Monday, September 29, 2008

Making Video Game Piracy Obsolete

Video game piracy, and intellectual property piracy is one of the most polarizing and complex issues that I have faced. People hold strong opinions on piracy that are all over the spectrum. There are people who want to see pirates thrown in jail and all their assets seized. There are people who believe that piracy is every person's God given right. There are those who pirate as a means of trying before they buy.

What's interesting is that on both sides of the argument are claims that the other side is wrong. Instead of fighting with each other, why not cooperate? Most people who use pirated games don't want to steal, and well, I don't know about game sellers, they seem to really hate pirates. But I think they should learn to love them.

There are a ton of questions that people have difficulty answering when it comes to piracy:

Is piracy stealing?
Is piracy morally wrong?
Is piracy worse than shoplifting?
Is piracy ever justifiable?
Is expending energy answering these questions a waste of time?

I don't know the answer to any but the last question and I say yes to that.

The more interesting questions to me is: why do people pirate and how can its damaging effects be minimized? Let me ask an even better question: can piracy be beneficial to the gaming industry?

My top three answers to the first question are piracy is fast , piracy is free, and piracy is safe. My answer to the last question, I will answer way at the end, so MONKEYSHINES bookmarking in effect--skip down to the red MONKEYSHINES to get to the answer. But first, I will discuss why I believe piracy is so prolific and how its destructive effects can be minimized.

Consider Ubuntu Linux. I can download the entire contents of a CD for Ubuntu Linux in a few minutes with Bittorrent. The speed with which I can get content via that protocol makes it a superior and preferable option to any other form of distribution. Pirates use the same protocol to distribute content. They do it because it is the most efficient means available. If something better were to come along, they would adopt it immediately. There is a lot one can learn from pirates.

“If it's free, I want it.” -- a buddy of mine from college. That buddy ended up having an apartment full of crap, but he has an interesting point. Free, as a price point is difficult to beat. In the current paradigm of video game commerce, a pirate can easily get a game that is better than the one they could buy at a store for free.

It's safe. There is virtually no perceived risk in piracy. Not counting computer viruses or litigation, there isn't much of a risk involved in software piracy. If you don't like it, you delete it and you go about your business. There are two interesting effects of this risk free environment: people try out new products at will, and it creates a really good picture of what kinds of products people like.

Compare piracy with buying a software 'the right way'.

Retail purchases of games requires some form of waiting, either waiting for the game to be delivered via the mail or making a trip to a B&M store. Take my own situation for example. I live within 2 miles of one of a Target and within 5 miles of a Best Buy and a Gamestop. Getting to a store and back isn't a big deal. If I really want a game now, I can probably get one within 15 minutes. 15 minutes that I would need to spend going to and from a store in my car to pick up a game. 15 minutes that I could have spent doing any number of other things just so I could pick up a game. Compare that to getting a game online, I can just pick something out and let my computer do the work while I'm off doing whatever it is that I do.

Buying games through retail is expensive. It's expensive not only in terms of time, but also money. Some games sell for as much as $60. That's half a week of food for my wife and me. That's a tank of gas. That's two rounds of golf at my local golf course. All of those things are what I'm comparing your product to when I decide whether I'm going to buy it. Is your product comparable to going out to dinner with friends? The $60 price point is something I would need to really think about, and I'd probably get by butt kicked by my wife if I bought a $60 game without telling her. For $30, I can pick that up without getting my butt kicked.

Price points become important when you consider the risks of buying a game. If you pay $60 for a game that sucks, well you just wasted $60. I don't know of a retailer that will accept a return on a game. They learned that a lot of people return video games. Why? The two reasons that seem obvious are: 1) the game sucks, or 2) the customer is tired of it. In both cases the customer did not feel that they received sufficient value for their money.

Anti piracy advocates always talk about how the people who make the games work hard. Customers work equally as hard for their money and they don't want to feel ripped off and cheated. Sound familiar? Just because you work hard to create a product doesn't mean that you are entitled to sales. If I plow sand, it's going to be a lot of work. When it comes time to harvest the fruits of my work there isn't going to be much. Is it anyone else's fault that I picked a poor spot to farm?

So, what is the problem? Piracy is able to compete with the traditional retail paradigm by ways of speed, risk, and price. By pirating software, people are able to enjoy the same experiences without any of the negative effects of the traditional retail experience.

The only way to eliminate the effects of piracy is to make it obsolete, or better yet, make it work for you. I propose the following plan to make compete with piracy on the basis of speed, risk, and value.

1. Compete on the basis of speed. Digital distribution is the way of the future. Look at Steam. They are doing a lot of things right. Steam is my preferred point of purchase for video games because they mitigate many of the downsides of purchasing video games. Digital distribution is competing directly with piracy in terms of speed.
Printing physical media is a waste of resources and a wasteful practice. Instead of treating your products like a physical good, treat it exclusively as a license. When a person purchases a license treat it as a key to use your product. Look at how Steam and most MMOs work. You can download the software through the publisher's site easily and quickly. You just need an account in good standing to play the game.

It costs way less to distribute digitally than it does to manufacture a physical product and distribute that physical product via traditional logistics. It is also, largely unnecessary.

2. Mitigate the risk of purchasing your product. Take a minute to look at how video game publishers work. Let's face facts and admit that most video game purchases are regrettable.

Why is this? I think the biggest reason is because games are pushed out to market before they reach an acceptable level of maturity. Add to this the level of support that people receive after they purchase a game, typically zero, and it is easy to see why people feel cheated or ripped off when they make the mistake of buying a game.

Instead of abandoning your customer with your incomplete mess of a game, why not stand by your work? Are you in the business of deceiving people into buying your product and then ditching them once you have cash in hand or are you in the business of creating and selling a high quality experience to your customers? If your customers feel that you are trying to rip them off, there are many potential customers who will not hesitate to rip you off instead.

Do the right thing, if you sell crap, buck up and take responsibility for your bad product. If you feel entitled to your customer's money because they were unfortunate enough to believe your marketing and you treat them as such, do you think that the same people will hesitate to feel entitled to receive everything you ever did or will create for free because they paid for a piece of incomplete and malfunctioning garbage? Pirates aren't the only ones who feel entitled to the fruits of others' hard work.

Respect your customer and they will respect you. Look at Blizzard. Nobody will accuse them of selling crap. They can't meet a deadline to save their lives, but their work is excellent. They are the pinnacle of video game developers. People do not hesitate to purchase Blizzard products. When Diablo III hits the shelves there will be people lining up to buy it. Yes, people will want to pirate it too, but the vast majority of them will want to buy it because Blizzard will...

3. Make the gaming experience for the purchased product vastly better than the experience that a pirated product can give. A few ways in which this can be accommodated are to provide an enhanced online experience--people with pirated products will be hesitant to use use a game maker's servers with a pirated product. If they aren't, well you know where to send the bill. Look at the MMO games that have a subscription based model, piracy isn't a big problem with them, because running a pirated product isn't very useful. It's actually in a subscription based service's best interest to allow people to distribute their products on their own. It reduces the bandwidth load...more on that later.

I think the software developing world could learn a lot from Blizzard. They don't sell any product until it reaches their high standards. They continue to offer a fantastic online experience with their titles well after their products sell. Look at Starcraft, it has been on the market for 10 years. During that time, its use has shifted focus from the single player game on the online gameplay, which is provided by Blizzard for no additional charge.

Providing the server for no additional charge makes sense in my opinion. The game seller can control who uses their product online. By controlling the online game, the game seller can control who uses it, i.e., keep the pirates out. They can also provide a better experience than the pirated version.

I believe that too many game publishers are spending too many resources trying to make game piracy impossible. I'm going to let you guys in on a little secret, it is a loser's game. Most game security professionals will tell you that at best you can hope to make it difficult enough for the pirated version to only be ubiquitous after the game launches. Instead of spending resources trying to fight a losing battle, why not use your enemies' forces to work for you.

MONKEYSHINES

The million dollar question is how to turn what some claim is destroying the video game industry into something that helps it. The key is simple, provide a better experience through the purchased product than a pirated version can deliver. That is to say, give the person you call a pirate a compelling reason to become the person you call a customer.

Instead of calculating a pirated copy as a potential loss of purchase, why not treat it as a potential sale? Instead of turning a list of pirates over to legal, why not turn that list over to sales? There is no way to 'win' with a lawyer, it's just a degree of loss.

Instead of turning them into martyrs and your peers into monsters, turn the people who have tried your product out a chance to become paying customers. You don't need Ricky Roma to come in and schmooze someone into a sale, they know your product. Even better than knowing your product, they already have it, anything you gain from them is pure profit.

Engineer the product so it isn't all that challenging to be 'pirated' as a product that is inferior to what the purchased version can deliver. Online multiplayer is just an example, another strategy that can work is to provide extra downloadable content at no extra charge to paying customers. Engineer the product so that 'pirating' it is not much different than distributing a good demo. It wasn't long ago that companies like id and Blizzard offered rich playable demos of games like Doom, Quake, and Warcraft. I don't know what ever happened to those franchises, but I do know that we played the crap out of them in college and spread the word about how awesome those games are.

What else is piracy good for? Market research. Torrent numbers on certain notorious web sites based in Scandinavian countries don't need to be insulting. They're performing a few services to the content producing community. They are showing what people are interested in. The more people who torrent a title is pretty significant. Yes it doesn't directly translate into sales, but it does show what people want when cost is not a factor. That's information that is ripe for the taking. If you read the threads about the games, you can see what people honestly think about the games. They didn't pay anything for it, so they aren't going to be nearly as hostile or angry as a disappointed paying customer.

Lastly, learn to live with piracy. It's going to happen and no matter what technical and legal means are used to try and stop it altogether, there will be some who will take it as a challenge to defeat those countermeasures. Make it easy on yourselves, develop strategies to use piracy to your benefit, and then you can focus on the things that you really want to focus on.

6 comments:

Anonymous said...

What your analysis leaves out is that there is an army of middle-men, who have created employment by handling your purchase. "Piracy" or unlicensed reproduction cuts them out of the picture. DRM primarily helps the distributors. That's why the RIAA is a consortium of music publishers, not musicians.

Paul Wiedel said...

You say that like it's a bad thing. If they aren't adding value, they ought to go too.

Jimmy Hawkins said...

I was very impressed by your thorough post regarding piracy in the video game industry and how publishers can make piracy obsolete and turn it in their favor. It was a very interesting read, considering that most articles regarding piracy cover only the ends of the spectrum, those who love it and those who hate it. Each of the points that you brought up were valid and I felt like your argument was tailored towards me, which really drew me in.

I was most impressed by the thoroughness that you took in explaining not only explaining the reasoning behind why people pirate games, but also how the industry would be able to use that reasoning to their advantage. Though I have not pirated games before, I am familiar with Valve's Steam and the free distribution of game demos and trials with limited time periods (like World of Warcraft). These could almost be considered legalized piracy. Legally, there is a fine line between a publisher releasing a demo and a pirate downloading a torrent of the entire game, but for the end user, the result is similar. They get to test out a game without having to pay for it.

With that in mind, your arguments to make game experience better for non-pirates than for pirates and make high-quality games are extremely important because in doing that, you are turning the pirates into paying customers. A question I have for you is, do you see piracy rates increasing or decreasing in the future? On one hand, as technology advances and word spreads, it makes it easier for users to pirate games, and publishers have been battling piracy since the days of floppy disks. But, on the other hand, now that piracy is becoming such a big issue and is being talked about in greater depth, are publishers going to find ways to use the internet to make piracy obsolete?

Paul Wiedel said...

@Jimmy Hawkins
Thank you for the kind words.

Assuming that the industries that sell intellectual property continue to maintain the status quo of business, I would say that piracy will increase. Pirated content is in many ways a better product than what the publishers are selling.

The ball is very much in the publishers' court, they can recognize that their mode of business is antiquated and putting their products at a competitive disadvantage with the pirated version of itself.

Content piracy has always been around, I suspect that it always will be. Bruce Everiss wrote a nice history of game piracy here: http://www.bruceongames.com/2008/04/23/game-piracy/

With it showing no signs of stopping, I think that publishers would be best served to put the energy of pirates to constructive use. If the content owners are able to make money off of piracy, I don't think they would mind it so much--though I think that there will be some who will.

Jeremy said...

You make very valid points. Just one thing I would like to throw out in the air, If major video game consoles distributed demos and games to download through the internet this would not make piracy ''completely'' obsolete. For that to happen games could only be distributed through the internet and some people don't actually have the internet. Free demos would help though. In all and all I have really enjoyed this article!

Anonymous said...

I have been saying the same thing for awhile now. They need to stop complaining and use this distribution method to their advantage. They have to know what they are doing is not working. But still they persist on DRM. A lot of times this stuff is cracked before it hits the street from a leaked copy. I do think a few publishers are looking at this in a similar way like the guys from Valve. The industry is seeing the glass half empty instead of half full.
Very good article.
Thank You