Piracy Outpacing Sales by 4:1, Says U.K. Game Body

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Piracy Outpacing Sales by 4:1, Says U.K. Game Body

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U.K. Interactive Entertainment, the organization of U.K.-based videogame publishers, claims that for everyone one videogame sold in the country, four copies are pirated.

Piracy. Most of us can agree that it's not a good thing. The debate begins when we try to figure out exactly how bad it is. UKIE Director General Michael Rawlinson estimates that the ratio of piracy to legitimate game sales is running at about 4:1, an appalling figure, but acknowledged that the actual impact on the industry is very hard to determine. He also said that recent figures claiming piracy cost U.K. retailers nearly $2.3 billion in 2010 was a "conservative" guess that did not necessarily represent a direct loss to sellers.

"We took a conservative position of saying if this is only 1:1 across all titles it would have a retail equivalent value of 1.45 billion," he told GamesIndustry. "We did not say this was the loss to industry."

"What is clear is people who 'share' games via P2P networks or buy illegal copies are not buying the real product, and this reduces retailer sales. It can provide the consumer with a sub-standard product and money paid to illegal traders does not flow back to the creative," he continued. "In turn, investors see higher risks/lower returns, and this in turn will undermine confidence in the sector and lower the amount of money invested, reducing the developer's chance to create new products."

Figuring out the real cost of piracy is a tricky job because there are so many variables at play, not to mention the fact that people might be inclined to be less than honest about taking part in what is essentially a dishonest activity. The matter is further complicated by cases like that of Daniel Amitay, the creator of the iPhone game Punch 'Em!, who recently attributed a big, sustained jump in his sales to increased rates of illegal copying. Rawlinson said the UKIE is commissioning further research into the issue to try to come up with a better understanding of the impact of piracy but cautioned against using anecdotes like Amitray's to justify it.

"My position is clear, there can be no justification of unauthorized 'sharing' or pirate sales," he said. "The industry should never support or condone this on the basis of any potential or perceived 'marketing' upside."

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Guess those Pirates weren't buying the actual game if they liked it like they claimed after all.

Who'd of thought that people who steal "illegally acquire" games would lie?

Well fuck. Even if ten percent of pirated games is a lost sale that's a large chunk of change.

I'm almost okay with people pirating (almost), but the ones that pirate, and then bitch about lack of innovation or some such really piss me off.

AAAAAAAAAAAAAAARRRRRRRRRRRRRRRRRRRGGGGGGGGGGGHHHHHHHHHHHHHHHHHHHHUUUUUUUUUUUUHHHHHHHHHHHHHHH and in other news, pirating is ok when done seldom, Remember:Only you can prevent mass pirating.

And we wonder why games are expensive. This is what happens when we allow permissiveness to go too far. There's a fine line between 'you won't be hated for who you are' and 'anything you ever do is OK'.

Guess which version people in the UK grow up believing?

First of all these are ridiculously misleading statistics:

1) It assumes that they can account for every pirated game by magic. Even torrent following sites miss a few sites or direct download links, and some of them give completely inaccurate data because it's the amount of times a torrent is started and doesn't give an accurate number of how many actually downloaded the whole thing.

2) It doesn't account for the fact that a considerable amount of pirated games are games that are currently unattainable because of age or platform. Ex: One of the top torrents on TPB is a SNES emulator pack...there's no possibility of a lost sale because those games and consoles are available only on eBay and other auction sites.

3) Following from 2, these statistics are unfairly weighted towards implying that every pirated game is a copy of a game coming out that year, thus showing that piracy is outpacing sales for current games, which is more than likely completely and totally false.

Piracy is an inevitability in the age of the internet, and it gives you more marketing data, so use it for what it can be used for and suck it up. Stop whining and either come up with an unbreakable DRM that doesn't fuck over us legitimate customers, or use piracy to track sales and make good marketing and follow-up decisions.

And so what? There is a lot of piracy. Big surprise. But if they try to say that every pirated game is a lost sale they can suck my manly part. Make a good product, and people will buy it.

Sometimes people have zero cash. And pirate. While I can not really condone this, I usually remember Bill Gates' words (at least I think it was him) when told about windows piracy in china. It went something along the lines of "if they pirate, I'd rather they pirated OUR product." He was smart enough to realize that sooner or later either
1: They would HAVE to pay because the business got too official
or
2: They would pay freely because they had come into money and could afford to run a legit operation.

I get so sick of publishers whining about this. The market has NEVER been bigger, and they owe a LOT of free PR to piracy. No one seems to take THAT into account.

Once again, I'll wheel out my estimate that 0.01% of pirated copies are lost sales. However, if deth2munkies' second point is accurate, I'll probably have to revise that down.

1-4 doesn't seem that bad really, considering the whole "it's free and virtually undetectable"
maybe us brits are just more principled.

Im curios. has anyone ever had to pay for a pirated version of a game ? Becasue ive never really heard it, nor seen anyone trying to sell one. Ofc, that dosent mean its not being done, Im just curious as to what platform a money-pirate goes for. Sadly, statistics given to us by firms such as these never give us those numbers. or well, they dont give them to me on a silver platter with whipped cream and cherries. Whats a guy supposed to do to get some darned Relevant-Statistic-objects on a silver platter with whipped cream and cherries on top ?

blech, im going to hit the sack.

Losing sales due to people who wouldn't buy the game in the first place? Okay, Michael, whatever you say...

Andy Chalk:
UKIE Director General Michael Rawlinson estimates that the ratio of piracy to legitimate game sales is running at about 4:1

To me, this sort of translates to "here is a ratio I pulled out of my ass!"

That said, piracy is wrong and there are very few excuses for it. As was brought up in Extra Credits, possibly the only excuse if it is actually not possible to get the game legally; either due to where you live or because it's a game that is no longer being produced, such as for old consoles.

"What is clear is people who 'share' games via P2P networks or buy illegal copies are not buying the real product, and this reduces retailer sales."

No, no, no, no, for the last time, it is not 'clear' that a pirated games equals a lost sale. This gets trotted out everytime. I hope they do stop all piracy, only to find out that their sales figures stay about the same. And these so called missing sales were completely made up.

This deluded concept that everyone who pirates a game would have brought it if they could not pirate it. It is actually worrying as the industry is using a lot of resources to fight this problem which may not help their bottom lines very much if solved. If the same amount of resources were spent elsewhere, they might well be in better shape.....

ANd this coming from someone who always buys their games. And gives their freetard firends a tounge lashing for not supporting the industry.

I love how there's a big whoop every single fucking meaningless statistic like this is brought up.

ph0b0s123:
"What is clear is people who 'share' games via P2P networks or buy illegal copies are not buying the real product, and this reduces retailer sales."

No, no, no, no, for the last time, it is not 'clear' that a pirated games equals a lost sale. This gets troted out everytime.

As noted in my previous post in this topic, I actually use this line in Piracy related articles to rule out any possibility of truth. As soon as this is said, or anything eludes to it, it is obvious that no actual research has been done and it is all speculation and sensationalism.

Andy Chalk:
Most of us can agree

I find it hilariously unprofessional that your first line in an article about how "your side" represents barely 20% of the relevant population at best, you immediately pull a "9 out of 10 doctors" fallacy out of nowhere as an attempt to establish your position as the "true" one.

Generic Gamer:
And we wonder why games are expensive. This is what happens when we allow permissiveness to go too far. There's a fine line between 'you won't be hated for who you are' and 'anything you ever do is OK'.

Guess which version people in the UK grow up believing?

Kind of a Chicken and Egg argument.
I bet of all the conclusions drawn from this study, none of them are "games are too expensive."
When I was poor, I didn't pay for every game I got but I didn't play nearly as many as I do now. And yes, the really good ones I would buy, or get as a gift.
What I'm saying is that many (if not most) of the people downloading these games for free wouldn't buy them even if that was the only option available.

deth2munkies:
First of all these are ridiculously misleading statistics:

1) It assumes that they can account for every pirated game by magic. Even torrent following sites miss a few sites or direct download links, and some of them give completely inaccurate data because it's the amount of times a torrent is started and doesn't give an accurate number of how many actually downloaded the whole thing.

2) It doesn't account for the fact that a considerable amount of pirated games are games that are currently unattainable because of age or platform. Ex: One of the top torrents on TPB is a SNES emulator pack...there's no possibility of a lost sale because those games and consoles are available only on eBay and other auction sites.

3) Following from 2, these statistics are unfairly weighted towards implying that every pirated game is a copy of a game coming out that year, thus showing that piracy is outpacing sales for current games, which is more than likely completely and totally false.

Piracy is an inevitability in the age of the internet, and it gives you more marketing data, so use it for what it can be used for and suck it up. Stop whining and either come up with an unbreakable DRM that doesn't fuck over us legitimate customers, or use piracy to track sales and make good marketing and follow-up decisions.

You saved me a lot of typing cheers...

I might also add that in an age where game studios/publishers are enjoying the largest and most diverse consumer market they have ever known they really think a bullshit statistic like 4:1 illegal to legal copies will fly?Behave... Developers should be grateful they even have a market given the recession and what not.

There is probably only a small selection of stereotypes that will illegally download games. I think it's a safe bet that any games developed for children or families will probably not get pirated. Same goes for the casual market. Since you cannot reliably state what percentage of hardcore gamers illegally download games you cannot even begin to speculate as to actual lost sales. Made even more difficult when you should only count those games that people would have bought.

As said above and which rings true for all digital media industries, the games industry needs to adapt to the age of the Internet, develop more sophisticated DRM technology and most importantly of all, Increase the value of purchasing a genuine game not just jacking up the price to reflect estimated losses...

Honestly, the film, music and games industries have failed so much to adapt to the internet it'd make an Amish man facepalm...

Low Key:
Losing sales due to people who wouldn't buy the game in the first place? Okay, Michael, whatever you say...

Why are they playing the game if they had no intention of buying it?

ShadowKirby:

Low Key:
Losing sales due to people who wouldn't buy the game in the first place? Okay, Michael, whatever you say...

Why are they playing the game if they had no intention of buying it?

Because they like free shit.

Bollocks. The piracy rate might be that high for PC (and even then I am highly skeptical of it being that high), but I highly doubt it is that high for console games, let alone all games across all systems.

Just because things are a certain way does not mean that that was is the correct and final way they will be.

Just because a studio can make a killing profit on a game doesn't mean that it should.

MOST games released make a profit - but for the greedy greedy production corporations that rule them - it isn't enough.

Who the fuck made itmandatory that if you make a good movie or good game, you need to be awarded with so much money that you don't know what to do with it all?? It's just that the business model worked out that way (which doesn't mean its set in stone).

What makes me, a level designer who is supposedly in it for the passion of my art - more valuable than a university professor? a high school teacher? or any other professional? Why should I get 2000 times more than those other people? Same goes with being an actor or a band. Why should I get pissed that instead of making 20million I make 1million or instead of making 500,000 I make 80,000? It is still more than enough for a great life..

Just because certain fields can be exploited to yield unwarranted amounts of money doesn't mean they must keep doing that or the world will end.

Piracy as it exists right now, takes a small amount out of profits of business administrations sponsoring companies, bands, actors and puts it in the pockets of other professionals. As someone in the software industry my view is to let the greedy business people handle the issue of piracy while I focus on perfecting my art. As long as I can have a reasonable and happy life with my family, I will be happy to get my software to as many as possible.

Low Key:

ShadowKirby:

Low Key:
Losing sales due to people who wouldn't buy the game in the first place? Okay, Michael, whatever you say...

Why are they playing the game if they had no intention of buying it?

Because they like free shit.

You ask me to pay to watch Sex in the City 2. I will just laugh at you. You let me watch it for free, I will give it a shot. Actually on second thoughts....

What annoys my more about these stupid stats statements, is that the journos doing the interviews never question these dumb statements. Wheres the journalism. Talk about being an industry mouth piece.

More content industry ass pulled numbers.

Imagine he was talking about books and libraries instead of games and downloading:

"For every book purchased from a store 10 are checked out from a library. This 'sharing' costs the publishing industry umpteenbrazillion dollars every year according to a study we paid people do it. The only sensible conclusion is to shut down all libraries or else there will be no more books written evar!"

zwober:
Im curios. has anyone ever had to pay for a pirated version of a game ? Becasue ive never really heard it, nor seen anyone trying to sell one. Ofc, that dosent mean its not being done, Im just curious as to what platform a money-pirate goes for. Sadly, statistics given to us by firms such as these never give us those numbers. or well, they dont give them to me on a silver platter with whipped cream and cherries. Whats a guy supposed to do to get some darned Relevant-Statistic-objects on a silver platter with whipped cream and cherries on top ?

blech, im going to hit the sack.

A long time ago I paid for a couple of pirated games. They were on this computer called an Apple 2c. I had to pay the costs to get new blank 5.25 inch disks so that we could have the games copied onto them. I wish I could remember the names of those games, because I'd try to find them again, in a non-magnetic medium that wouldn't be completely corrupted.

Lightnr:
Profit expectation snip

Well said, I was having this train of thought the other day and forgot about it. Might write a thread on this later...

Oh no, piracy, lets all rage against it. Listen, kids die of cancer, warlords in Africa participate in Genocidal activities everyday, and the world economy is in shambles. Let's worry about piracy!

Also, for the record, this is not an excuse as to why games are so much. It has nothing to do with piracy and everything to do with the fact that game budges can get higher than summer blockbuster movie budgets. Companies employ a team of 100 or more, in some cases, to make a big game. This is not necessary to make a good game, though it has had favorable results. But the I remember buying 3D Dotgame Heroes, it cost $40, and it was freakin' superb.

Also, take into account that he is merely estimating what the ratio is, and I'm positive that he has no idea what the real numbers are. I do know that if I was trying to make a strong case against something, I would skew the numbers my way if I was allowed to estimage something like that.

Remember, there are three parts to a persuasive argument, the ethos, pathos and logos. All arguments should be won based on the logos, which is non existent here, but the ethos and the pathos are pretty strong. I'm not convinced, that's for sure.

And to make the correlation equals causation folks happy, just because it's pirated by someone, doesn't mean they would have invested their hard earned money into it if they had not the ability to pirate it. It works the other way too though, just because they pirated it, doesn't mean they would buy it.

CHEERS!

Well, it's a big assumption to assume that someone pirating a game would have bought it if the pirate version was not availible. A lot of people might be trying the games just because they are free. As others have said, there is no way to lose sales to people who never would have bought a product anyway.

In my case I don't defend piracy, since it IS stealing, but I really can't defend the industry and the way it operates either. What's more, it's hard to be sympathetic when your looking at a thriving multi-billion dollar industry, that wants to use that piracy and the belief that they could be making more money to install DRM/Spyware/Crippleware on your system.

What's more their arguements are based on a lot of misdirection. The creative people rarely suffer from piracy. What happens is that a producer provides the money to make these games, those huge development budgets are what the people doing the creative are getting paid in the way of salaries and wages. By the time a game comes out, the creative team has already been paid. The product goes to the producer, and any profits or losses from the product influance him, not the creative people behind it who are generally seeing absolutly no share of the game's sales.

Now there are exceptions to this, like when a game developer borrows money itself to develop a game. The money they borrow is more or less to pay themselves during development however. In that case as they are their own producer they are hoping to make enough money in sales to pay back the loan and interest and have some left over. Even if this fails though, this means they still got paid for the work they did.

The big risk involved here is more along the lines of producers no longer wanting to invest money, or loan it to game development companies. In the end though billions of dollars are being made overall, and there is no shortage of people willing to invest money in this right now even with piracy.

This is why it's hard to determine if piracy actually has any effect on the game industry, since producers aren't exactly slowing down in putting up money, and as long as they make a profit they never will, it's all whining about how much more money they think they could be making. I wouldn't care, except instead of just whining, I get garbage like DRM put on my system.

At any rate, a lot of the hype against piracy is an outright lie. By a game existing the creative people have already gotten paid. Even in cases of a developer borrowing money from a bank or investment group to produce itself, your typical writer, coder, or graphics artist is not seeing any share of those profits. Anyone who puts up the "your stealing from a poor game coder" arguement is lying to your face for purposes of propaganda, that guy got paid out of that multi-million dollar development budget. Unless piracy stops people from investing or loaning money, it's irrelevent in the big picture.

... or in short, your making billions, the pirates might be thieves but I'm a legitimate customer and keep your bloody crippleware and "internet verification" garbage off my system. There are plenty of investors putting money into this stuff, so don't try and justify making my gaming miserable because some dude thinks that instead of a hundred million in profits he could have had four million in profits. That's like crying because your Lamborgini is two years old, or your private jet doesn't have mink carpets. If I was operating on that level I might want more myself, but I'm not going to start terrorizing my customers over it, and that's exactly what is going on here.

4:1 implies that out of 5 copies, 20% will be legitimate. ("For ea 1, create 4")
That means: For each legitimate purchase, at most, 1 sale can be attributed to post-piracy purchases.

To be more clear: For every "Try and buy pirate", there are at least 3 other pirates who never paid. And this model mathematically assumes that EVERYONE who bought legitimately pirated it first, which obviously isn't the case; because there are obviously customers who never pirated the game first before buying it. They just bought it regularly.

While I cannot state what percentage of "try and buy" pirates actually justify their claims by purchasing after the fact, I can say that the percentage (based on the 4:1 ratio provided) is less than 25% (among the pirate part of the proportion); and it's probably FAR less than that.

rembrandtqeinstein:
More content industry ass pulled numbers.

Imagine he was talking about books and libraries instead of games and downloading:

"For every book purchased from a store 10 are checked out from a library. This 'sharing' costs the publishing industry umpteenbrazillion dollars every year according to a study we paid people do it. The only sensible conclusion is to shut down all libraries or else there will be no more books written evar!"

HAHA, GLORIOUS! Well said my friend, well said.

GonzoGamer:

Generic Gamer:
And we wonder why games are expensive. This is what happens when we allow permissiveness to go too far. There's a fine line between 'you won't be hated for who you are' and 'anything you ever do is OK'.

Guess which version people in the UK grow up believing?

Kind of a Chicken and Egg argument.
I bet of all the conclusions drawn from this study, none of them are "games are too expensive."
When I was poor, I didn't pay for every game I got but I didn't play nearly as many as I do now. And yes, the really good ones I would buy, or get as a gift.
What I'm saying is that many (if not most) of the people downloading these games for free wouldn't buy them even if that was the only option available.

Yeah, I think my original post is born out of general frustration with our selfish youth rather than from empirical evidence. I don't think we'll ever know what percent would have bought a game because even though everyone says no right now I personally think most would eventually. Maybe not for release day prices mind you, but for 20 or 10 a few months later.

Lightnr:
MOST games released make a profit - but for the greedy greedy production corporations that rule them - it isn't enough.

That's not correct. Very few games are "smash hits". Many eke out a marginal profit or break even. More than a few lose money.

I had a reference on this, but now can't remember where it is. I'll dig for it and post a link when I can find it again.

-- Steve

PS: I hate reCaptcha. "Foorivic" yourself, stupid 'bot.

Baresark:

rembrandtqeinstein:
More content industry ass pulled numbers.

Imagine he was talking about books and libraries instead of games and downloading:

"For every book purchased from a store 10 are checked out from a library. This 'sharing' costs the publishing industry umpteenbrazillion dollars every year according to a study we paid people do it. The only sensible conclusion is to shut down all libraries or else there will be no more books written evar!"

HAHA, GLORIOUS! Well said my friend, well said.

His analogy actually works....if those 10 books came from the aether.
You might not be aware of this, but libraries buy books too.

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