An interesting point about piracy

It has being said time and time again that not every pirate would actually buy the games he downloads if he suddenly lost the ability to pirate. That’s a given, yes, but there’s one other thing that I haven’t seen people pay much attention to and that point is, as David Rosen puts it:

[…] most pirates that I’ve met have downloaded enough software to exceed their entire lifetime income, were they to have paid for it all. A more plausible (but still overly optimistic) guess is that if piracy was stopped the average pirate would behave like an average consumer. […] So how do we calculate what percentage of the market consists of pirates? Do we just go with 90%? […] The answer is simple — the average pirate downloads a lot more games than the average customer buys. This means that even though games see that 80% of their copies are pirated, only 10% of their potential customers are pirates, which means they are losing at most 10% of their sales.

He arrives at this conclusion by two means: common sense and by analyzing the case of the iphone: there’s an 80% piracy rate but only 10% of the iphones have been jailbroken. So, basically, 10% of the iphone users are the cause of that 80% piracy rate. On the PC side we normally see a 90% piracy rate… but jailbraking an iphone and just downloading a torrent require very different levels of expertise. The more difficult it is to do, the less people will do it, that’s a given. So there’s probably more pirates in the pc market than in the iphone one. But wait, there’s more: when pirating games, size matters. I’m willing to bet that the average iphone app at the very least is ten times smaller than the average pc game. So that will also affect the circumstances here: iphone pirates will likely download more apps than pc pirates.

So, taking into account those three factors(higher rate of piracy, bigger size and easier to do), then one could estimate that the pc market worldwide has something around a 30% of pirates. But that’s not the whole story, there’s at least one more thing to this whole issue:

Anecdotally and from studies by companies like the BSA, it’s clear that pirates for the most part have very little income. They are unemployed students, or live in countries with very low per-capita GDP, where the price of a $60 game is more like $1000 (in terms of purchasing power parity and income percentage). When Reflexive games performed a series of experiments with anti-piracy measures, they found that they only made one extra sale for every 1000 pirated copies they blocked [7]. This implies that their 90% piracy statistic caused them to lose less than 1% of their sales.

It’s probably more than 1% and even then it’s only one case, but it’s strong evidence of the point made at the beginning: pirates are usually people that couldn’t afford the games in the first place. If you took out the piracy numbers coming from latin-america, russia, india and china you’d get a better picture of pirates that could potentially convert to real customers. And even then you’d still be ignoring unemployed students.

After all that, how would the estimate look like? My guess? Probably less than 8%.

pirate ship ride
Yes, the whole reason why I keep talking about piracy is because I get to post amusing pictures.

And then, as a final example, let me bring up Ubisoft for a second. Yes, they molested their PC customers, but Assassin’s Creed 2 stayed practically impervious to piracy for 6 weeks. Let me say that again: 6 weeks. That’s exactly what they wanted, to fend off piracy for as long as they could, but not forever. After all, almost every sale is made in the first few weeks of any big AAA game (not counting Blizzard).

How much did they actually sell? Apparently nobody tracks PC sales, or just aggregates them with other platform’s sales, which makes it very difficult to say for sure if the PC version of AC2 sold more or less than the predecessor. But what I can say is that apparently, AC1 sold 8 millions in total, and AC2 shipped 8 million by february 2010, and that’s before the PC version hit the streets, so at the very least the console versions of the sequel outsold the previous title. A similar result would be expected of the PC version then, regardless of the whole piracy issue… right?

If that were the case, then one would imagine that Ubisoft would have been shouting this fact from the rooftops. “Hey everybody, this whole DRM deal works! Let’s continue to molest our customers, they apparently love it!”. But no, not even a single word about sales numbers has been uttered. Sure, they shouted about outselling the original title, but that was before the PC version came out.

Mmmmhhh, strange isn’t it? It’s almost like this time they sold less, even when piracy wasn’t an issue like the first time around. I wonder why would that be. I mean, it’s a better game, it had better reviews, it already sold better on the consoles, it had no piracy for 6 weeks…

Huh.

Is it possible that the amount of people pissed off at the DRM was greater than the amount of pirates converted to legitimate customers?

I don’t know, I’m leaning towards a resounding “YES!” but maybe that’s more wishful thinking than actual objective analysis.

We’ll see, time will tell. *possible victory dance*

Image taken from flickr under a Creative Commons license. (Yes, took me long enough to find a way to search for images under CC)

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s