands of years. Be it hired guards, dogs, metal bars, or an alarm system. Publishers seem to be under the impression they can protect their software the same way, with DRM. This is of course, completely incorrect, but many publishers seem to persist in their attempts. It is completely naive to think that a DRM can be created that will be unbreakable, especially at the software level.This year alone, the game Call of Duty: Black Ops was reported to have been downloaded over 4.2 million times*, Mass Effect 2 over 3.2 million times. This should be evidence enough that DRM is not doing much to slow Piracy down, and yet publishers persist...

So how can Piracy be handled? It’s not something that can be stopped legally through any feasible means, it’s not something that can be locked down with security, but it certainly is costing Publishers money. Publishers need to see Piracy for what it is... it is a competitor. Piracy is providing consumers the same service that publishers are, at a much cheaper cost, threatening to run them out of business. Since Napster, piracy is becoming more culturally and socially acceptable by the year, people do not hide the fact they pirate, people are not ashamed of it. The publisher is facing one of their greatest competitors ever, and until acknowledged as such, they will never be able to compete with a product that is in many ways superior to the one they are offering.

The first step for Publishers should be obvious. Finding out why your customers are going to your competitor.

There are many types of Pirates, just as there are many types of consumers.Some Pirates would never have purchased a game to begin with, and only Pirate it for the sake of Pirating it. These consumers will not be won over by any change in offering that can be made. Some consumers, however, would have purchased a game if Piracy was not an option. They wanted to play the game enough to pay for it, but found that 60 dollars was not worth what was offered and would rather take the pirated version. What does one get for a Purchased copy? One could argue you got a Box, a set of instructions, sometimes a little trinket, but do these things alone justify 60 dollars? Certainly they would not sell for that much without the game, so it could be assumed that whatever value these things have, it is not 60 dollars.

Perhaps it is simply the convenience? Many people prefer getting things online at 1 in the morning when they have the urge to buy it. Piracy certainly offers this option. Publishers also offer this option too now though. This allows people to purchase their games online with almost as much convenience as the Piracy option. Some websites, such as Direct 2 Drive or Steam allow a purchase to be made, followed by a download that will be as quick as or quicker than piracy. But this does not come with one of the few things that made the Publisher stand out from the Pirated version, the Box, Instructions and Trinket. Additionally, there is often NO discount offered over the Physical version! The box may not be worth 60 dollars, but by selling a game online at no discount, the publisher is telling the consumer that the box has absolutely no value at all.  This has the unintended effect of bringing the Publishers offering even CLOSER to what the Pirated version offers: A game to be installed and nothing more. Selling less product for the same cost but in a more convenient way might be a reasonable idea on its own, but when considering the competition is already doing that at a HUGE discount, it becomes far less compelling to consumers.

Furthermore, when offering up games for download in a way that is meant to be convenient, distribution methods like Steam often include DRM as well.. Specifically: Requiring a constant internet connection for verification of authenticity. As discussed earlier, DRM does very little to actually prevent or curb Piracy, these games are going to get out into the wild, but it does have an unintended side effect in the product that Publishers would like to sell. Additional DRM in a game (not just via Steam) means addition hoops for the Consumer to jump through. The more intricate the DRM attempts to be, the more hoops to jump through. Piracy offers a game experience without these hoops, and while some hoops are very minor annoyances at the worst, compounded upon one another, they can reach a point where the consumer may find it LESS hassle to pirate a game than purchase from the Publisher. If this fact isn’t setting alarm bells off in Publishers head’s, there is a problem. In the past it was more of a hassle to find a way to pirate a game, if the tables have turned, then why is there any reason for a consumer to go through MORE effort in order to purchase from the Publisher, instead of Pirating it?

So what can publishers actually do to start winning customers over? GoG.com (a content distribution site specializing in older games and Abandonware [Games no longer sold by the publisher]) is a company that appears to be making great strides towards this answer. They offer a DRM free distribution method whereby a purchase on the site offers infinite downloads, no activations, and unlimited installs on as many computers as the users choose.  Guillaume of GoG.com had this to say ** “[... ]the best way to stop this process [piracy] is to deliver a passionate, genuine and hassle-free experience to the users [...]When our partners ask whether we believe our fair model can really prevent games from being pirated, I always share the same fact with them: many abandonware websites took down the products we started distributing on GOG.com and decided to become our affiliates instead.” This speaks volumes about the direction in which publishers should be moving, Publishers need to work harder to get Consumers on their side. This needs to be done by creating a business model that provides their customers with what they want, and at price that they find reasonable, without creating a separation in the amount of hassle between their products and pirated ones.

So can we expect Publishers to change their tune anytime in the near future? Probably not. Many publishers in recent times have shown us that they think of their customers as nothing more than numbers... that we are unable to see the sorts of things they are doing : Trying to stall piracy by inconveniencing their actual customers, offering little to no incentives for downloading a game instead of purchasing a physical copy, I'm sure the reader can think of numerous other things. When your customers have no faith in your company or your business model, they will always turn away from you. Publishers truly have more control over piracy than anyone else out there, and until they realize that fact, more and more people are going to abandon them for their more attractive competitor.

 * Piracy Numbers Obtained from TorrentFreak
** Full interview can be found on DosBox.com
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